Microsoft has been sued again over its controversial anti-piracy program.

The lawsuit alleges that Microsoft's (Windows Genuine Advantage) WGA is spyware and that the software giant misled consumers by labelling it as a critical security update.

The plaintiffs - companies Engineered Process Controls and Univex, and individuals Edward Misfud, David DiDomizio and Martin Sifuentes - also maintain Microsoft did not make users aware that WGA frequently contacted its central servers.

"WGA gathers data that can easily identify individual PCs, and WGA can be modified remotely to collect additional information at Microsoft's initiation," the filing states. WGA collects a computer's IP address, Bios data, system version and local language and settings information, the suit says.

Microsoft acknowledges WGA collects hardware and software data but maintains it is only used to verify that only one copy of an operating system has been registered on one computer.

If Microsoft finds a discrepancy, WGA can notify users their OS may be unlicensed through pop-up warnings. Users have complained WGA is flawed, identifying legitimate copies of an OS as fraudulent. Microsoft blocks the download of some programs but allows security patches if an OS is judged to be invalid.

Last week, Microsoft changed some features of WGA, including adding an option that lets users turn off warnings that their OS may be invalid, and the frequency with which WGA communicated with its servers.

The suit asks for compensation and for Microsoft to warn users of the risks of WGA and produce a tool to remove it.