Court Opinion

ID: 9399243
Source: CourtListenerOpinion
Date Created: 2023-06-02 16:01:30.380385+00
Date Added: 2024-06-11T17:18:50.300312
License: Public Domain

FOR PUBLICATION

     UNITED STATES COURT OF APPEALS
          FOR THE NINTH CIRCUIT

ENIGMA SOFTWARE GROUP                             No. 21-16466
USA, LLC,
          Plaintiff-Appellant,                      D.C. No.
                                                 5:17-cv-02915-
    v.                                                EJD

MALWAREBYTES, INC.,
        Defendant-Appellee.                         OPINION

         Appeal from the United States District Court
           for the Northern District of California
         Edward J. Davila, District Judge, Presiding

          Argued and Submitted November 8, 2022
                     Portland, Oregon

                       Filed June 2, 2023

Before: Richard R. Clifton and Patrick J. Bumatay, Circuit
 Judges, and M. Miller Baker,* International Trade Judge.

                  Opinion by Judge Clifton;
                 Concurrence by Judge Baker;
                  Dissent by Judge Bumatay

*
  The Honorable M. Miller Baker, Judge for the United States Court of
International Trade, sitting by designation.
2    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

                          SUMMARY**

                           Lanham Act

    The panel affirmed in part and reversed in part the
district court’s judgment dismissing a lawsuit brought by
Enigma Software Group USA LLC, a computer security
software provider, against its competitor Malwarebytes, Inc.
for designating its products as “malicious,” “threats,” and
“potentially unwanted programs”; and remanded for further
proceedings.
    Enigma’s operative complaint alleged a false advertising
claim under Section 43(a) of the Lanham Act, 15 U.S.C.
§ 1125(a)(1)(B), and tort claims under New York
law. Dismissing the motion under Fed. R. Civ. P. 12(b)(6),
the district court concluded that all of Enigma’s claims were
insufficient as a matter of law.
    The district court primarily based the dismissal on its
conclusion that Malwarebytes’s designations of Enigma’s
products were “non-actionable statements of opinion.” The
panel disagreed with that assessment. In the context of this
case, the panel concluded that when a company in the
computer security business describes a competitor’s
software as “malicious” and a “threat” to a customer’s
computer, that is more a statement of objective fact than a
non-actionable opinion. It is potentially actionable under the
Lanham Act provided Enigma plausibly alleges the other
elements of a false advertising claim.

**
  This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.    3

    The district court held that the tort claims under New
York law failed because Malwarebytes was not properly
subject to personal jurisdiction in New York. That meant
Enigma’s claim for relief under New York General Business
Law (NYGBL) § 349 failed because that statute did not
apply to the alleged misconduct. The panel disagreed and
concluded that Malwarebytes is subject to personal
jurisdiction in New York. As this action was initially filed
in New York, the law of that state properly applies.
    The common law claims for tortious interference with
contractual relations and tortious interference with business
relations were also dismissed by the district court. Those
torts are recognized as actionable under California law, as
they are under New York law, but the district court
concluded that Enigma failed to allege essential elements for
those claims under California law. The contractual relations
claim failed because Enigma did not identify a specific
contractual obligation with which Malwarebytes interfered.
The business relations claim was dismissed because that
claim required an allegation of independently wrongful
conduct, and that requirement was not satisfied following the
dismissal of the Lanham Act and NYGBL § 349
claims. Because the panel held that the Lanham Act and
NYGBL § 349 claims should not have been dismissed, the
panel concluded that the tortious interference with business
relations claim should similarly not have been
dismissed. The panel agreed with the district court regarding
dismissal of the claim for tortious interference with
contractual relations, however, and affirmed the dismissal of
that claim.
    Concurring, Court of International Trade Judge Baker
wrote separately to touch on choice of law. He wrote that
ordinarily the application of a transferor jurisdiction’s law
4   ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

carries with it the choice-of-law rules of that jurisdiction, but
here the parties did not address the choice of law beyond the
dispute over whether personal jurisdiction existed in the
Southern District of New York. The opinion assumes—as
the parties did in their briefing by not addressing choice of
law—that under New York choice-of-law rules, New York
substantive law applies to Enigma’s state-law claims, save
for the claims based on Malwarebytes’ transactions with
customers outside of New York.
    Judge Bumatay dissented. He wrote that the Lanham
Act protects against false or misleading representations of
fact, but flagging a competitor’s products as “potentially
unwanted,” a “threat,” or “malicious” is no expression of
fact—these are subjective statements, not readily verifiable,
which means they are opinions. He wrote that by treating
these terms as actionable statements of fact under the
Lanham Act, the court sends a chilling message to
cybersecurity companies—civil liability may now attach if a
court later disagrees with your classification of a program as
“malware.” He wrote that Enigma’s failure to allege a
misstatement of fact is also dispositive on its state-law
claims.

                         COUNSEL

Terry 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.
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.     5

Moez M. Kaba (argued), Michael H. Todisco, and Warren
S. Crandall, Hueston Hennigan LLP, Los Angeles,
California; John C. Hueston, Hueston Hennigan LLP,
Newport Beach, California; for Defendant-Appellee.

                         OPINION

CLIFTON, Circuit Judge:

    Plaintiff-Appellant Enigma Software Group USA LLC
(“Enigma”), a computer security software provider, sued a
competitor, Defendant-Appellee Malwarebytes, Inc.
(“Malwarebytes”), for designating its products as
“malicious,” “threats,” and “potentially unwanted
programs” (“PUPs”). Enigma’s operative complaint alleged
a false advertising claim under Section 43(a) of the Lanham
Act, 15 U.S.C. § 1125(a)(1)(B), and tort claims under New
York law.
    Malwarebytes moved to dismiss under Federal Rule of
Civil Procedure 12(b)(6). The district court granted the
motion, concluding that all of Enigma’s claims were
insufficient as a matter of law. It primarily based the
dismissal on its conclusion that Malwarebytes’s
designations of Enigma’s products were “non-actionable
statements of opinion.” As we explain in more detail below,
we disagree with that assessment. In the context of this case,
we conclude that when a company in the computer security
business describes a competitor’s software as “malicious”
and a “threat” to a customer’s computer, that is more a
statement of objective fact than a non-actionable opinion. It
is potentially actionable under the Lanham Act provided
6   ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

Enigma plausibly alleges the other elements of a false
advertising claim.
    The district court also held that the tort claims under New
York law failed because Malwarebytes was not properly
subject to personal jurisdiction in New York. That meant
Enigma’s claim for relief under New York General Business
Law (“NYGBL”) § 349 failed because that statute did not
apply to the alleged misconduct. We disagree and conclude
that Malwarebytes is subject to personal jurisdiction in New
York. As this action was initially filed in New York, the law
of that state properly applies.
    The common law claims for tortious interference with
contractual relations and tortious interference with business
relations were also dismissed by the district court. Those
torts are recognized as actionable under California law, as
they are under New York law, but the district court
concluded that Enigma failed to allege essential elements for
those claims under California law.
    The contractual relations claim failed because Enigma
did not identify a specific contractual obligation with which
Malwarebytes interfered. The business relations claim was
dismissed because that claim required an allegation of
independently wrongful conduct, and that requirement was
not satisfied following the dismissal of the Lanham Act and
NYGBL § 349 claims. Because we hold that the Lanham Act
and NYGBL § 349 claims should not have been dismissed,
we conclude that the tortious interference with business
relations claim should similarly not have been dismissed.
We agree with the district court regarding dismissal of the
claim for tortious interference with contractual relations,
however, and affirm the dismissal of that claim.
     ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.       7

    In sum, we affirm in part, reverse in part, and remand for
further proceedings.
I.      Background and Procedural History
    Enigma is a Florida company that markets and sells
computer security software nationwide. Its products,
according to its Second Amended Complaint (“SAC”), “(i)
detect and remove malicious software (i.e., malware)” such
as “viruses, spyware, adware, ransomware, and Trojans; (ii)
enhance users’ Internet privacy; (iii) offer users the choice
to block ‘Potentially Unwanted Programs’ (‘PUPs’); and/or
(iv) eliminate security threats and risks from problematic
software programs.” SAC ¶ 2.
    Malwarebytes is a Delaware corporation, headquartered
in California. It is a direct competitor of Enigma in the anti-
malware and computer security market. Founded in 2008, its
flagship anti-malware products are aimed, according to the
complaint, at “detect[ing] and remov[ing] malware, PUPs,
and other potentially threatening programs on users’
computers.” SAC ¶ 7.
    Enigma commenced this lawsuit against Malwarebytes
in the U.S. District Court for the Southern District of New
York asserting Lanham Act false advertising and
supplemental tort claims under New York law. See Enigma
Software Grp. USA, LLC v. Malwarebytes Inc., 260 F. Supp.
3d 401 (S.D.N.Y. 2017). Malwarebytes moved to dismiss for
lack of personal jurisdiction and failure to state a claim or,
in the alternative, to transfer the case to the Northern District
of California under 28 U.S.C. § 1404. Id. at 404. The district
court granted the motion to transfer and declined to reach the
motion to dismiss. Id.
8   ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

