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The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation - UPDATED
Sunday, September 04 2005 @ 09:29 PM EDT

I guess you've heard that Microsoft's CEO, Steve Ballmer, has been quoted in a declaration filed in the Microsoft v. Google/Google v. Microsoft dueling lawsuits, as saying he will blankety blank kill Google and "bury" its CEO, Eric Schmidt. Here's the report, and excuse his language:
Microsoft Corp. CEO Steve Ballmer vowed to "kill" internet search leader Google Inc. in an obscenity-laced tirade, and Google chased a prized Microsoft executive "like wolves," according to documents filed in an increasingly bitter legal battle between the rivals.

The allegations, filed in a Washington state court, represent the latest salvos in a showdown triggered by Google's July hiring of former Microsoft executive Kai Fu-Lee to oversee a research and development centre that Google plans to open in China. . . .

Ballmer's threat last November was recounted in a sworn declaration by a former Microsoft engineer, Mark Lucovsky, who said he met with Microsoft's chief executive 10 months ago to discuss his decision to leave the company after six years.

After learning Lucovsky was leaving to take a job at Google, Ballmer picked up his chair and hurled it across his office, according to the declaration. Ballmer then pejoratively berated Google CEO Eric Schmidt, Lucovsky recalled. "I'm going to f---ing bury that guy, I have done it before, and I will do it again," the declaration quotes Ballmer. "I'm going to f---ing kill Google."

I await with eager anticipation the cries of moral outrage from Rob Enderle and Laura Didio and Darl McBride and everyone else who has accused the FOSS community of verbal extremism.

That may be quite a wait, so let me be the first to call on the proprietary software community to condemn in no uncertain terms such violent speech coming from their community. Death threats are never acceptable, don't you agree?

Such threats coming from the CEO of the largest software company in the world are far more serious than they would be coming from some teenage Slashdotter, because Ballmer surely has the means to follow through, does he not, should he actually mean it?

If you were Mr. Schmidt, how safe would you be feeling today? It was a metaphor, you say. Likely it was, but are you positive? And let's say you answer yes, it was a metaphor. Is it all right for a convicted monopolist to threaten to "kill" a competing company?

Ballmer now denies he ever made such threats. That is possible. It's also possible the Microsoft lawyers turned pale upon learning of the statement and insisted on a public denial.

He sort of has to deny it, since antitrust issues leap into our minds otherwise, and that is one of the things Google is complaining about in its litigation, not to mention that should Mr. Schmidt from this day forward have so much as a headache, the whole world will blame Mr. Ballmer. Should he actually die, an investigation is certain to at least be considered, I would think. If I were as rich as Mr. Schmidt, I'd probably hire bodyguards, if we assume that Mr. McBride needed them on far less provocation.

All this made me decide to look into what would have Mr. Ballmer allegedly throwing a chair at the wall and making such threats. For the record, and so that Mr. Ballmer doesn't sue me or, gasp, decide to "bury" me, too, here's what he says about it:

In a statement, Ballmer described Mark Lucovsky's recollection as a "gross exaggeration. Mark's decision to leave was disappointing and I urged him strongly to change his mind. But his characterization of that meeting is not accurate."

It's not true, the man says. OK. But it *feels* true, doesn't it? At least it does to me. So, appropriately inspired, I set out to find out what this was all about.

And here you go, everything I could find on the Google-Microsoft battle so far. Note that there are some documents missing, because some state courts don't make filings as fully available as District Courts, but this is what I've learned and the significant documents that are available. Unfortunately, the one document we most want to see, the one that tells about Ballmer allegedly throwing a chair across the room and threatening Google's life and limb, isn't available yet. I'll explain the documents we do have, but remember that it's just my impression, I don't have all of them, and I'm not giving it the fine-grained analysis I do in the SCO litigation, so feel free to read the documents themselves and draw your own conclusions. This is more for fun.

Microsoft v. Google and Google v. Microsoft

First, there are two lawsuits filed. Microsoft filed first in Washington State and a few days later, Google filed in California. Google's was then assigned to a US District judge. It's a dispute about Google hiring a Microsoft employee out from under them, Dr. Kai-Fu Lee, and it centers on a non-competition agreement which he signed in 2000.

