News Analysis: Battle lines blurring in malware fight

Australian vendor PC Tools says it has had a legal win against a US company whose products it classifies as malware. But's Patrick Gray writes the legal machinations are far from over and highlight some very delicate issues.

Zango loses PC Tools, Kaspersky battle, but the war has just begun

Courts in the United States have thrown out an application by US software maker Zango for temporary restraining orders against Australian anti-malware company PC Tools and Kaspersky Labs. (Kaspersky judgement here, PC Tools here.)

Zango has been known as a peddler of spyware and adware in the past, so software from PC Tools and Kaspersky classifies the company's current wares as such. But Zango also claims it has reformed its evil ways -- which saw it fined US$3 million last year by the US Federal Trade Commission -- and its current software is about as dangerous and annoying as a basket full of puppies.

It's a tricky issue. Adware might be considered by many to be sneaky, unethical stuff, but in many cases it's installed legally, with consent from the user. Sure, they might not read the license agreement for the dancing bears screen saver they just downloaded, but by accepting it, they've technically consented to having all manner of nasties installed on their system. It gets interesting when the same user has installed a piece of software from a company like PC Tools designed to make decisions for them on what sort of software they should allow on their machine.

Zango, unhappy with the way its software was classified by PC Tools' anti-spyware software, filed suit and applied for a temporary restraining order (TRO) that would have PC Tools reclassify their software as harmless. And while Zango has lost its application for a TRO, that hearing is separate to the actual law suit, in which Zango is seeking US$35 million in damages.

PC Tools' PR spin on this one is frankly odd. When asked if the restraining order application was separate to the actual law suit, PC Tools PR staffer Alisha Benson was guarded. "At the moment we're not talking about the law suit... at the moment we've had a clear victory," she told by phone.

When asked if her response indicated the law suit was ongoing, she replied: "We're not talking about the law suit, we're talking about the temporary restraining order," adding "the only thing we're releasing to the public at the moment is in the press release". She even refused to acknowledge the existence of a law suit, she'd just trot out the same line each time I asked.

Five minutes with confirmed the suit is still on.

So the TRO's out the window, but the war proper is just ramping up. Here's Zango's statement of claim.

Now, as we mentioned earlier, Zango has a chequered past, fined US$3 million by the US Federal Trade Commission (FTC) last year. Despite the company's claims that it's reformed, it seems obvious that the FTC's finding against the company at least contributed to the judge who heard Zango's application tossing it. In outlining his reasons for denying the application, United States District Judge John C. Coughenour, actually quoted an FTC press release in his judgement.

He also ruled that Zango could demonstrate that it had suffered irreparable harm at the hands of PC Tools, but hinted that may not be such a bad thing.

"The Court finds that Plaintiff has demonstrated some degree of irreparable harm. Spyware Doctor's categorization of Plaintiff's software as potential malware threatens Plaintiff's reputation," the judgement reads. "The Court finds it unlikely that Plaintiff will be able to demonstrate that Defendant's conduct in attempting to protect its customers from what it perceives to be potentially harmful or annoying software stems from an 'improper' motive or uses any 'wrongful' means. Its classification is not unreasonable given Plaintiff Zango's past conduct and in light of other companies' similar classification of Plaintiff's software."

We'll keep watching this one.

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