    In the California federal court, Malwarebytes renewed its
motion to dismiss, arguing that Enigma failed to state a claim
and, in the alternative, that Malwarebytes was immune from
suit as all of Enigma’s claims were barred by Section 230 of
the Communications Decency Act of 1996, 47 U.S.C.
§ 230(c)(2). See Enigma Software Grp. USA LLC v.
Malwarebytes Inc., No. 5:17-CV-02915-EJD, 2017 WL
5153698, at *1 (N.D. Cal. Nov. 7, 2017). The district court
granted the motion, holding that Malwarebytes was immune
from suit under Section 230. It did not examine whether
Enigma failed to state a claim. Id. at *4.
    Enigma appealed the district court’s ruling. This court
reversed and remanded, holding that Section 230 did not
apply to “blocking and filtering decisions that [we]re driven
by anticompetitive animus.” Enigma Software Grp. USA,
LLC v. Malwarebytes, Inc., 946 F.3d 1040, 1050 (9th Cir.
2019).
    On remand, Enigma filed its SAC asserting four causes
of action: (1) false advertising in violation of the Lanham
Act, 15 U.S.C. § 1125(a)(1)(B); (2) a violation of NYGBL
§ 349, prohibiting deceptive and unlawful business
practices; (3) tortious interference with contractual relations;
and (4) tortious interference with business relations.
    Enigma alleged that from 2008 to October 2016,
Malwarebytes’s products did not identify any of Enigma’s
products as “malicious,” “threats,” “PUPs,” or any other
type of malware, nor did it quarantine or block consumers
from using any of them. SAC ¶ 11. But starting in October
2016, the complaint alleged, Malwarebytes started to do so.
Enigma alleged it was in retaliation for Enigma suing an
affiliate of Malwarebytes called Bleeping Computer, which
held itself out to the public as an independent website
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.    9

reviewing software products. SAC ¶ 11. According to
Enigma, Bleeping Computer was not independent and
conveyed “false, misleading, and deceptive information” on
its website about Enigma and its products, as well as
“instruct[ing] users not to install, or to uninstall,” Enigma
products and “instead purchase Malwarebytes’ competing
products.” SAC ¶ 23. Enigma alleged that Bleeping
Computer disseminated this false information in exchange
for sales commissions from Malwarebytes. SAC ¶ 11.
    Enigma further alleged that Malwarebytes retaliated
against it because the former subpoenaed the latter in the
Bleeping Computer lawsuit seeking evidence of a
“profiteering scheme” between Malwarebytes and Bleeping
Computer “employing anticompetitive, unfair trade
practices” to Enigma’s detriment.
    Malwarebytes moved to dismiss for failure to state a
claim, and the district court again dismissed the case, as
described above. Regarding the Lanham Act claim, the
district court reasoned that Enigma alleged that
Malwarebytes’s designations of the former’s products were
“just [nonactionable] subjective opinions” rather than
“verifiably false.” As to Enigma’s state law claims, the
district court concluded that California law applied because
New York lacked personal jurisdiction over Malwarebytes.
For that reason alone, the district court held, the NYGBL
§ 349 claim failed. But even if New York law applied, the
claim failed for the same reasons that the Lanham Act claim
failed. The district court concluded that Enigma’s tortious
interference claims failed under California law. The district
court reasoned that the contractual interference claim failed
to identify “a specific contractual obligation with which
Malwarebytes interfered” and failed to “plead that
Malwarebytes engaged in any independently wrongful act
10 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

which interfered with a specific contractual obligation under
its at-will agreements with users.” The interference with
business relations claim failed because Enigma did not
“allege any other independently wrongful conduct,”—
meaning conduct “proscribed by some [statutory or common
law] standard,”—beyond the failed Lanham Act and
NYGBL § 349 claims.
    In dismissing the case, the district court also denied leave
to amend, reasoning that “there are no further facts Enigma
can allege to cure the complaint.” Enigma timely appealed.
II.        Discussion
    We review de novo a district court’s dismissal for failure
to state a claim, crediting all factual allegations as true and
construing the pleadings in the light most favorable to the
non-moving party. Tingley v. Ferguson, 47 F.4th 1055, 1066
(9th Cir. 2022).
      A.      Lanham Act
    Enigma argues that the district court erred in dismissing
its Lanham Act claim. Enigma alleged that Malwarebytes
designated its products and domains as “malicious,”
“threats,” and “PUPs” and that such statements were
“factually false” and misrepresented the very purpose of its
software. The district court held that these statements were
non-actionable statements of opinion. As to the statements
that Enigma’s products are “malicious” and “threats,” we
disagree.1

1
 Enigma also argues that our previous opinion in Enigma Software Grp.
USA, LLC v. Malwarebytes, Inc., 946 F.3d 1040 (9th Cir. 2019), compels
reversing the district court’s dismissal of the Lanham Act claim. There,
     ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 11

    To state a claim for false advertising under Section 43(a)
of the Lanham Act, Enigma had to allege that (1)
Malwarebytes made a false statement of fact in a commercial
advertisement; (2) the statement deceived or had the
tendency to deceive a substantial segment of its audience;
(3) the deception was material, in that it was likely to
influence the purchasing decision; (4) the false statement
entered interstate commerce; and (5) Enigma has been or is
likely to be injured as a result of the false statement.
Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134,
1139 (9th Cir. 1997). Because the district court concluded
that Malwarebytes’s challenged designations were non-
actionable statements of opinion rather than fact, the court
did not consider whether the company plausibly alleged the
other applicable requirements.2
     To show falsity under the Lanham Act, a plaintiff must
allege that “the statement was literally false, either on its face
or by necessary implication, or that the statement was
literally true but likely to mislead or confuse consumers.”
Id.; see also Ariix, LLC v. NutriSearch Corp., 985 F.3d 1107,
1121 (9th Cir. 2021) (quoting Coastal Abstract Serv., Inc. v.
First Am. Title Ins. Co., 173 F.3d 725, 731 (9th Cir. 1999))

we held that Enigma’s Lanham Act claim did not fall under Section 230
of the Communications Decency Act’s intellectual property exception.
Id. at 1052–53. We did not decide, however, whether Enigma stated a
claim under the Lanham Act.
2
  In addition to the defending the district court’s determination that the
challenged designations were nonactionable opinions rather than
statements of fact, Malwarebytes defends dismissal of the Lanham Act
claim on the alternative grounds that those designations were not
commercial speech, and that they did not deceive a substantial segment
of the relevant audience. We remand those issues to the district court to
consider in the first instance.
12 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

(“An actionable statement is a specific and measurable
claim, capable of being proved false or of being reasonably
interpreted as a statement of objective fact.”).
    Taken as true at the stage of a motion to dismiss,
Enigma’s allegations are sufficient to state a Lanham Act
claim. Malwarebytes’s designations employ terminology
that is substantively meaningful and verifiable in the
cybersecurity context. Unlike non-actionable statements of
puffery, which are “extremely unlikely to induce consumer
reliance,” Malwarebytes’s designations of Enigma’s
products “make[] a claim as to the specific or absolute
characteristics of a product” and are accordingly actionable
statements of fact under the Lanham Act. Newcal Indus., Inc.
v. Ikon Off. Sol., 513 F.3d 1038, 1053 (9th Cir. 2008)
(internal quotation marks and citation omitted). As Enigma
points out, its products either contain malicious files and
threaten the security of users’ computers, or they do not.
These statements are not the type of general, subjective
claims typically deemed non-actionable opinions.
    We must look to “the totality of the circumstances” when
assessing whether a statement implies a factual assertion.
Underwager v. Channel 9 Australia, 69 F.3d 361, 366 (9th
Cir. 1995). Although “malicious” and “threatening” are
“adjectives [that] admit of numerous interpretations,”
Partington v. Bugliosi, 56 F.3d 1147, 1158 (9th Cir. 1995),
“[t]he context . . . is paramount” because “the reasonable
interpretation of a word can change depending on the context
in which it appears.” Knievel v. ESPN, 393 F.3d 1068, 1075
(9th Cir. 2005). Malwarebytes’s anti-malware program
specifically labeled Enigma’s software as “malicious” and a
“threat,” which a reasonable person would plausibly
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 13

interpret as the identification of malware.3 SAC ¶¶ 143–64.
Because whether software qualifies as malware is largely a
question of objective fact, at least when that designation is
given by a cybersecurity company in the business of
identifying malware for its customers, Enigma plausibly
alleged that Malwarebytes’s statements are factual
assertions.
    Our dissenting colleague disagrees. The dissent
contends, at 36, that “[c]ontrary to Enigma’s claims, a
program isn’t simply ‘potentially unwanted’ or not. A
software program isn’t verifiably a ‘threat’ or not. And a
website isn’t measurably ‘malicious’ or not. In the
cybersecurity context, these terms refer to a spectrum of
digital features with no verifiable line to cross to determine
when they apply.”
    We agree that “potentially unwanted” is too unspecific to
provide a basis for a Lanham Act claim, as we noted above
at 13, n.3. But the premise of the dissent regarding the terms
“threat” and “malicious” rests on an understanding of the
meaning of those words in this context that we do not share.
    Malware, in its ordinary meaning, refers to software
“written with the intent of being disruptive or damaging to
(the user of) a computer or other electronic device; viruses,
worms, spyware, etc., collectively.” Oxford English
Dictionary Online (2022); see also Malware, Black’s Law
Dictionary (11th ed. 2019) (defining malware as “software,
used to monitor or gain access to another’s computer system

