SANTA CLARA — Network Associates Inc., formerly McAfee Associates Inc., said Tuesday it dropped its $1-billion defamation lawsuit against rival software company Symantec Corp.
Separately, a federal court last week rejected Symantec's request to stop shipments of McAfee PC Medic, a software product that Symantec says is based on stolen Symantec programming code.
Network Associates and Symantec have been embroiled in lawsuits for the past year. Symantec, a publisher of utility software and network management programs, had accused Network Associates of stealing its software code and basing products on it. Symantec had asked the court to stop Network Associates from shipping those products.
In return, Network Associates had countersued Symantec for defamation, seeking $1 billion in damages.
On Dec. 19, the U.S. District Court in San Jose rejected a second Symantec request for an injunction, officials of both companies said. The ruling essentially ends all outstanding Symantec requests for preliminary injunctions against Network Associates products, Network Associates said.
In light of the "favorable ruling," Network Associates dropped its defamation lawsuit, the company said. Symantec said it will continue to pursue its infringement lawsuit. "We're going to take this to trial," said Symantec Chief Executive Gordan Eubanks.
Shares of Santa Clara-based Network Associates rose $1.91 to close at $52.34 on Nasdaq; shares of Cupertino-based Symantec rose 81 cents to $20.94, also in Nasdaq trading.