SHEIN v Temu: Proving copyright ownership, and platform liability
Oliver Fairhurst
SHEIN v Temu: Proving copyright ownership, and platform liability
In 2023, two members of the SHEIN group of companies issued proceedings against the newcomer of the e-commerce world, Temu. Temu was relatively unknown in the UK at the time, having only launched there in April 2023. Its aggressive pricing, combined with a mind-boggling array of products and gamified sales experience, launched it into the consumer consciousness quickly. SHEIN is the relative grandfather of Chinese e-commerce, having come close to listing in the US and then the UK, before settling on Hong Kong. Both have undercut existing Western business models, including benefiting from tax loopholes for low-value parcels. Temu attracted the attention of regulators immediately, particularly with regard to its compliance with data protection laws, and, more recently, its non-compliance with the EU's Digital Services Act (here).
The proceedings related to SHEIN's allegation that Temu had infringed its copyright through the use of its copyright images on product listings. Temu not only denied those allegations, but counterclaimed under competition law for infringements of the UK's Chapter I and Chapter II prohibitions (i.e. the UK equivalents of articles 101 and 102 of the Treaty on the Functioning of the European Union). While it is difficult to summarise those claims in a sentence, they are essentially allegations that SHEIN was deliberately attacking Temu to prevent it taking SHEIN's market share. Those competition law issues were hived off to the UK's Competition Appeal Tribunal (CAT), where they are due to be tried in March 2027. Judgment in the copyright proceedings was handed down last week (Roadget Business PTE Ltd & Anor v Whaleco UK Ltd [2026] EWHC 2165 (Ch)).
The proceedings
SHEIN brought proceedings in relation to 2,559 product listings on Temu's UK website. The photographs were said to have been a mixture of images taken by employees of SHEIN, supplier photographs, and agency-produced photographs. Temu removed thousands of products from its website on the basis of these complaints and under two interim injunction orders. To make it manageable, the court ordered that the trial on liability would consider a sample set of 20 photographs, drawn from a narrowed set of 100 images selected randomly from the wider set, then narrowed further with each side picking 10. By the time the case reached trial, this number had reached only five images, four of which were 'employee works' and one a 'supplier work'.
The claims were for infringement under sections 17, 20 and 23 of the Copyright, Designs and Patents Act 1988. Those were reproduction, communication to the public, and secondary infringement (based on the images being 'infringing articles' - see Getty Images, IPKat).
Some factual background
It is necessary to explain a little of the background. SHEIN's business model places significant commercial risk onto its suppliers. To meet its performance and delivery requirements, its suppliers need to produce stock that far exceeds SHEIN's typical initial orders. This means that, if a product does not sell well, and SHEIN places no further orders, the suppliers are left with significant amounts of surplus stock. Their options are limited with regard to what they can do with it without taking a huge loss, so some list it on Temu. It is common for them to do so using the images from the original SHEIN listing, the copyright in which SHEIN claimed to own.
A significant distinction was drawn between the two businesses, with SHEIN selling its own products, while Temu's sellers were said to be "independent entities who are not affiliated with Temu and are free to sell their products elsewhere, such as to Shein". SHEIN rejected Temu's characterisation of itself in this way, claiming that "Temu controls product pricing, manages promotions, controls product listings in various ways, offers image-editing tools, and offers delivery, customer service and warehousing facilities."
The defences
Temu denied that SHEIN had standing to enforce the copyrights in the images, and also that it had reproduced the images, or communicated them to the public, itself. It also relied on s.28A CDPA, which provides a defence to copyright infringement where the reproductions were temporary copies. Finally, it relied on regulation 19 of the E-Commerce Regulations, which is the 'hosting defence' implementing article 14 of the E-Commerce Directive 2000/31/EC.
The counterclaim
Aside from Temu's competition law counterclaim, it also claimed under the cross-undertaking given by SHEIN (as is the normal case) when it obtained its interim injunctions. Temu said that, if those claims ultimately failed, SHEIN should pay it damages for its losses.
Copyright ownership
Proving title is often difficult, and this case exemplifies this difficulty. Only one of the images in the trial sample involved images taken of the 'Strawberry Nightdress' by a supplier (Jiameiluo), or more accurately a freelance photographer/model, Yaqian Chang. Ms Chang did not execute any written assignment, and did not know how the images were to be used, other than that Jiameiluo would use them for its e-commerce operations. The judge found Mr Lin (the owner of Jiameiluo) to be an evasive witness, with the judge noting the importance of SHEIN to his business.
SHEIN claimed that the licence from Ms Chang was assigned to it. This was rejected for several reasons. The main one was that the agreement SHEIN relied on purported to transfer IP rights from Jiameiluo, not contractual rights. The other was that SHEIN's claim to have received an assignment of the contractual licence was unpleaded, and raised only at trial. Being a matter of Chinese law, this prevented the judge from hearing evidence on it.
The lack of clarity over the ways in which the images were to be used, and the fact that they could only have been granted under a licence, meant that the court needed to decide what kind of licence that was. Following established case law (Robin Ray v Classic FM [1998] FSR 622), she found that the minimum form of assignment or licence should be found, and that would be a non-exclusive licence, i.e. a right to use, not to sue.
SHEIN relied on other written assignments entered into after the proceedings were underway. Unsurprisingly, those assignments were effective, but Temu argued that as a matter of contractual interpretation under PRC law, the Strawberry Nightdress image was not assigned to SHEIN. After a lengthy consideration of PRC law on the issue, the judge found that SHEIN had obtained the copyright in those images.
