A federal court in California has pared back Brandy Melville’s lawsuit against Shein, but kept in play claims that target how the company operates and profits from its platform. The U.S. District Court for the Central District of California dismissed Brandy Melville’s trademark and unfair competition claims as preempted by copyright law, while declining to strike allegations supporting contributory and vicarious infringement. The result is a narrower case that still squarely puts at issue whether Shein’s role in presenting, promoting, and monetizing products – including those sold by third parties – can give rise to liability beyond direct acts of copying.
The Case in Brief: Bastiat USA, Inc., Brandy Melville’s U.S. IP holding company, filed suit against Shein in June 2025, accusing it of using Brandy Melville’s original product photos to market lookalike items. Bastiat characterizes this conduct as a broader “bait-and-switch” strategy, pointing to Shein’s alleged use of genuine images to promote non-genuine goods. Bastiat asserts claims for direct, contributory, and vicarious copyright infringement, as well as trademark infringement in the form of false designation of origin under the Lanham Act and unfair competition. It also targets Shein’s marketplace model, alleging that the company profits from both its own sales and third-party listings, including allegedly infringing products, through commissions.
Where the Case Gets Interesting
While the court dismissed Bastiat’s Lanham Act and unfair competition claims as preempted by the Copyright Act, it refused to strike allegations tied to false designation of origin from the contributory and vicarious copyright claims. The court found these allegations potentially relevant because they may be relevant to how Shein’s platform operates.
Bastiat claims that Shein used – or allowed others to use – Brandy Melville’s images in a way that suggested customers would receive the item depicted. The court found that these allegations are not “immaterial,” and may bear on elements of secondary liability, including: whether Shein knew about the infringement, materially contributed to it, had the ability to control it, and/or financially benefited from it. As the court put it, these questions are better resolved on a full factual record, not at the motion-to-dismiss stage. In other words, the way Shein presents and promotes products on its platform, including the use of branded imagery, may be relevant to determining liability.
Why This Matters for Platforms
The ruling highlights a growing pressure point for e-commerce platforms that operate as both retailer and marketplace. To state a claim for contributory infringement, a plaintiff must show that a defendant knew of infringing activity and materially contributed to it. For vicarious liability, the focus shifts to control and financial benefit. By allowing these claims to proceed, the court suggests that platform design and product presentation may factor into “material contribution,” the ability to control listings and sellers may support “supervisory authority,” and commission-based models may satisfy the “financial benefit” requirement.
Taken together, this may allow plaintiffs to argue that liability stems not just from individual infringing products, but from the structure and operation of the platform itself.
THE BOTTOM LINE: While the court dismissed Bastiat’s trademark and unfair competition claims, it preserved a distinct theory of liability: that Shein may be held liable for how infringing products are marketed, displayed, and monetized on its platform. That shifts the focus toward the mechanics of platform-driven retail – and whether those systems enable, amplify, or profit from infringement.
The case is Bastiat USA, Inc. v. Shein Distribution Corp. et al., 2:25-cv-05701 (C.D. Cal.).
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