ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, September 15, 2005

Goliath (Microsoft) v. Goliath (Google)

A battle between the software giant and the search engine giant began back in July with Microsoft’s request for a temporary order restraining its former executive, Kai-Fu Lee, from performing his new job heading Google’s China operation. Microsoft sued both Google and Lee, claiming that the work Lee is doing for Google violates a non-competition clause contained in paragraph 9 of his Microsoft employment agreement. The Washington court granted the TRO, stating that Microsoft had a “well-grounded fear” that leaked trade secrets could hurt its business. 

The saga continues and, earlier this week, a Washington Superior Court judge granted Microsoft a preliminary injunction in its case against Google and Lee. The ruling enjoins Lee from doing some, but not all, work he was slated to do for Google in China, and both sides are claiming victory.

Lee can start recruiting employees for Google, meeting with government and university officials, and establishing a headquarters for Google's new research center. But, pending trial, Lee is enjoined from hiring anyone away from Microsoft, using confidential information he learned during his employment there, or working in computer search and other specific projects for Google.

According to the preliminary injunction, one issue at trial in January will be “whether independent consideration exists to support the [non-competition] Agreement.”

Some reports of a Microsoft settlement offer spread around shorlty after the judge issued the prelimary injunction, but it does not appear from news accounts that the parties have settled yet.

[Meredith R. Miller]

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