Lawsuit Against Fashion Brand Shein
Alleges Massive Copyright Infringement Scheme07/27/2023Three visual artists have sued the ultra-fast-fashion behemoth Shein for copyright infringement, alleging that Shein operates a wide-ranging scheme that relies on artificial intelligence, deliberate copyright infringement, and a hope that none of the artists will notice.
In a complaint filed July 11 in a Los Angeles federal court, the artists allege that Shein uses artificial intelligence and a proprietary algorithm to find emerging popular art, including theirs, and then uses the artwork in Shein merchandise without credit or payment to the artists. Interestingly, the artists hint that human beings may not even be involved; Shein’s automated processes simply find art, create merchandise, and offer it for sale. Plaintiffs further allege that Shein’s process is designed to evade copyright liability; Shein produces only a few of an infringing items at first, and then waits to see if an artist raises an infringement claim. If so, Shein settles with them quickly or stops the low-run production. Conversely, if no one notices the infringement and the product sells well, Shein ramps up production. As a practical matter, many instances of Shein’s alleged infringement go unnoticed among the many thousands of items Shein offers for sale every day. As a result, Plaintiffs allege, copyright infringement is a key component of Shein’s business model, allowing Shein to profit enormously from the work of emerging artists without paying them.
Plaintiffs have asserted not only copyright and trademark infringement claims, but also causes of action under the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal law that provides for both criminal penalties and civil actions aimed at ongoing criminal enterprises. Plaintiffs allege that to escape the repercussions of their infringement activities, Shein operates a web of smaller, separate companies that work together to systematically create and sell infringing clothing, in violation of RICO. In recent years, we have also seen RICO claims asserted in other art cases, including litigation in connection with a dispute between an artist and her gallery; an art forgery scandal; and a lawsuit over stolen artwork. RICO claims can be complex to litigate, but they make treble damages available, raising the possibility of larger recoveries.
We have written before about claims by artists who say their work was incorporated into someone else’s creation without their permission (see here and here for examples). In such cases, defendants sometimes assert common affirmative defenses, including that the alleged infringement was fair use; that the work didn’t infringe at all because it lacked substantial similarity to the original; or the so-called “de minimis” defense. But on an initial reading of this complaint, those defenses may not protect the copy-and-paste type of infringement alleged here. This case may also raise interesting questions about how artificial intelligence technology is making copying easier and more automated than ever, and how the copyright law should account for that. Shein has not yet filed a formal response to the complaint.
The case fits into a wider trend in which smaller artists are increasingly empowered to assert their intellectual property rights against major fashion and retail corporations like Shein. A prominent artist recently sued Shein after it put his art on a shirt without permission. The Wall Street Journal has reported that more than 50 intellectual property infringement lawsuits are currently pending against Shein. In recent years, artists have also taken legal action against other fast fashion retailers like Kohl’s, Zara, and Francesca’s. And, as we’ve covered before, the US has recently created a small-claims process to make asserting copyright infringement claims easier for plaintiffs. We’ll continue to follow the case’s progress.
Art Law Blog