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Enigma Software Group USA, LLC v. Malwarebytes Inc.

United States District Court, N.D. California, San Jose Division

November 7, 2017

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

          ORDER GRANTING DEFENDANT'S MOTION TO DISMISS RE: DKT. NO. 97

          EDWARD J. DAVILA UNITED STATES DISTRICT JUDGE

         Plaintiff Enigma Software Group USA LLC (“Enigma”) brings claims against Defendant Malwarebytes Inc. based on its allegation that Malwarebytes unlawfully characterized Enigma's software as harmful to users' computers. Malwarebytes now moves to dismiss under Fed.R.Civ.P. 12(b)(6). Malwarebytes's motion will be granted.

         I. BACKGROUND

         Malwarebytes develops software that protects internet users from malware, adware, and other unwanted computer programs. First Am. Compl. (“FAC”) ¶¶ 3, 36, Dkt. No. 33. Malwarebytes's software scans users' computers for “potentially unwanted programs, ” which it automatically flags and quarantines. Id. ¶ 5. When the software detects an unwanted program, it displays a notification and asks the user if she wants to remove the program from her computer. Id.

         Enigma also provides anti-malware software to internet users. Id. ¶ 4. Enigma alleges that, in 2016, Malwarebytes revised the criteria it uses to identify unwanted programs. Id. ¶ 7. Under the new criteria, Malwarebytes's software identifies Enigma's software as a potential threat. Id. Enigma alleges that Malwarebytes's classification of Enigma's software is wrong because Enigma's programs “are legitimate and pose no security threat to users' computers.” Id. ¶ 9. Enigma alleges that Malwarebytes revised its criteria to interfere with Enigma's customer base and to retaliate against Enigma for a separate lawsuit Enigma filed against a Malwarebytes affiliate. Id. ¶¶ 8, 19-20.

         On that basis, Enigma brings claims for (1) false advertising in violation of § 43(a) of the Lanham Act (FAC ¶¶ 134-43), (2) violations of New York General Business Law § 349[1] (FAC ¶¶ 144-50), (3) tortious interference with contractual relations (FAC ¶¶ 151-160), and (4) tortious interference with business relations (FAC ¶¶ 161-68).

         Malwarebytes now moves to dismiss under Fed.R.Civ.P. 12(b)(6). Def.'s Mot. to Dismiss (“MTD”), Dkt. No. 97.

         II. LEGAL STANDARD

         A motion to dismiss under Fed.R.Civ.P. 12(b)(6) tests the legal sufficiency of claims alleged in the complaint. Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Dismissal “is proper only where there is no cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal theory.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.' ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).

         III. DISCUSSION

         Malwarebytes argues that all of Enigma's claims are barred by the immunity provisions of § 230(c)(2) of the Communications Decency Act. Mot. 7. That section provides:

         No provider or user of an interactive computer service shall be held liable on account of-

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or
(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to ...

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