3
  Unlike the terms “malicious” and “threat,” which a cybersecurity
application would use to describe malware, “potentially unwanted
program” is too vague to be considered a factual assertion.
14 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

without authorization for the purpose of impairing or
disabling the system.”).
    We think such a definition lends itself to verification.
Enigma’s complaint indicates that malware can come in
many forms, including “viruses, spyware, adware,
ransomware, and Trojans.” SAC ¶ 2. But at bottom, as
demonstrated by the dictionary definitions quoted above, the
term necessarily implies that someone created software with
the intent to gain unauthorized access to a computer for some
nefarious purpose. The dissent offers no compelling reason
why that cannot be determined objectively. Just like the
certification at issue in Ariix, whether a given software
qualifies as malware can be reduced to “a binary
determination” based on “falsifiable criteria.” 985 F.3d at
1122. The dissent’s characterization of malware as “a
spectrum of digital features with no verifiable line” is
therefore incorrect.4

4
  The dissent contends that we have manufactured a claim against
Malwarebytes stating, “Enigma has never alleged that Malwarebytes
violated the Lanham Act based on the use of the term ‘malware.’”
Dissent at 42–43. Not so. Enigma alleged that Malwarebytes’s software
tells users that conducting a recommended “Threat Scan” “scans all the
places malware is known to hide.” SAC ¶ 132 (emphasis added). If
Malwarebytes’s software detected something as a “threat” or “PUP,” the
default configuration was to “treat detections as malware.” SAC ¶¶ 133–
34. The result is that Enigma customers using Malwarebytes’s software
to conduct a “Threat Scan” were left with the impression that Enigma’s
products were malware. See, e.g., SAC ¶ 147 (stating that one customer
contacted Enigma to inquire why “Malware bites [sic] says [Enigma’s
software] is an infection” and “another customer reported the ‘malware
bytes’ program keeps detecting malware every time I try to download
your software.’”); SAC ¶ 149 (“Please advise why your SpyHunter and
RegHunter applications are being detected as malware.”) (emphasis in
     ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 15

    More importantly, judges are not experts in the
cybersecurity field. We should not presume that we are.
Enigma has alleged that those terms have implied meaning
in that field which was understood by a significant portion
of its users, SAC ¶¶ 143–64, such that Malwarebytes’s
allegedly false use of those terms can be proved or disproved
as a matter of objective fact. Those allegations are not
implausible, and the dissent does not claim that they are. To
prevail, Enigma must ultimately prove that Malwarebytes’s
designation of its software was false. But at the motion to
dismiss stage, the allegations are sufficient.
    At root, the dissent’s disagreement with our conclusion
rests on its purported effort to protect expressions of
“opinion” based on its misperception of the First
Amendment. It makes that clear from its first paragraph.
Dissent at 27. The dissent acknowledges that the protection
afforded to commercial speech is limited and that “there can
be no constitutional objection to the suppression of
commercial messages that do not accurately inform the
public.” Dissent at 32 (quoting Cent. Hudson Gas & Elec.
Corp. v. Pub. Serv. Comm’n of New York, 447 U.S. 557, 562–
63 (1980)). But it does not heed that distinction. As we said
in Ariix,

         Today,    consumers     face     waves     of
         advertisements amid a sea of product choices.
         To navigate the seemingly unending stream
         of advertisements, consumers often depend
         on independent reviews for candid and
         accurate assessments. But when someone

original). In short, the dissent’s contention is premised on a misreading
of the record.
16 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

       falsely claims to be independent, rigs the
       ratings in exchange for compensation, and
       then profits from that perceived objectivity,
       that speaker has drowned the public trust for
       economic gain. Society has little interest in
       protecting such conduct under the mantle of
       the First Amendment.

Ariix, 985 F.3d at 1118–19.
    In that case, we held that a five-star rating system
comparing nutritional supplement products from the view of
the speaker was an opinion not actionable under the Lanham
Act. Id. at 1121. If Malwarebytes had said that its product
was better than Enigma’s product, that statement would be
covered by Ariix and not subject to a Lanham Act claim. That
is not the statement challenged by Enigma in this action,
though. Malwarebytes stated that Enigma’s products were a
“threat” and “malicious.” We conclude that those statements
could be found to be statements of objective fact, subject to
being found false. Like the “Medal of Achievement”
certification in Ariix, those statements may properly be the
subjects of a claim, outside the protection of the First
Amendment, as we held in that decision. Id. at 1121–22.
    The facts of this case do not closely match Ariix, but the
principle is the same. Enigma has alleged that Malwarebytes
disparaged Enigma’s products for commercial advantage by
making misleading statements of fact. If those allegations
are true, and at this stage we must presume that they are,
trying to wrap them in a First Amendment flag does not
make them any less offensive or any less actionable.
“Society has little interest in protecting such conduct under
the mantle of the First Amendment.” Id. at 1119.
     ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 17

    B.       Personal Jurisdiction
    Enigma also argues the district court erred in holding that
Malwarebytes was not subject to personal jurisdiction in
New York and that California law applied to the dispute. We
review personal jurisdiction rulings de novo. Ayla, LLC v.
Alya Skin Pty. Ltd., 11 F.4th 972, 978 (9th Cir. 2021).
    As noted above, the Southern District of New York
transferred this case to the Northern District of California.5
Generally, diversity cases transferred under 28 U.S.C.
§ 1404(a) require that the transferee district court apply the
state law, including the choice-of-law rules, of the original
transferor court. See Van Dusen v. Barrack, 376 U.S. 612,
639 (1964) (holding, in a diversity case transferred at the
request of the defendant, that “[a] change of venue under
§ 1404(a) generally should be, with respect to state law, but
a change of courtrooms”); Ferens v. John Deere Co., 494
U.S. 516, 529 (1990) (in another diversity case, extending
the rule of Van Dusen to cases transferred at the request of
the plaintiff); Muldoon v. Tropitone Furniture Co., 1 F.3d
964, 965–66 (9th Cir. 1993) (under Van Dusen and Ferens,
“the transferee court must follow the choice-of-law rules of
the transferor court”).
    To apply the state law of the transferor jurisdiction in a
§ 1404(a) transfer case, the transferor court must have had
personal jurisdiction over the defendant. Because the court
in New York declined to rule on Malwarebytes’s challenge
to personal jurisdiction before transferring this case, “the

5
 The district court exercised federal question jurisdiction over Enigma’s
Lanham Act claim, see 28 U.S.C. § 1331, and—because the parties are
citizens of different states—diversity jurisdiction over its state-law
claims, id. § 1332.
18 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

transferee court must determine whether . . . jurisdiction
would have been proper in the transferor court in order to
decide which forum state’s law will apply under Erie” and
Van Dusen. Davis v. Costa–Gavras, 580 F. Supp. 1082,
1086 (S.D.N.Y. 1984) (citing Roofing & Sheet Metal Servs.,
Inc. v. La Quinta Motor Inns, Inc., 689 F.2d 982, 992–93
(11th Cir. 1982); Ellis v. Great Southwestern Corp., 646
F.2d 1099, 1107 (5th Cir. Unit A June 1981); Martin v.
Stokes, 623 F.2d 469, 474 (6th Cir. 1980)); see also Nelson
v. Int’l Paint Co., 716 F.2d 640, 643 (9th Cir. 1983) (where
transferor court lacked personal jurisdiction, state law of
transferee court applies).
   Accordingly, we must determine whether the court in
New York had personal jurisdiction over Malwarebytes. If
New York had such jurisdiction, as discussed above we must
apply the law of New York to the state law claims; if the
New York court lacked personal jurisdiction, we would
apply the law of California.
    “An exercise of personal jurisdiction in federal court
must comport with both the applicable state’s long-arm
statute and the federal Due Process Clause.” Burri L. PA v.
Skurla, 35 F.4th 1207, 1212 (9th Cir. 2022). New York’s
long-arm statute states that a court may exercise specific
personal jurisdiction over a non-resident if it “transacts any
business within the state,” N.Y. C.P.L.R. § 302(a)(1), and if
the “cause of action ‘aris[es] from’ such a business
transaction.” Best Van Lines, Inc. v. Walker, 490 F.3d 239,
246 (2d Cir. 2007) (alteration in original) (quoting Deutsche
Bank Sec., Inc. v. Montana Bd. of Invs., 850 N.E.2d 1140,
1142 (N.Y. 2006)).
    “A defendant transacts business within the meaning of
§ 302(a)(1) when it purposefully ‘avails itself of the
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 19

