Enigma Software Group USA, LLC v. Malwarebytes, Inc., No. 17-17351 (9th Cir. 2019)
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The Ninth Circuit filed an order withdrawing its prior opinion and replacing the opinion with an amended opinion, denying a petition for panel rehearing, and denying on behalf of the court a petition for rehearing en banc. The panel also filed an amended opinion reserving the district court's dismissal, as barred by section 230 of the Communications Decency Act (DCA), of claims under New York law and the Lanham Act's false advertising provision.
Enigma filed suit alleging that Malwarebytes Inc. has configured its software to block users from accessing Enigma's software in order to divert Enigma's customers. 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. The panel held that the phrase "otherwise objectionable" does not include software that the provider finds objectionable for anticompetitive reasons. In regard to the state-law claims, the panel held that Enigma's allegations of anticompetitive animus were sufficient to withstand dismissal.
In regard to the federal claim, the panel held that section 230's exception for intellectual property claims did not apply because Enigma's false advertising claim did not relate to trademarks or any other type of intellectual property. The panel remanded for further proceedings.
Court Description: Communications Decency Act. The panel filed (1) an order withdrawing its opinion and replacing the opinion with an amended opinion, denying a petition for panel rehearing, and denying on behalf of the court a petition for rehearing en banc; and (2) an amended opinion reversing the district court’s dismissal, as barred by § 230 of the Communications Decency Act, of claims under New York law and the Lanham Act’s false advertising provision. Enigma Software Group USA, LLC, and Malwarebytes, Inc., were providers of software that helped internet users to filter unwanted content from their computers. Enigma alleged that Malwarebytes configured its software to block users from accessing Enigma’s software in order to divert Enigma’s customers. Section 230, the so-called “Good Samaritan” provision of the Communications Decency Act, 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.” Distinguishing Zango, Inc. v. Kaspersky Lab, Inc., 568 F.3d 1169 (9th Cir. 2009), the panel held that the phrase “otherwise objectionable” does not include software that the provider finds objectionable for anticompetitive reasons. As to the state-law claims, the panel held that ENIGMA SOFTWARE V. MALWAREBYTES 3 Enigma’s allegations of anticompetitive animus were sufficient to withstand dismissal. As to the federal claim, the panel further held that § 230’s exception for intellectual property claims did not apply because this false advertising claim did not relate to trademarks or any other type of intellectual property. The panel remanded the case for further proceedings. Dissenting, Judge Rawlinson wrote that § 230 is broadly worded, and Enigma did not persuasively make a case for limitation of the statute beyond its provisions.
This opinion or order relates to an opinion or order originally issued on September 12, 2019.
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