Microsoft Sues Google Over Ex-Employee

By Reed Stevenson

Microsoft Corp. asked a county judge on Friday to stop its newest rival Google Inc. from hiring a senior executive familiar with the world's largest software maker's plans in China.

Microsoft, which already won a temporary restraining order last month to stop former vice president Kai-Fu Lee from starting his job at Google, stepped up its efforts to block Lee from working at Google by asking King County Superior Court Judge Steven Gonzalez for a preliminary injunction against hiring Lee.

Microsoft argued in its motion that Lee, the former head of its Beijing research and development center, is violating a non-compete contract that he signed with Microsoft because he has intimate knowledge of Microsoft's operations in China, its competitive strategy against Google and recruiting efforts.

"Allowing Dr. Lee to 'turn on a dime' and use this highly confidential information to do directly competing work for Google would undermine the most basic purpose of Dr. Lee's non-compete and non-disclosure promises to Microsoft," Microsoft argued in the court documents.

Google disagreed, saying that Microsoft was "behaving as if they own Kai-Fu."

"Kai-Fu wanted to work at Google, he told us that and we hired him. There's nothing illegal about that, that's fair game," Google's associate general counsel Nicole Wong, said in an e-mailed statement, "He's not going to work on anything at Google that is competitive with what he did at Microsoft."

Microsoft and Google are locked in competition over search and other Web-based technologies, as well as for top software talent.

Google plans to open a new facility in China later this year to develop new technologies and attract computer science researchers. A final location has not yet been chosen.

Lee, a former Carnegie Mellon University researcher who previously worked for Apple Computer Inc., most recently oversaw groups at Microsoft developing speech recognition and other interactive technologies for computers.

Google, based in Mountain View, California, counter-sued in its home state last month to block Microsoft's lawsuit and was set to contest the temporary restraining order next week in Washington state.

The trial is scheduled for January 9, 2006, but Microsoft said that it is trying to fast-track legal proceedings because its non-compete contract with Lee is only effective for one year after his last day at Microsoft, which was July 18."

Microsoft argued in Friday's filing that Lee had begun working with Google well before his last working day at Microsoft's headquarters in Redmond, Washington.

"As a senior Microsoft executive, Dr. Lee had frequent access to highly confidential competitive plans including plans to compete with Google," Microsoft said in its motion.

According to Microsoft, Lee attended an internal briefing at Microsoft on March 24 for the software giant's top executives entitled "The Google Challenge" which Microsoft described as "highly confidential."

Microsoft also detailed in its motion the pay package that Lee negotiated with Google, which was worth over $10 million, including a $2.5 million signing bonus, a $250,000 yearly salary, stock options worth more than $5 million and other perks.

Copyright 2005 Reuters Limited.

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