A U.S. federal court denied class action status to a lawsuit accusing Microsoft Corp (MSFT.O) of misleading buyers about which computers could run expanded features that were part of the Windows Vista operating system.

But Judge Marsha Pechman of the U.S. District Court in Seattle allowed the suit to go forward on behalf of individual plaintiffs, according to court documents issued on Wednesday.

In 2006, Microsoft authorized computer manufacturers to put a sticker on PCs indicating they were Windows Vista Capable, meaning the then-current Windows XP operating system could upgraded to the Vista operating system.

The plaintiffs led by consumer Dianne Kelley said Microsoft's marketing campaign was misleading because a large number of these computers could only be upgraded to Windows Home Basic, a version of Vista that lacks a number of features that the Premium version had. Those computers did not have a Premium Ready designation.

Microsoft said the distinctions between the various versions of Vista were clear in its marketing campaign.

The court ultimately ruled that the plaintiffs could not demonstrate that their claims were common to the entire class of consumers who bought computers marked with the Windows Vista Capable but without the Premium Ready label. But it also said the plaintiffs could continue their suit individually.

While the court decertified the class today, it is careful to note that this ruling makes no comment on the merits of the plaintiffs' claims, Pechman said in the ruling.

The case is Dianne Kelley, et al. v. Microsoft Corp, United States District Court, Western District of Washington at Seattle, No. C07-0475 MJP.

(Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Derek Caney)

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