The suit alleges that PC Tools' Spyware Doctor flags Zango's software as adware and removes it without the express permission of the user.
Both companies have confirmed that the suit has been filed, but declined to comment any further on the case.
"We believe the proceedings are an attempt by Zango to influence our reclassification process," PC Tools said in a statement.
"Prior to the lawsuit we were well into an in-depth review and reclassification of the latest versions of Zango products.
"We advised Zango of this imminent re-rating and we believe they have chosen to lodge these proceedings as a way to gain media attention of the review."
Zango is seeking $35m in damages for the "irreparable harm" caused by PC Tools' classification of its software which Zango says has been "consensually installed" by millions of PC owners worldwide.
Formerly known as 180solutions, Zango paid US$3m (A$3.6 million) in November 2006 to settle US Federal Trade Commission charges that its software was being installed deceptively.
Zango filed a similar action against Zone Labs two years ago after the firm's firewall software labelled the advertising client as spyware.
Zango said that it has cleaned up its act and no longer distributes adware. The company now bills itself as an online media firm providing consumers with free access to videos, games, music, tools and utilities.
Testers from Sunbelt Software have said that Spyware Doctor clearly notifies users before attempting to remove Zango's software.
Zango sues PC Tools for US$35mn
By Staff Writers on May 23, 2007 11:08AM