Fashion lawsuits in May 2026 were headlined by a New York model’s suit accusing Rainbow Shops of generating unauthorized AI images of her after her contract expired, and by a UK Court of Appeal ruling that gave brands more room to police how retailers sell their products online. Those two May developments sit inside a busy stretch of litigation touching dupes, fast fashion, resale, bankruptcy, and sustainability claims.
Model’s AI Likeness Suit Against Rainbow Shops
On May 22, 2026, New York City model Francheska Pujols sued Rainbow USA in New York Supreme Court. Pujols alleged that after her modeling contract with the retailer expired in March 2026, Rainbow used artificial intelligence to generate new, unauthorized images of her likeness, placing an AI-created “doppelganger” in suggestive poses and settings she never consented to.1New York Post. NYC Model Allegedly Cloned for Unauthorized AI Ads by Clothing Retailer
According to the complaint, the original contract permitted only minor edits like cropping and stylistic adjustments, not the creation of entirely new images. Pujols brought claims for defamation, misappropriation, false endorsement, and violation of New York’s Right of Privacy Law, arguing the images damaged her reputation as a high-end model and deprived her of licensing fees.2PetaPixel. Model Sues Fashion Brand After It AI-Generated Pictures of Her Rainbow denied the allegations, with a spokesperson stating, “We used our images properly and there’s no violation of her rights.” The lawsuit was withdrawn within weeks, with Pujols’s lawyer saying the parties were “seeking to resolve this matter privately.”1New York Post. NYC Model Allegedly Cloned for Unauthorized AI Ads by Clothing Retailer
The suit is one of the clearest fashion-industry tests of the right of publicity in the AI era. Those rights are governed by a patchwork of state laws with no federal equivalent, and about 38 states recognize some form of the right.3American Bar Association. What’s Real, What’s Fake: The Right of Publicity Tennessee’s ELVIS Act, enacted in March 2024, was the first state law specifically targeting unauthorized AI-generated voice clones and deepfakes.4Bloomberg Law. AI Advertising and the Right of Publicity
UK Court of Appeal Expands Brand Control Over Online Sales
On May 8, 2026, the UK Court of Appeal handed down a ruling in Deckers UK Limited v. Up & Running (UK) Limited that gave fashion brands more flexibility to control how their products are sold online. Deckers, which manufactures HOKA shoes, had terminated its relationship with retailer Up & Running after the retailer breached its contract by selling discounted products on a separate, unbranded website. The retailer challenged the termination as an unlawful restriction of competition, and the Competition Appeal Tribunal initially agreed.5White & Case. Context Matters: UK Court of Appeal Overturns CAT Ruling on Selective Distribution
The Court of Appeal reversed, finding that the Tribunal had committed a “fundamental error of law” by failing to consider the economic context. The ruling clarified that brands operating selective distribution systems have “a material degree of discretion” to impose contractual restrictions on retailer websites, and that competition law should not interfere absent a clear showing of competitive harm.6VBB. English Court of Appeal Confirms Brands’ Ability to Control Online Sales For luxury and premium labels that rely on selective distribution to protect brand image, the decision expands their legal toolkit.
Active Dupe Fights
A wave of litigation has targeted the market for cheaper lookalikes of premium products. Three cases are shaping the law here.
