US Judge Partially Dismisses Temu's Lawsuit Against Shein, Allows IP Claims to Proceed

US Judge Partially Dismisses Temu's Lawsuit Against Shein, Allows IP Claims to Proceed

Introduction

A federal judge in Washington, D.C. has partially dismissed Temu's lawsuit against Shein, throwing out allegations of unlawful market cornering and trade secret theft. However, Temu can continue to pursue claims related to intellectual property rights.

Factual Background

Temu's 2023 lawsuit alleged Shein "hatched a desperate plan" to shut Temu out of the market through abuses, including misuse of copyright takedown procedures and "mafia-style" intimidation of suppliers. Shein had captured 75% of the U.S. fast-fashion market by the time Temu entered in 2022.

Procedural Background

The judge dismissed Temu's antitrust claims due to lack of jurisdiction, as the alleged conduct occurred in China. The judge also dismissed trade-secret claims for the same reason. However, Temu can continue to press claims related to:

• Sham Copyright Takedown Notices: Shein intentionally sent thousands of notices for product listings.
• Copyright Infringement: Shein's infringement of copyrights covering Temu's promotional mobile games.
• Trademark Rights: Violation of related trademark rights.

Issues

1. Jurisdiction: Whether the court has jurisdiction over Temu's antitrust claims.

2. Intellectual Property Rights: Whether Shein violated Temu's intellectual property rights.

Contentions of the Parties

Temu's Contentions:

• Shein engaged in abusive practices to shut Temu out of the market.
• Shein misused copyright takedown procedures and intimidated suppliers.

Shein's Contentions:

• The court lacks jurisdiction over antitrust claims.
• Temu's allegations are unfounded.

Reasoning & Analysis

The court lacked jurisdiction over antitrust claims due to the alleged conduct occurring in China. However, Temu's intellectual property claims can proceed.

Decision

The court partially dismissed Temu's lawsuit, allowing some claims to proceed.

In this case Temu was represented by Anna Naydonov, Claudine Columbres, Jack Pace and Lauren Papenhausen of White & Case. Meanwhile Shein was represented by Michael Bonanno, William Burck and Andrew Schapiro of Quinn Emanuel Urquhart & Sullivan.

Implications

This decision highlights the complexities of international e-commerce and intellectual property law.