Copyright infringement
Having shown that it owned the pictures, via an interesting but too complex for a post of this length discussion of s.136 of the Law of Property Act 1925 and allegations that SHEIN's reliance on copyright in images that it did not own when the proceedings were commenced was abusive, the judge moved on to considering infringement.
Sections 16(1)(a) and 17 - reproduction
To constitute an infringement, the reproduction must have taken place in the United Kingdom. SHEIN accepted that Temu's servers were located outside of the UK, placing those reproductions outside of the ambit of s.16(1)(a). This left SHEIN's case as one of authorisation, i.e. that Temu had authorised users of its website to reproduce the photographs in their browsers. This led to two issues: had Temu authorised that, and if so, were those reproductions 'temporary copies'.
The answers to those questions were 'no' and 'yes', respectively.
SHEIN's key point on authorisation was that the website was made available and Temu's website terms of use granted a licence for them to display the images. However, the court found that making the website available to consumers, even with the standard licence wording in the terms of use, SHEIN did not encourage, sanction or approve the use of infringing content, or purport to grant users the right to do so. Relying on Newzbin and Dramatico, the court found that Temu had not gone beyond "merely enabling or assisting".
In relation to the temporary copies argument, the court considered the case law, focusing on Lord Sumption's judgment in Meltwater. In that case, Sumption had ruled out liability for users reading infringing content, taking a purposive approach to the s.28A exception. The most interesting discussion is on the independent economic value of the temporary copy, which in this case was found to be absent. The user of the website "gains no independent economic advantage from that act". This conclusion supports that significant limitation on the 'authorisation' limb of copyright infringement in Meltwater.
Sections 16(1)(d) and 20 - communication to the public
Despite the images in question having been previously made available to the public through SHEIN's own website, SHEIN claimed that Temu had made them available to a 'new public', so as to infringe SHEIN's copyright. Readers of this blog will no doubt be familiar with the cases mentioned in this part of the judgment (including GS Media, mentioned on Eleonora's famous 'linking' table). For present purposes, the most interesting aspect is the decision to follow Case C-682/18 Peterson v Google EU:2021:503, handed down after the UK's departure from the EU. In that case, the CJEU had agreed with Google that a platform such as YouTube does not make a communication to the public "unless it contributes, beyond merely making that platform available, to giving access to such content to the public in breach of copyright". SHEIN argued that Peterson was wrongly decided and should not be followed, which was rejected as the judge echoed the Court of Appeal's finding in TuneIn that courts should be striving for consistency rather than diverging willy-nilly (my words).
Regulation 19 - the hosting defence
The hosting defence has come under increasing pressure in recent years, with platforms becoming significantly more powerful and adept at managing the content shown to users. The possible nadir of reliance on the defence was in Montres Breguet v Samsung Electronics [2023] EWCA Civ 1478, where Samsung's review of watch faces uploaded to its store was fatal to the application of the defence.
The judge stated that the application of the defence "depends not on the character of the marketplace's business in the abstract, but on the role played by the operator in relation to the specific disputed content." This means that whether or not a platform can benefit from it is not binary in general, but depends on each alleged infringement. The question is whether it plays an active role in the infringement.
On the evidence, the judge found that Temu could benefit from the defence. Importantly, SHEIN had relied on various reports that Temu had an active role with its suppliers, even setting prices. However, the evidence it relied on was weak, mainly consisting of blog posts. This is surprising to this Kat. To rely on such weak evidence in a case of this magnitude suggests either that the reports were wrong, or that SHEIN failed to corroborate them. If the allegations were correct, one might have expected disclosure on the efforts Temu was alleged to go to to control the sellers on its website, or that SHEIN might have obtained evidence from its suppliers, many of whom also sell on Temu (a point noted by the judge).
Temu's counterclaim
With SHEIN having failed on infringement, even after dropping its claim on 15 of the 20 sample works, it is unsurprising that the judge found that SHEIN was liable under its cross undertaking in damages.
The most important aspect of this finding is the court's consideration of whether it was reasonable for Temu to take down the whole product listings as opposed only to the images complained of. The court found that it was reasonable for Temu to take all of the products down, as it was not practicable to leave the listings without images.
The financial significance of this is known only to the parties at the moment, but it is likely that the costs will be the most important aspect.
Comment
What started out as a claim about allegations of large-scale copyright infringement has morphed into a wider dispute that remains to be resolved. The lesson for practitioners in such infringement cases is surely to tie up copyright title before issuing proceedings. That SHEIN had to drop 75% of its sample works shows how fundamentally disorganised its copyright chain of title process was. Even its later 'catch up assignment' left enough scope for argument. Copyright can be simple, except when it ain't.
However, to this Kat, the Regulation 19 issue is the most significant issue in this case. Over recent years, websites and other platforms have moved far beyond being neutral in the traditional sense. Platforms are run by algorithms, and Chinese e-commerce platforms have been noted for their high-tempo sales tactics. Close coordination with 'sellers' (blurring the line with 'suppliers' in traditional retail), re-targeting of products that users have looked at, or similar products, combined with ticking timers, special deals, and discounts offered by the platforms (not the sellers) are surely pushing them closer to the line. Of course, the EU has sought to address this with increased obligations on platforms under the DSA, but the UK has not.