Ex-Microsoft employee a million-dollar man

The filing by Microsoft was in preparation for a hearing Wednesday in Washington state court in which Microsoft is asking for a temporary restraining order to prevent Lee from working at Google.

Microsoft claims Lee's defection to Google breaks noncompetition promises he made in a contract signed in 2000. "Dr. Lee was well paid in exchange for these promises," Microsoft wrote in the filing. "He has received...well over $3 Million since he returned to Microsoft in August of 2000, including more than $1 Million in 2004 alone."

Google did not immediately return a request for comment.

The case appears to be another episode of employee poaching in the tech world and marks the latest clash in the feud between Microsoft and Google, which compete in a variety of areas including desktop search.

Lee joined Microsoft in Asia in 1998 and founded the software giant's China research lab under Rick Rashid, who heads the company's research division. In 2000, he was rehired by Microsoft at its Redmond campus and promoted to vice president, according to the filing. In a meeting with CNET News.com editors last year, Lee said his work was centered on prototyping new user interface technology, advanced search technology, natural language interfaces and speech recognition.

On July 19, Google said it had hired Lee to lead a new research-and-development center in China and serve as president of its Chinese operations. The same day, Microsoft sued both Lee and Google, accusing the search giant of encouraging Lee to violate promises made to Microsoft.

On July 21, Google and Lee asked a California court to declare Microsoft's noncompete provision invalid.

Google appears to be taking advantage of a California rule that frowns on noncompete contract clauses, and a war over courtroom jurisdiction could loom.

Except in narrow circumstances, California code renders noncompete agreements meaningless. In addition, California courts have at times struck down employment contracts signed outside the state, said Martin Foley, attorney with the firm Sonnenschein, Nath & Rosenthal.

"California has voided noncompete contracts from non-California employers when the employee works in California or lives here," he said.

In their court filing, Google and Lee said Lee resides in California. Microsoft took issue with Google's filing.

"Last week, Google announced that Kai-Fu Lee was hired to lead their new R&D Center in China and, in fact, he directly said he is looking forward to returning to China," Microsoft said in a statement Wednesday. "Forced to confront its clear violation of Washington law, Google is attempting to manufacture California residency for Dr. Lee in a poorly disguised effort to persuade a California court to treat him as a California resident in order to evade Washington law and renege on the agreement Dr. Lee made to Microsoft."