Lululemon v. Costco
In June 2025, Lululemon sued Costco Wholesale Corporation in the Central District of California, alleging that Costco sold knockoffs of its SCUBA hoodies, DEFINE jackets, and ABC pants. The claims span design patent infringement, trade dress infringement, and trademark infringement, with Lululemon alleging that Costco used confusingly similar marks like “Scuba Full Zip” and even copied its “Tidewater Teal” color mark.7Gilberts Law. The High Cost of Fashion Dupes: Trademark and Design Infringement Costco answered in August 2025, and garment manufacturer Jacques Moret Inc. intervened as a defendant in September 2025. The case remains in early stages with no dispositive rulings as of mid-2026.8CourtListener. Lululemon Athletica Canada Inc. v. Costco Wholesale Corporation
Deckers (UGG) v. Quince
Deckers Outdoor Corporation sued Last Brand, Inc. (doing business as Quince) in June 2023 in the Northern District of California, alleging that Quince’s shearling-lined boots infringed its unregistered trade dress for the Classic Ultra Mini, the Bailey Button Boot, and the Tasman Slipper, plus a design patent on the Ultra Mini.9AFS Law. UGG-ly Result: Court Calls Classic Ultra Mini and Tasman Trade Dress Generic In an October 2025 ruling, the court found the trade dress for the Classic Ultra Mini and the Tasman to be generic and therefore unprotectable, but denied Quince’s attempt to invalidate the design patent, letting that claim head to trial.10Justia. Deckers Outdoor Corporation v. Last Brand, Inc., Order on Summary Judgment Quince then filed a separate antitrust complaint accusing Deckers of running a “litigation assembly line” to assert exclusive rights over “basic and unprotectable product features.”11Above the Law. Not Getting Duped
Glow Recipe v. MCoBeauty
The dupe fight extends beyond apparel. In June 2025, Glow Recipe (Aramara Beauty LLC) sued MCoBeauty in the Southern District of New York, alleging that MCoBeauty’s “Hydrate & Glow Ultra-Dew Serum” copied the distinctive pink spherical bottle and packaging of its bestselling “Watermelon Glow Niacinamide Dew Drops.” The complaint noted that MCoBeauty marketed itself with the slogan “It’s not a dupe. It’s a dupé!”12The TMCA. Aramara Beauty LLC v. MCoBeauty Pty Limited, Complaint By June 2026, Glow Recipe had filed an amended complaint adding Target as a defendant for allegedly contributing to infringement through its product listings and search optimization practices.13The Fashion Law. Looking Beyond the Dupe: Glow Recipe Expands Fight Against MCoBeauty
SHEIN, Temu, and the RICO Theory
SHEIN faces upwards of 30 ongoing lawsuits in U.S. federal courts, most involving copyright, trademark, or patent infringement. Plaintiffs range from independent designers to Dr. Martens, Ralph Lauren, Chrome Hearts, and Stussy.14The Fashion Law. Shein: A Look at the Lawsuits for an Ultra-Fast Fashion Giant
The most legally novel suit was filed in July 2023 by three independent designers, Krista Perry, Larissa Martinez, and Jay Baron, who alleged not just copyright infringement but also violations of the Racketeer Influenced and Corrupt Organizations Act. The designers argued that SHEIN’s systematic copying constituted a “long and continuous pattern of racketeering,” and that SHEIN’s decentralized corporate structure made it difficult to hold any single entity accountable.15Time. Shein Lawsuit: Copyright Infringement In November 2024, a California federal court refused to dismiss the RICO claim, signaling that courts may treat algorithmic, systematic IP theft as racketeering activity.16Khurana and Khurana. Fast Fashion Copy-Paste Disputes: Shein and the Digital Age’s Copyright Crisis The case was terminated in September 2025 following an undisclosed settlement.17CourtListener. Perry v. Shein Distribution Corporation
Meanwhile, SHEIN and rival Temu are locked in sprawling litigation. Temu alleged SHEIN engaged in an anticompetitive scheme involving improper DMCA takedown notices and coercive supplier practices, while SHEIN alleged Temu facilitated counterfeit sales and misappropriated trade secrets. After years of separate proceedings in the U.S. District Court for the District of Columbia, Judge Timothy J. Kelly consolidated the cases in April 2026 into a single discovery and case management track. Claims have been trimmed on both sides, with core IP and DMCA misuse claims surviving.18The Fashion Law. SHEIN-Temu Legal Battle Collides as D.C. Court Combines Rival Lawsuits
Marquee Cases That Recently Closed
Three cases that drew heavy attention have now resolved, with results worth knowing.
Chanel v. What Goes Around Comes Around. On February 6, 2025, a jury found luxury reseller WGACA liable for trademark infringement, false association, and false advertising, awarding Chanel $4 million in statutory damages.19Katten. Chanel’s Legal Victory Sends a Clear Message: Authenticity Isn’t Just a Luxury, It’s the Law On February 26, the court entered a permanent injunction requiring WGACA to display disclaimers on every product page stating it is not affiliated with or authorized by Chanel, and to include serial number photographs in every listing.20Forensics Group. Chanel Wins Trademark Infringement Case With Expert Testimony WGACA has appealed to the Second Circuit.
