Shady Anti-Spyware Developer Loses Lawsuit Against Competitor Who Flagged Its Software As Malicious

from the respect-us,-they-sued dept

Enigma Software makes Spyhunter, a malware-fighting program with a very questionable reputation. But the company isn’t known so much for containing threats as it’s known for issuing threats. It sued a review site for having the audacity to suggest its pay-to-clean anti-spyware software wasn’t a good fit for most users… or really any users at all.

Bleeping Computer found itself served with a defamation lawsuit for making fact-based claims (with links to supporting evidence) about Enigma’s dubious product, dubious customer service tactics (like the always-popular “auto-renew”), and dubious lawsuits. Somehow, this dubious lawsuit managed to survive a motion to dismiss. Fortunately, Bleeping Computer was propped up by Malwarebytes’ developers, who tossed $5,000 into Bleeping Computer’s legal defense fund.

The developers of this more highly-regarded anti-malware program soon found themselves facing the litigious wrath of Enigma, which apparently makes enough from its pay-to-clean, auto-renewing, subscription-based Spyhunter program to keeps lawyers busy all the damn time.

Enigma decided to sue Malwarebytes for felony interference with a business model, a.k.a., “tortious interference.” According to Enigma, it was unfair and retaliatory for Malwarebytes to treat its software as a threat to users and remove it from computers when performing scans.

The judge, fortunately, did not agree. Malwarebytes has emerged victorious [PDF] in a lawsuit that began with unfair business practices allegations before somehow morphing into an argument about the limits of Section 230 immunity.

Malwarebytes cited a Ninth Circuit Appeals Court decision which dealt with the actions of another anti-malware provider, Kaspersky. In that case, Kaspersky availed itself of Section 230 immunity to dismiss claims made by Zango, an adware pusher. As Malwarebytes points out, the Appeals Court found Kaspersky’s blocking of Zango’s adware to be immune from Zango’s claims of interference, reasoning that the removal of objectionable software is pretty much equivalent to removing objectionable content. Efforts made to police software/content do not strip providers and publishers of immunity.

Enigma argued the decision clearly stated the removed material must be “content that the provider or user considers obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable.” It claimed its software fell under none of those headings. The district court disagrees:

Enigma overlooks Zango’s clear holding that § 230(c)(2)(B) immunity applies to “a provider of computer services that makes available software that filters or screens material that the user or the provider deems objectionable.”

[…]

This interpretation of Zango aligns with the plain language of the statute, which likewise states that immunity applies to “material that the provider or user considers to be . . . objectionable.” 47 U.S.C. § 230(c)(2)(A) (emphasis added). In Zango, the provider of the anti-malware software, Kaspersky, exercised its discretion to select the criteria it would use to identify objectionable computer programs. The Ninth Circuit held that malware, as Kaspersky defined it, was properly within the scope of “objectionable” material. In that respect, the Court agrees with Malwarebytes that Zango is factually indistinguishable from the scenario here.

In its final attempt to skirt Section 230 immunity, Enigma attempted to resculpt its arguments into a half-assed Lanham Act complaint. But the court has zero sympathy for Enigma’s attempt to drag trademark into this.

Enigma’s argument fails because its complaint does not allege an intellectual property claim. The Lanham Act contains two parts: one governing trademark infringement (15 U.S.C. § 1114) and one governing unfair competition (15 U.S.C. § 1125(a)). The unfair competition provision, in turn, “creates two distinct bases of liability”: one governing false association (15 U.S.C. § 1125(a)(1)(A)) and one governing false advertising (15 U.S.C. § 1125(a)(1)(B)). Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1384 (2014). Enigma’s complaint asserts a false advertising claim under § 1125(a)(1)(B). FAC ¶ 135.

Enigma does not assert claims under the trademark provisions of the Lanham Act. The complaint does not allege that Enigma owns trademarks or any other form of intellectual property, nor does it allege that Malwarebytes has committed any form of intellectual property infringement, including misuse of its trademarks. Accordingly, the Court finds that Enigma’s false advertising claim under the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), does not arise under a “law pertaining to intellectual property” under 47 U.S.C. § 230(e)(2).

Enigma loses, Malwarebytes wins, and status remains quo until the inevitable appeal. Enigma seems to believe it can sue its way into respectability — somehow failing to realize every lawsuit against competitors and critics moves it several steps in the opposite direction.

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Companies: bleeping computer, enigma, malwarebytes

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Comments on “Shady Anti-Spyware Developer Loses Lawsuit Against Competitor Who Flagged Its Software As Malicious”

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13 Comments
Anonymous Coward says:

It would seem that the best way of judging the best anti-virus/anti-malware company is to see which one gets sued the most, such as by companies who insist that their malware is not really malware. Kaspersky was notable for being the first (and for awhile the only) mainstream AV company to tag the Sony Rootkit as Malware. Such software blurred the line between traditional malware, anonymously written software which had no corporate backing, and corporate malware, EULA-laden crap which mainstream AV companies considered legitimate (perhaps because they feared being sued for removing it) despite the user being exploited.

Like Kaspersky, Malwarebytes was not afraid to take on the shady bundleware industry, showing that its first and only duty was protecting the consumer (even from the consumer’s own incompetence) EULAs be damned.

It was a shame (but not surprising) that the big antivirus companies almost always turned a blind eye to corporate-backed malware, leading to the emergence of grass roots startups like Malwarebytes whose original focus was identifying and removing the malware green-lighted by the big AV companies.

As the good folks of Techdirt discovered, those who stand up for principles and ideals by calling out bad actors can expect to get sued, and those who fight will usually prevail in the end.

Anonymous Coward says:

Re: Re:

Kaspersky products are malware. There is no such thing as “ex-Russian intelligence”. Anyone using it should stop instantly or expect to face litigation — there are quite a few of us with expert credentials who are willing to testify in court that use of Kaspersky isn’t just negligent, it’s deliberate self-sabotage.

Roger Strong (profile) says:

Dead Parrot Sketch, Enigma Software Edition

Bleeping Computer: I wish to make a complaint!

Enigma Software: We’re closin’ for lunch.

Bleeping Computer: Never mind that, my lad. I wish to complain about this anti-spyware software what I purchased not half an hour ago from this very boutique.

Enigma Software: Oh yes, uh, Spyhunter…What’s, uh… What’s wrong with it?

Bleeping Computer: I’ll tell you what’s wrong with it, my lad. It’s useless, that’s what’s wrong with it!

Enigma Software: No, no, that’s uh,… that’s defamation.

Bleeping Computer: Look, matey, a negative review is protected free speech, and this negative review is well earned.

Enigma Software: No no it’s not free speech, it’s defamation! Remarkable software, Spyhunter, idn’it, ay? Beautiful UI!

Bleeping Computer: The UI don’t enter into it. It’s stone useless.

Enigma Software: It’s a legitimate product! That’s just your opinion, and it’s defamation!

Bleeping Computer: All right then, let’s see what others think about it! (Runs Malwarebytes) (Malwarebyes declares it a threat and removes it.)

Owner: That’s tortious interference, that is!

Bleeping Computer: No, it’s an accurate assessment based on its uselessness, not to mention your other business practices!

Enigma Software: It’s felony interference with a business model!

Bleeping Computer: It isn’t. Your product is useless! Ineffectual! Pointless! Hopeless! Fruitless! Incapable! Incompetant! Inept! Inadequate! If you weren’t charging people for automatic renewals in perpetuity, you’d go under! This product protects users like Ajit Pai protects consumers!

Enigma Software: I never wanted to do this in the first place. I wanted to be… a DRM provider!

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