and Submitted February 15, 2019 San Francisco, California
from the United States District Court for the Northern
District of California Edward J. Davila, District Judge,
Presiding D.C. No. 5:17-cv-02915-EJD
Budd (argued), Budd Law PLLC, Wexford, Pennsylvania;
Christopher M. Verdini and Anna Shabalov, K&L Gates LLP,
Pittsburgh, Pennsylvania; Edward P. Sangster, K&L Gates
LLP, San Francisco, California; for Plaintiff-Appellant.
G. Newby (argued), Guinevere L. Jobson, and Sapna Mehta,
Fenwick & West LLP, San Francisco, California, for
Before: Mary M. Schroeder and Johnnie B. Rawlinson, Circuit
Judges, and Robert S. Lasnik, [*] District Judge.
panel reversed the district court's dismissal, as barred
by § 230 of the Communications Decency Act, of claims
under New York law and the Lanham Act's false advertising
Software Group USA, LLC, and Malwarebytes, Inc., were
providers of software that helped internet users to filter
unwanted content from their computers. Enigma alleged that
Malwarebytes configured its software to block users from
accessing Enigma's software in order to divert
230 immunizes software providers from liability for actions
taken to help users block certain types of unwanted online
material, including material that is of a violent or sexual
nature or is "otherwise objectionable."
Distinguishing Zango, Inc. v. Kaspersky Lab, Inc.,
568 F.3d 1169 (9th Cir. 2009), the panel held that the phrase
"otherwise objectionable" does not include software
that the provider finds objectionable for anticompetitive
reasons. As to the state-law claims, the panel held that
Enigma's allegations of anticompetitive animus were
sufficient to withstand dismissal. As to the federal claim,
the panel further held that § 230's exception for
intellectual property claims did not apply because this false
advertising claim did not relate to trademarks or any other
type of intellectual property. The panel remanded the case
for further proceedings.
Judge Rawlinson wrote that § 230 is broadly worded, and
Enigma did not persuasively make a case for limitation of the
statute beyond its provisions.
SCHROEDER, Circuit Judge
dispute concerns § 230, the so-called "Good
Samaritan" provision of the Communications Decency Act
of 1996, enacted primarily to protect minors from harmful
online viewing. The provision immunizes computer-software
providers from liability for actions taken to help users
block certain types of unwanted, online material. The
provision expressly describes material of a violent or sexual
nature, but also includes a catchall for material that is
"otherwise objectionable." 47 U.S.C. §
230(c)(2). We have previously recognized that the provision
establishes a subjective standard whereby internet users and
software providers decide what online material is
objectionable. See Zango Inc. v. Kaspersky Lab,
Inc., 568 F.3d 1169, 1173 (9th Cir. 2009).
parties to this dispute are both providers of software that
help internet users filter unwanted content from their
computers. Plaintiff-Appellant Enigma Software Group USA, LLC
has alleged violations of New York state law and a violation
of the Lanham Act's false advertising provision. Each
claim is based on the allegation that defendant, Malwarebytes
Inc., has configured its software to block users from
accessing Enigma's software in order to divert
Enigma's customers. The district court, relying on
Zango, dismissed the action as barred by §
230's broad recognition of immunity. We did not hold in
Zango, however, that the immunity was limitless.
case differs from Zango in that here the parties are
competitors. In this appeal Enigma contends that the
"otherwise objectionable" catchall is not broad
enough to encompass a provider's objection to a
rival's software in order to suppress competition. Enigma
points to Judge Fisher's concurrence in Zango
warning against an overly expansive interpretation of the
provision that could lead to anticompetitive results. We heed
that warning and reverse the district court's decision
that read Zango to require such an interpretation.
We hold that the phrase "otherwise objectionable"
does not include software that the provider finds
objectionable for anticompetitive reasons.
contends that it had legitimate reasons for finding
Enigma's software objectionable apart from any
anticompetitive effect, and that immunity should therefore
apply on Enigma's state-law claims, even if the district
court erred in its interpretation of Zango. We
conclude, however, that Enigma's allegations of
anticompetitive animus are sufficient to withstand dismissal.
federal claim warrants an additional analytical step. The
CDA's immunity provision contains an exception for
intellectual property claims, stating that "[n]othing in
this section shall be construed to limit or expand any law
pertaining to intellectual property." 47 U.S.C. §
230(e)(2). Enigma has brought a false advertising claim under
the Lanham Act, a federal statute that deals with trademarks.
