Microsoft Wins First Round In Court

[jmiller]

Microsoft Corp. claimed victory in court yesterday as a judge ruled that former Microsoft executive Dr. Kai-fu Lee, at least temporarily, may not begin his duties at rival search company Google Inc.

Microsoft claims Lee’s defection to Google is in violation of a non-compete agreement as Lee has intimate knowledge of the software giant’s business strategy.

The temporary restraining order was granted by Superior Court Judge Steven Gonzalez barring Lee from working on any Google product, service, or project similar to those he was involved with at Microsoft. Google requested a specific list of tasks, to be delivered Monday, that Lee can and cannot perform.

The restraining order will stand until September 6, when the court will decide on a more permanent injunction that could restrict Lee’s work at Google until the case goes to trial.

"We felt we needed to take this step to protect our sensitive business information and to ensure that Google and Dr. Lee honor the confidentiality and noncompetition agreements he made when he started working here," said Micosoft spokeswoman Stacy Drake said.

The Google gang has contended all along the case is “without merit,” and Microsoft’s retaliation toward them is little more than an attempt at scaring their employees.

"We are confident that once the judge has done so he will side with Google and Dr. Lee. Microsoft will not prevail in their intimidation campaign," said Google attorney Nicole Wong.

The trial is set for January 9.

[wrmineo]

Another great news find and article - way to go jmiller!

I think in the end, you'll see the fine Dr. working for Google and Microsoft in counseling for paranoid schizophrenia.

If I were Dr. Lee, I would be counter suing MSFT for the defemation of character as the suit implies that he has no ethics, morals or professionalism; it assumes that he will divulge proprietary trade secrets ... and so on. I'm not a sue-happy person, but I would take great, personal offense to this action if I were in his shoes.

This issue has raised some interesting discussion over at DC Forum about the definitions of non-compete clauses and the potential fallout for all involved parties.

I replubished an AP feed of this story this morning over at Referene Resources where Ms. Gillespie (AP Writer) made an interesting quote:

Lee said that in a July 15 meeting, Gates told him, "Kai-Fu, (CEO) 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."

I think this points to the open door that MSFT was looking for to take action against Google; if it wasn't Dr. Lee, it would have certainly been someone else.

What's the saying about no such thing as bad press? I think this is a good example of Gates and MSFT going for some headlines without regard of the fallout, simply to gain some exposure and attempt to throw some eggs ... bad form!

[mushroom]

Orangecrate has a great article on the subject

Titled " Microsoft: You Have No Right to Freedom "

http://www.orangecrate.com/article.php?sid=1092

[wrmineo]

Orangecrate has a great article on the subject

Titled " Microsoft: You Have No Right to Freedom "

http://www.orangecrate.com/article.php?sid=1092

Awesome article with great points of view; thanks for sharing!

[ADAM Web Design]

No, actually, that's one of the dumbest things that I've seen this week, and I've had to deal with IBM on three separate occasions.

This is very much about intellectual property, and the protection of such. Dr. Lee has evidently signed a non-compete agreement, and guess what? Google is a competitor to Microsoft, and a significant one. Dr. Lee obviously has some intimate and confidential knowledge of the inner workings of his former company, things that could easily be used by a major competitor (in this case, Google) to significantly hinder his former company's position.

It doesn't matter who the companies would be; the same thing applies. Employee A leaves Company B for Company C after Company B signs a non-compete agreement, Company B has the right to act accordingly to protect their interests.

As far as what the guy who wrote the article is saying, I have but three words: "DUMD, DUMB, DUMB." The point isn't that Lee is an employee as opposed to a chattel. Microsoft isn't trying to sue Lee for leaving. If Lee were going to Wal-Mart or something like that to work, they wouldn't even care. Do you not think people have left the company before? Come on. How stupid is that?

