In Enigma Software Group USA, LLC v Malwarebytes, Inc (21-16466; 9th Cir; 2 June 2023) – a case originally based on a false advertising claim under Section 43(a) of the Lanham (Trademark) Act – the US Court of Appeals for the Ninth Circuit has affirmed in part, reversed in part and remanded the district court’s dismissal of the claim. The higher court concluded that the defendant’s description of a competitor’s software product was plausibly alleged to be an element of false advertising, providing crucial guidance for brand owners in this space.
Enigma is a security software company whose products detect and remove malicious software such as viruses, spyware, adware and ransomware. Malwarebytes is a direct competitor of Enigma and sells products designed to detect and remove malware and other potentially threatening programs on users’ computers.
Enigma initially brought this action in the US District Court for the Southern District of New York, but the case was moved to the Northern District of California following Malwarebytes’s motion to transfer.
The California court ruled that Enigma’s claims were barred by Section 230 of the Communications Decency Act, a ruling that the Ninth Circuit reversed, holding that the section did not apply to “blocking and filtering decisions that [we]re driven by anticompetitive animus”. The Ninth Circuit remanded the case.
On remand, Enigma asserted four causes of action:
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