A federal judge approved a settlement where Yahoo has agreed to extend its period where it will review claims of so called "click fraud" back to January 2004. Yahoo's old policy only reviewed such claims within 60 days. Additionally, the company will pay $5 million in legal fees.

The settlement could also release the company from any liability in another click fraud suit, brought by Arkansas online retailer Lane's Gift's & Collectibles, LLC against Google. Yahoo was named as a defendant in that case.

Click fraud occurs when a person displaying advertising on their pages either manually or automatically clicks a link repeatedly in order to generate revenue. The advertiser is then forced to pay for these false leads.

The suit is a class action, and was brought by Checkmate Strategic Group last year. Lawyers for Checkmate applauded Yahoo's moves to cooperate, which even included access to confidential procedures for how it deals with click fraud. Both Yahoo and Checkmate said they were pleased with the settlement terms.

Yahoo advertisers who qualify as participants in the class action now have an opportunity to object. In the Lane's case, a group of advertisers have filed suit in an attempt to block that settlement.

News of the settlement was first reported in the Wall Street Journal Thursday.