* Shein loses bid to hold Temu liable for copyright

infringement

* Ruling follows first trial in global legal battle between

rivals

* Court says Temu was only 'intermediary' for merchants

* Temu's competition law case against Shein to be heard in

2027

(Recasts, adds detail from ruling, reaction in paragraphs 4-11)

LONDON, Aug 13 (Reuters) - Online fast-fashion platform

Shein on Thursday lost its London lawsuit against rival Temu

over alleged copyright infringement, in a ruling that could be

beneficial for online marketplaces hosting third-party sellers.

The ruling, which comes as Shein aims for a more than $30

billion valuation in a Hong Kong initial public offering,

concerns the first round of the companies' London legal battle.

Temu's counterclaim that Shein broke competition law by tying

suppliers to exclusive agreements is due to go to trial next

year.

Shein had accused Temu of breaching its copyright "on an

industrial scale", arguing at a trial in May that Temu - owned

by PDD Holdings ( PDD ) - used photos of Shein's own-brand

clothing to "piggy-back" on a more established competitor.

Judge Kelyn Bacon rejected Shein's arguments that Temu

infringed Shein's copyright and said that, even if it had

infringed, Temu would not be liable.

Shein had initially argued that Temu reproduced Shein's

photos, but did not pursue that at the trial as Temu's servers

are outside the United Kingdom and any reproduction was outside

the UK, Bacon said in her ruling.

A Shein spokesperson said there was no dispute that Shein

owned the thousands of photos it had sued over and that they had

appeared on Temu's website.

"Yet despite copying on an industrial scale, it has avoided

liability in the UK simply because the servers supporting its UK

website happen to sit in Ireland," the spokesperson said. Temu

did not immediately comment.

FAST-FASHION RIVALS FACE OFF

The case is part of a global legal battle between Shein and

Temu, which have expanded rapidly in international markets with

low-cost clothing, accessories and gadgets.

In her written ruling, Bacon rejected the argument that Temu

authorised the infringement of Shein's copyright by merchants

who uploaded photos to its website, saying Temu "prohibits

merchants from uploading infringing content".

The judge also significantly ruled that, if there had been

copyright infringement, Temu could have relied on the so-called

hosting defence, because it was only an "intermediary" and did

not have the requisite knowledge of any infringement.

"In so far as any infringements could be established in this

case, Temu did not have either actual knowledge of the

infringements or awareness of facts or circumstances from which

the infringements would have been apparent," Bacon said.

She also upheld Temu's counterclaim, which sought damages

for having to remove listings when Shein obtained an injunction

in relation to images for which Shein did not own the copyright.