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McAfee sues for $1 billion

Like cats and dogs, the virus busters are at it again. This time McAfee claims defamation and trade libel.

Like cats and dogs, McAfee (MCAF) and Symantec (SYMC) are at it again in the latest battle of the virus busters.

In the latest blow struck, McAfee today filed a $1 billion defamation and trade libel suit against its competitor.

McAfee filed its action against Symantec in California Superior Court in Santa Clara County and is requesting $1 billion in compensatory and punitive damages. McAfee has already filed similar suits in Japan.

McAfee's suits come in response to a press release Symantec issued today, which accuses its rival of lying about the facts of ongoing litigation between the companies.

Symantec's release stated that McAfee admitted copying code from its antivirus products. McAfee, however, said it has never admitted it has ever used copied code.

"McAfee admitted that Symantec code is actually present in its flagship product, VirusScan, after denying this, in earlier press releases. This compounds McAfee's earlier admission that it had engaged in copying of the core functionality of Symantec's CrashGuard product, and had inserted it into its own PC Medic product," the Symantec release said.

And in a statement from Symantec's chief technical officer, Enrique Salem, said: "It is remarkable that McAfee would attempt to downplay their culpability by claiming that even though the Symantec code is present in VirusScan, it is not 'used.' The fact is that McAfee slipped Symantec's CrashGuard code into their PC Medic product, and when Symantec investigated, outside experts found that McAfee had even more of our code in their products."

The original lawsuit was filed in April and amended in July. It will have its first hearing on October 3. But today's lawsuit is a separate action.

In the original suit, Symantec alleged McAfee used its codes in some of the McAfee software. In July Symantec further alleged that McAfee's VirusScan antivirus software infringed on its copyrights.

McAfee said in a statement yesterday that Symantec's claims regarding its VirusScan were unfounded, noting that the code in question has never performed any function in any version of VirusScan shipped anywhere in the world.

Peter Watkins, McAfee's vice president and general manager of the network security division, said yesterday that McAfee is going to petition the court to dismiss Symantec's claims and that the company was not interested in filing any countersuits.

"I want to get on with competing [against Symantec] with products, because I don't want to compete in the courtroom. I want to move on with business and we have not filed any countersuits," Watkins said yesterday. But apparently the tone of Symantec's release changed McAfee's feelings about going to the courts.

Both companies are named in another patent infringement suit that was filed by Trend Micro in May.

McAfee's stock today dropped 7 percent in trading to 55, from yesterday's close of 59-1/4. Symantec gained about 5 percent to 25-1/2, from yesterday's close of 24-5/16.