`BEDFORD, FREEMAN & WORTH PUBLISHING
`GROUP, LLC d/b/a MACMILLAN LEARNING;
`MACMILLAN HOLDINGS, LLC; CENGAGE
`LEARNING, INC.; ELSEVIER INC.; ELSEVIER
`B.V.; MCGRAW HILL LLC; and PEARSON
`EDUCATION, INC.,
`
`
`
` v.
`
`SHOPIFY INC.,
`
`
`
`
`Plaintiffs,
`
`Defendant.
`
`
`
`
`
`
`
`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 1 of 35 PageID# 1
`
`UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF VIRGINIA
`
`
`
`
`
`
`
`Case No.
`
`
`COMPLAINT AND JURY DEMAND
`
`
`
`Plaintiffs Bedford, Freeman & Worth Publishing Group, LLC d/b/a Macmillan Learning
`
`(“Macmillan Learning”), Cengage Learning, Inc. (“Cengage”), Elsevier Inc. (“Elsevier”),
`
`McGraw Hill LLC (“McGraw Hill”), and Pearson Education, Inc. (“Pearson”) (collectively, the
`
`“Publishers”), and Macmillan Holdings, LLC and Elsevier B.V. (collectively, with the Publishers,
`
`“Plaintiffs”), by and through their undersigned counsel, hereby file their Complaint against
`
`Shopify Inc. (“Shopify”), asserting claims of contributory and vicarious copyright infringement
`
`and contributory trademark infringement. Plaintiffs allege as follows on personal knowledge as
`
`to matters relating to themselves and on information and belief as to all other matters.
`
`INTRODUCTION
`
`1.
`
`The Publishers are leading educational publishers committed to creating,
`
`publishing, marketing, and selling high-quality copyrighted works that advance learning. Shopify
`
`is among the world’s largest providers of “one-stop” e-commerce solutions. Shopify provides its
`
`

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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 2 of 35 PageID# 2
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`subscribers—including known infringers—with a complete online business toolbox that includes,
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`among other things, storefront building, webhosting, product fulfillment, marketing, customer
`
`support, business expertise, business analytics, capital investment, and payment processing.
`
`2.
`
`Shopify plays host, enabler, and protector to a world of digital textbook pirates.
`
`Shopify has received detailed notices virtually every week for years identifying specific Shopify
`
`subscribers using Shopify’s services for piracy. Yet, Shopify routinely ignores illegal activity by
`
`the identified subscribers, putting its corporate finances over its legal obligations. Shopify knows
`that it is assisting subscribers to infringe, but it does not care.
`
`3.
`
`Shopify’s President describes Shopify’s one-strike policy towards infringement as
`
`follows: “If we see a store that is infringing on any type of intellectual property, either on a
`
`trademark or a copyright or anything of that nature, it’s gone. We don’t allow it.” Nilay Patel,
`
`How Shopify’s Network of Sellers Can Take On Amazon, The Verge (May 4, 2021, 9:30 AM),
`
`https://www.theverge.com/22417825/shopify-harley-finkelstein-interview-online-shopping-
`
`amazon-apple. Unfortunately, Shopify’s actions do not match its words. Shopify does not enforce
`
`its own policies, merely giving lip service to the protection of others’ intellectual property rights
`
`while profiting from the infringement of those rights.
`
`4.
`
`When Shopify
`
`learns of specific
`
`instances of copyright and
`
`trademark
`
`infringement, Shopify shirks its legal obligations by continuing to assist repeat infringers in their
`
`infringement. Shopify not only provides its repeat-infringer subscribers with the tools they need
`
`to run their illegal businesses, but also provides them with anonymity, a false veneer of legitimacy,
`
`and a safe haven from which to break the law. When Shopify becomes aware that one of its
`
`subscribers is using its services to infringe, Shopify must do something about it. Blindly ignoring
`
`piracy in order to make more money, as Shopify does here, is not a lawful option.
`
`
`
`2
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`5.
`
`Shopify has a Trust and Security team that is charged with the responsibility of
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`monitoring Shopify stores (i.e., websites) for compliance with its Acceptable Use Policy, which
`
`expressly prohibits copyright and trademark infringement. See Shopify Acceptable Use Policy ¶ 6
`
`(Apr. 15, 2020), https://www.shopify.com/legal/aup (“Acceptable Use Policy”). Shopify also
`
`claims to use artificial intelligence (“AI”) to monitor Shopify stores. Notwithstanding Shopify’s
`
`policies and claimed practices, Shopify routinely allows subscribers to sell infringing goods, even
`
`after Shopify knows that they are engaged in illegal behavior.
