A recent ruling in Washington, D.C. has dealt a blow to Temu’s bold lawsuit against Shein. The court dismissed key antitrust and trade-secret allegations on jurisdictional grounds, ruling that the disputed conduct occurred in China and thus could not be adjudicated in U.S. courts. Temu’s remaining claims now focus primarily on intellectual property and unfair competition. This development carries significant meaning for how competition laws and trade-secret statutes may be applied in globalized e-commerce, especially in the fast fashion sector.

Temu’s complaint accused Shein of monopolistic behavior in the ultra-fast fashion market and of misappropriating trade secrets to undercut its rival. Temu claimed that Shein coerced suppliers, locked exclusive agreements, and used aggressive tactics to block Temu’s entry. It also alleged that Shein’s use of the U.S. copyright system to issue mass takedown demands was part of an anticompetitive strategy. The court, however, held that Temu failed to establish proper U.S. jurisdiction over these claims, because the relevant acts and decisions occurred in China. The judge specifically dismissed the trade-secret claims and the antitrust counts tied to marketplace control. Meanwhile, Temu is allowed to maintain copyright and trademark claims, such as alleging sham takedown notices and infringement of promotional content. Reuters

From a competition law standpoint, the dismissal of the antitrust claims serves as a reminder that cross-border e-commerce disputes face serious jurisdictional hurdles. Even if a company’s conduct has downstream effects in U.S. markets, proving that such effects are sufficiently tied to U.S.-based decisions remains a challenge. The court’s ruling suggests that plaintiffs must carefully map the chain of decision-making to show domestic nexus, especially in industries where supply chains and platform control span multiple countries.

The dismissal of trade-secret claims likewise signals caution. Trade-secret protection generally requires that the misappropriation and unlawful use occur within a jurisdiction where trade-secret laws have remedy. If crucial acts—such as employee theft or server access—occur outside the U.S., asserting U.S. trade-secret causes may be blocked regardless of the harm felt in the U.S. market.

For Shein and similar global e-commerce players, the outcome strengthens the shield against sweeping liability in the U.S. for edge claims rooted in overseas operations. A company can now point to this case as precedent for geographic limits on trade-secret and antitrust liability, especially when alleging predatory tactics in supplier arrangements abroad.

For competitors, innovators, and designers, this decision underscores two key lessons. First, claiming antitrust or trade-secret violations is not enough — the plaintiff must demonstrate domestic acts and sufficient connection to U.S. law. Second, IP-based claims remain a potent weapon in competitive disputes. Temu’s ability to continue pursuing copyright misuse, trademark violation, and sham takedown allegations shows that courts are receptive to competition arguments wrapped in IP statutes.

In an industry notorious for design copying, supplier manipulation, and cutthroat tactics, the case reshuffles how parties will structure litigation strategies. Claims may increasingly lean on DMCA, copyright, counter-notice abuse, and trademark law rather than purely on antitrust or trade-secret frameworks. It also pressures fast-fashion rivals to audit their takedown practices and supply chain agreements to avoid exposure under U.S. unfair competition doctrines.

Moreover, for brands and designers operating globally, the case confirms the importance of protecting IP assets—copyrights, trademarks, and design registrations—as these may be the strongest means to push back against unfair competitive conduct in key markets.

If you are a designer, brand owner, or competitor in e-commerce or fashion seeking to navigate these complex intersections of competition, supply chain, and intellectual property law, the importance of expert counsel cannot be overstated.

Contact The Plus IP Firm today. Call Mark Terry at 786-443-7720 or email [email protected] to schedule a consultation. Our firm specializes in antitrust, trade-secret, and intellectual property litigation. We help clients develop precise strategies to enforce their rights or defend against global claims in the evolving legal landscape.