Shocking Fashion Lawsuits: Shein, Lululemon, and Chanel

Fashion lawsuits in recent years have reached well beyond ordinary knockoff disputes, pulling in racketeering statutes, federal consumer-protection enforcement, and multi-million-dollar fights over “dupes,” superfakes, fake reviews, and even pandemic-era health claims. The cases below are among the most consequential now shaping the industry.

Shein’s Racketeering Case Over Algorithmic Design Copying

On July 11, 2023, three independent designers — illustrator Krista Perry, Miracle Eye brand owner Larissa Martinez, and patch designer Jay Baron — sued Shein Distribution Corp. in the U.S. District Court for the Central District of California. They alleged Shein uses a secretive algorithm to identify trending independent designs and reproduce them without permission.¹²

Perry claimed Shein copied her “Make it Fun” graphic and a floral textile design. Martinez alleged the company replicated her copyrighted orange daisy overalls. Baron said Shein reproduced his “Trying My Best” embroidered patch, created in 2016 and copyrighted the following year. Perry was reportedly offered an informal $500 settlement over one design, a figure the plaintiffs cited as evidence of how cheaply the company valued creators’ work.²

What set the case apart was its legal theory. The plaintiffs invoked the Racketeer Influenced and Corrupt Organizations Act, arguing that Shein’s corporate structure — involving entities including Shein Distribution Corp., Roadget Business, and the China-based Zoetop Business Co. — functioned as a criminal enterprise that systematically committed copyright infringement and wire fraud as predicate racketeering acts.³ The complaint described the copying as part of Shein’s “organizational DNA.”⁴

On November 8, 2024, Judge Mark C. Scarsi denied Shein’s motion to dismiss the amended complaint, ruling that the designers had “viably alleged copyright infringement as a predicate act for their RICO claim.”⁵⁶ It was the first ruling to let a RICO claim built on fashion copyright infringement survive a motion to dismiss, and legal commentators flagged it as a possible roadmap for small designers who find traditional copyright litigation too expensive against well-funded defendants.⁷⁸⁹

The Perry case was not isolated. Since 2020, Shein has been involved in more than 50 U.S. federal lawsuits alleging copyright or trademark infringement, per Wall Street Journal reporting.² Plaintiffs include Levi Strauss, Ralph Lauren, Chrome Hearts, Oakley, Stussy, and the maker of Dr. Martens, alongside independent artists. Most cases resolve in about 5.8 months and are voluntarily dismissed after undisclosed settlements.¹⁰

Shein vs. Temu: Platform Rivals Weaponizing IP Enforcement

Shein’s legal battles extend to its chief rival. Shein and PDD Holdings-owned marketplace Temu have been in cross-litigation since late 2022, with the disputes consolidated before Judge Timothy J. Kelly in the U.S. District Court for the District of Columbia.¹¹

Temu sued first in December 2023, alleging Shein engaged in an “anticompetitive mafia-style scheme” through thousands of improper DMCA takedown notices, coercive supplier practices, and misrepresentations to the U.S. Copyright Office. Shein countersued in August 2024, alleging Temu facilitates counterfeiting, steals trade secrets, and controls sellers in ways that encourage infringement. A Temu spokesperson said Shein was “buried under its own mountain of IP lawsuits” and had “the nerve to fabricate accusations against others for the very misconduct they’re repeatedly sued for.”¹²

Both sides have had claims narrowed. In September 2025, the court dismissed Temu’s antitrust and trade secret claims but let its DMCA misuse, copyright infringement, and Copyright Office fraud claims proceed. In January 2026, the court dismissed PDD Holdings for lack of personal jurisdiction, tossed Shein’s trademark dilution and product disparagement theories, and allowed Shein’s core IP, trade secret, and false advertising claims to continue. The consolidated cases are now in discovery.¹¹