`
`6.
`
`Beginning in 2017, and continuing over the successive years, Plaintiffs and/or their
`
`authorized agents have regularly and repeatedly sent infringement notices to Shopify identifying
`
`specific subscribers engaged in piracy (“Pirate Subscribers”) by store name and store URL
`
`(“Notices”). These Notices identify representative examples of specific infringing works sold on
`
`the Pirate Subscribers’ websites (“Pirate Websites”) by providing the URL of the product pages
`
`advertising and selling such infringing works. The Notices also make clear that the Pirate
`
`Subscribers are not authorized to sell digital copies of the Publishers’ works on Shopify. The
`
`Notices identify hundreds of Pirate Websites and many thousands of specific instances of
`
`copyright and trademark infringement on Shopify. Yet, despite receiving Notice after Notice,
`
`Shopify has continued to assist known Pirate Subscribers to infringe.
`
`7.
`
`Without court intervention, Shopify will continue to facilitate and assist in the
`
`infringement of Plaintiffs’ copyright and trademark rights as complained of herein, causing
`
`significant financial damage and reputational harm. Accordingly, to address and remedy Shopify’s
`
`persistent and pervasive willful infringement, Plaintiffs bring this action.
`
`
`
`3
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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 4 of 35 PageID# 4
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`JURISDICTION AND VENUE
`
`8.
`
`The claims herein arise under the Copyright Act of 1976, 17 U.S.C. § 101 et seq.,
`
`as amended, and the Lanham Act, 15 U.S.C. § 1051 et seq., as amended. The Court thus has
`
`subject matter jurisdiction under 28 U.S.C. §§ 1331, 1338(a), and 15 U.S.C. § 1121(a).
`
`9.
`
`The Court has specific personal jurisdiction over Shopify pursuant to Va. Code
`
`Ann. § 8.01-328.1. Shopify has engaged in substantial activities purposefully directed at the
`
`Commonwealth of Virginia, and the claims asserted herein arise from and relate to those extensive
`
`activities and Shopify’s contacts therefrom. Shopify engages in a persistent course of conduct and
`
`derives substantial revenue from services rendered and products used in Virginia. Shopify
`
`regularly transacts and solicits business, knowingly and intentionally markets, and contracts to
`
`supply and supplies its services and products in Virginia, including services and products that
`
`relate to the infringement complained of herein. Shopify has caused tortious injury to Plaintiffs
`
`by acts of copyright and trademark infringement occurring within Virginia.
`
`10.
`
`In particular, and without limitation, Shopify operates and/or controls computer
`
`servers in Ashburn, Virginia to, among other things, store and deliver infringing digital copies of
`
`the Publishers’ textbooks, test banks, and/or ISMs, which often bear infringing copies of
`
`trademarks, to the consuming public. Accordingly, the infringing activities complained of herein
`
`occur in part through Shopify-controlled servers located in Virginia. Further, the Pirate Websites,
`
`which exist and operate solely on Shopify’s platform, and which Shopify monitors and controls,
`
`are highly interactive, continuously accessible to Virginia customers, and sell infringing digital
`
`content to Virginia consumers, among others. When that infringing content is sold on the Pirate
`
`Websites, it is often delivered from computers in Virginia. Plaintiffs’ injuries complained of
`
`herein arise out of these interactions.
`
`
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`4
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`11.
`
`Alternatively, the Court has personal jurisdiction over Shopify pursuant to Federal
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`Rule of Civil Procedure 4(k)(2)—the so-called “federal long-arm statute.” The copyright and
`
`trademark infringement claims herein arise under federal law. Shopify has extensive contacts with
`
`the United States as a whole. Shopify overwhelmingly directs its business into the United States,
`
`including with respect to the matters giving rise to this lawsuit. For instance, and without
`
`limitation:
`
`a. Shopify is a publicly traded company on the New York Stock Exchange, trading
`
`under the symbol “SHOP” since 2015.
`
`b. Shopify’s founder and CEO has acknowledged in the press that “Shopify was a
`
`company initially [built] for American customers.” Sriram Krishnan, Tobi Lütke,
`
`The Observer Effect (Dec. 16, 2020), https://www.theobservereffect.org/tobi.html.