Enigma contends that the false advertising claim is one
"pertaining to intellectual property" and thus
outside the scope of § 230 immunity.
it is true that the Lanham Act itself deals with intellectual
property, i.e. trademarks, Enigma's false
advertising claim does not relate to trademarks or any other
type of intellectual property. The district court therefore
correctly held that the intellectual property exception to
immunity does not apply to the false advertising claim. The
district court went on to hold that under
Zango's application of § 230 immunity,
Malwarebytes was immune from liability for false advertising.
As with Enigma's state law claims, we hold that the
district court read Zango too broadly in dismissing
the federal claim. We therefore reverse the judgment on this
claim as well.
appeal centers on the immunity provision contained in §
230(c)(2) of the Communications Decency Act
("CDA"), 47 U.S.C. § 230(c)(1996). The CDA,
which was enacted as part of the Telecommunications Act of
1996, contains this "Good Samaritan" provision
that, in subparagraph B, immunizes internet-service providers
from liability for giving internet users the technical means
to restrict access to the types of material described in the
subparagraph A. Id. § 230(c)(2)(B). The
material, as described in that subparagraph, is
"material that the provider or user considers to be
obscene, lewd, lascivious, filthy, excessively violent,
harassing, or otherwise objectionable." Id.
grant of immunity dates back to the early days of the
internet when concerns first arose about children being able
to access online pornography. Parents could not program their
computers to block online pornography, and this was at least
partially due to a combination of trial court decisions in
New York that had deterred the creation of online-filtration
efforts. In the first case, Cubby, Inc. v. CompuServe,
Inc., a federal court held that passive providers of
online services and content were not charged with knowledge
of, or responsibility for, the content on their network.
See 776 F.Supp 135, 139-43 (S.D.N.Y. 1991).
Therefore, if a provider remained passive and uninvolved in
filtering third-party material from its network, the provider
could not be held liable for any offensive content it carried
from third parties. See id.
corollary of this rule, as later articulated by a New York
state trial court, was that once a service provider undertook
to filter offensive content from its network, it assumed
responsibility for any offensive content it failed to filter,
even if it lacked knowledge of the content. See Stratton
Oakmont, Inc. v. Prodigy Services Co., 1995 WL 323710,
*5 (N.Y. Sup. Ct. May 24, 1995) ("Prodigy's
conscious choice, to gain the benefits of editorial control,
has opened it up to a greater liability than CompuServe and
other computer networks that make no such choice."),
superseded by statute, Communications Decency Act,
Pub. L. No. 104-104, 110 Stat. 137, as recognized in
Shiamili v. Real Estate Group of N.Y., Inc., 952 N.E.2d
1011 (2011). Representative Chris Cox warned during debates
on proposed legislation aimed at overruling Stratton
Oakmont, that premising liability on providers'
efforts to filter out offensive material was deterring
software companies from providing the filtering software and
tools that could help parents block pornography and other
offensive material from their home computers. See
141 Cong. Rec. 22, 045 (1995) (statement of Rep. Cox).
Stratton Oakmont decision, along with the increasing
public concern about pornography on the internet, served as
catalysts for legislators to consider greater internet
regulation. Congress considered, in early 1995, two different
amendments to the Telecommunications Act. The first, called
the Exon-Coats amendment, targeted pornography at the source
by prohibiting its dissemination. See id. at 16,
068. Proponents of this bill argued that parents lacked the
technological sophistication needed to implement
online-filtration tools and that the government therefore
needed to step in. Id. at 16, 099. The second
proposal, entitled the Online Family Empowerment Act
("OFEA"), targeted internet pornography at the
receiving end by encouraging further development of
filtration tools. Id. at 22, 044. Proponents of this
bill pointed out that prohibiting pornography at the source
raised constitutional issues involving prior restraint, and
argued that parents, not government bureaucrats, were better
positioned to protect their children from offensive online
material. Id. at 16, 013.
February 1, 1996, Congress enacted both approaches as part of
the CDA. The Exon-Coats amendment was codified at 47 U.S.C.
§ 223, but was later invalidated by Reno v.
ACLU, 521 U.S. 844, 877-79 (1997). Before us is
OFEA's approach, enacted as § 230(c)(2) of the CDA.
See Pub L. No. 104-104, § 509, 110 Stat. 56,
137-39. By immunizing internet-service providers from
liability for any action taken to block, or help users block
offensive and objectionable online content, Congress
overruled Stratton Oakmont ...