English High Court strengthens online platforms' position as Shein's copyright claims dismissed

The English High Court in Roadget & Anor v Whaleco, better known as Shein v Temu, has dismissed all copyright infringement claims brought by two Shein group companies against a company in the Temu group concerning photos of Shein-branded products displayed on Temu's UK website. 

Even if infringement had been established, Mrs Justice Bacon decided obiter that Temu would have been able to rely on the hosting defence. Temu succeeded in its counterclaim for loss arising from wrongful intellectual property (IP) infringement notifications under a cross-undertaking given by Shein.

This decision underscores how difficult it can be to establish platform liability for user-uploaded content. Rightsholders undertaking wide-scale takedown campaigns must sufficiently substantiate their claims and resolve ownership issues before acting.

While the decision is positive for platform operators, it also clarifies when platforms may still face liability. A platform's ability to rely on the hosting defence will depend on the nature of the infringing activity, the rights relied upon, and how its approach can be evidenced. To disapply the hosting defence, evidence of a platform operator's active involvement in the specific infringements, or failure to act expeditiously once notified, is required.

Fast-fashion battle

The Shein and Temu groups are competitors in the fast-fashion sector. Shein alleged that Temu committed primary copyright infringement by authorising reproduction of the photos by its users under section 17 Copyright, Designs and Patents Act 1988 (CDPA) and communicating the works to the public under section 20 CDPA, and secondary infringement by exhibiting or distributing infringing copies under section 23 CDPA. Shein failed to make out any of these claims. Temu succeeded in its counterclaim for damages under a cross-undertaking given by Shein for loss arising from wrongful alleged infringement notifications. The quantum is to be determined.

Copyright ownership issues

Shein's claim concerned 2,559 product listings for which photographs had been uploaded to Temu's UK website. Shein relied on photographs that were employee works, agency works and supplier works.

Shein's ownership of the four employee works was undisputed by trial. However, Shein's claims in respect of the agency and supplier works either had to be dropped before trial or were rejected by the judge as Shein did not have the necessary rights to successfully pursue the claims.

Communication to the public

The judgment confirmed that UK law when platforms "communicate to the public" is in line with the post-Brexit Court of Justice of the EU decision in Peterson, which, while not binding on the English courts, was found to be correctly decided and applicable to UK law.

It is not sufficient to show merely that a platform provided the means by which the infringing content was uploaded and accessed. And it is not enough for platform operators to know "in a general sense" that some user uploaded content is protected by copyright and its publication is unauthorised by the rightsholder. Rather, it is necessary to determine whether the platform operator's conduct constitutes a "deliberate intervention 'in full knowledge of the consequences of doing so, with the aim of giving the public access to protected works'". The court must consider the Peterson factors:

• Whether the platform operator knows or ought to know that users are making protected content available illegally and has failed to put in place technological measures expected of a "reasonably diligent operator" to counter the infringements.
• Whether the operator participates in selecting illegally communicated content, for example, by providing tools intended for illegal sharing or knowingly promoting it.
• Whether the operator's financial model encourages illegal sharing.
• Whether the operator has been warned by the rightsholder and failed to take "expeditious measures" to make the content inaccessible.

The judge concluded that Temu displayed none of these factors; instead, it contractually prohibits sellers from uploading infringing content and operates an IP complaints process. Temu's conduct did not amount to a communication to the public under section 20 CDPA.

Authorising reproduction and exhibiting or distributing

Shein's other copyright infringement claims also failed.

Shein claimed that Temu were authorising the reproduction of the photographs that would occur on users devices but Mrs Justice Bacon accepted Temu's argument that the temporary copies exception under section 28A CDPA applied and held obiter that Temu's conduct would not have amounted to authorisation in any event because its actions did not go "beyond merely enabling or assisting" the reproduction.

Shein's infringement claim for exhibiting or distributing infringing copies also failed because Temu removed the photographs before it had carried out sufficient investigations into Shein's complaints to fix Temu with the level of knowledge required to establish secondary copyright infringement.

Hosting defence

Although no infringement was established, the judge held obiter that Temu would have been able to rely on the hosting defence. Its role in relation to the photos was passive and it lacked the requisite knowledge to disapply the defence; to the extent it did have knowledge, it acted expeditiously to remove the relevant listings.

On the knowledge requirement that would disapply the hosting defence, the judge – again relying on Peterson – found that a "general" or "abstract" awareness that a platform is used to share infringing content is insufficient. The platform must have knowledge of the specific illegality. Where knowledge is said to arise from notification of alleged infringement, that notification must contain sufficiently "precise" and "substantiated" information for the platform operator to establish, without a detailed legal examination, that the content is illegal.

Shein did not provide sufficiently detailed information: it failed to include comparisons for the "overwhelming majority" of allegedly infringing photos or even the basis on which it claimed copyright in its letter before action. In any event, had the letter been adequate, Temu would have been found to have acted expeditiously in removing the listings. This was the case even though it took Temu several weeks to work through the large number of complaints it had received from Shein. 

Osborne Clarke comment

This judgment illustrates the difficulty in establishing platform liability. The judge accepted that platform operators may still be able to rely on the hosting defence, even if it took weeks or months to remove the reported content. Here, Shein had swamped Temu with thousands of IP complaints, far beyond normal volumes, and it was not reasonable to expect Temu to immediately engage additional personnel to deal with them.

This decision does not mean that platforms will never be liable for third-party uploaded content. The extent to which platforms can rely on the hosting defence will vary depending on the nature of the infringing activity, the platform's role and knowledge, and the speed of its response once notified.

It is worth recalling the divergence between UK and EU law on the applicability of the hosting defence. In the EU, article 7 of the Digital Services Act states that platform providers can still rely on the hosting defence even if they undertake "voluntary own-initiative investigations" in good faith and in a diligent manner to identify and remove illegal content. This does not apply in the UK and the Court of Appeal has previously noted that if platform providers undertake content review for commercial reasons then they must "accept the risk that they may not be able to rely" on the hosting defence. Therefore, it may be easier for platforms to rely on the hosting defence in the EU.

The outcome here was shaped in part by the ambitious scale of Shein's action, the rights it relied on and its chain of title issues, and its failure to substantiate its claims adequately. However, this is a first instance decision that could still be appealed. Temu also alleged that Shein's conduct was contrary to competition law, which will separately be dealt with by the Competition Appeal Tribunal in a trial in March 2027. This case may have a long way to run.