Lululemon vs. Costco and the Dupe-Culture Test Case

The rise of “dupe culture,” in which consumers openly seek affordable replicas of popular branded goods, has produced its own litigation wave. Lululemon’s suit against Costco is the leading example. Filed June 27, 2025, in the Central District of California, it alleges Costco sold products through Danskin, Jockey, Spyder, and its own Kirkland Signature label that copied features of Lululemon’s Scuba hoodies, Define jackets, and ABC pants.¹³

The claims span design patent infringement, trade dress infringement, trademark infringement (including the registered “SCUBA” mark), and violations of the Lanham Act and California unfair competition law. Lululemon argues that because private-label goods make up over a third of Costco’s sales, consumers seeing similar-looking apparel at Costco are likely to assume it was made under a licensing arrangement.¹⁴ Cited design elements include seam placement, pocket configurations, and curvilinear ornamental stitching lines.¹³

A partial settlement arrived on February 27, 2026. Lululemon, Costco, and manufacturer Jacques Moret Inc. resolved claims involving specific Danskin and Jockey outerwear, along with patent invalidity challenges Jacques Moret had raised against two Lululemon design patents. Active claims remain regarding other products, including the Spyder Women’s Yoga Jacket and the Kirkland Signature 5 Pocket Performance Pant. Court-ordered mediation must be completed by July 31, 2026. No injunctions are in place.¹³

Richemont vs. Malidani: Superfakes at Premium Prices

Counterfeiting looks different when the fakes themselves cost thousands. In July 2025, Richemont International, parent of Cartier and Van Cleef & Arpels, sued New York-based Malidani Jewelry Corp. in the Southern District of New York, alleging Malidani sells “superfake” jewelry mimicking iconic luxury designs at prices from $1,500 to $9,000.¹⁵

Targeted imitations include Cartier’s LOVE bracelet (priced at $2,800 by Malidani), the Juste un Clou collection ($3,900), and Van Cleef & Arpels’ Alhambra line ($3,900 to $6,000). Richemont alleges the copies are marketed as indistinguishable from originals and that a store representative encouraged customers to compare the knockoffs with authentic pieces to confirm the differences were “undetectable.” Richemont seeks up to $2 million in statutory damages per counterfeit mark, a permanent injunction, and disclosure of Malidani’s manufacturing and distribution networks.¹⁵ The case, before Judge Loretta A. Preska, is in active discovery with a protective order in place since November 2025. A jury demand has been filed.¹⁶

Chanel vs. The RealReal: Luxury Resale Under Fire

Chanel’s trademark suit against resale platform The RealReal, filed in 2018 in the Southern District of New York, originally included trademark infringement, counterfeiting, false advertising, and unfair competition claims. In a March 2020 ruling, Judge Vernon S. Broderick dismissed some claims but allowed trademark counterfeiting, false advertising, and common law unfair competition to proceed.¹⁷

The case has moved slowly. A March 5, 2026 settlement conference produced no resolution.¹⁸ Later that month, Judge Broderick dismissed The RealReal’s antitrust and tortious interference counterclaims as time-barred and denied Chanel’s motion to strike an “unclean hands” defense.¹⁹ Discovery, stayed since July 2023, resumed in March 2026, with filings as recent as June 2026.¹⁷

Sol de Janeiro vs. MCoBeauty: Dupes Reach the Beauty Aisle

The dupe phenomenon extends into beauty products. In November 2024, Brazilian-inspired body care brand Sol de Janeiro sued Australian company MCoBeauty in the Southern District of New York, alleging that MCoBeauty’s fragrance mists copy Sol de Janeiro’s packaging, color schemes, and marketing language, including claims that MCoBeauty products “smell exactly like” the originals.²⁰ The complaint alleges trade dress infringement under the Lanham Act and false advertising, including the claim that MCoBeauty’s influencer marketing violates FTC endorsement guidelines.²¹

MCoBeauty filed a motion to dismiss on January 27, 2026, arguing the trade dress elements Sol de Janeiro cites (bottle shape, font) are generic and functional, that its marketing is permissible puffery or fair use, and that Sol de Janeiro cannot show actual injury given its own reported revenue growth. As of mid-2026, the court has not ruled.²⁰

Deceptive Pricing and Fake Reviews

Not every fashion lawsuit is about design. Some of the most consequential cases involve how brands price and market their products.