In fact, if people bothered to read one of the key comments, Microsoft isn't even going to be able to restrict Lee from going to Google. They're just going to ensure that any project that is being worked on is a non-competitive project. And that makes a buttload of sense.

It's idiots like this orangecrate guy that are blowing this way out of context and not stopping to think, by citing ridiculous examples of things to somehow justify their own arguments. People truly need to stand back and look at situations objectively before offering opinions, and this guy obviously can't do that.

[wrmineo]

Adam - I hear what you're saying, but it is assuming quite a bit. First, it's assuming that Dr. Lee, who worked for MSFT in voice recognition programming, will somehow be selling out his former employer's search engine technology - apples and oranges.

Next, a non-compete agreement in the US generally covers an employer from having an employee leave the company to start their own business with the employer's information and clients. Although, it is conceiveable that the clause could also include not taking proprietary company information, it is not likely to be legally binding if it contains language to the effect that an individual could be barred from working for a competing company.

Simply leaving one company and going to the next does not mean that he's sold out his former employer. Going to work for the competition is part of the capitalization market.

How stupid would Dr. Lee or Google have to be to use anything remotely close to something that is proprietary to MSFT? Uh ... way stupid?

I honestly don't think Microsoft is trying to protect anything except their egos. If anything, they are trying to gain on Google by any means necessary; if that means throwing some bad press their way, filing a lawsuit or whatever, so be it - also part of the animal we call a capital market.

I have the utmost respect for MSN's new search engine and attempts to make an honest name for themselves in the Search Engine World. However, it may have been wise to better formulate not just this suit, but the information surrounding its basis.

Then again, maybe it is that ambiguity that is creating differences of opinion and hence, lots of press, forum posts and brand name saturation that they were hoping for ... ?

[mushroom]

Here's an other take on the subject

"This lawsuit is a charade," Google said in court documents filed before a hearing on Wednesday in Seattle. "Indeed, Microsoft executives admitted to Lee that their real intent was to scare other Microsoft employees into remaining at the company."

From: http://www.iht.com/articles/2005/07/...ess/google.php

[ADAM Web Design]

Okay, this has just gone past stupid and gone right into insane.

And this whole thing about Google filing court papers saying Dr. Lee had this conversation with Microsoft, something which they almost certainly were not privy to, is just ridiculous. Even if it is 100% accurate, then why wasn't this made public before? Why was this filed as a coutr document by Google itself as a defense mechanism, rather than by Lee himself? If Lee actually had any real case, he could have just as easily turned around and sued Microsoft for interfering with his right to work. And would that have been made public? You're damn right it would have.

It also doesn't even apply to anything to do with this case. The only thing that really is relevant is what Lee is doing now and if it does relate to search. Not only that, the article that mushroom pointed out (which is good for exactly one thing) indicates that Lee signed non-compete AND confidentiality agreements. Even if the non-compete one doesn't apply, the confidentiality one does. And if the conversation above took place and is true, then Dr. Lee just broke the confidentiality agreement in a BIG way by revealing it to Google.

For those who may never have seen one, confidentiality agreements are pretty commonplace these days, especially when sensitive information is being dealt with. I've personally not only had to sign one, but I've also prepared a standard one for my clients. And these things, while in legalese, are generally pretty clear on one thing: they're documents you don't want to screw around with and try to find loopholes in. It's not worth it, especially when someone's paying you $3 mill to keep your trap shut. For that kind of money, I'm not saying boo about a company that would hire me unless they're doing something against the law and I have to.

So...one of three things happened:

1) Google is lying or exaggerating the truth (possible, but not likely, since they're not exactly known for this sort of thing).

2) Dr. Lee is telling the truth, which again means he broke the confidentiality agreement and would likely do so again. Granted, this doesn't paint a good picture of Microsoft either, but this scenario just is too far-fetched.

And if it were true, this guy's got some "playbook" information that was also revealed in confidence. Do you not think that would come out in chance meetings with Google?

