A US Judge has ruled that Microsoft defector Kai-Fu Lee, can start work for Google next week. The decision follows a bitter spat that resulted in Microsoft boss Steve Ballmer claiming that the defector knew Microsoft’s “Secret Sauce Recipe” for China.
Lee a former Microsoft executive has accused Microsoft of serious business “blunders” in China and testified in a US court case that he left for rival Google after Bill Gates yelled at him in frustration over difficulties in the country.In the US court hearing Lee told the sitting judge that “Microsoft just wasn’t getting it,” the former executive, Kai-Fu Lee, testified, ecounting exchanges with Gates and others about the company’s approach in China.But Microsoft Chief Executive Steve Ballmer, in videotaped testimony, said Lee himself was deeply involved in Microsoft’s China strategy and knows the “secret sauce” behind its plans in that critical part of the world — information that Microsoft says it fears Lee will pass along to Google. Those were some of the opposing positions presented in the latest court hearing over Google’s hiring of Lee to head its new China operation. The suit by Microsoft is ostensibly over a non-compete clause in Lee’s employment contract.
Ruling on Microsoft’s request to extend a restraining order, a Seattle judge said Dr. Lee could proceed with helping to create a Google research center in China. But the judge, Steven C. Gonzalez of King County Superior Court, restricted him from working on some of his specialties – search and language technologies – or using information acquired while a Microsoft vice president. The dispute is an extension of the companies’ increasing rivalry on each other’s software turf, with Google offering a growing array of software programs and utilities that impinge on Microsoft’s monopolies and Microsoft trying to gain ground in the search engine market.
Their animosity has grown more acute, or at least more evident, since Google announced in July that it was hiring Dr. Lee, a Chinese computer scientist who established a Microsoft research center in China and more recently worked at Microsoft headquarters on speech recognition technology. The judge’s ruling does not end the legal battle. A trial is scheduled to begin in Seattle in January in a Microsoft lawsuit seeking broad application of a noncompete clause in its contract with Dr. Lee. And even before then, the two sides will be court in October for a hearing on a countersuit that Google has filed in California.
The New York Times reported that Microsoft’s general counsel, Bradford L. Smith, said Tuesday night that the company was willing to settle if Google would accept the restraining order as written through next July 18, a year after Dr. Lee left. “We can settle this lawsuit tomorrow,” Mr. Smith said, “if Google will agree to take today’s preliminary injunction, keep every word without a single change, and agree to it as a permanent injunction that will last until July 18, 2006. We can avoid a trial, forgo paying outside lawyers, and get back to work competing in the marketplace.”
A Google spokesman, Steve Langdon, said: “We haven’t heard from Microsoft, only reporters. If they have something they want to discuss we’d be happy to learn more about what they’re offering.” In a telephone interview, Dr. Lee said that he was thrilled to be getting down to work at Google.
“Tomorrow morning I will be excitedly going to work,” he said, “and shortly after that I will be flying to China.” He said he would start on building a Google lab in China and “hiring great people.” Google’s associate general counsel, Nicole Wong, posted a note on Google’s Web site stating, “A lot of legal process, but the bottom line is Dr. Lee is going to get busy.”
But Tom Burt, Microsoft’s deputy general counsel, said the ruling denied Google the ability to use Dr. Lee effectively.
In its ruling pending a trial, the court said that Google’s use of Dr. Lee for recruiting related to its planned center in China, as well as nontechnical advice for Google about doing business there, would not violate his employment agreement with Microsoft, provided that he did not try to recruit Microsoft employees or use any confidential information.
The court ruling restricts Dr. Lee from developing computer-search and natural-language technologies and also prohibits him from setting budget or compensation or defining the research and development to be undertaken at Google’s China lab.
Mr. Burt said the ruling converted Dr. Lee from being a crucial technical strategist to being a “highly overcompensated head of human resources and leasing manager.”
Ultimately the case may hinge on differences in employment law in Washington and California. Washington gives more power to corporations in enforcing “noncompete” agreements like the one Dr. Lee signed at Microsoft, which typically bar employees from going to work for rivals on directly competitive matters.
Dr. Lee, 43, a respected technology figure in China, is about to publish a book there called “Be Your Personal Best.” It is meant to help students combine the best aspects of Chinese and American culture, he said.
The scientist himself is a product of both cultures. He became a prominent speech recognition researcher at Carnegie Mellon University and moved to Apple Computer before joining Microsoft in 1998.
In an interview on Tuesday, he said he had been attracted to Google by the way products are designed and created there. Google has given its employees wide latitude in pursuing projects of their own design, permitting them to spend two days a week on their own activities.
As for the lab in China, Dr. Lee said Google had not settled on a location, but thought it would most likely grow to about 50 researchers. “Any endeavor like this begins with getting the people,” he said.
While on sabbatical earlier this year, Dr. Lee approached Google about leaving Microsoft and then discussed the company’s business before accepting a job in July.
Depositions in the trial have revealed deep anger among top Microsoft executives over Google’s recruitment of Microsoft talent.
Google submitted testimony from Mark Lucovsky, a former high-ranking engineer at Microsoft, who said that when he told Microsoft’s chief executive, Steven A. Ballmer, of his own plans to join Google, Mr. Ballmer threw a chair across the room and threatened to “kill” Google. Mr. Ballmer issued a statement calling the account a “gross exaggeration.”