`
`c. Shopify maintains a substantial U.S. workforce and regularly hires employees in
`
`the United States, including those with responsibility for Shopify’s handling of, and
`
`response to, infringement notices, as well as members of Shopify’s Trust and
`
`Security team. While Shopify has announced that its workforce will work remotely
`
`on a permanent basis with certain exceptions, it has employees in multiple states
`
`across the United States, including Arizona, California, Michigan, New York,
`
`Pennsylvania, and Virginia.
`
`d. Shopify’s in-house legal counsel includes numerous U.S. lawyers who are active
`
`members of various bars in the United States. Shopify’s newly appointed General
`
`Counsel is also located in Washington, D.C.
`
`e. Shopify lobbies the U.S. Congress, including with respect to the sale of counterfeit
`
`goods online, and has retained lobbyists in the United States for that purpose.
`
`
`
`5
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`f. Shopify uses data centers—including for hosting and distributing infringing
`
`content—in the United States, including in Virginia.
`
`g. According to Shopify’s securities filings, at the end of 2020, half of Shopify’s
`
`subscriber base was in the United States. See Shopify Inc., S.E.C. Form 40-F ex.
`
`1.1, at 11 (Feb. 17, 2021), https://d18rn0p25nwr6d.cloudfront.net/ CIK-
`
`0001594805/c3898d01-52b6-4d9b-87dc-21744e8ba90d.pdf. As set forth herein,
`
`Shopify’s subscriber base includes subscribers who use Shopify services to operate
`
`pirate stores and sell infringing content. No other country could claim a double-
`
`digit percentage of Shopify’s subscriber base, including Canada. See id. Similarly,
`
`Shopify obtained 68.4% and 66.7% of its revenues from the United States in 2019
`
`and 2020, respectively. See id., ex. 1.2, at 41. The countries or geographic
`
`locations outside of the United States with the next highest percentages of revenues
`
`in 2019 and 2020 were responsible for 7.7% and 8.7%, respectively. See id.
`
`h. Shopify has commercial relationships with a variety of U.S. companies that relate
`
`to the operation of the Pirate Websites, including Amazon Web Services, Google,
`
`Microsoft, Stripe, and others.
`
`i. Shopify also partners with Facebook, Instagram, and other social media outlets to
`
`enable Shopify subscribers in the United States, including Pirate Subscribers, to
`
`create and run marketing campaigns.
`
`j. Shopify has at least one physical location in the United States where Shopify
`
`subscribers, including the operators of Pirate Websites, can, among other things,
`
`make in-person appointments for customer support.
`
`
`
`6
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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 7 of 35 PageID# 7
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`k. Shopify owns at least three subsidiaries incorporated in the United States: Shopify
`
`LLC, Shopify Holdings (USA) Inc., and Shopify Payments (USA) Inc. In
`
`particular, Shopify Payments (USA) Inc. handles payment processing for U.S.
`
`subscribers, including pirates, who are located in the United States and use Shopify
`
`Payments.
`
`12.
`
`The injuries suffered by each of the Plaintiffs arise out of Shopify’s contacts with
`
`the United States, which include Shopify distributing infringing copies of the Publishers’
`
`textbooks, test banks, and ISMs, including the Works, to consumers throughout the United States,
`
`and promoting, maintaining, monitoring, and supporting websites on Shopify, including Pirate
`
`Websites, that sell such content and use in commerce infringing copies of the Marks. Plaintiffs
`
`suffer the effects of this infringement across the United States.
`
`13.
`
`Venue is proper under 28 U.S.C. §§ 1391(b) and 1400(a) because a substantial part
`
`of the acts of infringement and other events and omissions complained of herein occur, or have
`
`occurred, in this District, and this is a District in which Shopify may be found.
`
`THE PARTIES
`
`14. Macmillan Learning is a New York limited liability company with its principal
`
`place of business in New York, New York. Macmillan Learning is a wholly owned subsidiary of
`
`Macmillan Holdings, LLC. Macmillan Learning asserts copyright claims herein.
`
`15. Macmillan Holdings, LLC is a New York limited liability company with its
`
`principal place of business in New York, New York. Macmillan Holdings, LLC is a holding
`
`company and the parent company of Macmillan Learning. Macmillan Holdings, LLC asserts a
`
`trademark claim herein.
