Shopify Sues to Stop Merchant From Sending Bogus DMCA Takedown Notices

Defendant Zachary Lotz, who also goes by the aliases Lao Ganma and Sam Hill, “has repeatedly harassed, and continues to harass, Shopify merchants and Shopify itself through knowingly false allegations of copyright infringement,” alleged Shopify’s Digital Millennium Copyright Act complaint Monday (docket 1:23-cv-01254) in U.S. District Court for Western New York in Buffalo.

Shopify’s lawsuit seeks to halt Lotz’s bogus DMCA takedown notices “and hold him accountable for the damage he has caused,” said the complaint. The DMCA “immunizes online service providers from claims of copyright infringement based on materials uploaded to the services by users,” it said. The services must promptly remove allegedly infringing materials on receipt of DMCA takedown notices from the copyright holders, it said.

Where a takedown notice meets the statutory requirements, a service provider “must expeditiously remove alleged infringing content in order to claim the DMCA’s immunity,” said the complaint. “Service providers thus have strong incentives to promptly remove content identified in facially valid takedown notices,” it said.

Online services that receive takedown notices that they contend are incorrect “may file a prescribed counter notification and have the disputed content restored, but only after a two-week waiting period.” said the complaint. The DMCA’s notice and counter-notice approach, and especially the statute’s mandate of expeditious removal and delayed restoration of content, “has made the statute ripe for abuse,” it said.

Malicious actors like Lotz “can send takedown notices making bogus claims of infringement,” said the complaint. They thereby can secure the removal, at least temporarily, “of content to which they object or content with which they compete,” it said.

Congress was aware that takedown notices could be abused to secure the removal of “perfectly legitimate content,” said the complaint. That’s why it included a provision in the DMCA “authorizing those aggrieved by false notices to bring an action against the sender for damages,” it said. “This is such an action.”

9 Takedown Notices Sent

Lotz has sent Shopify at least nine DMCA takedown notices “littered with misrepresentations,” alleged the complaint. The notices claim that materials Shopify merchants have posted to their online stores “supposedly infringe his copyright,” it said.

But Lotz doesn’t actually “own any of the copyrights to which he claims ownership in these notices,” said the complaint. “Much, if not all, of the information Lotz has supplied in the notices are false,” it said. Lotz has submitted them to Shopify “as part of a scheme to harm competing Shopify merchants and Shopify itself,” it said.

As the host of millions of online storefronts from merchants all over the world, Shopify “receives thousands of DMCA takedown notices each month,” said the complaint. “In the vast majority of cases, when Shopify receives a notice that substantially complies with the requirements for a DMCA takedown notice, it promptly disables access to the allegedly infringing material,” it said.

Unscrupulous individuals “are increasingly seeking to exploit the DMCA takedown process for anti-competitive purposes or reasons of animus,” said the complaint. Lotz sent a host of fraudulent takedown notices to Shopify, targeting the stores of Shopify merchants who compete with his own Shopify store, ISupportJapan.com, it said. Lotz’s store sells anime-inspired clothing, it said.

But Lotz’s notices weren’t intended to address “actual infringement of copyrights he actually owns,” said the complaint. Lotz instead “weaponized” the DMCA takedown process to cause Shopify to remove other merchants’ rival products from the platform, it said. To make matters worse, Lotz “perpetrated this scheme during the busiest shopping week of the year in an effort to cause the greatest amount of harm to other businesses, and reap for himself the greatest advantage,” it said.

Black Friday Misconduct

Lotz uses “fake identities” to create Shopify accounts. said the complaint. He created one under the alias Lao Ganma on Nov. 22, the day before Thanksgiving. He created another, under the name Sam Hill, on Nov. 24, Black Friday, it said. After creating those accounts, Lotz accessed the Shopify webform and used it to submit DMCA takedown notices to Shopify, “attesting that materials posted by merchants to Shopify’s platform violated his copyrights,” it said.

But Lotz’s bogus takedown notices “were rife with misrepresentations,” said the complaint. On Nov. 28, one of the targeted merchants contacted Shopify and informed it of Lotz’s misconduct, it said. Through an investigation, Shopify determined that Lotz “was the real person responsible” for sending the false takedown notices through the Lao Ganma and Sam Hill accounts, it said.

While Lotz knew the assertions in his takedown notices were false when he made them, “Shopify did not,” said the complaint. Before it learned of Lotz’s scheme, Shopify “processed many of his takedown notices consistent with the DMCA, removing the allegedly infringing content and assessing strikes to the accused merchants,” it said. “Based on the notices, Shopify removed dozens of products from its platform, albeit temporarily.”

Those efforts cost Shopify tens of thousands of dollars “in personnel time and resources,” said the complaint. “The loss of goodwill that Shopify suffered from penalizing innocent merchants cannot be quantified,” it said. It seeks compensatory damages, plus preliminary and permanent injunctive relief, it said.

Efforts to reach Lotz for comment Tuesday were unsuccessful. A visit Tuesday morning to his online Shopify store, ISupportJapan.com, returned the message that the store was “unavailable.”