Kai-Fu Lee trial to stay in Washington, for now

Judge's interim ruling keeps case on Microsoft's turf in battle with Google over hiring of key executive.

SAN JOSE, Calif.--A federal judge has issued a tentative ruling that would put on hold Google's effort to move the battle over Kai-Fu Lee to California.

The fight over Google's hiring of the former Microsoft engineer originally landed in a Washington state court, but Google filed a suit seeking to have a California court also rule on the matter. After the matter was transferred from California state court to federal court, Microsoft asked a judge to either dismiss, transfer or stay the California case.

Kai-Fu Lee
Source: Microsoft
Kai-Fu Lee

On Friday, Google attorneys argued that the federal court needed to step in if California's policy against noncompete agreements was to have an impact on the case. Microsoft, meanwhile, asserted that California policy and law could be argued in a Washington state court.

Ahead of Friday's hearing, the judge in the case had said that he was tentatively planning on granting a stay until the Washington case is decided.

In a posting on a court Web site late Thursday, U.S. District Court Judge Ronald Whyte said simply, "The court grants the motion to stay."

Whyte could either go ahead with his tentative ruling, modify it, or reverse course. A decision could come as soon as late Friday.

Before listening to the oral arguments from each side, Whyte praised the prowess of both side's lawyers saying each time he finished reading one side's brief he would say, "Yep, they're right."

"I think it's a tough case," Whyte added. He did not give any indication after the arguments were presented as to how he would rule.

In a statement Friday, Microsoft said it was "very encouraged" by the tentative ruling. "Dr. Lee's employment agreement clearly states that the Washington courts will be the venue for resolving any disagreements, and we look forward to presenting our case in Washington state," the company said.

Michael Kwun, litigation counsel for Google, said: "We would have preferred to have gotten a ruling on the merits." However, Kwun said he was pleased that the court considered Google's oral arguments on why a stay should not be granted.

A Washington state court initially barred Lee from joining Google as head of its China research and development labs.

California law generally strikes down noncompete agreements such as the one Lee signed. However, Google argued that without a ruling in California, the Washington state judge would likely rule at least part of the noncompete agreement enforceable. "In Washington, it is quite likely there will be some portion of the noncompete that is enforceable," Kwun said.

Last month, the Washington court issued a narrower order that paved the way for Lee to begin work for Google, though there are some limits on what he can do there.

Kwun said that Lee is currently on a book tour in China and has done some recruiting visits while there. Lee has also done work at Google's Mountain View, Calif., headquarters.

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