Anti-malware provider immune under CDA for calling competitor’s product a security threat

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Plaintiff anti-malware software provider sued defendant – who also provides software that protects internet users from malware, adware etc. – bringing claims for false advertising under the Section 43(a) of Lanham Act, as well as other business torts. Plaintiff claimed that defendant wrongfully revised its software’s criteria to identify plaintiff’s software as a security threat when, according to plaintiff, its software is “legitimate” and posed no threat to users’ computers.

Defendant moved to dismiss the complaint for failure to state a claim upon which relief may be granted. It argued that the provisions of the Communications Decency Act at Section 230(c)(2) immunized it from plaintiff’s claims.

Section 230(c)(2) reads as follows:

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 material described in [paragraph (A)].

Specifically, defendant argued that the provision of its software using the criteria it selected was an action taken to make available to others the technical means to restrict access to malware, which is objectionable material.

The court agreed with defendant’s argument that the facts of this case were “indistinguishable” from the Ninth Circuit’s opinion in in Zango, Inc. v. Kaspersky, 568 F.3d 1169 (9th Cir. 2009), in which the court found that Section 230 immunity applied in the anti-malware context.

Here, plaintiff had argued that immunity should not apply because malware is not within the scope of “objectionable” material that it is okay to seek to filter in accordance with 230(c)(2)(B). Under plaintiff’s theory, malware is “not remotely related to the content categories enumerated” in Section 230(c)(2)(A), which (B) refers to. In other words, the objectionableness of malware is of a different nature than the objectionableness of material that is obscene, lewd, lascivious, filthy, excessively violent, harassing. The court rejected this argument on the basis that the determination of whether something is objectionable is up to the provider’s discretion. Since defendant found plaintiff’s software “objectionable” in accordance with its own judgment, the software qualifies as “objectionable” under the statute.

Plaintiff also argued that immunity should not apply because defendant’s actions taken to warn of plaintiff’s software were not taken in good faith. But the court applied the plain meaning of the statute to reject this argument – the good faith requirement only applies to conduct under Section 230(c)(2)(A), not (c)(2)(B).

Finally, plaintiff had argued that immunity should not apply with respect to its Lanham Act claim because of Section 230(e)(2), which provides that “nothing in [Section 230] shall be construed to limit or expand any law pertaining to intellectual property.” The court rejected this argument because although the claim was brought under the Lanham Act, which includes provisions concerning trademark infringement (which clearly relates to intellectual property), the nature of the Lanham Act claim here was for unfair competition, which is not considered to be an intellectual property claim.

Enigma Software Group v. Malwarebytes Inc., 2017 WL 5153698 (N.D. Cal., November 7, 2017)

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

Court reinstates SCO’s misappropriation claim against IBM in long-running lawsuit

For almost a decade and a half, SCO and IBM have been fighting over their collaboration gone wrong concerning the development of a new version of UNIX for Intel processors. The case has garnered much attention, including from the open source community. You can read the backstory here on the Wikipedia page for the dispute. The case has been on appeal to the Tenth Circuit, which released its opinion on October 30. The decision was a mixed ruling – the court affirmed summary judgment in favor of IBM on most of the issues, but ruled in favor of SCO on one important claim – misappropriation.

SCO sued IBM for the tort of misappropriation (a form of unfair competition) arising from IBM’s alleged use in its own product of source code that SCO had contributed to the joint efforts to develop the new UNIX version. The district court granted IBM’s motion for summary judgment on the misappropriation claim, holding that such a claim was barred under New York law’s “independent tort doctrine”. SCO sought review with the Tenth Circuit Court of Appeals. The court reversed and remanded the case on the misappropriation claim.

This doctrine provides that a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated. This separate duty must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent upon the contract.

In this case, the court held that while IBM and SCO may not have had a formal partnership or joint venture as a matter of law, they surely enjoyed a business relationship in which each reposed a degree of trust and confidence in the other. In such a situation, there exists a duty not to take a business collaborator’s property in bad faith and without its consent in order to compete against that owner’s use of the same property.

SCO v. IBM, — F.3d —, 2017 WL 4872572 (10th Cir., October 30, 2017)

Evan_BrownAbout the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

No copyright protection for two word phrase

quipIn a final pretrial order, plaintiff stated that “to this day [defendant] persists in using [plaintiff’s] copyrighted ‘usurpassed performance’ language on its packages.” Defendant filed a motion in limine (a motion to exclude evidence) to preclude plaintiff from introducing evidence or putting on testimony that would infer or suggest the phrase “unsurpassed performance” has been registered as a copyright.

The court granted the motion.

Under the Copyright Act, “[w]ords and short phrases such as names, titles, and slogans” are not subject to copyright. 37 C.F.R. § 202.1(a). The court looked to a number of cases in which short phrases had been denied copyright protection. For example, other courts had held that “Where Words Come Alive,” “Earth Protector,” “Chipper,” and “Retail Plus” were not copyrightable material.

One wonders whether plaintiff was really trying to assert some form of unfair competition or trademark infringement. The notion is worth entertaining for but a brief moment, till one realizes that laudatory phrases such as “unsurpassed performance” find no protection under trademark law either.

