Engima Software Group USA, LLC v. Malwarebytes, Inc., No. 17-17351 (9th Cir. 2019)Annotate this Case
Section 230 of the Communications Decency Act (DCA) immunizes software providers from liability for actions taken to help users block certain types of unwanted online material, including material that is of a violent or sexual nature or is "otherwise objectionable."
Enigma filed suit alleging violations of New York state law and a violation of the Lanham Act's false advertising provision based on Malwarebytes Inc.'s configuration of its software to block users from accessing Enigma's software in order to divert Enigma's customers. The district court dismissed the action as barred by section 230's broad recognition of immunity.
The panel distinguished Zango Inc. v. Kaspersky Lab, Inc., 568 F.3d 1169, 1173 (9th Cir. 2009), from this case and held that the parties here were competitors. The panel heeded the warning in Zango against an overly expansive interpretation of section 230 that could lead to anticompetitive results. Therefore, the panel held that the phrase "otherwise objectionable" does not include software that the provider finds objectionable for anticompetitive reasons. In this case, the panel held that Enigma's allegations of anticompetitive animus were sufficient to withstand dismissal.
The panel also held that, although the Lanham Act itself deals with intellectual property, Enigma's false advertising claim did not relate to trademarks or any other type of intellectual property. Therefore, the district court correctly held that the intellectual property exception to immunity does not apply to the false advertising claim. Like the state law claims, the panel held that the district court read Zango too broadly in dismissing the federal claim.