Microsoft filed first, so it has that advantage, and it got a temporary restraining order [PDF] until a hearing on September 6 on whether or not to extend it until the trial. Frankly, getting to trial is likely to take longer than a year, which is all the non-compete clause covers, so we'll see what the judge does, but it seems likely that the court will extend the restraining order. As I will explain, that doesn't mean Microsoft will win in the end, just that the judge wants to prevent unfixable damage. But the first question is: which court will be the one that decides this dispute? The parties are fighting hard over that issue.

The Fight Over Jurisdiction

Where this gets heard is huge. As it happens, California tends to toss non-compete's overboard, so Google wants California to take the case long enough to do just that. They have a motion for summary judgment [PDF] filed, asking that the agreement be declared invalid and unenforceable and against public policy in California. Let's pick up the narrative by looking at the various court filings. Because I only have access to most of the Google v. Microsoft filings and only a few of the Microsoft v. Google filings, there could be gaps here or there, but a number of the Microsoft v. Google documents are filed in the Google v. Microsoft case as exhibits, including the Complaint, so we can get a pretty good picture.

Google and Dr. Kai-Fu Lee filed their action on July 21. It's Case No. CV-05-03095 RMW. Why not just file an answer to Microsoft's complaint and bring counterclaims? To get it out of Washington and into California, silly. It might not work, but it's certainly worth a try.

Dr. Lee, in his Declaration [PDF] in support of their Motion for Summary Judgment, which has the non-competition agreement [PDF] attached as Exhibit A, tells us that it was he who approached Google, asking for a job, and they ultimately offered him one that he officially accepted on July 19. The Declaration says he told his Microsoft boss he quit on July 18, and immediately thereafter, Microsoft served a complaint [PDF] on him, the one filed with the state's Superior Court of the State of Washington. The case is No. 05-2-23561-6 SEA, Microsoft Corporation v. Kai-Fu Lee and Google Inc., for those of you wanting to track it down at the courthouse to get the rest of the filings. Here are documents in the case that you can read without a Pacer account. They don't seem to make filings in general available on their website, however, just the rulings.

Microsoft has already begun filing sealed documents, which isn't a shock, because this is a case about secrets and because it's Microsoft, and there's an order [PDF] on how to handle such sealed documents already. They have also demanded redactions from Google, notably a quotation from Bill Gates, something that Google said he said about Dr. Lee.

Going to the court is about the only way to get the rest of the court filings for that case, I think, unless I'm just missing them somehow, which is always possible (the declaration by Lucovsky was reportedly just filed on Friday, and so it wouldn't be available on Pacer yet anyway). For that matter, the Google v. Microsoft complaint isn't available either, because it was filed in state court, and when the case was reassigned to US District Court, it wasn't sent over. They only have on Pacer what happened after that point.

I guess I should explain that in the US, states often call their lowest courts by high-sounding names like Superior Court or Supreme Court. By that, they mean in contrast to things like city courts, like traffic court, not suggesting in any way that they are the ultimate court. The US Supreme Court is the ultimate. So here, the Superior Court is the first step, the trial court, in the chain of courts that might ultimately hear a case.

OK. So Microsoft got the first bite. Why were they in such a hurry? I am only guessing, but I believe it is likely because Google has its offices in California, and that is where Dr. Lee was headed. California has a strong public policy of not allowing non-competition agreements to interfere with a man's employment opportunities. Washington State does not. So, naturally, since Microsoft's position is that the agreement blocks Dr. Lee from working for Google for a year on anything that is remotely the same as what he was doing for them, they'd prefer to avoid California.

The Non-Compete Agreement

In Microsoft's Motion for Temporary Restraining Order and Order to Show Cause [PDF], they tell us their reasons for concern:

Dr. Kai-Fu Lee -- with Google's encouragement -- is blatantly violating his non-competition promises to Microsoft. He is doing so by defecting Microsoft for Google, a direct competitor in markets as to which Dr. Lee holds Microsoft's most sensitive technical and strategic information. The non-compete provisions Microsoft seeks to enforce are narrowly drawn and were agreed to by Dr. Lee as a condition of his return to Redmond as a Microsoft Vice President, a position for which he was paid over a million dollars last year alone.