`
`
`
`7
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`

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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 8 of 35 PageID# 8
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`16.
`
`Cengage is a Delaware corporation with its principal place of business in Boston,
`
`Massachusetts. Cengage asserts copyright and trademark claims herein.
`
`17.
`
`Elsevier is a Delaware corporation with its principal place of business in New York,
`
`New York. Elsevier asserts copyright and trademark claims herein.
`
`18.
`
`Elsevier B.V. is a corporation organized under the laws of the Netherlands with its
`
`registered office in Amsterdam. Elsevier and Elsevier B.V. are affiliated companies that share a
`
`parent company. Elsevier B.V. asserts a trademark infringement claim herein.
`
`19. McGraw Hill is a Delaware limited liability company with its principal place of
`
`business in New York, New York. McGraw Hill asserts copyright and trademark claims herein.
`
`20.
`
`Pearson is a Delaware corporation with its principal place of business in Hoboken,
`
`New Jersey. Pearson asserts copyright and trademark claims herein.
`
`21.
`
`Shopify is a Canadian corporation, with its headquarters in Ottawa, Canada.
`
`PLAINTIFFS’ COPYRIGHTS AND TRADEMARKS AND THEIR BUSINESSES
`
`22.
`
`The Publishers work with authors who are experts in their fields to create and
`
`publish valuable, highly regarded, and quality educational textbooks. The Publishers and their
`
`respective authors engage in an ongoing creative process, collaborating closely to select, plan,
`
`create, write, edit, organize, and arrange the content within each of their textbooks. The Publishers
`
`and their respective authors also actively review and update the content based on their expertise,
`
`research, and analysis, and the needs of the scholastic community.
`
`23.
`
`The Publishers’ publications include physical and digital textbooks that are widely
`
`available for sale in the United States. The Publishers’ textbooks are sold through direct sales
`
`channels and via third-party distributors and stores, including through online sales. The
`
`Publishers’ textbooks are among the most popular and widely used titles in their fields. The
`
`
`
`8
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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 9 of 35 PageID# 9
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`Publishers invest significant time and monies into publishing their textbooks, including in content
`
`creation and in the support, advertisement, marketing, and promotion of their textbooks in the
`
`United States. The Publishers’ textbooks contain copyright notice pages pursuant to 17 U.S.C.
`
`§ 401.
`
`24.
`
`The Publishers also publish test banks and instructors’ solutions manuals (“ISMs”),
`
`which are important supplemental materials to textbooks. Test banks are sets of questions (and,
`
`in some instances, corresponding answers) to be used by the professor or instructor who assigned
`
`the textbook for his or her course. ISMs are guides that provide answers and solutions to questions
`
`contained within the textbook. Professors and instructors use these supplemental materials to
`
`create lesson plans, homework assignments, and exams, and for grading purposes. Accordingly,
`
`to preserve their pedagogical value, these supplemental materials are not generally distributed to
`
`the public.
`
`25.
`
`Test banks and ISMs are tailored to the pedagogical approach of the textbooks to
`
`which they correspond. Test banks and ISMs contain additional protected expression beyond what
`
`is in the textbook. Myriad creative efforts go into creating and selecting questions, whether for
`
`inclusion in the textbook or its corresponding test bank, and into creating the answers and solutions
`
`in the test banks and ISMs. Countless decisions are made concerning wording, examples,
`
`approach, depth, and other substantive details.
`
`26.
`
`The Publishers’ works are published under trademarks that are well-known and
`
`highly respected. The trademarks and the goodwill of the businesses associated with them have
`
`become associated in the public mind with Plaintiffs’ rich histories and reputations for quality in
`
`the publishing industry. Plaintiffs and their predecessors have invested decades of effort in
`
`building a trusted reputation in the publishing industry, which consumers associate with the
`
`
`
`9
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`

`

`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 10 of 35 PageID# 10
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`Publishers, their works, and the trademarks under which these works are published and educational
`
`products and services are provided.
`
`27.
`
`The Publishers are the copyright owners of, or the owners of exclusive rights under
`
`copyright in, the works or derivative works, consisting of textbooks, test banks, and ISMs,
`
`described in Exhibit A hereto (the “Works”). The Works are registered with the U.S. Copyright
`
`Office. The thousands of Works described in Exhibit A constitute a non-exhaustive, representative
`
`list of textbooks, test banks, and ISMs infringed because of Shopify’s infringing activities
`
`complained of herein.
