Microsoft files lawsuit over "click fraud"

A man tries out the touch features of the new Windows 7 operating system at the Microsoft booth at the annual Consumer Electronics Show (CES) in Las Vegas, Nevada, January 9, 2009.

(Reuters) - Microsoft Corp filed a lawsuit against three individuals believed to be based in Vancouver, accusing them of a form of "click fraud" by improperly using Microsoft's online advertising service for profit, court documents show.

In the suit filed on Monday in a U.S. federal court in Seattle against the three individuals and companies they are believed to control, Microsoft said it suffered at least $750,000 as a result of the click fraud scheme.

Under the scheme, large groups of people or automated computer scripts click on online advertisements without having any interest in the services or product being advertised.

The Redmond, Washington-based company said it traced the source of allegedly fraudulent traffic back to the defendants, Eric Lam, Gordon Lam and Melanie Suen.

Microsoft alleges that advertisements for the defendants' websites displaced their competitors' advertisements.

Reuters could not immediately reach the defendants for comment.

(Reporting by Ajay Kamalakaran in Bangalore, editing by Will Waterman)