Enigma Software Group Prevails Over Malwarebytes at the Ninth Circuit
Ninth Circuit Rules Enigma Software Group can proceed with claims in California District Court
Clearwater, FL, June 6, 2023 – The U.S. Court of Appeals for the Ninth Circuit has ruled in favor of Enigma Software Group USA, LLC (“Enigma”) that it can proceed with its lawsuit against Malwarebytes on its claims that Malwarebytes has engaged in anticompetitive conduct, false advertising under the Lanham Act and tortious interference with Enigma’s business relations.
The Appellate Panel majority specifically held: “In the context of this case, we conclude that when a company in the computer security business describes a competitor’s software as ‘malicious’ and a ‘threat’ to a customer’s computer, that is more a statement of objective fact than a non-actionable opinion.” The Panel further explained that the First Amendment does not protect such statements: “Enigma has alleged that Malwarebytes disparaged Enigma’s products for commercial advantage by making misleading statements of fact. If those allegations are true, and at this state we must presume that they are, trying to wrap them in a First Amendment flag does not make them any less offensive or any less actionable.”
Finally, the Appellate Panel rejected Malwarebytes’ assertion that it lacked business contacts in New York and, thus, ruled in favor of Enigma that Malwarebytes was subject to personal jurisdiction in New York and that New York law applies. The Appellate Panel sent the case back to the District Court for the continuation of case proceedings.
Enigma filed suit against Malwarebytes on claims of unfair trade practices, interference with business relations, and false advertising in connection with Enigma’s claims that Malwarebytes had unlawfully blocked consumers from using Enigma’s cybersecurity protection software products, thereby harming consumers and damaging Enigma.
This new Ninth Circuit ruling is the second time the Court of Appeals has rejected Malwarebytes’ attempts to avoid responding to Enigma’s claims. Previously, the Ninth Circuit ruled that Malwarebytes was not protected from liability on Enigma’s claims by Section 230 of the Communications Decency Act because Enigma adequately alleged Malwarebytes’ anticompetitive conduct.
Opinion: Enigma Software Group USA, LLCv. Malwarebytes, Inc., No. 21-16466 (9th Cir. June 2, 2023)
About Enigma Software Group
Enigma Software Group is a privately held international systems integrator and developer of PC security software with offices in the United States and the European Union. Enigma is best known for SpyHunter 4, its anti-malware software. SpyHunter 4 has scored top grades by independent third-party testing labs such as AV-Comparatives and AV-TEST.