Online behemoths Shein and Temu battled it out recently in the High Court. The ruling found that Temu was not liable for Shein’s alleged copyright infringement by third party sellers, partly because Temu acted as an intermediary without knowledge of specific infringement. Read the full story here.

What are the implications for the genuine SME seller and what can we learn?

The overwhelming message from this case is not to rely on online marketplaces to protect your work and that accountability and liability would appear to be scant. The “copyright trap” was that Temu relied on a “hosting defence” which is a legal protection for an online platform that hosts content uploaded by other people or businesses, rather than creating or controlling that content itself.

What are some tips and advice for sellers of their original work?

Displaying a visible deterrent on any images in the form of a watermark is a good start to image ownership.

Anti Copying In Design’s (ACID) Top tips:

Watermark online images (members of ACID can use a newly created logo watermark) which does the trick and sends a clear warning shot of ownership here

Register trade marks and designs officially at the UKIPO here

Keep accurate records of your creative work as evidence and proof of your work.

ACID members can use the free IP Databank for unregistered designs and copyright work (artwork, photos, images and designs)

The ACID Databank was created as an alternative free process for our members to record iterations of their unregistered designs and copyright works as there is no current formal legal system for doing so.

Familiarise yourself with individual platforms’ takedown procedures and act quickly if you see a third party using your images or re-selling your designs.

Evidence of ownership is critical, so ensure you can prove you own the designs or images

Take screenshots of copied images or re-sellers illegally using your designs

According to Reuters “The case is part of a much wider legal battle between the two companies. Temu has accused Shein of anti-competitive behaviour, including allegedly pressuring suppliers not to work with Temu. That competition dispute is expected to proceed to trial in the UK in 2027. Both companies are also involved in separate US litigation. Overall, the UK judgment is significant because it strengthens the position of online marketplaces that host third-party sellers and raises questions about how far platforms should be legally responsible for sellers’ copyright violations”.

A “hosting defence” is basically a legal protection

Commenting on World Intellectual Property Review (WIPR) in an article by Muirreann Bolger, Andy Lee, partner at Brandsmiths, views the ruling as “an important decision for fashion brands and online marketplaces because it addresses where responsibility lies when infringing content is uploaded by third party sellers”. He explained, “The court reflected Shein’s attempts to establish that Temu was itself liable for copyright infringement and found that Temu would, in any event have been able to rely on the “hosting defence”

Dids Macdonald OBE, Chairman and Co-founder of ACID, commenting on the case said, “The irony is hard to miss, two online marketplace behemoths, Shein and Temu, fought a legal battle over copyright while both, individually, face multiple IP disputes, globally”. This time, the judgment went against Shein, with the court finding Temu protected by the intermediary/hosting defence. But does this endorse Temu’s underlying IP practices and accountability?”

“ACID members, adds Macdonald, consistently raise concerns about both platforms. However, Macdonald does note that Temu has entered meaningful discussions with ACID to facilitate easier access to takedown mechanisms for resellers which is a positive sign”.

“But the situation remains a fraught one for designers and smaller brands.”

“For SMEs, the frustration is that the cost and burden of IP protection fall disproportionately on smaller brands,” Macdonald explains. “Copying designs, imagery or products can quickly erode differentiation, while pursuing infringers across global marketplaces is expensive, time-consuming and a real challenge”.