The Inane Asylum

July 20, 2005

Microsoft Sues Google For Hiring MS Exec

Posted at July 20, 2005 1:19 PM

A few months ago, Microsoft threatened to go after Google in much the same way they went after Netscape in past. Well, here we go...

from apnews.myway.com:

Ex-Microsoft Exec Sued Over Google Job

SEATTLE (AP) - Microsoft Corp. (MSFT) sued Google Inc. (GOOG) on Tuesday, accusing it of poaching a top executive the search engine company had wooed away to head a new research lab in China.

The Redmond-based software power also sued the executive, Kai-Fu Lee, whose appointment Google trumpeted in a news release announcing the lab's establishment.

In a complaint filed in King County Superior Court in Seattle, Microsoft accused Lee of breaking his 2000 employment contract, in part by taking a job with a direct competitor within a year of leaving the company.

Microsoft also accused Google of "intentionally assisting Lee."

"Accepting such a position with a direct Microsoft competitor like Google violates the narrow noncompetition promise Lee made when he was hired as an executive," Microsoft said in its lawsuit. "Google is fully aware of Lee's promises to Microsoft, but has chosen to ignore them, and has encouraged Lee to violate them."

Microsoft and Google, along with Yahoo Inc. (YHOO), are locked in a fierce battle to dominate search, both online and through programs that index computer hard drives so files can be instantly located. Google also has begun offering new services, including e-mail, that compete with Microsoft offerings.

Tom Burt, a lawyer for Microsoft, said Lee announced Monday that he was leaving for the Google job and had given no indication that he planned to honor an agreement not to work for a direct competitor for one year.

"To the contrary, they're saying, 'In your face,'" Burt told The Associated Press.

Google shot back with a statement saying: "We have reviewed Microsoft's claims and they are completely without merit. Google is focused on building the best place in the world for great innovators to work. We're thrilled to have Dr. Lee on board at Google. We will defend vigorously against these meritless claims."

Efforts to reach Lee were not successful. He did not have a listed phone number.

Google publicized Lee's hiring in a news release that called him a "respected computer scientist and industry pioneer" who will "lead the operation and serve as president of the company's growing Chinese operations." The news release, though mentioning that Lee had previously worked for Microsoft, did not mention the lawsuit or any noncompete clause.

Google said the research and development center Lee was hired to run, the company's first in China, would open in the third quarter of 2005.

At Microsoft, Lee oversaw development of the company's MSN Internet search technology, including a desktop search service released earlier this year. More recently, he has served as corporate vice president of the company's Interactive Services Division.

In its lawsuit, Microsoft said it was seeking a court order forcing Lee and Google to abide by terms of confidentiality and noncompetition agreements that Lee signed at Microsoft.

The company said it wants Lee barred from disclosing any Microsoft trade secrets or other confidential information.

It also wants a judge to order Lee to return any documents, files or reports he obtained from Microsoft and to forbid him from destroying any documents related to Microsoft and Google's move to hire him.

Companies in every industry hire people away from their competitors, but Burt said it usually doesn't happen unless the company the employee is leaving negotiates an agreement with the worker that typically requires that the new job not overlap with the old one.

That didn't happen in this case, Burt said.

"What makes this a particularly egregious violation," Burt said, "is that he's been hired to work in a position that's absolutely in direct competition with the work he was doing at Microsoft."

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