Lopez, who finished second to Kei Nishikori at last year's event, was bounced by Karlovic 7-6 (7-2), 6-4 at the Racquet Club of Memphis.
In other action, No. 4 seed Yen-Hsun Lu of Taiwan notched a 3-6, 6-3, 6-3 comeback win over American qualifier Denis Kudla, and Alex Kuznetsov of the United States upended No. 8 seed Mikhail Kukushkin of Kazakhstan 2-6, 6-3, 7-6 (7-1).
Lytro unveils camera that can focus a photo after shooting it
Yosemite climber falls 30 feet, suffers major injuries