Fast Fashion Retailer SHEIN Accused In Lawsuit Of RICO Violations & ‘Knowingly’ Stealing From Small Designers

Fast Fashion Retailer SHEIN Accused In Lawsuit Of RICO Violations & ‘Knowingly’ Stealing From Small Designers

It looks like the fast fashion retailer SHEIN is in a bit of legal trouble!

SHEIN is facing a lawsuit that accuses the company of “large-scale and systematic intellectual property theft from U.S. designers large and small.” As if that isn’t bad enough, the popular brand has also been accused of engaging in infringement-related racketeering activities.

According to the complaint filed on Tuesday (July 11), independent designers Krista Perry, Larissa Martinez, and Jay Baron accuse SHEIN of

“produc[ing], distribut[ing], and selling exact copies of their creative works,”

claiming its actions are,

“part and parcel of Shein’s ‘design’ process and organizational DNA.”

The suit claims SHEIN utilizes a “secretive algorithm” that identifies growing fashion trends,

“and by coupling it with a corporate structure, including production and fulfillment schemes, that are perfectly executed to grease the wheels of the algorithm, including its unsavory and illegal aspects.”

The suit reads,

“When Shein copies a small or independent designer, the most likely outcome (without brand protection specialists and specialized software on the lookout) is that the infringement will go unnoticed.”

If there is a demand for the product, SHEIN will allegedly produce more, as long as the threat of infringement doesn’t exist.

In the event of a lawsuit, the plaintiffs claim SHEIN relies upon a,

“multiplicity of entities and [outwardly] decentralization structure…aid in its efforts to avoid liability for intellectual property infringement.”

The lawsuit alleges that the fashion brand would blame an independent company when all along it was SHEIN who was the true culprit.

As for the RICO claims, the suit alleges SHEIN has,

“knowingly committed criminal copyright infringement, [and] played its role with full knowledge of the overarching criminal copyright infringement it participates in.”

The plaintiffs say SHEIN’s alleged efforts to prevent infringement lawsuits are,

“committed not by a single entity, but by a de-facto association of entities, [and] just as intended by Congress, the same decentralization that facilitates Shein’s criminal infringement and other racketeering activity, renders individual components of the enterprise, such as the defendants, liable under civil RICO.”

The plaintiffs are seeking monetary damages.

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