privilege of conducting activities [in New York], thus
invoking the benefits and protections of its laws.’” Brown v.
Web.com Grp., Inc., 57 F. Supp. 3d 345, 356 (S.D.N.Y.
2014) (alteration in original) (quoting Fischbarg v. Doucet,
880 N.E.2d 22, 26 (N.Y. 2007)). “[P]roof of one transaction
in New York is sufficient to invoke jurisdiction, even though
the defendant never enters New York, so long as the
defendant’s activities [there] were purposeful and there is a
substantial relationship between the transaction and the
claim asserted.” Eades v. Kennedy, PC L. Offices, 799 F.3d
161, 168 (2d Cir. 2015) (quoting Chloé v. Queen Bee of
Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010)).
    Whether there is personal jurisdiction based on the
operation of a website depends on where the website falls on
the “spectrum of interactivity.” Weiss v. Barc, Inc., No. 12
CV 7571(TPG), 2013 WL 2355509, at *4 (S.D.N.Y. May
29, 2013). “Passive websites . . . are limited to making
information available to users” and do not establish personal
jurisdiction. Id. “Interactive websites knowingly transmit
goods or services to users and if made available to New York
residents, the activities can be sufficient for establishing
personal jurisdiction over a defendant.” Id. The website
operated by Malwarebytes easily qualifies as interactive
under Weiss.
    As for whether the claim “arises from” a business
transaction, the New York Court of Appeals has held that the
“arising from” prong of Section 302(a)(1) does not require
but-for causation between a defendant’s New York business
activity and a plaintiff’s injury. Licci v. Lebanese Canadian
Bank, 984 N.E.2d 893, 900 (N.Y. 2012). Instead, it requires
“a relatedness between the transaction and the legal claim
such that the latter is not completely unmoored from the
former . . . . In effect, the ‘arise-from’ prong limits the
20 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

broader ‘transaction-of-business’ prong to confer
jurisdiction only over those claims in some way arguably
connected to the transaction.” Id. at 900–01.
    Applying these standards, Malwarebytes is subject to
personal jurisdiction in New York. First, Malwarebytes
“transacts business” in New York through its website, which
allows New York–based users to buy and download
products.6 Malwarebytes does not have to be physically
present in New York to transact business there within the
meaning of the first clause of Section 302(a)(1). See Chloé,
616 F.3d at 169 (collecting cases). Second, Enigma’s claims
in this lawsuit arise at least in part out of Malwarebytes’s
transaction of business in New York. Courts in New York
have held that the sale of copyright- and trademark-
infringing works into New York through the internet is
sufficient to establish personal jurisdiction under the “arising
under” prong.7
   New York’s exercise of personal jurisdiction is also
consistent with the Due Process Clause. See Knight v.
Standard Chartered Bank, 531 F. Supp. 3d 755, 763

6
  Cf. Citigroup Inc. v. City Holding Co., 97 F. Supp. 2d 549, 565–66
(S.D.N.Y. 2000) (finding that a website permitting New Yorkers to apply
for loans and communicate with defendant’s employees was
“unqualifiedly commercial in nature,” rising to the level of transacting
business required by § 302(a)(1)); NFL v. Miller, No. 99 Civ. 11846
JSM, 2000 WL 335566, at *1 (S.D.N.Y. Mar. 30, 2000) (“[O]ne who
uses a web site to make sales to customers in a distant state can thereby
become subject to the jurisdiction of that state’s courts.”).
7
   See, e.g., Mattel, Inc. v. www.fisher-price.online, No. 21-CV-9608
(LJL), 2022 WL 2801022, at *4 (S.D.N.Y. July 18, 2022) (defendant’s
sale of counterfeit products in New York had “a substantial relationship
with Plaintiff’s claim that Defendant counterfeited and infringed upon
[its trademarks] in violation of the Lanham Act”).
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 21

(S.D.N.Y. 2021) (“[B]ecause the Due Process Clause
permits the exercise of jurisdiction in a broader range of
circumstances [than] N.Y. C.P.L.R. § 302, . . . a foreign
defendant meeting the standards of § 302 will satisfy the due
process standard.”) (internal quotation marks and citation
omitted). Therefore, if an exercise of personal jurisdiction
satisfies New York’s long-arm statute, it also satisfies the
Due Process Clause. See D.H. Blair & Co. v. Gottdiener, 462
F.3d 95, 105 (2d Cir. 2006) (“[T]he constitutional
requirements of personal jurisdiction are satisfied because
application of [§ 302(a)] meets due process requirements.”).
    We therefore reverse the district court’s holding that
New York lacked personal jurisdiction over Malwarebytes
and that California law applies to Enigma’s state law claims.
New York has personal jurisdiction over Malwarebytes with
respect to its sales to New York–based customers, and
therefore New York law applies to Enigma’s state-law
claims based on those transactions. We do not decide
whether New York law applies to Malwarebytes’s
transactions with other customers outside the state of New
York. That choice of law question is not before us in the
current appeal.
   C.        State-law Claims
        1.      NYGBL § 349
    The district court dismissed Enigma’s NYGBL § 349
claim for two reasons. The first was that New York law did
not apply. The second was that “an opinion that is not
actionable under the Lanham Act is also not actionable under
the NYGBL § 349.” Because we hold that New York law
applies and that Enigma’s Lanham Act claim is actionable,
we reverse the dismissal of the NYGBL claim and remand
to the district court to reinstate.
22 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

       2.      Tortious interference claims
    Enigma also argues that the district court erred in
dismissing its claims for tortious interference with
contractual and business relations. The district court
construed the tortious interference claims under California
law, but as discussed above, New York law applies to these
claims. Reading the complaint in the light most favorable to
the plaintiff, as we must, Enigma has sufficiently pled its
cause of action for tortious interference with business
relations but has failed to do so for tortious interference with
contractual relations.
            a. Tortious interference with business relations
    To state a claim for tortious interference with business
relations, New York requires a plaintiff to establish that:

       (1) it had a business relationship with a third
       party; (2) the defendant knew of that
       relationship and intentionally interfered with
       it; (3) the defendant acted solely out of
       malice, or used dishonest, unfair, or improper
       means; and (4) the defendant’s interference
       caused injury to the relationship.

Kirch v. Liberty Media Corp., 449 F.3d 388, 400 (2d Cir.
2006) (quoting Carvel Corp. v. Noonan, 350 F.3d 6, 17 (2d
Cir. 2003)). Enigma’s complaint plausibly demonstrated
each of these factors.
    Enigma stated in its complaint that it had contracts with
customers who purchased subscription-based licenses to use
its SpyHunter 4 and RegHunter 2 software. SAC ¶ 235.
Enigma also stated that it and Malwarebytes had some
customers in common who, seeking added levels of security,
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 23

simultaneously used both companies’ products. SAC ¶ 236.
Enigma further alleged Malwarebytes took a series of steps
to interfere with its prospective relationships with
customers. For instance, Enigma stated that Malwarebytes
(1) falsely labelled Enigma’s products as “threats” and
“PUPs,” (2) automatically blocked customers from installing
Enigma’s software, and (3) automatically quarantined and
preselected Enigma software for deletion. SAC ¶¶ 237–39.
The result of this conduct, Enigma alleges, is that
Malwarebytes induced Enigma’s customers to choose either
not to install, or to delete, Enigma’s programs from their
computers without any legitimate justification. SAC ¶ 240.
    Further, Enigma alleged the prospective relationships
with the requisite specificity to establish a claim for tortious
interference with business relations. New York requires that
a “plaintiff . . . identify a specific customer that the plaintiff
would have obtained ‘but for’ the defendant’s wrongful
conduct,” Zetes v. Stephens, 969 N.Y.S.2d 298, 304 (4th
Dep’t 2013), as relief should not be afforded for merely
speculative damage, see, e.g., Parekh v. Cain, 948 N.Y.S.2d
72, 76 (2d Dep’t 2012) (dismissing a claim for tortious
interference with business relations because the plaintiff did
not identify a third party with which the plaintiff had
business relations). For this, Enigma asserted that certain
customers downloaded its software before paying for a full
subscription. SAC ¶¶ 244–46. Because Enigma points to
identifiable customers whose business it lost, its complaint
plausibly alleges that it had business relationships with third
parties.
    The district court’s dismissal of this claim for Enigma’s
inability to identify an independent wrongful act was
erroneous for two reasons. First, Enigma’s reinstated claims
under the Lanham Act and NYGBL § 349 could serve as
24 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

independent wrongful acts if such a showing were necessary.
More importantly—and unlike under California law, see
Ixchel Pharma, LLC v. Biogen, Inc., 470 P.3d 571, 576 (Cal.
2020) (“[I]ntentionally interfering with prospective
economic advantage requires pleading that the defendant
committed an independently wrongful act.”)—a claim for
tortious interference with business relations under New York
law does not require the plaintiff to show an “independent
wrongful act.” Instead, Enigma only needs to allege that
Malwarebytes acted “solely out of malice, or used dishonest,
unfair, or improper means,” Kirch, 449 F.3d at 400, which it
did in its complaint. See SAC ¶ 249 (Malwarebytes acted
“for the sole purpose of inflicting intentional harm upon
[Enigma]”). Accordingly, we hold that Enigma sufficiently
alleged the elements of a claim for tortious interference with
business relations.
           b. Tortious interference       with    contractual
              relations
   To establish a claim of tortious interference with contract
under New York law, a plaintiff must plead the following
elements:

       (1) the existence of a valid contract between
       the plaintiff and a third party; (2) the
       defendant’s knowledge of the contract; (3)
       the defendant’s intentional procurement of
       the third-party’s breach of the contract
       without justification; (4) actual breach of the
       contract; and (5) damages resulting
       therefrom.

