Update: Microsoft, Washington attorney general sue alleged spyware company

Microsoft Corp. and the Washington state attorney general have filed lawsuits against antispyware software vendor Secure Computer LLC, alleging that the White Plains, New York, company's Spyware Cleaner software not only fails to remove spyware as advertised, but makes changes to users' computers that make them less secure. The attorney general's lawsuit is the state's first to be filed under Washington's 2005 Computer Spyware Act.

Washington's 16-count lawsuit was filed Tuesday in U.S. District Court in Seattle, and follows investigations by both Microsoft and the Attorney General's High Tech Fraud Unit. In addition to the Spyware Act violations, the lawsuit accuses Secure Computer of violating the state's Commercial Electronic Mail and Consumer Protection Acts, as well as the federal CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act, said Washington Attorney General Rob McKenna in an interview.

"What this company has been doing is marketing its Spyware Cleaner product using false and deceptive means and also corrupting computer users' hard drives as a result of the so-called free scan that they offered to consumers," he said.

The state's lawsuit also names Secure Computer President Paul E. Burke and Web domain owner Gary T. Preston, both of New York state, as defendants. It further charges Zhijian Chen, of Portland, Oregon, Seth Traub, of Portsmouth, New Hampshire, and Manoj Kumar, of Maharashtra, India, in connection with the advertising of the product.

Microsoft has also sued Secure Computer, alleging that the company's Spyware Cleaner e-mail and pop-up advertisements falsely suggested that Microsoft endorsed the product, said Nancy Anderson, vice president and deputy general counsel with Microsoft. "They were illegally using our name and our trademark to frighten consumers," she said.

Microsoft's lawsuit was filed Tuesday in U.S. District Court in Seattle, Anderson said.

A lawyer representing Secure Computer said that the controversial business practices at the heart of the state's case were the fault of marketing affiliates and not Secure Computer. "A lot of these allegations of this advertising ... they have nothing to do with us," said John Dozier, managing partner with Dozier Internet Law PC.

Secure Computer has used a marketing clearing house called Clickbank.com to recruit sales affiliates and one of the Clickbank.com affiliates, Manoj Kumar, was responsible for the advertising that misused the Microsoft brand, Dozier said. Kumar was fired as soon as Secure Computer became aware of his business practices, he said.

Secure Computer does not permit e-mail marketing of the product and it did not even develop the Spyware Cleaner software that McKenna accused of being spyware, Dozier added. The company is simply a "sales and marketing firm," he said.

Secure Computer President Paul Burke was "shocked and surprised" by the allegations in the complaints, Dozier said.