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

Legal Issues

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.

Filed Under: lists, malware, reviews, scans, spyhunter, tortious interference
Companies: bleeping computer, enigma, malwarebytes