For the past five years, Dr. Lee has held leadership positions with respect to Microsoft's efforts to develop new and improved search engine technologies. Microsoft is engaged in intense competition with Google in the market for these products. By virtue of his leadership roles, Dr. Lee learned Microsoft's most sensitive technical and strategic business secrets about search technologies. Throughout this time he was also deeply involved in Microsoft's efforts to expand its business in China and learned Microsoft's confidential strategic plans regarding that crucial new market.

Dr. Lee decided to defect Microsoft for Google in order to lead Google's new China operation developing search technology. This places him in direct competition with Microsoft on two issues -- search engines and China strategy -- where Dr. Lee holds Microsoft's most proprietary, confidential, and competitively sensitive information. This is a clear violation of the non-compete provisions of Dr. Lee's Employment Agreement. Microsoft is therefore compelled to seek a Temporary Restraining Order to prevent the actual and substantial injury that will result if Dr. Lee is allowed to violate his non-competition promises.

They call it narrowly drawn for a reason. No court in the world will say a man can't work at all in his chosen field ever again. It's obvious that at a certain level, you really couldn't work anywhere ever again, if an agreement were allowed to be written broadly enough. So Microsoft here is stressing that they aren't asking for more than the law allows. The standard in Washington, according to Microsoft, is this:

[A] noncompete agreement will be enforced so long as it is reasonably necessary to protect the employer's business, does not impose on the employee any greater restraint than is reasonably necessary for that protection, and is not contrary to the public interest.

Dr. Lee has limited options, given his area of speciality and how few search engine companies there are, so the court has to weigh his interest in staying employed against his former employer's interest in keeping their secrets secret from a competitor. The agreement had confidentiality clauses also, they tell us. That is significant, because there is no time limit on them. He agreed, they claim, to *never* reveal confidential matters or *ever* to solicit Microsoft employees to leave the company for a job elsewhere. The non-compete clause is considerably easier to justify. Clause 9 reads like this:

9. Non-Competition and Non-Solicitation. While employed at Microsoft and for a period of one year thereafter, I will not (a) accept employment or engage in activities competitive with products, services or projects (including actual or demonstrably anticipated research or development) on which I worked or about which I learned confidential or proprietary information or trade secrets while employed at Microsoft; (b) render services to any client or customer of Microsoft for which I performed services during the twelve months prior to leaving Microsoft's employ; (c) induce, attempt to induce, or assist another to induce or attempt to induce any person to terminate his employment with Microsoft or to work for me of for any other person or entity. If during or after my employment with Microsoft I seek work elsewhere, I will provide a copy of this Agreement to any persons or entities by whom I am seeking to be hired before accepting employment with or engagement by them.

Personally, I'd just stick to an agreement if I'd signed it, but that's just me. I'd stick to an agreement if I simply *said* I would, let alone signing anything.

[UPDATE:

I have gotten two more documents from the Microsoft v. Google litigation, and they definitely clarify the situation considerably:

It turns out that Dr. Kai-Fu Lee and Google unilaterally stipulated that pending trial Dr. Lee will not work on any technical areas listed by Microsoft in its proposed preliminary injunction, but that wasn't enough for Microsoft to drop its motion. According to Google, Microsoft is claiming that they have confidential methods of hiring people and Dr. Lee shouldn't be allowed to do that either, ever. Here's a segment from Google's opposition to Microsoft's Motion for Preliminary Injunction, and you'll note the redaction at the very beginning, apparently demanded by Microsoft:

To address Microsoft's purported concerns about Dr. Lee's knowledge of "confidential" Microsoft information, Defendants have stipulated that, pending trial to determine what technical or strategic information Dr. Lee actually worked on or knew, and whether it could be put to competitive use for Google, Dr. Lee will not work or consult in any of the technical areas identified in Microsoft's proposed preliminary injunction. Rather, pending trial, he will open a product development center in China, and staff it with non-Microsoft personnel.

