Controversial adware outfit Zango has withdrawn legal proceedings against anti-spyware firm PC Tools. The decision follows its failure to persuade a court to issue a temporary restraining order that would have prevented PC Tools from classifying Zango's software as potentially malicious. Both firms hail the outcome of the case as a victory.

Zango was established as a rebranding exercise following the 2006 acquisition of Hotbar by 180solutions. The firm publishes Hotbar, Seekmo Search Assistant and other adware programs of dubious merit. In May Zango took PC Tools to court over the behaviour of its free Spyware Doctor program that comes bundled in Google Pack.

Zango demanded $35m damages. And the case remained in play even after a judge denied a temporary restraining order against PC Tools after ruling that it was "unlikely that the plaintiff {Zango] will be able to prove that the defendant’s software [PC Tools] was unfair or deceptive..."

This week Zango voluntarily dropped the lawsuit claiming PC Tools has made changes to its software so that it no longer blocks Zango's software, the main bone of contention. However, court documents provide evidence that PC Tools modified Spyware Doctor so Zango's software was flagged as "potentially unwanted applications," rather than a "high" or "elevated" risks before Zango filed its lawsuit. This change in classification stopped Spyware Doctor from automatically removing Zango's software.

PC Tools said it has succeeded in seeing off a frivolous lawsuit without making any concessions.

"It appears that Zango has realised they were not going to prevail in this matter and the case has been withdrawn on this basis," said Simon Clausen, chief exec of PC Tools. "We believe the case should not have been brought in the first place. The outcome sends a strong message that PC Tools will not be changing their classification of programs as a result of the threat of legal proceedings." ®

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