Kirch, 449 F.3d at 401 (internal quotation marks and citation
omitted).
       ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 25

    The district court held that the contractual relations
interference claim failed because Enigma did not identify
any contractual breach that Malwarebytes induced.
Although the district court improperly analyzed this claim
under California law, the bottom-line result was still correct
under New York law.
    To state a claim for tortious interference with contractual
relations under New York law, a plaintiff must allege that
the defendant induced an actual breach of contract. See NBT
Bancorp Inc. v. Fleet/Norstar Fin. Grp., Inc., 664 N.E.2d
492, 495–96 (N.Y. 1996) (holding that, although tortious
interference can take many forms, New York mandates that
actual breach be shown). Here, Enigma alleged that its
preexisting customers cancelled their subscriptions and
requested refunds because of Malwarebytes’s conduct. SAC
¶¶ 239–41. And although this amounts to disruption of the
contractual relationship between Enigma and its customers,
it falls short of alleging any contractual breach by those
customers. Because New York law requires such a breach,
Enigma has not adequately pled one of the required elements
for a claim of tortious interference with contractual relations.
III.      Conclusion
    We affirm the district court’s dismissal of Enigma’s
claim of tortious interference with contractual relations. We
reverse the district court’s dismissal of Enigma’s remaining
claims and remand for further proceedings consistent with
this opinion. Each party is to bear its own costs.
  AFFIRMED in PART, REVERSED in PART, and
REMANDED for further proceedings.
26 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

BAKER, Judge, concurring:

     I join the majority opinion in full and write separately to
briefly touch on choice of law. As the opinion
acknowledges, ordinarily the application of a transferor
jurisdiction’s law under Van Dusen and Ferens carries with
it the choice-of-law rules of that jurisdiction. See Muldoon
v. Tropitone Furniture Co., 1 F.3d 964, 965 (9th Cir. 1993)
(under Van Dusen and Ferens, “the transferee court must
follow the choice-of-law rules of the transferor court”).
    Here, however, the parties have not addressed choice of
law beyond the dispute over whether personal jurisdiction
existed in the Southern District of New York. They appear
to agree that if such jurisdiction existed, then New York
substantive law would govern Enigma’s state-law claims
and, conversely, if such jurisdiction were lacking, then
California substantive law would apply. The opinion
therefore assumes—as the parties did in their briefing by not
addressing choice of law—that New York’s choice-of-law
rules require application of that state’s substantive law to
Enigma’s state-law claims, save for the claims based on
Malwarebytes’s transactions with customers located
elsewhere.
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 27

BUMATAY, Circuit Judge, dissenting:

    When a cybersecurity company flags another company’s
products as “potentially unwanted programs,” “threats,” or
“malicious,” could it be liable for false advertising under the
Lanham Act? The answer is plainly “no.” The Lanham Act
protects against false or misleading representations of fact.
See 15 U.S.C. § 1125(a)(1)(B). But flagging a competitor’s
products as “potentially unwanted,” a “threat,” or
“malicious” is no expression of fact—these are subjective
statements, not readily verifiable. That means they are
opinions. The freedom to express opinions is at the core of
the First Amendment. And that guarantee doesn’t change
because the opinions are about cybersecurity, malware, or
internet domains.
    Thus, even in the commercial context, we must be
careful not to expand Lanham Act liability to encompass
protected opinions. Unfortunately, that is exactly what our
court does here. We mistake subjective expressions of
opinion for provable statements of fact—falling for the claim
that some of these terms have an uncontested, objective
meaning in the cybersecurity field. Yet even a cursory
review shows that’s not true. By treating these terms as
actionable statements of fact under the Lanham Act, our
court sends a chilling message to cybersecurity companies—
civil liability may now attach if a court later disagrees with
your classification of a program as “malware.” But we have
neither the authority nor the competence to arrogate to
ourselves regulatory oversight over cybersecurity.
   For these reasons, I respectfully dissent.
28 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

                             I.
    Enigma Software Group USA, LLC and Malwarebytes,
Inc. develop competing anti-malware software products.
“Malware” is a portmanteau of “malicious” and “software.”
Oxford English Dictionary Online (2022). So, as the term
implies, anti-malware programs are designed to detect and
remove potentially unwanted, threatening, or malicious
programs from users’ computers. For eight years, from 2008
to 2016, the two companies’ products coexisted on users’
systems without issue. But in 2016, things changed. In
October of that year, Malwarebytes announced that it was
getting “tougher” on potentially unwanted programs. The
move was purportedly a response to software developers’
efforts to circumvent the company’s detection criteria.
    Malwarebytes provided a statement announcing its new
criteria:

       How do we identify potentially unwanted
       software?
       Analyzing and categorizing potentially
       unwanted software is a complex problem.
       Developers of potentially unwanted software
       rapidly evolve their products. Some even
       contain a few characteristics that resemble
       legitimate software to mask the unwanted
       functionality. It’s an on-going process, and
       we work hard to identify common behaviors
       that help provide you the highest level of
       protection.    In some cases, where the
       behavior is questionable, we will list the
       application even if it does not neatly fit into
   ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 29

       the listed criteria. In other words, we use our
       judgment.
       While we highlight potentially unwanted
       programs, you then make a choice in the
       exclusions list and select what you want to
       keep or remove.
       Here are some of the criteria we use:
       • obtrusive, misleading, or deceptive
       advertising, branding, or search practices
       • excessive or deceptive distribution, affiliate
       or opt-out bundling practices
       • aggressive or deceptive behavior especially
       surrounding purchasing or licensing
       • unwarranted, unnecessary, excessive,
       illegitimate, or deceptive modifications of
       system settings or configuration (including
       browser settings and toolbars)
       • difficulty uninstalling or removing the
       software
       • predominantly negative feedback or ratings
       from the user community
       • diminishes user experience
       • other practices generally accepted as
       riskware, scareware, adware, greyware, or
       otherwise commonly unwanted software by
       the user community

   Malwarebytes informed its users that it must “regularly
update” its software to meet these criteria. The company
30 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

also warned that “sometimes [it] get[s] it wrong” and
provided an email address to ask for “reconsideration” of its
decisions. Noting the need to respond promptly to “new
forms of potentially unwanted software” that “frequently
emerge and proliferate,” Malwarebytes “reserve[d] the right
to adjust, expand and update [its] criteria without prior notice
or announcements.”
    Under the new criteria, Malwarebytes’ software
designated two of Enigma’s anti-malware products—
“SpyHunter 4” and “RegHunter 2”—as “potentially
unwanted programs” and “threats.”           As a result,
Malwarebytes’ program blocked, quarantined, or disabled
SpyHunter 4 and RegHunter 2’s operation on users’
computers. Enigma contends that Malwarebytes blocked its
programs because of “anticompetitive animus” and in
retaliation for Enigma suing a Malwarebytes affiliate.
According to Malwarebytes, its program flagged SpyHunter
4 and RegHunter 2 as “scareware”—which Malwarebytes
defines as programs that detect harmless system files and
browser cookies and present them with alarming graphics
“to convince users their systems have problems.”
    Malwarebytes’ users had at least two options available if
they wished to continue using Enigma’s products. They
could exclude Enigma’s programs from scans by
“unchecking” and “ignor[ing]” the detection following
Malwarebytes’ instructions, or they could stop using
Malwarebytes’ program. But Enigma disputes whether both
programs can operate together. It argues that Malwarebytes’
default settings effectively prevent users from excluding
Enigma’s programs from scans, citing complaints from users
who struggled to change them.
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 31

