Enigma Software Group USA v. Malwarebytes Inc.
946 F.3d 1040
| 9th Cir. | 2019Background:
- Enigma Software (plaintiff) and Malwarebytes (defendant) are competing vendors of anti‑malware/filtering software; Malwarebytes updated its PUP (Potentially Unwanted Program) criteria in late 2016 and began flagging Enigma’s SpyHunter and RegHunter as PUPs.
- Enigma alleges Malwarebytes’ reclassification quarantined Enigma’s downloads, harming sales and reputation, and that the reclassification was a pretext for anticompetitive conduct.
- Enigma sued asserting three New York state claims (G.B.L. § 349, tortious interference with business and contract) and a federal Lanham Act false advertising claim; case was transferred to N.D. Cal.
- The district court dismissed all claims under § 230(c)(2) of the CDA, relying on this court’s Zango decision that filtering software providers are immune for blocking material they deem “objectionable.”
- On appeal the Ninth Circuit majority reversed: it held § 230(c)(2)’s “otherwise objectionable” catchall does not shield filtering decisions motivated by anticompetitive animus, and the Lanham Act false‑advertising claim is not saved by § 230(e)(2)’s intellectual‑property exception because it does not itself involve an IP right.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 230(c)(2)’s “otherwise objectionable” immunizes blocking motivated by anticompetitive purpose | Enigma: § 230 does not protect blocking aimed at suppressing competition | Malwarebytes: the statute gives providers subjective, unreviewable discretion to block material they find objectionable | Held: § 230 immunity does not extend to blocking done for anticompetitive reasons; such motive defeats immunity at the pleading stage |
| Whether Zango requires courts to accept a provider’s labeling of content as “objectionable” without inquiry | Enigma: Zango did not adjudicate motive and does not bar review of anticompetitive intent | Malwarebytes: Zango establishes broad, effectively unbounded immunity for filtering providers | Held: Zango held only that filtering software is covered by § 230; it does not preclude courts from examining improper motives |
| Whether Enigma’s pleaded facts of anticompetitive animus are sufficient to survive a § 230 dismissal | Enigma: pleaded facts show motive and pretext sufficient to overcome immunity dismissal | Malwarebytes: asserted legitimate content‑based reasons (deceptive tactics) justify classification as PUPs | Held: Enigma’s allegations of anticompetitive animus are sufficient to survive dismissal and require further factual development |
| Whether § 230(e)(2) intellectual‑property exception removes § 230 immunity for Enigma’s Lanham Act false advertising claim | Enigma: Lanham Act is an IP statute, so the IP carve‑out applies | Malwarebytes: Enigma’s §1125 false advertising claim does not involve IP rights, so the exception does not apply | Held: The § 230(e)(2) exception covers claims actually pertaining to established IP rights (trademark, copyright, patent); it does not encompass Enigma’s false advertising claim, but that claim still survives because the alleged conduct is anticompetitive and not immunized |
Key Cases Cited
- Zango Inc. v. Kaspersky Lab, Inc., 568 F.3d 1169 (9th Cir. 2009) (holds filtering‑software providers are § 230 beneficiaries; concurrence warned against unbounded readings)
- Perfect 10 v. CCBill, LLC, 488 F.3d 1102 (9th Cir. 2007) (construes § 230(e)(2) narrowly; interpret ‘intellectual property’ limitation against expansive readings)
- Reno v. ACLU, 521 U.S. 844 (1997) (invalidating a CDA provision; context on Congress’s internet regulation choices)
- Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) (explains that § 1125(a) of the Lanham Act extends beyond trademark protection)
- Cubby, Inc. v. CompuServe, Inc., 776 F. Supp. 135 (S.D.N.Y. 1991) (early decision on passive‑provider nonliability informing § 230 history)
- Norfolk & W. Ry. Co. v. Am. Train Dispatchers Ass'n, 499 U.S. 117 (1991) (ejusdem generis canon referenced for statutory interpretation)
- Sacramento Reg'l Cty. Sanitation Dist. v. Reilly, 905 F.2d 1262 (9th Cir. 1990) (ejusdem generis inapplicable where enumerated items are dissimilar)
- Baker Botts LLP v. ASARCO LLC, 135 S. Ct. 2158 (2015) (principle that courts should apply statutes as written, cited in dissent)