But Microsoft wants far more. It interprets its standard non-compete agreement to ban Dr. Lee from doing any work for Google -- or for any other software company -- in China, or anywhere else, that falls within the range of all of Microsoft's business globally. Microsoft brought this preliminary injunction motion not out of concern for any confidential information, which Google and Lee have stipulated to protect, but out of a desire to delay Google's entry into China, and make an example of Dr. Lee for other Microsoft employees who might have the audacity to "defect" from Microsoft. See Microsoft TRO Mtn. at 1.

Microsoft has no legal right, contractual or otherwise, to prevent Dr. Lee from utilizing his charismatic, personal qualities and general skills to start up a facility and hire from China's universities, and from companies other than Microsoft. Microsoft's claim that its non-compete covers recruiting is contrary to the terms of the non-compete covenant itself, which applies only to "products, services and projects," such as research, for which Dr. Lee was responsible, and not to the general activities Dr. Lee engaged in as a vice president, such as interviewing prospective executive hires. . . . Microsoft has not identified any confidential recruiting information or relations, and Dr. Lee knows of none, that could be put to competitive use for Google. Every aspect of what Microsoft has alleged is its "confidential" recruiting information and relations -- has been publicly disclosed on Microsoft's website and in public presentations by its management, besides being generally known.

II. STATEMENT OF FACTS

A. Google hired Dr. Lee to start and staff its product development center in China because of his reputation in China, and with Chinese students, not to obtain Microsoft information

Google hired Dr. Lee to help it start up a China development center because of his stature in China, his integrity, his leadership and managerial skills, his technical credentials, and his commitment to and connection with Chinese students. Every Google executive deposed in this case has so testified. . . .

Google did not hire Dr. Lee to obtain Microsoft information. Google is admittedly ahead of Microsoft in search technology. . . .

B. Dr. Lee's unique personal skills belong to him -- not Microsoft.

The unique skills and qualities that make Dr. Lee an ideal recruiter for Google are personal to him -- Microsoft does not own them and cannot prevent Dr. Lee from using them on behalf of Google.

As you can see, there have already been depositions. This litigation is moving a lot faster than SCO v. IBM, wouldn't you say? It shows what can be done when your object is actually resolution of the issues and not just delay. This makes it clearer that Google isn't even asking to get out of the noncompete agreement, only to clarify at trial exactly what is covered by it. Personally, I'm very relieved to see that. This also impacts on my analysis, so keep that in mind as you read on. I gave Microsoft too much of the benefit of every doubt, I realize, on reading the newly acquired filings. [End Update.]

But there is a line that the law recognizes. If there is, in any contract, parties that are not evenly matched, shall we say, then the law scrutinizes such an agreement more carefully, and the weaker party may not be bound by what can be viewed as overreaching terms. You see the issue come up regularly in pre-nuptial agreements, if the man has more education and money than the wife, particularly if she had no attorney of her own.

To give a more extreme example, if a mobster holds a gun to your head and tells you to sign over your business to him or else something might happen to you, the courts aren't going to hold you to your "word". They will figure the "bargain" wasn't fairly entered into because you weren't in a position to negotiate equitable terms, and they won't uphold the deal. Precisely where that line is between a hard bargain between equals and an unconscionable agreement varies from state to state, case to case.

But Microsoft makes a reasonable point when it points out that it relied upon Dr. Lee's promises and that it never would have hired him or given him access to confidential information at such a high level without those promises. In any contract, if one side relied on the promises of the other side, it reinforces the validity of the contract, so that is why they are saying that. It's also probably true that without the agreement, they would have kept him from confidential materials, but at a certain point, you can't do your job unless they reveal what you need to function, so it's true only to a point.

Microsoft says he sat in on high level meetings regarding plans for China up until May of 2005. Dr. Lee, they tell the court, managed technical teams working on MSN Search technology. At one point he was "even in charge of Microsoft's overall business efforts for MSN Search." The tech he managed includes improvements in "natural language processing" and speech research to improve the ability to search for audio and video files, and "highly confidential new and innovative search technologies using machine learning concepts." He therefore knows the "software architecture, source code, and algorithmic structure for the current MSN search engine" as well as Windows Desktop Search, and he is familiar with Microsoft's strategies for the future to "market and monetize" search products, according to Microsoft. You can almost hear them throwing up at the very thought of Dr. Lee defecting to Google with all that inside his head. (Dear Dr. Lee: Please don't ever donate anything to Linux, okay? We have enough trouble.)

