Microsoft, Google spar in Kai-Fu Lee case

Google Inc. and Microsoft Corp. are battling in a Seattle courtroom, arguing over what type of work a high-ranking Google executive should and shouldn’t be allowed to perform in the coming months, while a case over his hiring comes to trial in January 2006.

The hearing before Judge Steven Gonzalez of the Superior Court of the State of Washington began Monday and is expected to conclude on Tuesday.

Microsoft wants the judge to forbid one of its former vice presidents, Kai-Fu Lee, from performing a range of work at Google that Microsoft argues violates a noncompete and confidentiality agreement Lee signed with Microsoft in 2000.

That noncompete and confidentiality agreement forbids Lee for a year after leaving Microsoft from accepting employment or engaging in activities that compete with products, services or projects that he either worked on or gained confidential or proprietary knowledge of while employed by the company, according to Microsoft’s motion for preliminary injunction, dated Aug. 22.

The judge already granted Microsoft a temporary retraining order on this matter in July. Judge Gonzalez’s temporary order specified that forbidden activities included work on computer search technologies, such as Internet search engines and desktop search; natural language processing or speech technologies; and business strategies, planning or development with respect to the Chinese market for computer search technologies. These are all areas Microsoft argues are covered by Lee’s noncompete agreement.

Now Microsoft wants the effects of the temporary order extended in the form of a preliminary injunction at least until the case comes to trial in January, a spokeswoman for Microsoft said Monday.

“Microsoft simply seeks an order that will assure Microsoft receives the protection to which it is entitled under the agreement pending a full trial on the merits. An order that Dr. Lee not work in areas that overlap with his work at Microsoft, or about which he learned confidential information, is not an undue hardship on Google or Dr. Lee,” reads Microsoft’s 25-page motion.

Google argues that the work Lee would be doing doesn’t violate the noncompete and confidentiality agreement. Google says Lee would be in charge of opening a product development center in China and staff it with non-Microsoft personnel, and that he wouldn’t work on technical areas, such as search, natural language and speech technology.

“Dr. Lee will not work or consult in any of the technical areas identified in Microsoft’s proposed preliminary injunction,” reads the 24-page opposition to Microsoft’s motion, dated Aug. 30.

On July 19, 2005, Google announced it had hired Lee as president of its nascent China operations and to be in charge of opening a research and development center there. With this center, set to open in this year’s third quarter, Google hopes to create a strong research and development team in China to develop products and services for users and partners in that country and elsewhere, Google said in a press release then.

That same day, Microsoft issued its own press release on the matter, announcing it had filed a lawsuit against Lee and Google regarding breach of Microsoft’s employee confidentiality and noncompete agreement. Before joining Google, Lee was corporate vice president of Microsoft’s Natural Interactive Services Division. He had also been involved in Microsoft’s China operations, including the setting up of Microsoft’s first research and development facility there, according to Microsoft’s motion.

Microsoft alleges that Lee has direct knowledge of its trade secrets related to search technologies and of its China business strategies. “He has accepted a position focused on the same set of technologies and strategies for a direct competitor in egregious violation of his explicit contractual obligations,” Microsoft said in its July press release.

In its opposition to Microsoft’s motion, Google charges that Microsoft’s actions stem not from a desire to protect confidential information, “but out of a desire to delay Google’s entry into China, and make an example of Dr. Lee for other Microsoft employees who might have the audacity to ‘defect’ from Microsoft.”

Google and Lee countersued Microsoft in July, seeking “judicial relief from an overreaching and unlawful non-compete provision drafted by defendant Microsoft,” according to that complaint.

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