Understanding the Shopify Textbook Piracy Lawsuit

Last week, five major education publishers filed a lawsuit against Shopify alleging that the ecommerce service provider has enabled rampant commercial textbook piracy on its platform.

According to the publishers, which include Macmillan Learning, Cengage Learning, Elsevier, McGraw Hill and Pearson Education, they have sent more than 32,000 takedown notices to Shopify over allegations ebook piracy only for the company to throw up roadblocks to getting content removed and have the company fail to act against alleged repeat infringers.

According to the publishers, many pirate sites offer inexpensive PDF versions of their textbooks using Shopify’s platform. However, they allege that Shopify has failed to take adequate action against such sites and allowed them to run rampant over the past few years.

Shopify, for its part, has issued a statement saying that it takes intellectual property violations very seriously and has processed over 90% of its copyright and trademark reports within one business day. However, the publishers claim that is simply “lip service” and that the company’s responses to actual infringement are far too weak.

All totaled, the plaintiffs are seeking up to $150,000 for each infringed copyright and $2 million for each infringed trademark. The lawsuit lists some 3,400 copyrights, which raises the theoretical (though highly unlikely) maximum damages to $510 million on the copyright allegations alone.

Undoubtedly, this lawsuit is extremely important. It touches on several key issues of copyright and education (especially since the plaintiffs also accuse Shopify of playing host to test answers and other cheating guides). As such, it’s worth taking a few minutes to fully understand the allegations, the likely defenses to those allegations and why the publishers claim those defenses aren’t valid.

Understanding the Complaint and the DMCA

In the lawsuit, Shopify is not accused of operating any of the pirate sites themselves. Instead, they allege that the sites and their operators subscribe to Shopify services, which provide hosting, payment processing and more.

As such, the direct infringers in this case are the alleged pirate site operators. That is why the publishers are suing for contributory and vicarious copyright infringement, alleging that they aid in the direct infringement and willfully ignore or tolerate those infringements.

Similarly, they also assert contributory trademark infringement in regard to the book titles and other business marks that appear on the books.

This brings us to the largest obstacle the publishers will likely face in proving their case: The Digital Millennium Copyright Act (DMCA)

Normally, a host that provides a service to customers, like Shopify, would be protected under the DMCA. In short, the DMCA protects hosts from legal liability as long as they meet a few requirements. Those requirements include:

  1. Not have actual knowledge of infringement.
  2. Have a designated agent to receive notices of copyright infringement.
  3. The agent’s information must both be on the website and registered with the U.S. Copyright Office.
  4. When receiving such a notice, expeditiously removes or disables access to the work(s) in question.
  5. Has a policy for suspending the accounts of repeat infringers.

Shopify, according to their copyright and trademarks page, meets all of these requirements. They do not have direct knowledge of the infringements, they have a registered DMCA agent and, according to them, they respond quickly to notices of infringement.

However, the publishers feel differently and, to that end, they make a wide array of arguments as to why the DMCA should not protect Shopify.

The Publishers’ Arguments

In the complaint itself (PDF), the publishers acknowledge the DMCA but provide a lengthy list of reasons that, according to them, the DMCA should not apply.

Those reasons include:

  1. Allegations that Shopify has ignored or dismissed complete notices of copyright infringement by requesting extraneous information.
  2. Allegations that Shopify has failed to adequately remove or disable access to alleged infringing works.
  3. Allegations that Shopify has failed to take action against repeat infringers, including citing several specific examples.
  4. Allegations that Shopify made its DMCA contact information difficult to find on the site.
  5. Allegations that Shopify’s DMCA form is not publicly accessible and that users have to create an account with Shopify to use it.

In short, the publishers claim that Shopify pays only “lip service” to the DMCA and to enforcing copyright. They claim that the company is doing the bare minimum to comply with the law on paper, but failing to back up that compliance with adequate action.

As such, the publishers feel that the DMCA should not protect Shopify and that they should be held liable for at least some of the infringement that takes place on their service.

Why This Case is Important

This case is important for a variety of reasons, the biggest being that it examines an area that hasn’t gotten a great deal of attention from the courts: Exactly what are the responsibilities of a host under the DMCA?

The law seems to spell out those obligations clearly there is a great deal of vague wording. For example, the DMCA says that the host must make their DMCA agent’s information “accessible to the public” on its website, but what if it’s difficult to search for or behind signing up for a free account?

Likewise, the law requires hosts to have a policy for dealing with repeat infringers but gives little to no guidance on what that policy should be. Also, even though the law spells out the elements of a DMCA notice, many hosts have begun requiring additional information, is that legal?

The DMCA is a law from 1998 and, though other provisions of it have been analyzed regularly, the notice-and-takedown system has not. The internet has changed drastically, including how hosts use the DMCA, and this case may shed some light on those practices.

However, the allegations against Shopify go beyond pirated textbooks and include the sale of test banks, homework assignments and more. Publishers are asserting rights to those because they are often based on supplemental materials published with textbooks, but any shift here could impact schools and universities as they fight to keep these kinds of documents off the internet.

Bottom Line

In the end, this will be a case to watch. It will also be interesting to see what, if any, changes Shopify makes to their copyright policies due to the lawsuit.

Though the case could always be settled early, this one has the potential to be a major one for both the copyright sphere and the educational sphere. It represents a serious collision between those two worlds and could have major impacts in both.

While it is impossible to predict where a case is going to go or what the outcome will be, this is definitely one to watch whether you’re interested in the DMCA, improving academic integrity or just how the law impacts the internet as a whole.