The ruling, issued by US district judge Marsha Pechman, denies the class-action status of the suit and leaves the plaintiffs to pursue individual cases against the company rather than a single case on behalf of a large number of plaintiffs.
Because the ruling leaves just six individuals to pursue separate cases, the decision is being widely regarded as a victory for Microsoft.
The case centers around Microsoft's classification of certain PCs as being "Vista Capable," a distinction meant to show which machines would be able to run its latest operating system.
Because there were several different versions of Windows Vista released, the branding did not specifically define which systems could run all of the new features in the operating system.
The plaintiffs argue that the company set the "Vista Capable" standards low on purpose in an effort to sell underpowered hardware.
The case has lead to several embarrassing disclosures from Microsoft, including concern over the program both internally and from external retailers and sales partners.