3) Dr. Lee is either lying or exaggerating conversation details in an effort to provide Google with a stronger case.

If I were to bet on this, I'd say the most likely scenario is #3.

This isn't about indentured servitude, or big bad Microsoft trying to take over the world, or them trying to bring down the benevolent Google (who, by the way, will eventually bring themselves down at the rate they're going if they're not careful). It's about making sure that information related to the company that is the intellectual property of that company remains there.

As far as the "press and exposure" scenario wrmineo brought up...it would be the only other possible scenario that has any merit to it, albeit not a lot. Suing a competitor might bring brand name recognition, but how many people would use the MSN search engine as the result of a lawsuit-cum-smear campaign? Dumber ideas have certainly been employed in marketing, but this one is just a little too outside the box for me to quite buy into. They would be much more likely to run a multimedia campaign than anything.

By the way, I'm with you...I like their new engine a lot better, and I see it taking over Google at some point.

OK... here's the deal. Based on the no-compete contract Lee signed, he's got a lot to answer for and the suit filed by Microsoft says that Google warned him before his defection that Micosoft would come after them. As far as what Gates told Lee, it would be heresay more than likely and really, it doesn't matter because if Lee broke the agreement, then MS can still go after him.

He's a story I wrote about it right after it happened:

Microsoft levied the lawyers against Google on Tuesday as Google announced the hiring of Dr. Kai-Fu Lee for the top China R&D position at Google. Microsoft filed the lawsuit against Lee and Google for violating a no-compete agreement Lee had signed with Microsoft. His job at Microsoft was exactly what he's now doing for Google.

The lawsuit promises to be a major battle between two major competitors in the search industry. With both companies vying for market share in the burgeoning Chinese market, the switch of Lee from Microsoft to Google could have major strategic importance for both companies and Microsoft is hot.


"Creating intellectual property is the essence of what we do at Microsoft, and we have a responsibility to our employees and our shareholders to protect our intellectual property," said Microsoft in a statement yesterday. "As a senior executive, Dr. Lee has direct knowledge of Microsoft's trade secrets concerning search technologies and 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."

The lawsuit claims Lee and Google knowingly violated the contract and the suit says the Lee told Microsoft Google warned him about all these issues Microsoft alleges in the suit. Microsoft said the Lee was the chief and primary developer of their entire MSN search division and all the relevant properties tied to MSN's search efforts as well as the chief architect of their China strategy. They also say he had access to a lot of sensitive information as a vice president for the company and that his current position at Google will allow him to utilize all his knowledge of Microsoft for the benefit of Google.

Google hasn't said much about the suit so far. The made their big announcement of Lee's hiring yesterday but the pleasant aspect took a back seat to Microsoft's lawsuit.

"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 and will fully support Dr. Lee."

The no-compete contract also says that all legal action will be resolved in Washington and the suit says that since the agreement was reached in Washington and Google has offices in Washington, Washington state law will apply to this case. This is significant because were this to be handled in California, the no-compete agreement would be pointless.

While Google claims the suit is meritless, the suit says the Google warned Lee of all the problems he might be facing from an angry Microsoft on this one. It also said Google gave assistance to Lee in violating his contract with Microsoft. On the surface, Microsoft certainly has a case here and all the things they are worried about are legitimate. The no-compete agreement says that Lee would have to wait a year before being hired by anyone in a similar field as Microsoft. They claim Google qualifies.

Microsoft has gone after folks before and won. The case with Lee seems to be pretty iron clad. What will most likely happen will be that Google could quite possibly shell out some money but more importantly, Lee will be jobless for about a year. In any event, Dr. Lee will be in for a long ride back to China.


The point is, even if just was doing voice recognition, he'd still be in trouble because he was a VP at Microsoft and based just that one point, he would be privy to all kinds of information he could use and would therefor be liable.

[ADAM Web Design]

Finally, someone who can inject some sense into the proceedings. Good stuff, stithmeister.