By Blake Brittain

July 1 (Reuters) - E-commerce company Shopify SHOP.TO has settled a lawsuit that accused a rival company of copying its software to build a competing platform.

Shopify and Shopline, a subsidiary of technology company JOYY Inc JOYY.O, in a filing in federal court in Manhattan on Tuesday asked a judge to bar the latter from distributing its software after the companies agreed to resolve the litigation.

The companies' joint court filing said that other terms of the settlement were confidential.

"Shopline copied our Dawn theme, rebranded it, and sold it against us," Shopify general counsel Jean Niehaus said in a statement. "We took them to court and they've been ordered to stop and to pay us. Open source is built on trust and we'll defend that every time someone treats it as a free pass to steal."

Spokespeople for Shopline did not immediately respond to a request for comment on Wednesday.

JOYY, which is headquartered in Singapore and focuses on social-media technology, acquired Shopline in 2022.

Shopify said in its 2024 lawsuit that Shopline copied its Dawn storefront template technology to power competing e-commerce services. It said that Dawn "forms the backbone of the way an e-commerce site appears and functions," and that Shopline's Seed software copied it "wholesale."

Shopline denied the allegations and argued that Dawn was not copyrightable because it was made from technologies that are "publicly available, widely known and routinely used across the web."

The case is Shopify Inc v. Shopline Technology Holdings Pte Ltd, U.S. District Court for the Southern District of New York, No. 1:24-cv-03691.

For Shopify: David Kramer of Wilson Sonsini Goodrich & Rosati

For Shopline: Celeste Butera of Lippes Mathias

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Shopify sues rival for copyright infringement over e-commerce platform