Microsoft has filed three lawsuits against "cyber-squatters," which they allege are using domain names that contain the company's registered trademarks, as a way of drawing people to pay-per-click advertisements.

Cyber-squatting refers to the practice of including the name of a popular brand or company in a URL that is set up to deliver pay-per-click ads or other content that has little value to the user, and is not connected to the brand or company contained in the URL.

"With each click, revenue is generated for both the advertising network and the person who owns the site," said Aaron Kornblum, an Internet safety enforcement attorney at Microsoft.

He said this is an infringement on Microsoft's trademark and is forbidden under a 1999 US law called the Anti-cybersquatting Consumer Protection Act, which forbids the registration of website domains containing trademarked terms with bad faith intent.

As part of an initiative by Microsoft's Trademark and Internet Safety Enforcement groups, Microsoft filed suits against three defendants in Salt Lake City, Utah: Jason Cox, Daniel Goggins, and John Jonas, suing them both as individuals and through their two companies, Jonas and Goggins Studios LLC and Newtonarch LLC.

According to the suit, the three are working together to use Microsoft trademarks such as Windows and Hotmail in 324 domain names they have registered for sites that contain only pay-per-click ads.

Some of the domain names registered by the three that Microsoft claims infringe on its trademarks include: 1windows45.info, 1replacingwindows34.info, 1hotmail25.info and 1hotmail27.info, according to documents Microsoft has filed.

A similar suit, filed in Los Angeles, alleges that Long Beach, California, resident Dan Brown and his company Partner IV Holdings have used trademarks such as Xbox and Windows in 85 domain names for sites that are used for pay-per-click ads.

Microsoft also filed a third "John Doe" suit to target people who have registered domain names that infringe upon Microsoft trademarks but who have protected their identities through online registrars' privacy registration services, Kornblum said.

The services allow people to purchase website domain names but not publicly reveal their identities.

"We found hundreds of infringing domains that do this, and we've whittled down the list to 217 domains that were most egregiously infringing [on Microsoft trademarks]," he said. Microsoft is using the John Doe suit to subpoena the online registrars for the personal information of the people who have registered the sites, Kornblum added.

In addition, Microsoft also is working to shut down online auctions that resell website domain names that contain its trademarks, he said. "In the past, we have done some irregular requests to online auction companies to take these down, but we'll be doing this more systematically for auctions [now]," Kornblum said.

Kornblum said the initiative to target cyber-squatters arose several months ago out of work the company has been doing to thwart phishing scams with a company called Internet Identity in Tacoma, Washington.

Microsoft and Internet Identity have been monitoring the registration of new Internet domain names in the U.S in an effort to track down phishing scams, and noticed that sites were being registered to promote cyber-squatting in addition to phishing, he said.