Microsoft takes Round 1 vs. Google

Microsoft Corp. yesterday won a judge's order that may temporarily keep a high-ranking executive who defected to rival Google Inc. from doing the job he was hired for.

Citing Microsoft's fear that its trade secrets could be revealed, King County Superior Court Judge Steven Gonzalez ruled that Kai-Fu Lee, hired by Google to establish and run its China research and development effort, can't be asked to undertake any activities that would compete with projects he handled at Microsoft.

In a three-page order, Gonzalez also said Lee can't disclose trade secrets to Google, and he must return any Microsoft materials he still has.

Yesterday's ruling is the first in a lawsuit Microsoft filed against Google on July 19.

The suit shows how seriously Microsoft is taking its competitive struggle against the nation's leading search engine. Microsoft's own MSN search technology, launched this year, is in third place behind Google and Yahoo!

Microsoft alleges that Lee, who founded Microsoft's China research lab, violated his employment contract by taking a job with Google as president of its China operations. That contract prevents him from working in a directly competitive position for a year after leaving.

Google said Lee's new position doesn't compete directly with his previous Microsoft job. Google called Microsoft's lawsuit "a charade" designed to discourage others at the Redmond company from following Lee's lead.

In yesterday's order, Gonzalez ordered Microsoft by Monday to clarify the scope of restrictions on Lee. He also ordered Microsoft to post a $1 million deposit by Tuesday to pay Google's damages if his order turns out to have been wrongly issued.

Gonzalez set a hearing for a preliminary injunction, the next step in the legal process, for Sept. 6. A full trial, if necessary, is scheduled for Jan. 9.

Google attorney Nicole Wong called the order "only a temporary measure to maintain the status quo." Spokesman Steve Langdon said Google's plans for a research center in China "will move forward without any disruption."

He did not return calls asking whether Lee will be leading the center.

Microsoft general counsel Brad Smith said of the ruling, "We're very pleased. .... From our perspective, it does what we hoped the court would do."

Gonzalez said he'll decide by Tuesday whether to seal or release to the public three Microsoft documents pertaining to the dispute.

Attorney Judy Endejan, from the Seattle law firm of Graham & Dunn, yesterday filed a motion on behalf of the Seattle Post-Intelligencer asking the judge to refrain from placing the documents under seal, as Microsoft had requested he do earlier this week. The Seattle Times joined in the motion.

"What is vitally important is that a judicial decision on such an issue not be made from behind a shroud of secrecy," she wrote.

"In the absence of any articulation by Microsoft of its grounds for requesting sealing, both the Post-Intelligencer and the Court are left with no clear indication why plaintiff believes sealing is warranted."

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