    In December 2016, in response to Malwarebytes’ change
of criteria, Enigma issued a “Countermeasure,” which
allowed Enigma’s customers to download an installer that
disabled Malwarebytes’ products.          Shortly after,
Malwarebytes responded by having its anti-malware
program block access to Enigma’s web domains—URLs
ending in “.enigmasoftware.com.” Malwarebytes’ program
flagged the domains with a pop-up—“Malicious Website
Blocked.” Enigma alleges that Malwarebytes’ domain
blocking was retaliation for the “Countermeasure.” After
some time, Malwarebytes stopped flagging Enigma’s
domains, which Enigma takes as a concession that
quarantining its websites was improper.
    Enigma sued, alleging false advertising under the
Lanham Act and various torts under New York state law.
Enigma first brought suit in the Southern District of New
York, which transferred the case to the Northern District of
California. In the Northern District of California, the district
court granted Malwarebytes’ first motion to dismiss based
on immunity under § 230 of the Communications Decency
Act, 47 U.S.C. § 230. A divided panel of this court reversed
because we held that “immunity under [§ 230] does not
extend to anticompetitive conduct.” Enigma Software Grp.
USA, LLC v. Malwarebytes, Inc., 946 F.3d 1040, 1054 (9th
Cir. 2019). Dissenting, Judge Rawlinson noted that the
majority’s policy justifications for the carveout contravened
both text and precedent. Id. at 1054–55 (Rawlinson, J.,
dissenting).
   On remand, the district court again granted
Malwarebytes’ motion to dismiss. This time, the district
court held that Malwarebytes’ flagging of Enigma’s
products conveyed “non-actionable statements of opinion.”
Enigma Software Grp. USA, LLC v. Malwarebytes Inc.,
32 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

2021 WL 3493764, at *11 (N.D. Cal. 2021).             Enigma
appealed.
   On de novo review, this should have been an easy affirm.
                              II.
                              A.
    When it comes to the regulation of any speech, we
should always begin with the First Amendment. The First
Amendment protects against laws that abridge the freedom
of speech. U.S. Const. amend. I. And that’s true even in the
commercial context. Since Virginia Pharmacy Board v.
Virginia Citizens Consumer Council, Inc., 425 U.S. 748
(1976), the Supreme Court has recognized that First
Amendment protections apply to the regulation of purely
commercial speech. Id. at 761, 770. Such freedom advances
at least three purposes: it “serves the economic interest of
the speaker,” it “assists consumers,” and it “furthers societal
interest in the fullest possible dissemination of information.”
Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of
New York, 447 U.S. 557, 561–62 (1980).
   Of course, the Constitution “accords a lesser protection
to commercial speech than to other constitutionally
guaranteed expression,” and so “there can be no
constitutional objection to the suppression of commercial
messages that do not accurately inform the public.” Id. at
562–63. But unless the commercial communication is
“misleading,” the government’s power to circumscribe
commercial speech is limited. Id. at 564.
    This is where the Lanham Act fits in. In 1946, Congress
created a cause of action for “unfair competition through
misleading advertising or labeling.” POM Wonderful LLC
v. Coca-Cola Co., 573 U.S. 102, 107 (2014). To protect
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 33

companies from competitors’ false attacks, § 43(a) of the
Lanham Act creates civil liability for:

       Any person who, on or in connection with
       any goods or services, . . . uses in commerce
       any . . . false or misleading description of
       fact, or false or misleading representation of
       fact, which . . . in commercial advertising or
       promotion, misrepresents the nature,
       characteristics, qualities, or geographic
       origin of his or her or another person’s goods,
       services, or commercial activities[.]

15 U.S.C. § 1125(a)(1)(B). So, on one hand, to state a claim
under the Lanham Act, a plaintiff must show that the
defendant made “false or misleading representations of
fact.” Ariix, LLC v. NutriSearch Corp., 985 F.3d 1107, 1121
(9th Cir. 2021). On the other hand, given the freedom of
speech, “statements of opinion” are beyond the purview of
the Lanham Act. Id.
    With the First Amendment overlay here, we must be
careful in delineating what constitutes “fact” versus
“opinion.” While statements of fact are actionable under the
Lanham Act, “[s]tatements of opinion and puffery . . . are
not.” Id. And it makes no difference if the statements of
opinion are made for the purpose of anticompetitive gain.
After all, the suppression of “opinions”—even in the
commercial space—gets into murky constitutional waters.
Even so, it’s not always easy to distinguish between the two.
See, e.g., Cochran v. NYP Holdings, Inc., 210 F.3d 1036,
1038 (9th Cir. 2000) (per curiam) (“[A] statement of opinion
is not automatically entitled to First Amendment protection
simply by virtue of its status as opinion; rather, a statement
34 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

of opinion may be actionable to the extent that it implies a
false assertion of fact.” (simplified)).
    But our court has developed some good guideposts.
Commercial speech is actionable if it is “specific and
measurable,” “capable of being proved false or of being
reasonably interpreted as a statement of objective fact.”
Ariix, 985 F.3d at 1121. In other words, “a statement that is
quantifiable, that makes a claim as to the specific or absolute
characteristics of a product” may be actionable under the
Lanham Act. Newcal Indus., Inc. v. Ikon Off. Sol., 513 F.3d
1038, 1053 (9th Cir. 2008) (simplified). Given the serious
creep on First Amendment protections when we curtail
speech, when “it is highly debatable” whether a statement is
verifiable enough to be actionable, we must “err on the side
of nonactionability.” Partington v. Bugliosi, 56 F.3d 1147,
1158–59 (9th Cir. 1995) (simplified).
    Ariix is a good example of how these principles work. In
that case, a nutrition-and-health research company published
a guide that compared and reviewed nutritional supplements
using a five-star rating system based on 18 criteria. 985 F.3d
at 1111. It also awarded a “Medal of Achievement” to
nutritional supplements manufacturers that meet two
measurable conditions: (1) compliance with FDA’s “good
manufacturing practices” and (2) certification of product
labels by an approved laboratory. Id. The research company
portrayed itself to the public as independent, presenting only
objective data and scientific analyses. But privately the
company allegedly had financial ties to one manufacturer of
nutritional products. Id. at 1112. The company was then
accused of improperly manipulating the rating system and
withholding the certification from a competing manufacturer
that met the two conditions. Id. at 1112–13.
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 35

     We first considered whether the company’s five-star
ratings were actionable. 985 F.3d at 1121. We said no.
Even though the ratings were purportedly based on
“objective and scientific criteria,” we still held that they were
not factual. Id. That’s because “there is an inherently
subjective element in deciding which scientific and objective
criteria to consider.” Id. As an example, we compared the
ratings to college or law school rankings. While objective
criteria go into the rankings (like acceptance rates, test
scores, and class size), “selecting those criteria involves
subjective decision-making.” Id. Thus, we concluded that
the ratings were “simply statements of opinion about the
relative quality of various nutritional supplement products.”
Id.; cf. Underwager v. Channel 9 Australia, 69 F.3d 361, 367
(9th Cir. 1995) (concluding statements must rest “on a core
of objective evidence” to be provable as true or false under
defamation law).
    But the “Medal of Achievement” certification was
different. The award (or more precisely, the lack of an
award) makes “specific and measurable statements” about a
nutritional supplements manufacturer. Ariix, 985 F.3d at
1121–22.      The company’s certification is “a binary
determination” based on “falsifiable criteria” and the failure
to award the certification (when a manufacturer complies
with the two criteria) “falsely implies to consumers” that the
manufacturer did not meet manufacturing or labeling
standards. Id. at 1122. Because “[t]hese implications are
specific, measurable, and capable of being falsified,” we
held that they were actionable statements under the Lanham
Act. Id.
    So boiled down, whether commercial speech is
actionable depends on whether the statement implies
something that can be proven false.
36 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

   With this legal background, I turn to Enigma’s claims
against Malwarebytes.
                             B.
    Here, we must determine whether Malwarebytes’
statements calling Enigma’s products “potentially
unwanted,” a “threat,” or “malicious” can be proven false.
Given that each warning has an “inherently subjective
element,” id. at 1121, the answer is no.              Even if
Malwarebytes employed these terms to protect its products
from competition from Enigma, there are no dispositive,
objective criteria that would allow us to police whether the
three terms were falsely used against Enigma. In other
words, unlike the certification in Ariix, the three statements
aren’t “binary determinations.” Id. Contrary to Enigma’s
claims, a program isn’t simply “potentially unwanted” or
not. A software program isn’t verifiably a “threat” or not.
And a website isn’t measurably “malicious” or not. In the
cybersecurity context, these terms refer to a spectrum of
digital features with no verifiable line to cross to determine
when they apply. Cf. Underwager, 69 F.3d at 367 (“the term
‘lying’ applies to a spectrum of untruths including ‘white
lies,’ ‘partial truths,’ ‘misinterpretation,’ and ‘deception’”
and so is nonactionable). They thus depend on “subjective
decision-making,” Ariix, 985 F.3d at 1121, requiring the
exercise of judgment to determine when the warning is
warranted.
   Without a “core of objective evidence” to assess the
accuracy of the use of the warnings, Underwager, 69 F.3d at
367, no reasonable factfinder can say that Malwarebytes
made a false representation of fact in labeling Enigma’s
products or website as a “threat,” “malicious,” or
“potentially unwanted.” In fact, nowhere does Enigma offer
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 37