An interesting detail is that Microsoft says it has a Google competition "playbook". It's funny to me how all these corporations think in sports terms. It must be a guy thing. Dr. Lee went to a meeting at which top executives were briefed on "The Google Challenge" in March. So he knows precisely how Microsoft plans to compete against Google in the search engine marketplace, Microsoft complains. Both the product line and the geographical market "directly overlap."

You can understand this from their standpoint if you think of a worst-case scenario: your competitor secretly sends someone over to you to seek employment. He doesn't say he is from your competition. You hire him and teach him a bucket of stuff, and then he quits and goes back to your competitor with all your information. In the cutthroat business world, which is more like war than sports, except for the actual killing part (one hopes), no doubt someone would try it or has, and that is what non-competition agreements are supposed to prevent.

Here, though, Microsoft has one problem. This agreement is worldwide. Usually they are geographically limited, and Microsoft here realizes this could be a problem, so it says that a non-compete can be as broad in scope as the business you're in. Microsoft's business is worldwide. But that is the same as saying that Dr. Lee can't work for anyone anywhere for a year. Well. He can sling hash, I suppose. Microsoft says he can work for any competitor as long as he takes a position that isn't directly competitive. But what would that be at Google? I did hear they are looking for a chef, but that isn't Dr. Lee's field of expertise. With his training and experience, what really can he do for Google that wouldn't compete with some aspect of Microsoft's business interests?

Microsoft also argues that there is no public impact on Dr. Lee cooling his heels for a year, but I can think of a public interest, although I doubt the court will view it as anything to shake a stick at: we have an interest in search engines that work well, so innovation in that field is to our benefit. If Dr. Lee were to die, for example, before he gets to build his vision of what a search engine can do, we will be the losers. Well, he wasn't personally threatened with burial, so I guess that is remote. But personally, if Microsoft did "kill" Google, the whole world would be bereft.

Dr. Lee's Side of the Story

Dr. Lee, in his Declaration, tells us that he moved to California on the 19th, then registered to vote in California, got telephones in his name there, including a new cell phone, got a new driver's license in California, giving up the one he had in Washington State, and is now paying payroll taxes and income taxes to California. No doubt Google expected Microsoft might sue, and we can assume that because Dr. Lee negotiated, as part of his package, that Google would pay his legal bills, should such a lawsuit ensue. Microsoft in its Motion for a temporary restraining order points out that Dr. Lee still has a residence in Washington State. I'm guessing that is just because he hasn't found a buyer yet.

All of this is to prove to the court that Dr. Lee is a California resident now, with plans to stay there for the foreseeable future, so that the court will be inclined to accept the case and rule in his favor on the non-compete issue. And that is what their Motion for Summary Judgment is about. They ask the court to rule as a matter of law that the agreement is against public policy, is invalid and unenforceable and shouldn't be upheld. They also say in their complaint that Microsoft's efforts to enforce the agreement violates California law and is an unlawful business practice, illegal restraint of trade.

Why Microsoft is suing Google too is a puzzlement to me. Maybe they did it because when you are working very fast, and their lawyers were, you throw in anything you think you might need, so you are covered. But as Google points out in their response [PDF] to Microsoft's Notice of Pendency, they are being sued essentially for offering a man a job, which is not an illegal activity. They are not parties to the agreement in question.

Lee's supervisor was Eric Rudder, we learn from Microsoft's Answer and Affirmative Defenses [PDF], filed in answer to Google's California Complaint, and we learn that Dr. Lee submitted his resignation by letter. Microsoft's Motion for the TRO fills in a detail. It seems Dr. Lee told his boss on July 5 that he was considering going to Google. Rudder talked him out of it, urging him to wait and "explore opportunities for a Microsoft position in China." That explains how the lawyers were able to work so fast and serve Dr. Lee immediately after his meeting with Rudder on the 19th, when he handed in his letter of resignation. They were ready for him, just in case, apparently. Several Microsoft executives met with Dr. Lee to try to get him to change his mind. But Microsoft says Google offered Dr. Lee the opportunity to "build and lead its China office 'end to end.'" I've heard that is how Google gets folks on board -- they offer you the opportunity to make your vision, whatever it is, come true. You have to admit, that is irresistible to anyone with a vision.

