News

Microsoft Sues to Stop Kai-Fu Lee from Joining Google

• By Stuart J. Johnston
• July 20, 2005

Lawsuits claiming ex-employees violated so-called “non-compete” clauses in their work contracts by leaving one company to go to a competitor are nothing new. Microsoft has been involved in its fair share of them in the past, both for cherry picking other companies’ employees as well as to try to stop defections from its own ranks.

The latest came this week when Microsoft filed suit to stop a key executive and computer scientist – Kai-Fu Lee – from defecting to Google. Like many, if not most, technology companies, Microsoft’s standard employment contract places restrictions on how soon after leaving the company, a worker can go to work for a competitor – usually a year.

Lee is a renowned computer scientist and, until this week, was corporate vice president of Microsoft's Natural Interactive Services Division. That changed this week when Google announced it has hired Lee to found a research lab for them in China and to be president of the company's growing Chinese operations.

"Under the leadership of Dr. Lee, . . . the Google China R&D center will enable us to develop more innovative products and technologies for millions of users in China and around the world," said Alan Eustace, vice president of engineering at Google in a prepared statement.

One major sticking point has to do with what Lee has been working on since he moved to Redmond from China more than two years ago.

“Kai-Fu more recently worked on Microsoft search technologies,” says Joe Wilcox, operating systems analyst for JupiterResearch, on his Weblog. “Microsoft has sought to create search algorithms at least as good as Google's, and the company has good reason to want to ensure none of its work is revealed to a major rival. Search is a strategic technology for Microsoft, whether on the Web or Windows.”

Lee has a lot of experience in building up research labs.

He joined Microsoft in 1998 as managing director of Microsoft Research, China, and is widely credited with staffing up the company’s Beijing labs. Before being recruited into Microsoft Research, he was president of Cosmo Software, Silicon Graphics’ multimedia software business unit.

And prior to that, Lee spent six years at Apple Computer where he was vice president of that company’s interactive media group. During his tenure there, his group developed QuickTime, QuickDraw and other technologies. Previously, Lee was an assistant professor at Carnegie Mellon University, where he developed the first speaker-independent, continuous speech-recognition system. Although U.S. educated, Lee is originally from Taiwan and speaks fluent Chinese.

In some respects, this case is similar to the departure of Adam Bosworth and Tod Nielsen, who left Microsoft in 2000 to found CrossGain, a company later acquired by BEA Systems. In 2001, Microsoft sued them, and several other former employees, for violating the one-year non-compete clause. The two basically took vacations until the year elapsed before moving forward with CrossGain.

Their technology ultimately evolved into WebLogic Workshop, so Microsoft has some precedent to fear competition from brilliant former employees. Bosworth, who had been a driving force behind Microsoft’s early XML efforts as well as on Internet Explorer, became BEA’s chief architect but, perhaps ironically, left BEA a year ago to join Google.

“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. As a senior executive, Dr. Lee has direct knowledge of Microsoft’s trade secrets concerning search technologies and China business strategies,” says a statement Microsoft posted on its press site.