• by Wendy Davis  @wendyndavis, January 31, 2006

Adware company 180solutions has withdrawn its libel lawsuit against software vendor Zone Labs, the companies announced Monday.

Although both sides claimed victory, it appeared that 180solutions--under siege from a variety of sources--has gained little, if anything, from having brought the case, which accused Zone Labs of creating the impression that 180solutions' ad-serving software was "spyware."

Zone Labs previously labeled 180solutions' Zango program as "dangerous," and warned users that it tried to monitor keystrokes. By November--the same month that 180solutions filed suit--Zone Labs had tweaked its description of Zango, reclassifying it as "suspicious" rather than "dangerous." Zone Labs also now states that Zango "may" try to track or log keystrokes, as opposed to the previous warning that Zango "is trying" to monitor keystrokes.

John Slavitt, general counsel for Zone Labs' parent company Check Point Software Technologies, said that those edits were in the works before 180solutions filed the case. What's more, he said, Zone Labs informed 180solutions of the upcoming changes, and provided 180solutions with applicable screenshots, before the company filed its lawsuit.

"Nothing was done as a result of the lawsuit," Slavitt said, adding that the company hadn't agreed to any changes in exchange for 180solutions' withdrawal of the lawsuit. "We're not going to give in to companies just because they're bullying us--just because they're filing lawsuits," Slavitt said. He could not provide the precise date that Zone Labs changed its program, but it apparently had been revised by November; a post on the 180solutions blog dated Nov. 30 discusses the changes.

180solutions maintained Monday that the language revision convinced it to drop the lawsuit. When the company first filed the suit, Sean Sundwall, director of corporate communications, said that the terminology that Zone Labs used to describe 180solutions derailed a potential deal between 180solutions and another company.

Sundwall yesterday said that situation had changed, now that Zone Labs describes 180solutions' products with slightly different language. "The slight change in labeling ... has allowed us to move forward with a handful of business deals that the original labeling prevented."

But, he added, the labeling is "still over the top and fearmongering in its nature."

Eric Howes, a spyware researcher and director of malware research at Sunbelt Software, tested Zone Labs' product Monday and said it didn't appear that the user experience had changed since last November.

Lately, 180solutions has been battling greater challenges than labeling by Zone Labs. Last week, the nonprofit watchdog Center for Democracy & Technology filed a complaint with the Federal Trade Commission, charging that 180solutions engages in "distribution practices that appear to be broadly unethical and in many cases, illegal."

180solutions also faces a class-action lawsuit alleging non-consensual installations of its software; in addition, the company last fall laid off 50 employees, or 20 percent of its workforce.