A Raleigh artist’s design was stolen and sold as a knockoff on the popular shopping app Temu.
WRAL 5 On Your Side found this is a frequent complaint against the relatively new retailer. Our team also learned some of Temu’s business practices make counterfeits and other dangerous products difficult for U.S. officials to catch before they reach your home.
Stolen art
Liz Bradford’s artwork is featured in museums, parks, books and magazines. She also has her own shop on Etsy that she runs out of her Raleigh home.
"I have stickers, fine art prints, mugs, T-shirts and everything I make in-house, by myself," Bradford said.
Over the holiday season, Bradford noticed her sales were down. Then, she got a message from a customer on Etsy that appeared to explain the slump.
"[She] said, ‘I just want to reach out to you and let you know that Temu is selling your art,’" Bradford said the Etsy customer told her.
The design that was stolen by a vendor and sold on Temu was one of Bradford’s best sellers, a "bird nerd" sticker. It was listed on Temu and included the same photographs and description Bradford used on her Etsy page, but it was being sold for less than $2 while Bradford sold it for $7.
"That one hit very hard," Bradford said. "People steal a lot of stuff online, but for someone with such a huge budget and reach to just blatantly take my product and photographs is very rage-inducing."
Copyright and trademark infringement complaints against Temu are happening enough that the Better Business Bureau recently put out an alert, directing people with these complaints to federal offices that enforce infringement rules.
How Temu operates
There’s another component to the way Temu operates that makes it difficult to catch these counterfeit goods. It’s called the de minimis threshold.
Usually, when a retailer imports its products to the U.S., it’s done in bulk. The retailer has to pay duties and their shipments go through detailed customs inspections.
However, an item that costs less than $800 does not get the same scrutiny. That’s the de minimis threshold.
Temu leverages this rule by sending packages individually, addressed directly to you. That avoids taxes and some inspections.
There are risks to you when you buy products that are shipped this way. U.S. Customs and Border Protection says an imported item that is not fully inspected could have dangerous ingredients or be hazardous.
In the last year, the Consumer Product Safety Commission has recalled two products sold by Temu because they don’t meet U.S. saety standards.
Customs and Border Protection says that generally, China, where Temu is based, is the primary source economy for counterfeit and pirated products with dangerous attributes.
Other risks could include baby formula or cosmetics with unknown ingredients, counterfeit prescriptions with harmful chemicals, toys that contain lead paint or lithium-ion batteries that could catch fire.
In fiscal year 2022, CBP says it processed 685 million de minimis shipments.
Nearly 25 million counterfeit goods were seized. The estimated manufacturer’s suggested retail price (MSRP) of the seized goods, had they been genuine, was nearly $3 billion.
What Temu is doing with the de minimis threshold isn’t illegal, but two bills were introduced by Congress in 2023 in an attempt to reform the policy.
Temu sent 5 On Your Side this statement on de minimis:
"Temu’s growth isn’t dependent on the de minimis policy. The primary drivers behind our rapid expansion and market acceptance are the supply-chain efficiencies and operational proficiencies we’ve cultivated over the years. We are open to and supportive of any policy adjustments made by legislators that align with consumer interests. We believe that as long as these policies are fair, they won’t influence the outcomes of competitive business dynamics. We also see such reforms as potential avenues to alleviate concerns among various stakeholders, fostering greater comprehension and emphasizing the significance of each player in the market ecosystem.
"Though Temu is a young company with just over a year under our belt, we’ve always prioritized following the rules and regulations. Our commitment to full compliance has been unwavering since our inception and underpins all of our business activities. Given that Temu’s parent company is valued at over $190 billion and has ample cash flow and financial strength, it doesn’t make sense for us to flout rules or cut corners, particularly when launching a new business. Such actions aren’t beneficial for the long-term growth of either the new business or the parent company. They don’t make short-term economic sense either."
Temu says it’s making changes
Temu did apologize to Bradford for what happened, but Bradford said the retail giant cut deeply into her business.
"I sold about 800 of these stickers the past year and Temu, however long it was up, sold about 2,000," she explained. "If any of that traffic would have gone my way … I think it definitely hurts me, financially."
Temu told Bradford they removed counterfeit copies of her artwork, but made no offer to compensate her for the money the company made off her design.
"It takes a lot of work to create a business selling art," Bradford said. "Lately, it’s just being ripped out slowly from under me."
WRAL 5 On Your Side started asking Temu questions about Bradford’s situation. The company replied with the following statement and said the commentary about updates to intellectual property (IP) rights has not been reported previously:
"Ms. Bradford lodged a complaint via our IP Portal on Dec. 28. The infringing item in question was taken down the very next day on Dec. 29 immediately after we verified her copyright ownership. We took the further step of adding her designs to our image library to help prevent future sale of pirated products. We have communicated to her our actions to safeguard her IP rights.
"Temu has been online for just over a year, and since our launch, we have paid close attention to feedback from brands and copyright owners, continuously upgrading our intellectual property protection system. In September last year, we upgraded from processing complaints via email to launching a dedicated IP protection portal for rights holders, to make it easier for them to submit and track their cases. Recently, we tested and launched a beta version of an improved brand protection center to facilitate more comprehensive coverage of similar designs and images.
"We have significantly expanded our IP protection team as our business has grown, leading to rapidly improving efficiency in the processing of complaints. Compared to our peers, we have significantly improved the speed of our takedown process, now resolving over 98% of takedown notices in just a few days, which is much faster than the industry average.
"The effectiveness of our all-round efforts to enhance IP protection is clearly demonstrated by the continuous decrease in both the absolute number of complaints and their proportion in relation to our total business volume.
"As we continuously improve the methods to safeguard intellectual property rights, we’ve observed that artists, unlike larger, traditional brand owners, encounter more difficulties in protecting their rights. Typically, these artists operate in small, individual studios and lack the extensive legal resources that big brands possess. They often don’t have enough copyright protection for their work beforehand. This gap can distract them from their creative pursuits, especially when they need to file complaints.
"With this in mind, we’ve been actively brainstorming. On one front, we aim to enhance our machine learning capabilities to more proactively identify and prevent the listing of products that might infringe on copyrights. On the other, we’re exploring ways to improve our current IP protection portal to offer more targeted support to artists, helping them more effectively defend their rights.
"To this end, we seek the help of journalists like yourself. We encourage you to inform us of any artist complaints, as we are eager to assist them and address their concerns. Our goal is to enrich their experience and safeguard their rights through meaningful dialogue. We recognize that supporting creators isn’t just about addressing their immediate needs; it’s also vital for the long-term growth and health of our platform.
"Ensuring robust protection for these independent creators and valuing their contributions is key to keeping our platform dynamic and appealing. This approach not only nurtures a space for creativity but also encourages more individuals to share their unique talents on our platform, integrating them into our expansive, global supply chain. This commitment underlines our dedication to fostering creativity and supporting small businesses."
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Raleigh artist's design stolen and sold as knockoff on Temu, retail app says it will make changes - WRAL News
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