Michael Kors Outlet Pricing Class Action

A class action filed in May 2023, McCall et al. v. Michael Kors (USA), Inc., alleged the company used inflated “reference” prices at its outlet stores to make discounts appear deeper than they were, offering what plaintiffs called “perpetual” limited-time sales. The suit was brought under California’s Unfair Competition Law, Consumers Legal Remedies Act, False Advertising Law, and Oregon’s Unlawful Trade Practices Act. A settlement valued at up to $2 million received preliminary approval from the Superior Court of California, County of San Diego, in November 2025, with final approval set for March 27, 2026. Eligible consumers who purchased from a Michael Kors outlet between May 2019 and November 2025 could receive a $30 merchandise certificate.²²

Fashion Nova’s FTC Enforcement

Fashion Nova has faced federal enforcement twice. A 2020 FTC case alleging failure to notify consumers of shipping delays and illegal substitution of gift cards for cash refunds produced a $9.3 million settlement.²³ In January 2022, the FTC announced a $4.2 million settlement over allegations that the company used third-party software to automatically post four- and five-star reviews while suppressing lower-rated reviews for manual approval, hiding hundreds of thousands of negative reviews from late 2015 through November 2019.²⁴ The FTC called it the agency’s first enforcement action of its kind. Fashion Nova did not admit or deny the allegations.

Lorna Jane and False COVID-19 Activewear Claims

Australian activewear brand Lorna Jane was ordered to pay AUD 5 million in penalties after marketing its “LJ Shield Activewear” as capable of eliminating COVID-19 and protecting wearers from the virus. The July 2020 campaign included the headline “Cure for the Spread of COVID-19? Lorna Jane Thinks So.”²⁵

The Australian Competition and Consumer Commission brought the case, and on July 23, 2021, the Federal Court of Australia ruled Lorna Jane had no scientific testing or evidence to support its claims. Justice Darryl Rangiah called the conduct “exploitative, predatory and potentially dangerous.” The court found the campaign was directed at a “high managerial level” by company director and Chief Creative Officer Lorna Jane Clarkson, who personally authorized and participated in the marketing. Proceedings against Clarkson individually were ultimately dismissed.²⁶²⁵

Why Fashion Designs Are So Hard to Protect

A thread runs through all of these cases: U.S. law gives surprisingly thin protection to fashion designs. Clothing is classified as a “useful article,” and under the Copyright Act, only design features that can be identified separately from a garment’s functional aspects are eligible for protection. A pattern printed on fabric can be copyrighted; the cut and shape of the dress generally cannot. The Supreme Court’s 2017 decision in Star Athletica, LLC v. Varsity Brands Inc. established a two-part test for separating protectable design elements from utilitarian ones, but legal experts note it has not produced a wave of new fashion copyright claims.²⁷

Legislative efforts to broaden protection, including the Design Piracy Prohibition Act and the Innovative Design Protection Act of 2012, have failed in Congress. Brands rely on a patchwork of trademark law, trade dress claims under the Lanham Act, and design patents. Trademark covers names and logos but not garment shape. Trade dress requires proving “secondary meaning,” that consumers associate a look with a specific brand, and fails if the design is functional. Design patents offer strong protection but are expensive and slow, impractical for fast fashion cycles.²⁸

Those gaps explain why plaintiffs reached for RICO against Shein, why Lululemon frames its Costco case around trade dress and design patents rather than copyright, and why many smaller designers, facing high litigation costs and limited legal tools, never file at all.

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The Fashion Law. Richemont Takes on Cartier Van Cleef and Arpels Superfakes in New Lawsuit
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