an objective, measurable definition of the warnings from
which we may draw an implication of testable falsehoods.
Instead, Enigma hints that they carry “specific factual
meanings” in the cybersecurity field and discovery is
required before we may fully understand this. As shown
below, this is not enough to state a claim under the Lanham
Act, and we should have affirmed the dismissal of Enigma’s
claims.
   i.      Potentially Unwanted Program
     Take the phrase “potentially unwanted program.” That
designation inherently requires some guesswork—
estimating whether a program would be wanted—as made
clear by using the term “potentially.” And “unwanted” fits
within the type of nonactionable “personal assessments or
criticisms” that enjoy First Amendment protections. See
Partington, 56 F.3d at 1158 (observing that “fake,” “phony,”
“hefty mark-up,” and “unfair” are too subjective or
unprovable to be actionable). So the ordinary meaning of
the phrase conveys both uncertainty and subjectivity—not
falsifiability.
     If there were any question about the subjective nature of
the phrase, Malwarebytes made it clear that it developed its
own criteria to determine what’s “potentially unwanted.”
Malwarebytes announced eight criteria for the designation,
including obtrusive or misleading advertising, negative
feedback, the difficulty in uninstalling or removing a
program, and whether the program can be considered
“riskware, scareware, adware, greyware, or otherwise
commonly unwanted by the community.”                  It also
acknowledged that some malware didn’t “neatly fit into the
listed criteria,” which only represented “some of the
criteria.” It explained that identifying malware was
38 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

ultimately a judgment call, and “sometimes we get it
wrong.”    To address the changes in programming,
Malwarebytes expressly “reserve[d] the right to adjust,
expand and update [its] criteria without prior notice or
announcements.”
     Malwarebytes was thus explicit that subjectivity inhered
in its “potentially unwanted program” determinations. As in
Ariix, when a company develops a rating or designation
containing “inherently subjective element[s],” like the eight
criteria here, the designation cannot be actionable. Even if
some of Malwarebytes’ criteria could be treated as objective
and technical, it would have no impact on the analysis.
That’s because “there is an inherently subjective element in
deciding which scientific and objective criteria to consider.”
Ariix, 985 F.3d at 1121. And the weight assigned to each
criterion would also reflect Malwarebytes’ subjective
assessment of what constitutes a “potentially unwanted
product.” Id.
    In response, Enigma offers no objective, factual
definition of its own. Nor does Enigma provide any
evidence that the term has an agreed-upon and well-known
meaning in the cybersecurity world. Indeed, Enigma’s own
allegations prove the phrase’s subjective nature. For
instance, Enigma’s complaint alleges “Malwarebytes’ new
criteria rejected specific objective or scientific standards in
favor of subjective characteristics.” Similarly, Enigma
repeatedly criticized Malwarebytes’ criteria as “subjective,”
“vague,” and “self-serving”—grounds on which we have
previously held statements unactionable under the Lanham
Act. See Coastal Abstract, 173 F.3d at 731 (“vague and
subjective” statements are not liable under the Lanham Act).
So crediting the complaint’s allegations (as we must),
Enigma “may [have] plead[ed] [it]self out of court.”
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 39

Weisbuch v. County of Los Angeles, 119 F.3d 778, 783 n.1
(9th Cir. 1997).
   ii.     Threat
    The analysis of the “threat” designation fares no better.
Start with its ordinary meaning.          Like “potentially”
unwanted programs, “threat” generally refers to a “possible
source of harm or danger.” American Heritage Dictionary
of the English Language (5th ed. 2011) (emphasis added).
Given its tentative nature, it is not an absolute or specific
measurement. And, as with “unwanted,” a “source of harm
or danger” involves a subjective determination. See, e.g.,
Hernandez v. Scottsdale Hotel Grp. LLC, 2020 WL
6827745, at *3 (D. Ariz. Nov. 20, 2020) (holding the word
“threatening” in a defamation suit “is not provable or
falsifiable”). Indeed, Malwarebytes’ user guide emphasizes
that some programs or files categorized as “threats” are “not
malicious” and “[i]t is up to individual users to research and
make this determination.” Malwarebytes User Guide,
“Quarantine,” § 8.1 (2016).
    Enigma, for its part, doesn’t contend that there is a single
criterion for identifying software as a “threat.” Instead, it
suggests that the term is “widely used” and “commonly
understood” in cybersecurity—pointing to several
definitions from federal statutes and governmental and
software industry authorities. But even accepting these
definitions, they also confirm the subjective nature of the
term “threats” and so undermine Enigma’s assertions.
    First, Enigma offers the National Institute of Standards
and Technology (“NIST”) glossary for a definition of
“threat.” But NIST’s glossary has no fewer than 20
40 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

definitions for “threat.”1 Those definitions range from
“[a]ny circumstance or event with the potential to adversely
impact organizational operations . . . through an information
system via unauthorized access, destruction, disclosure,
modification of information, and/or denial of service” to “an
activity, deliberate or unintentional, with the potential for
causing harm to an automated information system or
activity.” Id. Thus, “threat” is defined in only the broadest
terms—“potential” for “harm” and “adverse[] impacts”—
with no attempt to narrow the field. And NIST prefaces its
glossary with the warning that “[t]erminology changes over
time” and its definitions may “contain potentially biased
terminology.” Id.
    Next, Enigma asks us to adopt the International
Organization for Standardization’s (“ISO”) definition of
“threat.” It provides that a “threat” is “a potential cause of
an unwanted incident, which can result in harm to a system
or organization.” ISO/IEC 27000, Info. Sec. Mgmt.
Standard, at 10 (2018). The problems with this definition
are obvious. It requires a subjective assessment of what is
“unwanted,” and it requires some guessing because it applies
to anything that “potential[ly]” causes harm. As with
“potentially unwanted programs,” such a definition offers no
measurable or objective guidance.
    Finally, Enigma looks to the definition of “cybersecurity
threat” from the Cybersecurity Act of 2015, 6 U.S.C. §§ 650,
1501. The Act defines “threat” as:

1
  Comput. Sec. Res. Ctr. Glossary, U.S. Dep’t. of Com. Nat’l Inst. of
Standards and Tech. (NIST), available at: https://csrc.nist.gov/glossary/t
erm/threat [https://archive.is/5yDWa].
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 41

          “[A]n action, not protected by the First
          Amendment to the Constitution of the United
          States, on or through an information system
          that may result in an unauthorized effort to
          adversely impact the security, availability,
          confidentiality, or integrity of an information
          system or information that is stored on,
          processed by, or transiting an information
          system.”

6 U.S.C. § 650(8)(A). Thus, this federal definition applies
to a broad range of “impact[s]” and requires a subjective
assessment of what is “adverse[].” Acknowledging the
ambiguity of its definition, the Act excludes “any action that
solely involves a violation of a consumer term of service or
a consumer licensing agreement.” § 650(8)(B).
    Nothing in these definitions supplies an objective,
measurable basis to assess the term’s veracity. In fact,
Enigma’s identification of multiple meanings for “threats”
by itself shows that the term represents an opinion rather than
a fact. See Steam Press Holdings, Inc. v. Hawaii Teamsters,
Allied Workers Union, Loc. 996, 302 F.3d 998, 1008–09 (9th
Cir. 2002) (approving argument that a phrase “subject to
multiple interpretations” is not “susceptible of verification”).
As we’ve said, when a term or phrase lacks a “singular” and
“concrete” meaning, it cannot be “readily verifiable.” Id. at
1009. So Enigma’s own attempt to provide meaning to the
term only establishes its vague and unfalsifiable nature.
   iii.      Malicious
   Nor does “malicious” have an objective and absolute
measurement. In its complaint, Enigma pleads that calling a
website “malicious” has a common meaning in the
42 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

“cybersecurity and privacy software markets”—“that the
website is harmful and can be disruptive to [users’]
computers.” Even if we accept this allegation as pleaded
fact, this definition of “malicious” reeks of subjectivity.
Because of the vagueness and inherent non-objectiveness of
“harmful” and “disruptive” in the definition of “malicious,”
the designation suffers from the same deficiencies as the
other two—there is no implied objective fact that can be
proven right or wrong. What can be “harmful” or
“disruptive” is necessarily in the eye of the beholder.
Imagine an energetic child in the classroom. Some might
view the child as “playful,” while others view him as
“disruptive.” Or spicy food. Some may find it enjoyable,
while others might find it “harmful” to their digestion.
    Likewise, whether Enigma’s “Countermeasure” to
disable Malwarebytes’ software was “harmful” and
“disruptive” is a matter of opinion. To Malwarebytes, a
website that offered a program that deliberately targeted and
removed its anti-malware products could fit the bill. To
Enigma, its website was innocuous and only allowed its
customers the choice to continue to use its products without
interference from Malwarebytes. Rather than weighing in
on this difference of opinion, we should have allowed the
market to decide who is right.
                             C.
    Ignoring the problems with the inherent subjectivity of
these terms, the majority presses on with the expansion of
Lanham Act liability here because, it claims, the term
“malware” lends itself to verification. Maj. Op. 14. There
are several problems with this.
    First, Enigma has never alleged that Malwarebytes
violated the Lanham Act based on the use of the term
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 43

