UK court rules Temu not liable for sellers’ copyrighted product images.
Shein has lost a copyright case against online shopping rival Temu in the UK, in a decision that could affect how online marketplaces are held responsible for material posted by independent sellers. The case was heard in London and centered on thousands of product photographs that Shein said had been copied and used on Temu’s website without permission.
Shein had accused Temu of copying its images on a large scale and argued that the rival company benefited from photographs created for Shein’s own clothing products. The dispute is part of a much larger fight between the two fast-growing companies, which compete for shoppers looking for inexpensive clothing, household items, accessories and other products. The lawsuit focused on whether Temu could be held responsible for images that appeared on its platform.
Judge Kelyn Bacon ultimately rejected Shein’s copyright claims. She also ruled that Temu would not have been responsible even if copyright violations had been proven under the circumstances presented in the case. Shein originally argued that Temu had reproduced its photographs. However, that argument was not pursued at trial after it became clear that Temu’s servers were located outside the United Kingdom. Bacon said the alleged copying took place outside Britain, limiting Shein’s ability to pursue that part of the case under UK copyright law.
Shein maintained that it owned the thousands of photographs involved and that the pictures had appeared on Temu’s website. A company spokesperson argued that Temu escaped responsibility because the servers supporting its UK site were located in Ireland.
The judge also considered whether Temu could be responsible for material uploaded by merchants selling products through the platform. Bacon rejected Shein’s argument that Temu had authorized copyright violations by those sellers. The ruling noted that Temu’s rules prohibit merchants from posting material that violates copyright law. Bacon further found that Temu could rely on a legal protection available to online services that act as intermediaries. Under that protection, a company may avoid liability in certain situations when it hosts material supplied by others but does not have the required knowledge that the material violates copyright.
The judge found that Temu did not have actual knowledge of the alleged violations and did not have enough information to make the alleged violations obvious. The ruling also went in Temu’s favor on part of its counterclaim. Temu sought damages after having to remove product listings when Shein obtained an order involving photographs that Shein did not actually own. The court upheld that counterclaim.
Shein is preparing for a planned stock market IPO listing to take place in Hong Kong, with a reported target valuation of between $30 billion and $40 billion. That figure is far below the nearly $100 billion valuation associated with the company in 2022. The company has also faced financial challenges. Shein recently reported a quarterly loss of $99 million after changes involving US import rules and a separate $328 million accounting charge connected to certain preferred shares. Shein’s planned Hong Kong listing is expected to take place on August 28. The company had previously considered listing in both New York and London before landing on Hong Kong as its preferred location.
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Shein loses UK copyright lawsuit against rival Temu in key e-commerce ruling
Shein loses UK copyright case against Temu in key ruling for online marketplaces