Procurement Manager

Shein v Temu: when are online marketplaces liable for copyright infringement? Back in August, the online marketplace Temu was found to be not liable to Shein for copyright infringement in relation to product photographs appearing in listings on its UK site. Shein has recently been granted permission to appeal aspects of the High Court's decision, adding a fresh chapter to the Shein v Temu saga. In the meantime, the High Court's decision offers useful guidance on when an online marketplace will be liable for copyright infringement in content uploaded by its users. The judgment also covers Chinese law, supply-chain arrangements, contractual agreements and the assignment of copyright, but this article focuses on the key points for marketplace operators and rights holders, as they currently stand. Background The dispute between two competing online fashion businesses arose after Shein suppliers began selling excess stock through Temu stores. Shein sued Temu's UK operator, Whaleco, alleging that 2,559 Temu clothing listings infringed its copyright because they used photographs taken from Shein's website. Temu denied infringement. In the alternative, it argued that the 'hosting defence' would protect it from liability for damages. Temu also counterclaimed for damages under a cross-undertaking given by Shein in relation to listings removed pursuant to interim injunctions. It separately brought a competition law counterclaim, which is being heard by the Competition Appeal Tribunal in March 2027. The decision To keep the trial manageable, liability was considered by reference to a sample of 20 product listings. By the time of trial, Shein had abandoned its claims in relation to 15 of those samples, and Temu no longer disputed Shein's ownership of works created by four employees. The remaining ownership dispute concerned the supplier photograph for a "Strawberry Nightdress". The Court found that, when Shein added the supplier photographs to its claim, it had not established the chain of title and did not know what rights it held in those works. In relation to the Strawberry Nightdress photograph, Shein initially had only a non-exclusive licence to use the photograph. It subsequently acquired copyright title and sufficient rights to pursue the claim through agreements entered into in June 2024. The Court nevertheless rejected Temu's argument that Shein's pursuit of the supplier claim was an abuse of process. That required actual knowledge, including 'blind-eye' knowledge, that Shein lacked title; what Shein ought to have known was not enough. Although Shein was aware of potential problems with its title to supplier works generally, the evidence did not establish a sufficiently specific suspicion that it lacked title to the Strawberry Nightdress photograph, or a deliberate decision to avoid confirming that position. Was there infringement? Shein argued that Temu was responsible for copyright infringement because it enabled users to view the photographs, made merchant-uploaded images available on its website and used them in connection with products offered through the platform. The Court ultimately found no infringement. Temu had consent to use the Strawberry Nightdress photograph from the photographer personally. The claims relating to the four employee works also failed. Temporary copies created when users browsed the website fell within the statutory exception for ordinary web browsing, and Temu had not authorised users' acts or reproduction or played an active role in relation to the disputed photographs. Importantly, its terms prohibited infringing content and it operated an IP complaint and a takedown process. Temu did not have the necessary knowledge that the photographs were infringing until Shein notified it (the threshold being in relation to the particular infringing works), following which the photographs were removed. Hosting defence Although it was not necessary to the outcome, the Court also considered whether Temu could rely on the 'hosting defence', which can protect online intermediaries from liability for content stored on behalf of users where, broadly, they play a sufficiently passive role, do not have the required knowledge of the infringement and act quickly to remove infringing content once notified. The Court found that Temu would have been entitled to rely on the defence. Although Temu provided services including product pricing, promotion and image-editing, it had not played an active role in relation to the photographs themselves. General awareness that infringement might occur on the platform was not enough: what mattered was knowledge of the specific infringing content. IP counterclaim Shein had given a cross-undertaking in damages when it obtained interim injunctions requiring Temu to take down product listings containing the disputed photographs. Temu counterclaimed for the losses caused by removing those listings. Shein argued that the court orders only required Temu to remove the photographs (not entire listings) and that Temu had failed to mitigate its loss. The Court disagreed: taking down whole listings was reasonable and inevitable, because Temu listings must include a photograph, and that the two-day removal deadline gave Temu no realistic opportunity to mitigate (for example, by obtaining replacement photographs). Permission to Appeal Shein has recently been granted permission to appeal the dismissal of its copyright infringement claim and the ruling in Temu's favour on its counterclaim under the cross-undertakings in damages in respect of photographs notified for removal. The hearing is due to be heard by 1 October 2027. The decision offers helpful guidance for online marketplaces and rights holders: Online marketplaces: general awareness of infringement risks is not enough; specific knowledge of the allegedly infringing content is critical. Platforms should have sensible IP controls in place, including clear terms and conditions and a takedown procedure, and act quickly when alerted to allegedly infringing content. Rights holders: should note several practical points before and during enforcement: * establish the chain of title and any relevant licences or consents and sort out any known issues before taking enforcement action; * make letters of claim precise and substantiated, so the recipient can easily identify infringements by reference to specific copyright works and specific listings; * where many works are involved, lead with the strongest examples; and * carefully assess the merits and potential financial consequences before seeking interim relief and giving a cross-undertaking in damages. If you wish to discuss any of the matters raised in this article, please contact Emily Roberts, Bethany Wheeler-Fowler, or your usual IP team contact.