Predator International, Inc. v. Gamo Outdoor USA, Inc., 2014 WL 321069 (D.Colo. January 29, 2014)

Court allows discovery of competitor’s keyword purchases

Scooter Store, Inc. v. Spinlife.com, LLC, 2011 WL 2160462 (S.D. Ohio June 1, 2011)

The Scooter Store and a related company sued a competitor for trademark infringement and other causes of action for unfair competition based in part on the competitor’s purchase of keywords such as “scooter store” and “your scooter store” to trigger sponsored advertisements on the web. Defendant moved for summary judgment and also moved for a protective order that would prevent it from having to turn over information to plaintiffs concerning defendant’s purchase of the keywords. The court denied the motion for protective order.

Defendant argued that it should not have to turn over the information because plaintiffs’ trademark claims based on those keywords were without merit, as the words are generic terms for the goods and services plaintiffs provide. Defendant also asserted a need to protect the commercially sensitive nature of information about its keyword purchases.

The court rejected defendant’s arguments, ordering that the discovery be allowed. It held that “whether or not [p]laintiffs’ claims involving these terms survive summary judgment [] has no bearing on whether the discovery [p]laintiffs seek is relevant, particularly viewed in light of a party’s broad rights to discovery under Rule 26.” As for protecting the sensitivity of the information, the court found that such interests could be protected through the process of designating the information confidential, and handled accordingly by the receiving party.

Court dismisses unfair competition claim against Facebook over alleged privacy violation

This is a post by Sierra Falter.  Sierra is a third-year law student at DePaul University College of Law in Chicago focusing on intellectual property law.  You can reach her by email at sierrafalter [at] gmail dot com or follow her on Twitter (@lawsierra).  Bio: www.sierrafalter.com.

In re Facebook Privacy Litigation, 2011 WL 2039995 (N.D.Cal. May 12, 2011)

Plaintiff Facebook users sued defendant Facebook for violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq., alleging that Facebook intentionally and knowingly transmitted personal information about plaintiffs to third-party advertisers without plaintiffs’ consent.  Facebook moved to dismiss the UCL claim.  The court granted the motion.

Defendant argued that plaintiffs failed to state a claim because they lacked standing under the UCL, since they did not allege they lost money or property.  Defendant asserted there was no such loss because plaintiffs’ “personal information” did not constitute property under the UCL.

Instead, the plaintiffs had alleged that defendant unlawfully shared their “personally identifiable information” with third-party advertisers.  However, the court distinguished the plaintiffs’ claim from Doe 1 v. AOL, LLC, 719 F.Supp.2d 1102 (N.D. Cal. 2010).  In that case, the plaintiffs’ personal and financial information had been distributed to the public after the plaintiffs therein signed up and paid fees for AOL’s service.  The court dismissed plaintiff’s claim in this case under the holding of Doe v. AOL — since plaintiffs alleged they received defendant’s services for free, they could not state a UCL claim.

Pop-ups don’t amount to unfair competition in Utah case

Nor do they give rise to tortious interference.

Overstock.com, Inc. v. SmartBargains, Inc., — P.3d —-, 2008 WL 3835094 (Utah August 19, 2008)

In 2004, Overstock.com sued its competitor SmartBargains in Utah state court for violations of the state’s anti-spyware statute [Utah Code sections 13-40-101 et seq.], unfair competition and tortious interference with prospective business relations. Overstock accused SmartBargains’ of using a technology to cause SmartBargains pop-up ads to appear when one visited Overstock.com. The lower court granted summary judgment in favor of SmartBargains, holding the anti-spyware statute unconstitutional, and finding that Overstock had not presented a genuine issue of material fact on its unfair competition and tortious interference claims.

Overstock sought review of the lower court’s decision on the unfair competition and tortious interference claims with the Utah Supreme Court. On appeal, the court affirmed the grant of summary judgment.

The lower court had looked to the various WhenU cases, which deal with pop-up advertising to determine there was no triable issue as to unfair competition. (1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir.2005), Wells Fargo v. WhenU.com, Inc., 293 F.Supp.2d 734 (E.D.Mich.2003), and U-Haul Int’l, Inc. v. WhenU.com, Inc., 279 F.Supp.2d 723 (E.D.Va.2003)) But the Supreme Court found the cases to be of limited value, given that they interpreted federal statutory laws, not state common law.

The court declined to adopt a “per se rule holding that all pop-ups do not violate Utah unfair competition law.” Nonetheless, the court found that Overstock did not demonstrate specific facts beyond the pleadings showing that the pop-ups were deceptive, infringed a trademark or passed off SmartBargains’ goods as those of Overstock. After all, the pop-ups were labeled with SmartBargains’ logo and appeared in a separate window. Without something compelling like survey evidence, the court concluded there was no genuine issue for trial.

As for the tortious interference claim, the court similarly held that Overstock had not shown any evidence of improper purpose (competition was fully legitimate end) or improper means on the part of SmartBargains in causing the pop-ups to appear. Although the case doesn’t expressly say so, the dismissal of this claim was probably collateral damage to the unconstitutionality of the anti-spyware statute. Among the things included as “improper means” under Utah tortious interference law is violation of a statute. With no statue left to violate, no so-called improper means could subsist.