WASHINGTON, Oct 1 (Reuters) - Shein has convinced a federal judge in Washington, D.C., to throw out allegations that it unlawfully cornered the ultra-fast-fashion market and stole trade secrets from rival Temu.
U.S. District Judge Timothy Kelly on Tuesday dismissed, opens new tab some of the claims in Temu's lawsuit, including allegations that Shein broke U.S. antitrust law, but said Temu could continue to press allegations that Shein violated its intellectual property rights.
Spokespeople and attorneys for the companies did not immediately respond to requests for comment on Wednesday.
Both companies, which have roots in China, have seen their businesses boom in the U.S. in recent years as inflation and cost-of-living pressures have helped attract consumers to low-cost e-commerce offerings. Shein entered the U.S. first, and Temu said that Shein had captured 75% of the U.S. fast-fashion market by the time it entered in 2022.
Temu's 2023 lawsuit alleged that Shein "hatched a desperate plan" to shut Temu out of the market through a wide range of abuses, including the misuse of copyright takedown procedures and employing "mafia-style' intimidation against its suppliers.
Kelly said on Tuesday that the court lacked jurisdiction over Temu's antitrust claims because its allegations concerned conduct in China. The judge also dismissed Temu's trade-secret claims because the alleged theft happened in China.
Kelly allowed Temu to keep pressing its claims that Shein intentionally sent thousands of sham copyright takedown notices for its product listings, infringed copyrights covering Temu's promotional mobile games and violated related trademark rights.
The companies previously dismissed a separate U.S. lawsuit that accused Temu of contracting social-media influencers to make "false and deceptive statements" about Shein to promote Temu.com.
The case is Whaleco Inc v. Shein Technology LLC, U.S. District Court for the District of Columbia, No. 1:23-cv-03706.
For Temu: Anna Naydonov, Claudine Columbres, Jack Pace and Lauren Papenhausen of White & Case
For Shein: Michael Bonanno, William Burck and Andrew Schapiro of Quinn Emanuel Urquhart & Sullivan
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Reporting by Blake Brittain in Washington
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Blake Brittain
Thomson Reuters
Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets, for Reuters Legal. He has previously written for Bloomberg Law and Thomson Reuters Practical Law and practiced as an attorney.