Shopify is waging a new copyright lawsuit against a “would be” competitor, which has allegedly engaged in the “wholesale copying” of the system that underlies its “enormously popular e-commerce service.” According to the complaint that it filed in a New York federal court on May 14, Shopify asserts that “unable to compete fairly with Shopify,” Shopline Commerce Pte. Ltd. and a number of related entities (“Shopline”) have “mimicked Shopify’s market-leading operations in many ways.” Specifically, Shopify claims that Shopline and co. are on the hook for copyright infringement in connection with their distribution of a “thinly-disguised knockoff” of its customizable e-commerce website template, Dawn, in the United States and around the world.
Setting the stage in the newly filed lawsuit, Ottawa-headquartered Shopify asserts that “central to [its] success is ‘Dawn,’” a computer program that enables merchants to “quickly launch a compelling online presence or to design their own unique store” in the form of a “highly customizable storefront.”
Singapore-headquartered Shopline – which announced its expansion into the U.S. market in March 2024 – similarly provides merchants the ability to create customizable website templates for their e-commerce business via its “Seed” offering. However, in lieu of creating a system of its own, Shopify claims that Shopline copied the bulk of its Dawn system – from “the file structure and layout, file names, function names, [and] lines of code [to] even icon codes from Shopify’s original” Dawn offering.
Shopify alleges that “given Shopline’s pervasive copying of the Dawn code, the appearance of [the e-commerce] stores that Seed generates is often indistinguishable from the ones Dawn generates,” which would “not be [the case] if the programs were independently developed.”
“By copying, modifying, and distributing its Dawn knock-off in the United States, Shopline has engaged in widespread and willful infringement of Shopify’s copyrights in Dawn,” Shopify asserts, alleging that Shopline is also “contributorily liable for the infringement of its merchants, like Defendant Fosterry, [which] are using this stolen version of Dawn to power their operations and thereby copying, distributing and publicly displaying it throughout this country and the world.”
TLDR: “To create its infringing Seed theme, Shopline duplicated Shopify’s Dawn theme, and now distributes it to Shopline’s merchant customers, thereby resorting to theft to try and undercut Shopify’s competitive advantage,” according to Shopify.
With the foregoing in mind, Shopify alleges that Shopline and co. “have infringed the copyright in the Dawn theme by copying, distributing, and displaying the Seed theme which is an infringing derivative of Dawn.” (Shopify also claims that in addition to “infringing [its] code so as to mimic Shopify’s look, Shopline has actively sought to induce merchant customers to leave Shopify’s service for Shopline” – but does not make any interference-centric claims.)
In connection with the lawsuit, Shopify is seeking preliminary and permanent injunctive relief to bar Shopline “and all those in active concert with them from infringing Shopify’s copyrights in Dawn in any manner and in particular through the copying, modification, distribution or public display of the Seed theme or any derivative.” It is also seeking monetary damages.
THE BIGGER PICTURE: The case comes on the heels of something of a growing number of cases that have centered on allegations of website design copying – albeit most of those cases have been waged on trade dress infringement grounds based on the “total look and feel” of the allegedly knocked-off sites and have lacked copyright claims since the overall design of a website, itself, (as distinct from the code used to build it) generally falls outside of the scope of copyrightable subject matter.
Against this background, website – and app-based – trademark infringement claims (and the arguments made in response in the 1-800 Contacts and Daily Harvest cases, among others) are likely to keep surfacing in litigation in the future as companies continue to rely heavily on their e-commerce sites as a critical sales channel.
The case is Shopify Inc. v. Shopline Technology Holdings Pte. Ltd., et al., 1:24-cv-03691 (SDNY).
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