Shein will continue to face RICO charges in copyright infringement lawsuit

Shein will continue to face RICO charges in a copyright infringement lawsuit filed last year, after a federal judge denied the fast fashion giant’s request to dismiss the racketeering claims, according to court documents filed Friday.

In July 2023, Shein was sued by a group of independent designers after it allegedly “produced, distributed, and sold exact copies” of the artists’ work.

The lawsuit was brought under the Racketeer Influenced and Corrupt Organization Act, or RICO, with attorneys for the plaintiffs arguing that Shein’s corporate structure and production strategy made it difficult to identify the company, and that its “byzantine shell game of a corporate structure” enabled the company’s alleged intellectual property theft and “blame avoidance.” 

The complaint also accused the fast fashion giant of mail and wire fraud, with attorneys for the plaintiffs saying Shein used mail and interstate wires to deliver alleged infringing designs to customers on Shein’s website, and misrepresented its corporate structure “for the purpose of making it impossible for victims to identify the entity or entities responsible for the theft of intellectual property.”

Shein moved to dismiss the racketeering charges by saying the plaintiffs’ allegations were insufficient. The court rejected Shein’s request to dismiss the RICO charges on both the copyright infringement and wire fraud charges. 

The case names Shein as a collective, which includes Shein Distribution Corp., Roadget Business and Zoetop. In the recent dismissal, the judge presiding over the case said that plaintiffs alleged Roadget owns the website where the infringement occurred, and Zoetop and Shein Distribution Corp. were at one time responsible for sales on the website.

“Given these allegations and other augmentations to the pleading, Plaintiffs’ pleading gives rise to a reasonable inference that the Shein Defendants participated in a RICO enterprise,” the judge wrote in the decision.

Following the judge’s decision last week, a Shein spokesperson said in an email to Fashion Dive that the company believes the RICO claims are without merit.

“Shein will continue to vigorously defend against such claims,” the spokesperson said.

While the bulk of the lawsuits filed against Shein center on copyright infringement from independent designers, this case is unique in regard to its racketeering claims.

Shein has also been involved in copyright infringement litigation with established brands, including Uniqlo, H&M and Victoria’s Secret-backed For Love and Lemons,  

In addition, Shein and its fast fashion rival Temu have sued each other over copyright infringement, among other claims.