• by Wendy Davis  @wendyndavis, May 21, 2008

Pursuing its attempt to sue a spyware removal company, Zango has filed additional court papers arguing that the anti-spyware vendor wrongly characterizes Zango as malware.

Bellevue, Washington-based Zango, which settled a Federal Trade Commission complaint in 2006, argued to the 9th Circuit Court of Appeals that the enforcement action itself proves the company is not "badware." To settle the charges, Zango agreed to pay a $3 million fine and take steps to ensure that people consented to installing its ad-serving software before downloading it.

"Zango's adherence to the consent agreement terms must be construed to indicate that its software applications are not 'spyware' or 'malware' or 'badware'; otherwise, the FTC would not have entered into a consent agreement permitting Zango to market that software," the company contended in its latest court filing.

The company sued the spyware removal company Kaspersky Lab last year, alleging that Kaspersky interfered with Zango's relationships with its customers by deleting Zango's pop-up serving program. U.S. District Judge John Coughenour in Seattle dismissed the lawsuit on the grounds that Kaspersky was acting as a good samaritan by helping people remove offensive software from their computers. The Communications Decency Act immunizes interactive services providers that act in good faith to block objectionable material.

Zango appealed to the 9th Circuit, which is now considering the case.

The dispute has become increasingly high-profile, drawing friend-of-the-court briefs from a diverse array of parties. The National Business Coalition for E-Commerce and Privacy--a group including major companies like Eastman Kodak, JP Morgan Chase and Experian-- weighed in on Zango's behalf, while a coalition of other groups including the digital rights organization Center for Democracy & Technology have urged the court to rule in Kaspersky's favor.