A new lawsuit has been filed in the United States against the Chinese fast fashion giant. More specifically, the action was brought against a number of companies associated with Shein’s sprawling holding company: Roadget Business Pte., Ltd., Shein Distribution Corporation, Shein Technology LLC, Shein US Services, LLC.

The Shein vs. Alan Giana case

Complaining of a “systematic infringement on an industrial scale” of his intellectual property rights is the well-known multimedia artist Alan Giana, whose works (which have been published since 1990) have been reproduced without authorisation on several Shein products.

In recent years, Shein has already been the subject of numerous counterfeit lawsuits, by internationally renowned players, including Levi’s and Ralph Lauren. However, the particularity of this dispute lies in the fact that Shein is being accused of exploiting algorithms and artificial intelligence (AI) to identify popular works or works with a certain notoriety potential that have been created by third-party artists and designers, and then proceeding to reproduce them without any authorisation of the copyright holders or any form of financial recognition to them.

After discovering the presence of slavish copies of his own works on a wide range of products for sale on the Chinese platform, Alan Giana filed a lawsuit in the Southern District Court of New York to obtain compensation for the damages he had suffered, and also requested the possibility of converting this complaint into a class action, should the conditions be met, certain that he was not the only one to complain of this type of violation.

Giana vs. Shein is in fact the latest in a series of cases highlighting the Chinese company’s well-established tendency to use forms of artificial intelligence to create counterfeit products. This is not just a case of so-called “dupes”, i.e. copies of luxury products, which are sold at significantly lower prices, but one of the unauthorised reproduction of (multimedia) works by more or less well-known independent artists.

Artificial intelligence and copyright: the Shein method

In particular, from the analysis of Shein’s conduct, it  is alleged that its creative and production system is divided into four phases:

1. The company carries out an analysis of market trends and products that are trending or considered to have high commercial potential, including by examining the preferences of online users.
2. The results of this analysis are communicated to the competent section for the reproduction of copies of the indicated products in prototype form;
3. These prototypes are put up for sale on the platform and, at the same time, consumer response to them is verified and monitored.
4. Then, if the market response is positive, full production is organised accordingly.

Shein and counterfeiting: precedents

This method/procedure had already been analysed in the lawsuit filed in California against Shein Distribution Corp., Roadget Business Pte. Ltd., Zoetop Business Co., by Krista Perry, Larissa Martinez and Jay Baron, in July 2023.

In the latter case, three independent artists complained about the reproduction of some of their models of clothing products. This dispute was an opportunity to point out how Shein’s complex economic and organisational structure is an obstacle to the recognition of infringements of exclusive rights owned, above all, by more or less well-known independent artists.

Again, in December 2023, the well-known Japanese company Uniqlo also sued the holding company Roadget Business Pte. Ltd., Fashion Choice Pte. Ltd., and Shein Japan Co., Ltd. before the Tokyo courts on charges of having produced and offered for sale, through the use of artificial intelligence, a product in blatant counterfeit of the iconic “Round Mini Shoulder Bag” model, so popular on social networks.

The AI Act and new copyright protections

In this context, at least at EU level, new safeguards come to the rescue.

The European Union, in fact, through the new and approved AI Act, is already tackling the issue of IP (Intellectual Property) related punishable conducts implemented through artificial intelligence.

Among the first countries to transpose the AI Act and to carry the EU’s precautionary vision forward with supplementary legislation is Italy, which, with the new bill, now being approved, will make an important contribution and change to copyright protection legislation.

In particular, Articles 23-25 of the text in question have the precise function of extending and updating the protection of copyright with respect to the new cases of infringement put in place through the use of artificial intelligence. In fact, in Article 23, the legislator expressly requires that works generated through AI respect copyright laws, including by ensuring the identification of works whose use is not expressly reserved to rights holders.

Furthermore, Article 25 of the bill envisages the criminal liability of anyone who reproduces or extracts text or data from works or other materials available on the web, including through the use of AI, without having the right to do so, and for any purpose and in any form.

 One can only hope, therefore, that the enforcement of this legal instrument will provide effective protection against these new modes of usurpation.