Shein v Temu: when are online marketplaces liable for copyright infringement?

Back in August, the online marketplace Temu was found to be not liable to Shein for copyright infringement in relation to product photographs appearing in listings on its UK site. Shein has recently been granted permission to appeal aspects of the High Court’s decision, adding a fresh chapter to the Shein v Temu saga. 

In the meantime, the High Court’s decision offers useful guidance on when an online marketplace will be liable for copyright infringement in content uploaded by its users.  The judgment also covers Chinese law, supply-chain arrangements, contractual agreements and the assignment of copyright, but this article focuses on the key points for marketplace operators and rights holders, as they currently stand. 

Background

The dispute between two competing online fashion businesses arose after Shein suppliers began selling excess stock through Temu stores. Shein sued Temu’s UK operator, Whaleco, alleging that 2,559 Temu clothing listings infringed its copyright because they used photographs taken from Shein’s website.

Temu denied infringement. In the alternative, it argued that the ‘hosting defence’ would protect it from liability for damages. Temu also counterclaimed for damages under a cross-undertaking given by Shein in relation to listings removed pursuant to interim injunctions. It separately brought a competition law counterclaim, which is being heard by the Competition Appeal Tribunal in March 2027.

The decision

Copyright ownership and Shein’s right to bring a claim

To keep the trial manageable, liability was considered by reference to a sample of 20 product listings. By the time of trial, Shein had abandoned its claims in relation to 15 of those samples, and Temu no longer disputed Shein's ownership of works created by four employees. The remaining ownership dispute concerned the supplier photograph for a “Strawberry Nightdress”.

The Court found that, when Shein added the supplier photographs to its claim, it had not established the chain of title and did not know what rights it held in those works. In relation to the Strawberry Nightdress photograph, Shein initially had only a non-exclusive licence to use the photograph. It subsequently acquired copyright title and sufficient rights to pursue the claim through agreements entered into in June 2024.

The Court nevertheless rejected Temu's argument that Shein's pursuit of the supplier claim was an abuse of process. That required actual knowledge, including ‘blind-eye’ knowledge, that Shein lacked title; what Shein ought to have known was not enough. Although Shein was aware of potential problems with its title to supplier works generally, the evidence did not establish a sufficiently specific suspicion that it lacked title to the Strawberry Nightdress photograph, or a deliberate decision to avoid confirming that position.

Was there infringement?

Shein argued that Temu was responsible for copyright infringement because it enabled users to view the photographs, made merchant-uploaded images available on its website and used them in connection with products offered through the platform.

The Court ultimately found no infringement. Temu had consent to use the Strawberry Nightdress photograph from the photographer personally. The claims relating to the four employee works also failed. Temporary copies created when users browsed the website fell within the statutory exception for ordinary web browsing, and Temu had not authorised users’ acts or reproduction or played an active role in relation to the disputed photographs. Importantly, its terms prohibited infringing content and it operated an IP complaint and a takedown process. Temu did not have the necessary knowledge that the photographs were infringing until Shein notified it (the threshold being in relation to the particular infringing works), following which the photographs were removed.

Hosting defence

Although it was not necessary to the outcome, the Court also considered whether Temu could rely on the ‘hosting defence’, which can protect online intermediaries from liability for content stored on behalf of users where, broadly, they play a sufficiently passive role, do not have the required knowledge of the infringement and act quickly to remove infringing content once notified.

The Court found that Temu would have been entitled to rely on the defence. Although Temu provided services including product pricing, promotion and image-editing, it had not played an active role in relation to the photographs themselves. General awareness that infringement might occur on the platform was not enough: what mattered was knowledge of the specific infringing content. 

IP counterclaim

Shein had given a cross-undertaking in damages when it obtained interim injunctions requiring Temu to take down product listings containing the disputed photographs. Temu counterclaimed for the losses caused by removing those listings.

Shein argued that the court orders only required Temu to remove the photographs (not entire listings) and that Temu had failed to mitigate its loss. The Court disagreed: taking down whole listings was reasonable and inevitable, because Temu listings must include a photograph, and that the two-day removal deadline gave Temu no realistic opportunity to mitigate (for example, by obtaining replacement photographs).

Permission to Appeal 

Shein has recently been granted permission to appeal the dismissal of its copyright infringement claim and the ruling in Temu’s favour on its counterclaim under the cross-undertakings in damages in respect of photographs notified for removal. The hearing is due to be heard by 1 October 2027. 

Takeaways

The decision offers helpful guidance for online marketplaces and rights holders:

Online marketplaces: general awareness of infringement risks is not enough; specific knowledge of the allegedly infringing content is critical. Platforms should have sensible IP controls in place, including clear terms and conditions and a takedown procedure, and act quickly when alerted to allegedly infringing content.

Rights holders: should note several practical points before and during enforcement:

• establish the chain of title and any relevant licences or consents and sort out any known issues before taking enforcement action;
• make letters of claim precise and substantiated, so the recipient can easily identify infringements by reference to specific copyright works and specific listings;
• where many works are involved, lead with the strongest examples; and
• carefully assess the merits and potential financial consequences before seeking interim relief and giving a cross-undertaking in damages.

If you wish to discuss any of the matters raised in this article, please contact Emily Roberts, Bethany Wheeler-Fowler, or your usual IP team contact.

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