Advertising software maker, 180Solutions, has dropped the lawsuit it filed against Zone Labs last year.

Moreover Zone Labs denied reports that it had made changes to the way its Zone Alarm software alerts users to the behaviour of 180Solutions' software.

The lawsuit was filed in November 2005 against Zone Labs which makes the popular Zone Alarm security software. 180Solutions said Zone Labs wrongly rated its 180Search Assistant and Zango Search Assistant as spyware.

But 180Solutions said this software is completely anonymous and it does not log keyboard input. The suit therefore sought to force Zone Labs to alter the way ZoneAlarm software labeled these technologies.

However, Zone Labs said it strongly defended itself and said the case was without merit.

ZoneLabs is not alone in rating the software from 180Solutions as spyware. Although they don't claim the software has a keystroke or mouse logger function, the companies behind Spybot Search and Destroy and Adaware both told Computeractive they label 180Solutions software as spyware.

Spybot said 180Solutions had contacted it several times to be taken off the spyware list. But Spybot said 180Solutions' promises to change the way its software behaves had not been carried out as far as it was concerned. Lavasoft commented that the privacy policy is not disclosed before installation.

Microsoft was more conciliatory and said that it regards 180Solutions software as adware rather than spyware. Zone Labs said 180Solutions had given no reason for dropping the case.

"From the inception of the suit, we believed it had no merit. ZoneAlarm alerts are triggered by the behavior of a program, not its name, said John Slavitt, general counsel for Check Point Software Technologies, Zone Labs' parent company.

"If the 180Solutions software exhibits suspicious behavior, we alert our customers accordingly. We did not make any concessions or reach a settlement after the suit was filed," he continued.

However 180Solutions said Zone Labs has made some changes and downgraded the alert given to Zone Alarm users.