Microsoft and Google reached an agreement to settle the dispute on Google’s employment of Mircrosoft’s former employee Lee Kai-Fu.
Microsoft sued Google, claiming it had violated non-competition agreements after it poached Lee, who was the head of its research operation in China.
Google counter-sued saying that it had done nothing wrong and that Microsoft was using the legal system to act unfairly.
In a statement, Microsoft said the three parties had entered into a "private agreement that resolves all issues to their mutual satisfaction."
The agreement indicated the end of a five-month wrangle on Lee’s job-hopping.
Lee, a Chinese-American and former Microsoft vice-president, left Microsoft and sought a position in Google to head Google’s research business in China this July.
Lee had worked at Microsoft since 2000 and helped develop its MSN Internet search technology, including desktop search software rivaling Google’s. He left in July to lead Google’s expansion into China after Google offered him a US$10 million compensation package.
Lee said Google had a kind of enterprise culture and entrepreneur spirit that he treasured and felt proud of and he also liked Google’s teamwork spirit, energetic environment and respect for individuals.
Microsoft sued Lee and Google in a Washington state court, contending that Lee’s job at Google would violate terms of the non-compete agreement that prohibits him from doing similar work for a rival for one year. Microsoft also accused Lee of using insider information to get his job at Google.
Google responded with its own lawsuit against Microsoft in US District Court in San Jose, California.
A Washington state judge ruled in September that Lee could not work on products, services or projects he worked on at Microsoft, including computer search technology, pending the trial. But the judge said Lee could recruit and staff a Google center in China.
Details of the agreement have not been made public, but both sides are saying that they have done well out of it.
Because of the settlement’s confidential terms, it is unclear what tasks Lee can perform until his non-compete-agreement runs out.
Google said it was "pleased" with the terms of the settlement agreement, while Microsoft said it had resolved all outstanding issues to "their mutual satisfaction". Hard to say if anyone won, or if neither side wanted the case to get to court because it would show off their soft underbellies.
Microsoft spokesman Jack Evans would not say when the settlement was reached. He also would not provide details of the settlement, calling it confidential. Google also declined to comment further.