I'm further guessing that Microsoft has templates from earlier defections on hand to work from. If I were Microsoft, with all the money in the world, and lawyers to burn, metaphorically speaking, I'd ask them to prepare and keep up-to-date every possible type of complaint, just in case. Their claim in the Washington lawsuit is that in addition to Dr. Lee being in violation of the agreement, the "conduct of Google and Dr. Lee constitutes threatened misappropriation of trade secrets" and that Google's conduct "constitutes or threatens tortious interference with contractual relations."

Constitutes or *theatens*? Well. OK. Call that a placeholder. They want to do discovery, I guess, and naming Google too makes that amply possible. No doubt they want to know exactly how much has been revealed to Google already, they want to prevent any further leaks, and they want it to cost Google an arm and a leg, metaphorically speaking, part of the I'll-blankety-blank-kill-you threat's fulfillment, perhaps.

Microsoft's Temporary Restraining Order

Microsoft was easily able to get a temporary restraining order [PDF] from the state court. I say it was easy, because the nature of the claim makes it very hard for any court to deny such a request. The bar will be higher, though, when it comes to getting a restraining order lasting until trial. But with so much at stake, I frankly can't see how a court will say no. The reason is that if they don't restrain him, the damage will be done and irreversible. Microsoft will be left without a remedy, even if it wins the case. By the time it goes to trial, the non-compete clause is likely to have run out, so without a restraining order, they could win at trial, but have it be too late to do them any good. Mere money won't make them whole, even if there existed a way to quantify their loss accurately. Dr. Lee would have benefitted from the bargain, they point out, getting the Microsoft job and the salary, but then he flies off without keeping his side of the bargain, so Microsoft gets no benefit at all from the agreement.

If they do restrain him until trial, and Google and Dr. Lee prevail, the damage to Dr. Lee is minimal, by comparison. Microsoft had to post a million-dollar security to pay costs and damages in the event that the defendants are found to have been wrongfully enjoined, but you can't put secrets back into secrecy, once they are let free. The damage to Google is real, but they did know about the agreement going in, and they were willing to hire him anyway. If I were the judge, that's how I'd see it, anyhow. But a decision like that isn't an indication of which side the judge thinks has the strongest case. He's balancing the equities, trying to figure out how to keep both sides reasonably whole no matter which way it ultimately goes, since there really is no way to know who is right this early in the game.

So, now you know what it means when you hear about forum shopping. That is step number one in major litigation, and no good lawyer would not think about it. Where you file matters. This case shows why. An non-competition clause is the heart of the case. Dr. Lee did sign the document, and now he would like to say clarification of exactly what it covers. He has other arguments too; for example, it is his position that what he will be doing for Google isn't the same as what he did for Microsoft, so the agreement doesn't apply in the situation, and that he can't do anything like the work he did for Microsoft for over a year anyway, since Google has no center built in China yet, but the quickest and easiest solution, from his standpoint, is to get the agreement tossed out, so he can get to work immediately, without worrying about all this.

He was hired, he tells us, to help Google open and establish a new research and development center in China. "The exact business plans and focus of this new project research and development center have yet to be fully determined," he says, "It is intended, however, that the new center will develop products to be used throughout the numerous markets that Google serves. I was expected to oversee recruiting and facilities construction in China for the new research and development center beginning in late 2005." Then, he adds, he'll be moving to China for a couple of years on a temporary basis, but retaining his California residence and continuing to pay taxes there.

This is to say, in legalese, as I understand it, that the agreement not to compete can't be said to apply to what he'll be doing, because no one even knows yet precisely what he will be doing so making a claim that it is the same as what he promised not to do has to fail, and he can't start doing it until the center is built and running, and that is sure to take a year anyway, and since the non-compete clause is only for a year, this is all a fuss about nothing.

