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Thursday, July 28, 2005 - Page updated at 02:13 PM

Microsoft suit wasn't personal, ex-VP says he was told

Seattle Times technology reporter

Microsoft Chairman Bill Gates was so unhappy that Kai-Fu Lee was leaving the company for Google that he told Lee to expect a lawsuit from Chief Executive Steve Ballmer, Lee said in court filings this week.

"Steve is definitely going to sue you and Google over this," Gates said, according to the filings. "He has been looking for something just like this, someone at a VP [vice-president] level to go to Google. We need to do this to stop Google."

Microsoft sued Lee and Google on July 19, hours after Google announced it had hired away the corporate vice president.

Yesterday, Microsoft was in a King County Superior Court trying to persuade a judge to issue a temporary restraining order that would immediately keep Lee from working at Google until the lawsuit was resolved.

The judge, Steven Gonzalez, said he would announce a decision on the restraining order today.

Lee also said in court filings that Ballmer told him not to take the lawsuit personally.

"We like you," Ballmer was quoted as saying. "Your contributions to Microsoft have been immense. It's not you we are after, it is Google."

Gates' and Ballmer's comments, if true, underscore Microsoft's anxieties about its rival in the search business. From the highest executives on down, Microsoft is intensely gunning for Google. Microsoft would not confirm the executives' comments yesterday.

Lee, 43, resigned from Microsoft this month to open a research center for Google in China. He told the court he approached Google about a job in May after hearing the company was interested in opening an office in China.

Lee took a paid sabbatical from Microsoft at the beginning of June and wasn't scheduled to return until the end of September, according to court filings. Google extended a job offer, and on July 5, Lee told Microsoft that he wouldn't be coming back.

Six executives talked to him over the next two weeks, Lee said, leading to a counteroffer from Ballmer on July 15. Lee said he turned down the offer and was served with a copy of the lawsuit on the last day he was employed by Microsoft.

Microsoft, in its lawsuit, said that when Lee became an executive at the company in 2000, he signed a contract saying that, if he left, he couldn't do any work that competes with Microsoft for a year.

Google countersued Microsoft last week, saying that under the law in California, where Google is based, Microsoft can't stop employees from choosing where they want to work.

In court yesterday, a Microsoft lawyer said Lee knows Microsoft's strategy for China and would be violating that agreement by working for Google. "It's clear what's going to happen in China, your honor," said the lawyer, Jeffrey Johnson. "They're opening a center in China to directly compete with us."

Lee said that he has attended some meetings of Microsoft's China Redmond Advisory Board, also known as "CRAB," but that he mainly worked on speech-recognition, natural-language and user-interface technologies at Microsoft. Additional work he might have done on search was debated in court yesterday.

Johnson said that speech recognition is tied to search, especially when it comes to searches using a mobile phone. Johnson also said that in March 2004, Lee attended an executive-only retreat where Microsoft's plans for competing with Google were discussed.

Google's lawyer, Michael Droke, said in court that Lee stopped working on search more than a year ago. He added that Google has repeatedly told Lee not to disclose any confidential information he learned while at Microsoft.

Microsoft filed the lawsuit without any understanding of what Lee's future job would be, Droke said.

"Microsoft has simply jumped the gun," he said.

In its filings, Google said Microsoft's lawsuit is a "charade" engineered to scare other Microsoft employees into remaining with the company.

In an interview after the hearing, Microsoft lawyer Tom Burt said the company has no interest in intimidating employees. "There are some employees who consider other job options," he said. "All we want is that when they do, that they recognize they've got a contractual commitment to Microsoft that they have to live up to."

Kim Peterson: 206-464-2360

Copyright © 2005 The Seattle Times Company



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