“malware.” To prove the Lanham Act claim, Enigma’s
complaint alleges that Malwarebytes used “false and
misleading statements” in commerce based on “statements
that SpyHunter 4 and RegHunter 2 are ‘threats’ and/or
‘potentially unwanted programs’ and that [Enigma’s]
website and domains are ‘malicious’ and disruptive.” The
term “malware” is not included among the statements
allegedly violative of § 1125(a)(1)(B). Indeed, there’s no
basis to equate the terms “threats,” “potential unwanted,”
and “malicious” with “malware.” Malwarebytes’ user guide
defines “potentially unwanted programs” as a “class[] of
non-malware,” and explains that some programs “may [be]
categorized as threats” even though they “are not malicious.”
Malwarebytes User Guide, “Quarantine,” § 8.1 (2016). And
Malwarebytes only referred to Enigma’s website domains as
“malicious,” not its software. A malicious website may host
malware, but calling a website malware is like calling a street
address a criminal. So the majority is manufacturing its own
claim against Malwarebytes—one that isn’t even supported
by the record.
    To justify the sua sponte amendment of Enigma’s
complaint, the majority looks to Malwarebytes’ user guide,
which explains that a default setting for its scan
configuration “[t]reat[s] detections” of potentially unwanted
programs “as malware.” Maj. Op. 14 n.4. But this allegation
is irrelevant because the majority agrees that calling
something “potentially unwanted” is “too unspecific” to be
actionable under the Lanham Act. The majority also relies
on the user guide’s reference to a “Threat Scan,” which
“captures all programs treated as ‘malware’ in all the places
malware is known to hide.” Id. But user guide statements
that Malwarebytes’ program treats something as “malware”
or scans where malware is known to be isn’t the same thing
44 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

as calling Enigma’s products “malware” in commerce. The
majority then somehow finds it actionable that Enigma’s
own customers called Enigma’s programs “malware.” Id.
(citing allegations that Enigma’s customers thought
Enigma’s products were “malware”). But what Enigma’s
customers say about Enigma is not a basis to find Lanham
Act liability against Malwarebytes.
    Second, while acknowledging that “judges are not
experts in the cybersecurity field,” the majority invents its
own verifiable definition of “malware” for the field—
“software [created] with the intent to gain unauthorized
access to a computer for some nefarious purpose.” Id. The
majority then concludes that “malware can come in many in
forms including ‘viruses, spyware, adware, ransomware, and
Trojans.’” Id. at 14. And finally, the majority says that these
terms can be objectively determined. Id. at 14.
    Even if Enigma’s complaint had alleged that
Malwarebytes designated Enigma’s products as “malware”
and if this definition were plausible, the majority’s
terminology admits subjectivity. One needn’t be an expert
in cybersecurity to see why. Take “adware.” Adware
monitors users’ online activities and habits, typically
without their knowledge, and uses the collected data to
display targeted advertisements or sell to third parties.
Adware usually comes bundled with free software (e.g.,
games, browser extensions, media players), allowing
developers to generate revenue and continue developing
useful and free software. Adware can expose sensitive data
and slow or disrupt one’s computer, though it also helps
serve users with more relevant ads. And typically, the user
has inadvertently authorized and consented to the adware’s
operation via a terms and conditions agreement. In such
cases, has the adware been created and employed for “some
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 45

nefarious purpose?” This is plainly a subjective question
that will elicit different responses from different people.
    The majority also insists that “[j]ust like the certification
at issue in Ariix,” the “malware” designation “can be
reduced to ‘a binary determination’ based on ‘falsifiable
criteria.’” Maj. Op. 14. It would seem the majority
conflates the ability to phrase something as a binary
determination,         with       the objectivity of         that
determination. One could also say, “whether green is the
best color is objective and verifiable, because either it is the
best, or it’s not the best.” But clearly that’s a subjective
question—appending “it is or it isn’t” doesn’t make the
determination objective and verifiable. See ZL Techs, Inc. v.
Gartner, Inc., 709 F. Supp. 2d 789, 798 (N. D. Cal. May 3,
2010). And calling Enigma’s products a “threat” or
“malicious” is far from Ariix saying a manufacturer didn’t
comply with FDA standards or obtain the appropriate
laboratory certification—both falsifiable criteria. Ariix, 985
F.3d at 1122.
                             ***
   In sum, Enigma cannot base its false advertising claim
on nonactionable opinions, like the phrases here. We thus
should have affirmed the dismissal of the Lanham Act claim.
                              III.
    Not only is Enigma’s failure to allege a misstatement of
fact dispositive on the Lanham Act claim, but it’s also
dispositive on its state-law claims. We thus should have also
affirmed the dismissal of Enigma’s claims for (1) violation
of New York General Business Law § 349, (2) tortious
interference with business relations, and (3) tortious
interference with contractual relations. In reviving the § 349
46 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

and business relations claims, the majority concludes that
New York has personal jurisdiction over Malwarebytes.
While I have serious reservations about the majority’s
jurisdictional analysis, we didn’t need to reach that question
because Enigma’s claims would fail under either New York
or California law.
    First, General Business Law § 349, New York’s law
against deceptive business acts and practices, generally
follows the Lanham Act. “[W]hat is non-actionable opinion
under the Lanham Act is also non-actionable . . . under
General Business Law § 349.” ONY, Inc. v. Cornerstone
Therapeutics, Inc., 720 F.3d 490, 498 (2d Cir. 2013). Since
I would conclude that Malwarebytes’ flagging of Enigma’s
products was non-actionable opinion, Enigma’s § 349 claim
must be dismissed as well.
    Second, Enigma’s claim for tortious interference with
business relations is not viable under either California or
New York law. In California, “interference with prospective
economic advantage requires a plaintiff to allege an act that
is wrongful independent of the interference itself.” CRST
Van Expedited, Inc. v. Werner Enters., Inc., 479 F.3d 1099,
1108 (9th Cir. 2007). “[A]n act is independently wrongful
if it is unlawful, that is, if it is proscribed by some
constitutional, statutory, regulatory, common law, or other
determinable legal standard.” Korea Supply Co. v. Lockheed
Martin Corp., 63 P.3d 937, 954 (Cal. 2003). New York has
adopted a similar general rule requiring an “independently
unlawful act” for tortious interference with a business
relationship. Carvel Corp. v. Noonan, 818 N.E.2d 1100,
1103 (N.Y. 2004). There is an “exception” in New York,
however, when a defendant engages in “egregious
wrongdoing” in the absence of an independent act, like
    ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC. 47

acting for the “sole purpose of inflicting intentional harm on
plaintiffs.” Id. at 1102–03 (simplified).
    Here, because Enigma’s Lanham Act claim fails, it
hasn’t shown that Malwarebytes engaged in independent
wrongdoing for a business interference tort. And while
Enigma alleges that Malwarebytes acted with anti-
competitive animus, that is not enough to invoke New
York’s exception to the general rule because the exception
does not apply to “normal economic self-interest.” Id. at
1103. As Enigma alleged, Malwarebytes also sought to
increase sales and “secur[e] a stronger, more dominant”
market position for itself. Thus, Enigma concedes that
Malwarebytes did not act “solely” to target Enigma, which
the exception requires. See id. at 1103. So Enigma’s
business tort claim fails.
    Third, I agree with the majority that Enigma failed to
plead tortious interference with a contract—although I
would hold it failed to do so under both New York and
California law. Enigma’s claim fails under California law
because it doesn’t allege an “independently wrongful act,”
as discussed above. See Ixchel Pharma, LLC v. Biogen, Inc.,
470 P.3d 571, 580 (Cal. 2020) (“We therefore hold that to
state a claim for interference with an at-will contract by a
third party, the plaintiff must allege that the defendant
engaged in an independently wrongful act.”). And the claim
must be dismissed under New York law because Enigma
hasn’t alleged a breach of a specific contract. See NBT
Bancorp Inc. v. Fleet/Norstar Fin. Grp., Inc., 664 N.E.2d
492, 495–96 (N.Y. 1996) (Absent wrongful means, there is
no tort “[w]here there has been no breach of an existing
contract[.]”).
48 ENIGMA SOFTWARE GRP. USA, LLC V. MALWAREBYTES, INC.

   So, in sum, the lack of an actionable Lanham Act claim
deprives Enigma of its other claims.
                           IV.
    For all these reasons, we should have affirmed the
district court’s order. I respectfully dissent.