South African e-commerce rethinks promotional strategies as competition for online shoppers intensifies. South Africa's online retail market is expected to reach R159 billion in 2026, growing about 22.5% annually. Yet this expansion is creating a new challenge for retailers: attracting consumers with internet access who have never completed an online purchase. With Amazon, Temu and Shein competing against established local businesses such as Takealot, Shoprite and Truworths, promotional strategies are changing. Discounts remain common, but retailers are also investing in subscription benefits, loyalty incentives, and improved digital purchasing processes. As Black Friday, seasonal, and holiday shopping approaches, the industry faces a question that goes beyond pricing: how can online businesses reach more South Africans instead of repeatedly competing for the same customers? Promotional offers extend beyond traditional e-commerce. Promotional strategies are no longer limited to online retailers selling physical products. Across South Africa's digital economy, businesses in sectors such as fintech, subscription services, food delivery, and online gaming use introductory incentives to attract new customers. These offers take different forms, including cashback, referral rewards, discounted subscriptions and account registration bonuses. The online gambling sector provides another example of how promotional models have expanded across digital services. As with e-commerce promotions, these incentives often come with eligibility conditions, spending requirements, or expiry dates that affect their real value. Some of these promotions include free spins or no-deposit options, allowing online casino operators to offer incentives without necessarily requiring an initial deposit. For instance, there are sites with offers of 120 free spins for real money in South Africa, illustrating how specific promotional rewards are used to distinguish offers in the online gambling market. The conditions attached to these promotions can vary, particularly wagering requirements, eligible games, and withdrawal rules. South Africa's retail growth is not reaching all internet users. The latest Online Retail in South Africa 2026 report, produced by World Wide Worx in partnership with Mastercard, Peach Payments and Ask Afrika, forecasts that online sales will account for 10% of national retail turnover during 2026. However, the research also identifies a considerable gap between internet usage and online purchasing. Based on 23,910 interviews conducted in 2025, the findings show that 79.1% of South African adults use the internet, but only 34.2% shop online. This means retailers are expanding sales in a market that still excludes a substantial share of connected consumers. Specno CEO Joshua Harvey has argued that retailers should reconsider how they attract customers, particularly ahead of major promotional periods such as Black Friday. Obstacles include high delivery charges, minimum-order requirements, payment concerns, mobile data costs, and limited local-language support. Addressing these problems could help retailers reach customers who currently remain outside the online market, rather than relying on promotions aimed at existing buyers. Competition among South African online retailers increasingly extends beyond individual product discounts. Subscription-based delivery benefits, faster fulfillment, and recurring savings are becoming part of how businesses encourage customers to order more often. For example, Shoprite's Xtra Savings Plus subscription offers unlimited qualifying deliveries for R99 per month. Amazon Prime, meanwhile, operates at R59 per month in South Africa. Both models demonstrate how businesses can structure recurring customer benefits around delivery convenience and ongoing access to services. The expansion of international platforms such as Shein, Temu and Amazon has also increased pressure on local retailers to reconsider fulfillment costs and delivery speed. Takealot, Truworths and The Foschini Group are among the established businesses competing for online spending as consumers gain access to a wider range of sellers. For retailers, the challenge involves balancing competitive prices with the costs of processing and delivering orders. A discounted product may attract attention, but extra delivery charges or long wait times can shape the final purchase decision, especially among consumers comparing several platforms. Payment uncertainty and mobile data costs remain barriers to online shopping. South Africa's expanding digital retail market still faces practical obstacles that promotional discounts can't solve. Payment uncertainty, expensive mobile data, and unreliable connectivity can prevent consumers from completing purchases even after they have selected products. Specno has identified the checkout process as an area that needs more attention, particularly for first-time shoppers using entry-level smartphones. Customers may encounter unexpected delivery charges, unclear payment confirmations, or interruptions that force them to restart transactions. Retailers can reduce these problems by displaying delivery availability and charges before the final checkout stage. Clear payment instructions and accessible customer assistance can also help consumers understand the status of interrupted transactions. Another improvement involves preserving shopping baskets when mobile connections fail. This allows customers to resume their purchases without selecting the same products again. Testing promotional campaigns under ordinary mobile conditions is equally important. A checkout system that performs well on office Wi-Fi may behave differently on slower connections, affecting how many customers complete transactions during high-demand sales periods. Customer reviews and targeted promotions gain influence over traditional advertising. Promotional strategies are also changing as South African retailers reassess what influences purchasing decisions. Industry findings indicate that customer reviews and promotions account for 55.3% of purchase decisions, compared with 5.4% for traditional brand advertising. The figures suggest that consumers place considerable weight on visible offers and feedback from previous customers. For online retailers, this increases the commercial importance of transparent product ratings, reliable customer reviews, and promotional information that customers can understand before checkout. Businesses are responding with more targeted discounts, loyalty rewards, and referral incentives rather than relying exclusively on broad advertising campaigns. These approaches let retailers distinguish between first-time buyers and regular shoppers. However, greater promotional activity also introduces costs. Discounts reduce margins, while cashback incentives and recurring membership benefits require businesses to account for the value of repeat transactions. With online retail sales forecast to reach R159 billion in 2026, South African businesses face increasing pressure to make promotional spending more effective while improving access for consumers who have not yet entered the digital shopping market.