• by Wendy Davis  @wendyndavis, May 1, 2008

Zango's high-profile lawsuit against anti-spyware company Kaspersky Lab is "akin to a cat burglar suing the alarm company," Kaspersky's law firm argued to a federal appellate court.

In papers filed this week with the 9th Circuit, Kaspersky said that Zango has no grounds to sue the security company for removing Zango's software, which serves pop-up ads. "Allowing Zango's suit will have a chilling effect on the Internet security industry and, ultimately, on use of the Internet," Kaspersky argues.

Calling security software vendors "the sentinels of the Internet," Kaspersky argued that forcing such companies "to allow malware to pass through a computer's 'gates' unchallenged will compromise computer security and, ultimately, the free flow of information over the Internet."

This case, initially brought by Zango last year, has drawn the attention of several prominent organizations and companies. Two weeks ago, the National Business Coalition on E-Commerce and Privacy weighed in on Zango's behalf, arguing that Zango's lawsuit against the spyware removal company should proceed to trial. The Coalition's members include major companies like Eastman Kodak, JP Morgan Chase and Experian. Those companies install cookies on users' computers and have an interest in discouraging anti-spyware vendors from removing those cookies.

Kaspersky also has powerful supporters, including the digital rights group Center for Democracy & Technology. That group plans to file a friend-of-the-court brief on the company's behalf on Monday, according to Vice President and Chief Operating Officer Ari Schwartz.

Zango filed suit against Kaspersky last year, alleging that the company interfered with Zango's business relationships with consumers by removing Zango adware from people's computers. Kaspersky manufactures programs that remove adware and spyware, including Zango's software, which serves consumers pop-up ads based on their Web-surfing activity.

U.S. District Judge John Coughenour in Seattle dismissed the lawsuit on the grounds that the federal Communications Decency Act immunizes interactive services providers that act in good faith to block objectionable material.

Zango appealed that ruling, arguing that Kapersky was itself a form of "badware" because it allegedly removed a program that consumers had chosen to install Zango.

In its brief filed this week asking the 9th Circuit to uphold Coughenour's ruling, Kaspersky went on the attack against Zango and adware. "Zango adware is, of course, a source of pop-up ads, which, in general, many computer users find objectionable," Kaspersky argued. "Apart from causing pop-up ads and opening links to sexually-explicit websites, adware itself is often harmful to a computer system, consuming computer memory, slowing processing time, causing computer system crashes, and clogging Internet connections."

Eric Goldman, director of the High Tech Law Institute at Santa Clara University, said that at least one other federal court has also recently interpreted the Communications Decency Act as immunizing a Web company for blocking objectionable content. Judge James Zabel of Illinois last month dismissed a lawsuit by e360insight against Comcast for allegedly treating e360's e-mails as spam and blocking them.

Zango was criticized in the past for allegedly installing adware without first obtaining users' consent. In 2006, the FTC brought a complaint against Zango, and the adware company agreed to pay a $3 million fine, refrain from installing adware without first making sure that people consented, and to monitor third-party distributors to make sure they are not installing the software without consent.

A Zango spokesperson declined to comment on Kaspersky's argument, other than to say the company intended to file a response with the 9th Circuit in two weeks.