Enigma Software Group USA, LLC v. Malwarebytes Inc.
260 F. Supp. 3d 401
S.D.N.Y.2017Background
- Enigma Software (Florida LLC) develops SpyHunter; Malwarebytes (Delaware corp., headquartered in Northern District of California) develops MBAM and altered its PUP (Potentially Unwanted Program) detection on October 5, 2016 to identify SpyHunter and RegHunter as PUPs, quarantining or blocking them on users’ PCs.
- Enigma alleges Malwarebytes acted in bad faith to harm Enigma’s business and reputation (Lanham Act false advertising and New York tort claims), and that the changes occurred shortly before Malwarebytes’ subpoena response deadline in related litigation involving Bleeping Computer.
- Fewer than 7% of affected consumers are alleged to reside in the Southern District of New York; most relevant Malwarebytes witnesses and documents are in California.
- Malwarebytes moved to dismiss for lack of personal jurisdiction and for failure to state a claim, or alternatively to transfer venue to the Northern District of California under 28 U.S.C. § 1404(a).
- The Court found venue proper in the Northern District of California, applied the § 1404(a) multi-factor test, and granted transfer to the Northern District of California; the Court declined to rule on the pending 12(b)(2) and 12(b)(6) motions and other ancillary motions (judicial notice, strike, supplemental pleading).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether transfer to Northern District of California is appropriate under 28 U.S.C. § 1404(a) | Enigma chose S.D.N.Y.; related prior litigation (against Bleeping) justified New York forum and plaintiffs choice deserves deference | Northern District of California is more convenient for witnesses, parties, locus of operative facts; most key witnesses, operations, and documents are in California | Transfer granted; factors (witness convenience, locus of operative facts, party convenience) favor transfer and outweigh plaintiff's forum choice |
| Whether the Court has personal jurisdiction over Malwarebytes in S.D.N.Y. (Rule 12(b)(2)) | Enigma alleged contacts sufficient to establish prima facie jurisdiction based on effects and sales | Malwarebytes disputed jurisdiction; argued principal place of business is California and no sufficient ties to New York | Court declined to decide jurisdiction after granting transfer; transferee court may address it |
| Whether the FAC states claims under Rule 12(b)(6) (Lanham Act and New York-law claims) | Enigma alleges false identification of SpyHunter as PUP and resulting reputational and economic harms | Malwarebytes argued the FAC fails to plead plausibly actionable misrepresentation/interference | Court did not decide merits of 12(b)(6) motion; left to transferee court |
| Whether ancillary motions (judicial notice, motion to strike, leave to supplement) should be resolved now | Enigma opposed judicial notice and moved to strike; sought leave to supplement FAC | Malwarebytes sought judicial notice and opposed strike/supplement | Court declined to rule on these motions and left them to the transferee court |
Key Cases Cited
- Everlast World’s Boxing Headquarters Corp. v. Ringside, Inc., 928 F. Supp. 2d 735 (S.D.N.Y. 2013) (§ 1404 transfer framework and factors)
- Filmline (Cross-Country) Prods., Inc. v. United Artists Corp., 866 F.2d 513 (2d Cir. 1989) (importance of witness convenience in transfer analysis)
- Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (paradigmatic bases for general jurisdiction over corporations)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard for plausibility under Rule 12(b)(6))
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (nonconclusory factual allegations required to survive Rule 12(b)(6))
- Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81 (2d Cir. 2013) (prima facie jurisdictional showing on pleadings before discovery)