Nike v. StockX. Nike’s trademark suit against the resale platform, filed in February 2022, settled on confidential terms on August 29, 2025. In March 2025, Judge Valerie Caproni had ruled on summary judgment that StockX was liable for selling 37 pairs of counterfeit Nike sneakers, while dismissing Nike’s claim that StockX’s “100% Authentic” guarantee constituted false advertising.21The Fashion Law. Nike v. StockX: A Timeline Behind the Trademark Lawsuit A jury trial on the remaining claims had been scheduled for October 2025.22SGB Online. Nike Inc. and StockX LLC Settle Lawsuit Over NFT Trademark Infringement
Lady Gaga’s “Mayhem” logo. On December 15, 2025, U.S. District Judge Fernando M. Olguin denied surf apparel company Lost International’s request for a preliminary injunction blocking Gaga’s use of the “Mayhem” logo. Applying the Rogers test under the Lanham Act, the court found the mark artistically relevant to Gaga’s work and not misleading as to the surf brand’s involvement.23ASI Central. Judge Rules in Favor of Lady Gaga Over Mayhem Trademark Dispute Lost International, which filed its $100 million suit in March 2025, said it intends to continue the fight; the case remains active since the injunction denial was not a final ruling on the merits.24AFS Law. Mayhem in the Marketplace: Judge Denies Injunction in Lady Gaga Trademark Dispute
Saks Global Bankruptcy
The biggest financial event in fashion retail landed on January 13, 2026, when Saks Global, parent of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, filed Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas after missing an interest payment to bondholders in December 2025.25CNN. Saks Global Files for Bankruptcy The company listed assets and debts each between $1 billion and $10 billion and more than 10,000 creditors. Chanel was owed $136 million and Kering (parent of Gucci and Balenciaga) nearly $60 million among the largest unsecured creditors.26WWD. Saks Global Bankruptcy Creditors Include Christian Louboutin and Capri
The collapse followed Saks Global’s $2.65 billion acquisition of Neiman Marcus in 2024, which left the combined company with a crushing debt load. Vendors had already pulled back over non-payment and 90-day payment terms, driving inventory gaps and lost revenue. The company secured $1.75 billion in financing to fund operations during restructuring and expects to emerge later in 2026 under new CEO Geoffroy van Raemdonck.27CNBC. Saks Global Files for Bankruptcy Protection
Greenwashing and False Advertising
Sustainability claims remain a litigation magnet. Companies including Nike, Lululemon, H&M, Canada Goose, Gucci, and Allbirds have faced class actions alleging that their products were falsely marketed as sustainable, recycled, or low-carbon.28Truth in Advertising. By the Numbers: Greenwashing Class-Action Lawsuits Federal courts have dismissed cases against Allbirds, H&M, Lululemon, and Nike, but others survive. A proposed class action in the Southern District of New York alleges H&M falsified environmental scorecard data and misrepresented products in its “Conscious Collection” as sustainable despite containing high percentages of synthetic materials.29The Fashion Law. H&M Is Being Sued Over Misleading Sustainability Marketing
Enforcement is intensifying abroad. In the UK, the Competition and Markets Authority can now impose fines of up to 10% of global turnover for consumer law breaches, including greenwashing, under the Digital Markets, Competition and Consumers Act 2024, with sector-specific guidance for fashion retailers issued in September 2024.30White & Case. Greenwashing Risk and the Fashion Industry: A Snapshot of Legal Developments
California’s Textile Producer Responsibility Deadline
A compliance deadline is reshaping how fashion brands operate in the largest U.S. consumer market. Under California’s Responsible Textile Recovery Act of 2024 (SB 707), any company that places apparel and textile products on the California market and has more than $1 million in annual global turnover must join an approved Producer Responsibility Organization by July 1, 2026. CalRecycle selected Landbell USA as the PRO in late February 2026.31Anthesis Group. SB 707: California’s Textile EPR Law Explained The PRO will administer a statewide system for collecting, sorting, repairing, and recycling textiles, funded by producer fees, and non-compliance can bring civil penalties of up to $50,000 per day. Full program rollout is expected by July 2030, and the law applies to e-commerce and direct-to-consumer businesses even without a physical California presence.32Sidley Austin. California’s Textile EPR Law: Key 2026 Milestones and Upcoming Producer Deadlines