Google Calls Microsoft Lawsuit 'A Charade'

By Elizabeth M. Gillespie
Associated Press
Thursday, July 28, 2005

SEATTLE, July 27 -- Google Inc. is asking a judge to reject Microsoft Corp.'s bid to keep a prized research engineer from taking a job at the Internet search company, saying the software titan filed its lawsuit to frighten other workers from defecting.

Microsoft sued Kai-Fu Lee, one of its former executives, and Google last week, claiming that by taking the Google job, Lee was violating an agreement he signed in 2000 barring him from working for a direct competitor in an area that overlapped with his role at Microsoft.

Google countersued last week, seeking to override Microsoft's non-compete provision so it can retain Lee. "This lawsuit is a charade," Google said in court documents filed before a Wednesday hearing in Seattle. "Indeed, Microsoft executives admitted to Lee that their real intent was to scare other Microsoft employees into remaining at the company."

Superior Court Judge Steven Gonzalez heard arguments in the case in Seattle on Wednesday and said he expects to issue a ruling Thursday.

Google's filings include details about a conversation Lee had with Microsoft Chairman Bill Gates, suggesting that the software company is becoming increasingly concerned about Google siphoning away talent -- and perhaps intellectual property.

In a July 15 meeting, Lee said, Gates told him, "Kai-Fu, [chief executive] Steve [Ballmer] is definitely going to sue you and Google over this. He has been looking for something like this, someone at a VP level to go to Google. We need to do this to stop Google."

Stacy Drake, a Microsoft spokeswoman, declined to comment on Gates's statement directly. "Our concern here is the fact that Dr. Lee has knowledge of highly sensitive information both of our search business and our strategy in China," she said.

Microsoft and Google, along with Yahoo Inc., are locked in a fierce battle to dominate search, both online and through desktop search programs. Mountain View, Calif.-based Google has begun offering new services, including e-mail, that compete with Microsoft offerings.

Lee joined Microsoft in August 2000, after he helped establish the company's research center in China. At one point, Microsoft said, he was in charge of the company's work on MSN Search.

Lee claims that Google did not recruit him and has not encouraged him to violate any agreement he had with Microsoft.

Microsoft counters that Lee's job with Google gives him ample opportunity to leak sensitive technical and strategic business secrets. Microsoft noted that Lee attended a confidential, executive-only briefing in March, dubbed "The Google Challenge."

"In short, Dr. Lee was recently handed Microsoft's entire Google competition 'playbook,' " Microsoft said.

Microsoft said it paid Lee well in exchange for his promises to honor confidentiality and non-compete agreements. The company said Lee made more than $3 million during nearly five years in Redmond, and that he earned more than $1 million last year.

Microsoft claims there is "an extremely close nexus" between the work Lee did at Microsoft and what he will be doing at Google.

Google argued otherwise, insisting that Lee is not a search expert and noting that his most recent work at Microsoft was in speech recognition.

"In truth, Kai-Fu Lee's work for Microsoft had only the most tangential connection to search and no connection whatsoever to Google's work in this space," Google said in court documents.


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