`
`28. Macmillan Holdings, LLC, Cengage, Elsevier, Elsevier B.V., McGraw Hill, and
`
`Pearson (the “Trademark Plaintiffs”) are the registrants under 15 U.S.C. § 1127 of the trademarks
`
`and service marks described in Exhibit B (the “Marks”). The Marks are duly registered on the
`
`Principal Register of the U.S. Patent and Trademark Office. The Marks are distinctive indications
`
`of origin and may also be incontestable under 15 U.S.C. § 1065. The Marks described in Exhibit
`
`B constitute a non-exhaustive list of trademarks infringed because of Shopify’s infringing
`
`activities complained of herein.
`
`SHOPIFY AND ITS INFRINGING ACTIVITIES
`
`29.
`
`Shopify is a paid subscription ecommerce service that enables and assists
`
`individuals and companies to set up online stores to sell products. Shopify acts as a “one-stop
`
`shop” for online sellers, including the Pirate Subscribers, to run their businesses. Shopify provides
`
`these sellers with an online storefront, a payment processor, a front and back office, a customer
`
`service team, and a marketing headquarters, all in one.
`
`30.
`
`Shopify advertises that it is the “platform commerce is built on.” Shopify,
`
`https://www.shopify.com (last visited Nov. 30, 2021). Shopify tells sellers that it “gives [them]
`
`
`
`10
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`

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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 11 of 35 PageID# 11
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`everything [they] need to run a successful online store”; they can take advantage of Shopify’s free
`
`trial and “[s]tart an online retail business today” (for as low as “$1 a day”); and, with Shopify, they
`
`can “[c]reate an ecommerce website backed by powerful tools that help [them] find customers,
`
`drive sales, and manage [their] day-to-day.” Id.; Shopify Tour, https://www.shopify.com/tour (last
`
`visited Nov. 30, 2021).
`
`31.
`
`Shopify provides its subscribers, including the Pirate Subscribers, with a
`
`comprehensive platform to manage their businesses and customers across multiple sales channels,
`
`which enables them to manage products and inventory, process orders and payments, fulfill and
`
`deliver orders, connect with customers, and leverage analytics and reporting, all from one
`
`integrated system.
`
`32.
`
`For instance, many Shopify subscribers, including Pirate Subscribers, use Shopify’s
`
`website-building tools and templates to create their online stores, and use Shopify’s content
`
`management system to develop and display the product pages that advertise and describe their
`
`products, including infringing copies of the Works. Shopify assists subscribers in finding and
`
`selling to customers by providing a marketing platform with search engine optimization, online
`
`advertising assistance, analytics, reporting, and other tools. Shopify provides its merchants with a
`
`system for effectuating and processing orders, including by storing and sending digital files and,
`
`in the case of Pirate Subscribers, infringing digital files. In doing this, Shopify often reproduces
`
`and distributes infringing copies of the Works. Shopify also provides payment processing services,
`
`either through Shopify’s system (Shopify Payments) or a variety of third-party payment gateways.
`
`In addition, Shopify offers extensive customer support to its subscribers, including via one-on-one
`
`communications.
`
`
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`11
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`33.
`
`Shopify also serves as the webhost for the Pirate Websites. Indeed, “[u]nlimited
`
`web hosting, worldwide” is included with every Shopify plan. Shopify Website Hosting,
`
`https://www.shopify.com/website/hosting (last visited Nov. 30, 2021). Shopify tells sellers that,
`
`on its platform, there is “[n]othing to set up”: “We set up and host your ecommerce website and
`
`also
`
`take
`
`care
`
`of
`
`all
`
`software
`
`upgrades.”
`
` Shopify Ecommerce Hosting,
`
`https://www.shopify.com/tour/ecommerce-hosting (last visited Nov. 30, 2021). Shopify provides
`
`servers that ensure its sellers’ websites are up and running with administrator, dashboard, content
`
`delivery, reporting, checkout, and other functions.
`
`34.
