Adware software provider 180Solutions has filed suit against security company Zone Labs for what it claims are "false and misleading statements about 180's products" within the popular ZoneAlarm tool. ZoneAlarm alerts users to the existence of 180's Zango software, and says it may log keystrokes and track Web sites visited.

The lawsuit, filed in the Superior Court of King County, Washington, alleges that Zone Labs has caused "thousands of 180's customers to remove or otherwise uninstall Zango and/or 180SA. 180 has been damaged by the wrongful removal of its applications caused by ZoneLab's tortious conduct."

"Because the Windows API Hook function can be used in connection with the monitoring of mouse movements and keyboard strokes, ZoneAlarm mistakenly assumes that this is the reason for its employ by 180's products, despite Zone Labs having been advised by 180 to the contrary," the suit adds.

180's case against Zone Labs highlights the fine line between adware and spyware, and how security vendors should classify such applications. 180Solutions spends much of the lawsuit defending its own practices, explaining that it offers free products over the Internet, which are sponsored by advertising.

Although 180's Search Assistant and Zango tools may not be solely designed to spy on unsuspecting users, they do track what Web sites are being visited and deliver advertisements based on that data. 180 maintains that ads are delivered anonymously using a unique identification number.

But do users really want an application monitoring them in the background? Zone Labs and other anti-spyware vendors don't think so, and recommend removal of the software.

However, 180 contends that Zone Labs doesn't provide a proper notice to users and has designed ZoneAlarm to "frighten consumers into believing that spyware resides on their computers, even if it does not."

In a well-timed editorial that was published Tuesday, 180Solutions CEO Keith Smith discussed the problems facing the adware industry. "The fact that there are currently no real industry standards that define what is or is not a threat provides ample wiggle room for these vendors to create and operate under their own definitions," he wrote.

"As we all know, it's close to impossible to get an entire industry to agree on general principles, but until this happens and it is adopted universally, the fight between downloadable programs and scanning applications will rage on," Smith added.

One group, the Anti-Spyware Coalition, has published guidelines intended to educate consumers and help anti-spyware vendors avoid legal attacks from ad companies who claim their software is unfairly targeted. Still, such definitions are a ways off from becoming widely accepted.

Despite its claims of a strict privacy policy and innocent advertising behavior, 180Solutions' actions have raised the ire of some. A special Web site has been setup detailing the company's alleged spyware infractions, from lying about its practices to distributing its software through IM worms and illegal warez sites.

According to Sunbelt Software President Alex Eckelberry, who first reported the lawsuit against Zone Labs, "This is all going to be rather interesting, to say the least."