## Facts

- Microsoft employed Dr. Kai-Fu Lee as a senior executive involved in search-related technologies and China business strategy.
- Lee signed an employee agreement containing confidentiality and a one-year non-competition covenant tied to products, services, or projects he worked on or learned confidential information about while at Microsoft.
- In July 2005, Google hired Lee as Vice President of Engineering and President of Google China to establish a China research and development center.
- Microsoft sued Lee and Google in Washington superior court, alleging breach of the confidentiality and non-compete agreement and threatened misuse of trade secrets concerning search technologies and China strategy.
- The Washington court entered a temporary restraining order limiting Lee’s work for Google in areas overlapping with his Microsoft responsibilities, including search, natural language processing, speech technologies, and certain China market strategy activities.
- The court conducted preliminary-injunction proceedings and entered a preliminary injunction that restricted Lee’s involvement in specified technical and strategic matters while permitting him to perform other work in China.
- During the Washington litigation, the parties proceeded under a stipulated protective order governing confidential and trade-secret discovery materials.
- Parallel litigation proceeded in federal court in California, where Google and Lee sought relief from the non-compete under California law; that action was stayed pending the Washington case and later dismissed after settlement.
- The parties ultimately resolved the dispute through a private settlement, ending both the Washington and California cases without a final merits judgment.

## Issues

1. Whether Microsoft’s confidentiality and one-year non-compete provisions were enforceable under Washington law against Lee’s planned work for Google.
2. What interim restrictions, if any, were necessary and appropriately limited to protect Microsoft’s alleged trade secrets pending final resolution.
3. Whether contractual language extended to (a) work Lee performed for a Microsoft subsidiary before signing the August 2000 agreement and (b) asserted control over Lee’s public image or personal relationships.
4. Whether a protective order should govern the exchange and use of confidential information during litigation.
5. In the parallel federal case, whether the California action should proceed under California choice-of-law principles or be stayed in favor of the earlier Washington proceedings.

## Decision

- The Washington Superior Court granted a preliminary injunction in part, issuing relief broader than Google’s proposed stipulation but narrower than Microsoft’s requested restraints.
- The injunction barred Lee (and barred Google from employing Lee) from activities related to:
  - computer search technologies (including internet and desktop search),
  - natural language processing and speech technologies, and
  - setting the budget, compensation levels, or research direction for a proposed Google China research facility.
- The injunction also barred Lee from soliciting Microsoft employees.
- The court permitted Lee to work for Google in China on matters outside the enjoined technical and strategic domains, including establishing and staffing a Google research facility.
- The court rejected Microsoft’s claim that the agreement’s “project” scope reached certain pre-agreement subsidiary work, treating related confidentiality obligations as expired due to the agreement’s narrower wording.
- The court rejected the contention that the agreement gave Microsoft rights to control Lee’s public image or personal relationships.
- In the federal California case, the court stayed the action and deferred ruling on Google’s motion for summary judgment, allowing the Washington proceedings to move forward.
- The parties later settled; the state action concluded pursuant to the settlement and the federal action was dismissed with prejudice by stipulation.

## Legal Principles

- A court may grant preliminary injunctive relief to enforce employee confidentiality and non-compete obligations when necessary to reduce the risk of trade-secret misuse pending final adjudication.
- Interim restraints should be limited to work areas that substantially overlap with the employee’s prior confidential responsibilities, rather than imposing a complete bar on employment.
- Contract provisions restricting post-employment conduct are construed according to their terms; courts may decline to extend restrictions to pre-agreement work or to rights not expressly granted (such as control over persona or relationships).
- Protective orders may be used, including by stipulation, to regulate the handling of confidential and trade-secret information during discovery.
- When parallel proceedings exist, a federal court may stay its case in deference to a related, earlier-filed state action addressing the same core dispute.

## Conclusion

The court issued a tailored preliminary injunction enforcing key parts of a senior executive’s non-compete and confidentiality obligations to protect alleged trade secrets in search technology and China strategy, while permitting continued employment in limited roles; the parties later ended the litigation through a private settlement without a final merits decision.


Microsoft Corp. v. Lee & Google Inc., No. 05-2-23561-6 (Wash. Super. Ct. King Cnty. 2005)