`
`Shopify actively encourages sellers to sell ebooks on Shopify. Shopify provides
`
`specific systems and applications to its subscribers for selling digital products, including digital
`
`copies of textbooks. Shopify promotes “[e]ducational products like ebooks” as one of the most
`
`“in demand” types of products to sell on its platform. Braveen Kumar, The Most Profitable Digital
`
`Products to Sell in 2021 (and How to Promote Them), Shopify Blog (Feb. 17, 2021),
`
`https://www.shopify.com/blog/digital-products#2. Shopify also markets to its subscribers that,
`
`with digital products, “[t]here’s no limit to how many products you can sell. No inventory. No
`
`manufacturers. No shipping or logistics. Just market the products. When a customer purchases a
`
`digital product, it’s delivered instantly, without your help.” Michael Keenan, Want to Make Money
`
`Online? Here Are 25 Easy Ways to Earn Money from Home, Shopify Blog (Oct. 8, 2021),
`
`https://www.shopify.com/blog/make-money-online. Yet, with respect to the Publishers and
`
`others, none of the Pirate Subscribers are authorized to copy or sell the digital copies of the
`
`textbooks, test banks, and ISMs that they are selling on Shopify. The Publishers have repeatedly
`
`given Shopify explicit notice of this fact.
`
`
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`12
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`35.
`
`Shopify assists the sale of “ebooks” that are PDF copies of the Publishers’
`
`textbooks, including copies that are missing important features of the legitimate digital textbooks,
`
`such as display and accessibility options. Further, although the Publishers often use Digital Rights
`
`Management or other digital security to protect their works, the Pirate Subscribers unlawfully
`
`circumvent these protections and, using Shopify, market and sell the infringing files with no way
`
`to prevent their downstream dissemination.
`
`36.
`
`Shopify claims that it “supports the protection of intellectual property and asks
`
`Shopify merchants to do the same.” Shopify Terms of Service ¶ 20 (Oct. 12, 2021),
`
`https://www.shopify.com/legal/terms (“Terms of Service”). Shopify also claims that upon receipt
`
`of notices of infringement, “we may remove or disable access to the [m]aterials.” Id.
`
`37.
`
`However, in practice, Shopify’s response to notices of infringement shows that
`
`Shopify does not follow its own policies or the law. Shopify routinely fails to act on notices and
`
`terminate Pirate Subscribers and instead routinely continues to provide its comprehensive services
`
`to known repeat infringers. Shopify assists and profits from the online sale of infringing copies of
`
`the Works by the Pirate Subscribers, who it knows are using Shopify’s services for infringement.
`
`Shopify furthers its business model—and bottom line—by enabling known repeat infringers in
`
`their continued infringement.
`
`Pirate Subscribers on Shopify
`
`38.
`
`Shopify assists, supports, and profits from numerous illegal websites on its platform
`
`that reproduce and sell infringing digital copies of the Works, many of which bear identical or
`
`substantially indistinguishable reproductions of the Marks. The objective of the Pirate Websites
`
`is to make money from infringement. The owners of those websites are not authorized to
`
`reproduce or distribute digital copies of the Publishers’ textbooks, test banks, or ISMs, including
`
`
`
`13
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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 14 of 35 PageID# 14
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`the Works, nor are they authorized to use the Marks in any way. Nonetheless, as anyone, including
`
`Shopify, can see from glancing at the Pirate Websites, such websites not only sell pirated digital
`
`copies of the Publishers’ textbooks, test banks, and ISMs—they are devoted to infringing conduct.
`
`39.
`
`The Pirate Websites, which depend on Shopify to operate and exist in whole or in
`
`part on Shopify’s computers or web servers, are highly interactive. Purchasers or prospective
`
`purchasers can interact with the Pirate Websites, including to communicate with the sellers via
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`Shopify’s tools, and, at the touch of a few keystrokes, purchase infringing copies of the Works.
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`The Pirate Websites receive a significant number of visitors from consumers and prospective
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`consumers located throughout the United States, including in the Commonwealth of Virginia.
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`40.
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`Shopify tools enable the creation and display of the product pages on the Pirate
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`Websites, which are designed to entice customers to buy the infringing products. The product
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`pages typically include images of the covers of the Publishers’ textbooks, which often display
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`unauthorized reproductions of the Marks, and which are used to suggest, falsely, that the infringing
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`products come from or are authorized or approved by Plaintiffs. The Pirate Subscribers use
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`Shopify tools to upload these images to their stores, and, as Shopify explains, there is “[n]o need
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`to worry about resizing or optimization - we do that for you.” Shopify Ecommerce Website,
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`https://www.shopify.com/tour/ecommerce-website (last visited Nov. 30, 2021). In addition, the
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`product pages often specifically tout that the pirated digital copies of the Works can be downloaded
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`or will be delivered instantly and that the files are compatible with any e-reader, tablet, or similar
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`device.
