The Custom Elements[1] and Shadow DOM[2] specifications have little to do with each other. The former is useful for defining new elements in HTML, along with properties and methods. The latter can be used to encapsulate the style/dom of that element's internals. So each technology is useful by itself and can be used standalone. When used together, that's when magic happens :)
[1]: http://w3c.github.io/webcomponents/spec/custom/ [2]: http://w3c.github.io/webcomponents/spec/shadow/