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Enigma Software Grp. USA, LLC v. Malwarebytes, Inc.

United States Court of Appeals for the Ninth Circuit

February 15, 2019, Argued and Submitted, San Francisco, California; December 31, 2019, Amended

No. 17-17351

Opinion

 [*1044]  AMENDED OPINION

SCHROEDER, Circuit Judge:

OVERVIEW

] This dispute concerns § 230, the so-called "Good Samaritan" provision of the Communications Decency Act of 1996, enacted primarily to protect minors from harmful online viewing. The provision immunizes computer-software providers from liability for actions taken to help users block certain [**4]  types of unwanted, online material. The provision expressly describes material of a violent or sexual nature, but also includes a catchall for material that is "otherwise objectionable." 47 U.S.C. § 230(c)(2). We have previously recognized that the provision establishes a subjective standard whereby internet users and software providers decide what online material is objectionable. See Zango Inc. v. Kaspersky Lab, Inc., 568 F.3d 1169, 1173 (9th Cir. 2009).

The parties to this dispute are both providers of software that help internet users filter unwanted content from their computers. Plaintiff-Appellant Enigma Software Group USA, LLC has alleged violations of New York state law and a violation of the Lanham Act's false advertising provision. Each claim is based on the allegation that defendant, Malwarebytes Inc., has configured its software to block users from accessing Enigma's software in order to divert Enigma's customers. The district court, relying on Zango, dismissed the action  [*1045]  as barred by § 230's broad recognition of immunity. We did not hold in Zango, however, that the immunity was limitless.

This case differs from Zango in that here the parties are competitors. In this appeal Enigma contends that the "otherwise objectionable" catchall is not broad enough to encompass [**5]  a provider's objection to a rival's software in order to suppress competition. Enigma points to Judge Fisher's concurrence in Zango warning against an overly expansive interpretation of the provision that could lead to anticompetitive results. We heed that warning and reverse the district court's decision that read Zango to require such an interpretation. We hold that the phrase "otherwise objectionable" does not include software that the provider finds objectionable for anticompetitive reasons.

Malwarebytes contends that it had legitimate reasons for finding Enigma's software objectionable apart from any anticompetitive effect, and that immunity should therefore apply on Enigma's state-law claims, even if the district court erred in its interpretation of Zango. We conclude, however, that Enigma's allegations of anticompetitive animus are sufficient to withstand dismissal.

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946 F.3d 1040 *; 2019 U.S. App. LEXIS 38784 **; 2019 WL 7373959

ENIGMA SOFTWARE GROUP USA, LLC, Plaintiff-Appellant, v. MALWAREBYTES, INC., Defendant-Appellee.

Subsequent History: Rehearing denied by, En banc, Rehearing denied by Enigma Software Grp. USA, LLC v. Malwarebytes, Inc., 946 F.3d 1040, 2019 U.S. App. LEXIS 38786 (9th Cir. Cal., Dec. 31, 2019)

Prior History:  [**1] Appeal from the United States District Court for the Northern District of California. D.C. No. 5:17-cv-02915-EJD. Edward J. Davila, District Judge, Presiding.

Enigma Software Grp. USA LLC v. Malwarebytes Inc., 2017 U.S. Dist. LEXIS 184658 (N.D. Cal., Nov. 7, 2017)Enigma Software Grp. USA, LLC v. Malwarebytes, Inc., 938 F.3d 1026, 2019 U.S. App. LEXIS 27492 (9th Cir. Cal., Sept. 12, 2019)

Disposition: REVERSED and REMANDED.

CORE TERMS

objectionable, block, software, users, online, anticompetitive, advertising, internet, filtering, trademarks, competitors, pornography, pertaining, encompass, harassing, unwanted, violent, customers, catchall, technologies, interactive, state-law, download

Communications Law, Federal Acts, Telecommunications Act, Communications Decency Act, Governments, Legislation, Interpretation, Antitrust & Trade Law, Consumer Protection, Likelihood of Confusion, False Designation of Origin, False Advertising, Lanham Act, Trademark Infringement