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`41.
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`The Pirate Subscribers also use Shopify tools to upload the infringing copies of the
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`Works to the Pirate Websites and do so via Shopify-controlled servers. The Pirate Subscribers can
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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 15 of 35 PageID# 15
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`also use Shopify tools to distribute the infringing files by enabling their direct download from the
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`Pirate Websites.
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`42.
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`Plaintiffs have purchased infringing copies of the Works, including those that bear
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`copies of the Marks, from many of the Pirate Websites. Plaintiffs made a number of these
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`purchases by direct digital download on the product page or checkout page. In these instances, the
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`infringing files were hosted on and transmitted to Plaintiffs from servers in Ashburn, Virginia.
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`43.
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`As described below, Shopify received repeated notices of infringement regarding
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`the Pirate Subscribers using its services to infringe the Works and the Marks. These notices gave
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`Shopify the specific identities of the Pirate Subscribers, referred to by their unique online storefront
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`name, and the URLs pointing to representative samples of their infringing products. Thus, at all
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`pertinent times, Shopify not only knew that the Pirate Subscribers were using its services to
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`illegally copy, upload, sell, and distribute digital copies of the Works and illegally use the Marks,
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`Shopify knew which specific subscribers were infringing.
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`44.
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`Yet Shopify persistently turned a blind eye toward the massive infringement.
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`Shopify condoned the illegal activity because it was popular with Shopify subscribers and acted
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`as a draw in attracting and retaining subscribers who pay a monthly subscription fee to Shopify.
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`Shopify subscribers, including Pirate Subscribers, also pay transaction fees or charges, including
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`those that constitute a percentage of each infringing sale. If Shopify prevents its repeat infringer
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`subscribers from using its services or makes its services less attractive for infringing uses, Shopify
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`will enroll fewer new subscribers, lose existing subscribers, and lose revenue. With each
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`additional infringing subscriber and each additional infringing sale, Shopify grows its revenues.
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`45.
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`Plaintiffs are not compensated for the illegal copying and sale of the Works on
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`Shopify. Such illegal sales displace the lawful acquisition of the Publishers’ textbooks. That harm
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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 16 of 35 PageID# 16
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`has a ripple effect impacting the authors of the Works as well as the Publishers’ ability to continue
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`to invest in their publications and the creation of new works and scholarly contributions that benefit
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`education as a whole. Further, the Pirate Subscribers advertise and sell infringing, digital copies
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`of the Publishers’ textbooks at a fraction of the price of the legitimate digital textbooks, thus
`diminishing their perceived value and resulting in lost sales.
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`46.
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`In addition, the Pirate Subscribers’ sale of infringing copies of the Publishers’ test
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`banks and ISMs encourages and facilitates academic cheating and undermines the integrity of the
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`educational process. Moreover, the unauthorized access to these supplemental materials on
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`Shopify compromises the value of the supplemental materials and, as a result, teaching
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`professionals’ adoption of the textbooks themselves.
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`47.
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`Plaintiffs also suffer reputational injury when the Marks are unlawfully used in
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`connection with the sale and offering for sale of illegitimate copies of the Works. Consumers who
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`see a copy of the Marks on infringing products or in connection with the sale and offering for sale
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`of the same are also likely to be confused and believe that the infringing products originate from
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`Plaintiffs and that Plaintiffs authorized their copying and distribution through the Pirate Websites,
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`which they did not.
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`Shopify Obstructs Submission of Infringement Notices
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`48.
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`Shopify imposes improper and unreasonable obstacles on rights owners who wish
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`to submit infringement notices to protect their intellectual property from piracy.
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`49.
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` Shopify has refused to process valid infringement notices that it receives at the
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`email address that it provided to the U.S. Copyright Office for its designated agent to receive
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`infringement notices pursuant to Digital Millennium Copyright Act (“DMCA”) requirements.
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`Shopify has rejected those notices and allowed them to fall into the abyss, even though they contain
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`Case 1:21-cv-01340-CMH-JFA Document 1 Filed 12/01/21 Page 17 of 35 PageID# 17
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`the information required for a notice to be effective under the law. Shopify concocts various
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`reasons that the notices are not “proper” when, in fact, they are val