Though the fashion industry moves quickly, the legal process is a little slower.
Last year was busy with some brands defending their trademarks and copyrights, and others defending against alleged counterfeiters. As e-commerce and resale gain popularity, and companies face shareholder pressure, there's no shortage of courtroom drama.
Here are the five biggest cases Fashion Dive is tracking as 2024 begins.
Battle of the fast fashion giants
In December 2023, Temu filed a legal complaint against its fast fashion rival Shein, accusing Shein of making Temu the target of a multi-faceted scheme to eliminate a competitive threat.
This wasn’t the first time Temu accused Shein of something similar. In July, Temu claimed Shein violated U.S. antitrust laws in an alleged scheme to lock up its supply chain by bullying Shein suppliers into avoiding business with Temu. Then in October, both Shein and Temu agreed to dismiss that case along with a separate case in which Shein sued Temu for allegedly mimicking it on social media, among other claims.
The pending complaint alleges that Shein coerced thousands of its suppliers into signing adhesion contracts, allowing it to seize the suppliers’ worldwide intellectual property rights; used the allegedly seized IP to obtain improper copyright registrations; instigated copyright infringement lawsuits against Temu; and attempted to keep suppliers from doing business with Temu “through Exclusive-Dealing Agreements, mafia-style intimidation of suppliers, and anticompetitive pricing floor requirements.”
On Jan. 2, Shein and Temu jointly asked the court to extend Shein’s deadline to respond to the Temu claims to Feb. 12. Shein anticipates filing a motion to dismiss the complaint, according to court papers.
Temu faces two class action lawsuits
In the second half of 2023, Temu was hit with two class action lawsuits in relation to its mobile app.
The first, filed in September 2023, accused the fast fashion giant of failing to secure its customers’ personal and financial data. Attorneys for the plaintiffs said Temu “grossly failed to comply with security standards and allowed its customers’ financial information to be compromised, all in an effort to save money by cutting corners on security measures that could have prevented or mitigated the Breach.”
The complaint further accused Temu of wiretapping the electronic communications of its website visitors.
The plaintiffs in the case plan to file an amended complaint by Feb. 5, according to court documents filed Jan. 9. Temu’s response to the complaint will be due after the amended complaint.
The second class action lawsuit against Temu was filed in November 2023. That complaint alleged that Temu misled consumers about the scope and reach of its data access and collection and intentionally loaded dangerous malware and spyware onto users’ devices.
The attorneys for the plaintiffs in that case claim Temu collected data from app users such as facial characteristics, voiceprints and fingerprints, and said that Temu gains access to “literally everything on your phone.” The suit further alleged that Temu is able to read private messages, make changes to a phone’s settings and track notifications.
On Jan. 3, a judge approved a time extension for Temu’s response to the complaint to Feb. 9.
Chanel and What Goes Around Comes Around lawsuit heads to trial
The lawsuit between Chanel and What Goes Around Comes Around went to trial on Jan. 9, after being filed in 2018. The case centers on WGACA’s use of Chanel marketing materials in its resale of Chanel products. Attorneys for the French luxury house accuse the luxury reseller of false advertising due to its alleged sale of counterfeit products.
The case is being argued in court as resale gains popularity in the fashion industry, and more luxury brands are grappling with preventing counterfeit sales. The result of the case could have implications for how a reseller can use a brand’s name when marketing their products.
Potential new trial in Thom Browne and Adidas trademark case
After a jury found Thom Browne not liable in Adidas’ trademark infringement complaint against the Zegna-owned brand in January 2023, Adidas requested a new trial.
Adidas claimed Thom Browne withheld emails as evidence in the trial that could potentially be relevant to whether Thom Browne “was aware that the use of the stripe designs on activewear could create confusion with [A]didas’s Three-Stripe Mark.” The complaint was initially filed in 2021, when Adidas said Thom Browne sold “athletic footwear and apparel with designs that were “confusingly similar” to Adidas’ products, because they had four parallel stripes.
Thom Browne opposed Adidas’ request in November, and a spokesperson for the brand said the emails referenced in the complaint weren’t intentionally withheld and “have nothing to do with the issues decided by the jury.”
Attorneys for Adidas filed more documents to support its request for a new trial on Jan. 4, according to a court filing.
Farfetch faces shareholder class action lawsuit
In December, Coupang announced plans to acquire Farfetch in a $500 million deal and take the company private. However, Farfetch and some of its key leaders are still facing a class action lawsuit from shareholders.
Attorneys for the plaintiffs claim Farfetch violated federal securities laws and failed to disclose that it was experiencing a “significant slowdown” of growth in the U.S. and China. It also alleged that Farfetch did not disclose challenges pertaining to its Reebok and Authentic Brands Group partnership.
The shareholders represented in the lawsuit bought Farfetch securities between March 9 and Aug. 17, 2023. During this time, their attorneys allege, Farfetch made “materially false and misleading statements regarding the Company’s business, operations, and prospects.”
The case is undergoing several motions from plaintiffs jockeying to be the lead or named plaintiff in the case, according to court documents. On Jan. 8, attorneys for Farfetch asked the court to move the case from a Maryland court to the Southern District of New York court, where Farfetch’s main office is located.