That is his argument, but I'm sure Microsoft will view that with a cynical eye and point out that he isn't being hired for his human resources or building construction skills. His resume tells you what he will likely be doing, and he knows too much about Microsoft's secrets; they accuse him of already sending confidential documents to Google, which Google denies. You can read Google's specific explanation of what Dr. Lee sent in their Public Version of Google Inc.'s Opposition to Microsoft's Motion for Preliminary Injunction. It was all public information, they say.

The TRO says he can't hire away any of Microsoft's employees either, so that seems to be a real concern of Microsoft's. Google's announcement of his joining the company said that he will serve as President of the company's Chinese operations and that the new center will strengthen Google's search efforts, as well as focusing on "developing new innovative technologies and projects," Microsoft points out, and they flat out say that he was hired to work on search and to do so immediately. That is in direct competition with Microsoft, hence covered by the agreement. He was, they tell us, "one of the main architects of Microsoft's business strategies in China." No doubt that worries them plenty too. And that is an area that is bound to get serious, because of some eternal confidentiality clauses in the agreement.

In their Answer, Microsoft denies that their "limited non-competition provision" violates California public policy or is invalid or unenforceable under California law, and Microsoft doesn't think the agreement is governed by California law anyway. It says troubles will be aired out in Washington. They also don't think they are guilty of illegal restraint of trade, which Google has alleged. Dr. Lee was the initial employee of Microsoft Research Asia in China in 1998. It wasn't until he went to work in Redmond, Washington in 2000 that he signed the agreement. This could end up mattering, depending on what he will be doing for Google in China and what he did for Microsoft since 2000. If what Dr. Lee will be doing for Google is similar to what he did for Microsoft in China but not what he did later in Redmond, Microsoft could be up a creek without a paddle.

That is the kind of detail that lawyers need and depend on the client to provide, so if you are ever in litigation, be sure to tell your lawyer everything you can think of. Your lawyer will know which detail, like this one, might matter under the law. You might not, so just tell everything, and when you see your attorney's eyes light up, you'll know it matters.

From Microsoft's Answer, we also learn that Dr. Lee was on sabbatical from Microsoft as of June of 2005. We learned already that he approached Google in May, and quit in July, so the timing seems, well, pointedly helpful, should a person want to house hunt, let's say, or register to vote in a new state. Microsoft, in a footnote, say that Microsoft's sabbatical policy is that you can't use it to job hunt and then not return. Dr. Lee "confirmed" the policy in writing and orally, they say. Sheesh. Maybe Microsoft should look to its policies. That kind of regimentation must make some yearn to escape the bird cage, I would think. And, as we see, people act like people anyway, so what's the point?

UPDATE:

In Google's Public Version of Google Inc.'s Opposition to Microsoft's Motion for Preliminary Injunction, they answer this allegation:

Microsoft has accused Dr. Lee of breaching a formal, written policy, allegedly set forth in a document he signed, requiring him to return after his sabbatical term ended. Senior Microsoft VP Eric Rudder, who declared to those facts under oath, has now admitted, also under oath, that no such written policy is set forth in the documents signed by Lee.

Rudder was Dr. Lee's boss, remember. Are we starting to get a feel for why Dr. Lee was unhappy working for Microsoft? [End update]

The agreement, Microsoft points out, provides that it be governed by the laws of the State of Washington and that exclusive venue for any action lies in state or federal court located in King County, Washington. Personally, I wouldn't want to sign any agreement with Microsoft with such a provision. I think we can assume a home court advantage in a state that likely rakes in mucho dinero in taxes and political contributions from Microsoft. Then there is the golf course schmooze factor. California has no stake here, Microsoft argues, on one additional ground: the agreement was entered into in Washington State between two Washington residents. (Here they are using the corporate entity as a "person" residing in that state.) Dr. Lee agreed to the terms of the agreement, and it should stand.

Google and Dr. Lee's request for declaratory relief should at least be stayed or the California court should abstain from hearing the case at all, Microsoft asserts, "in favor of the first-filed, ongoing, and more advanced Washington State court action."

"More advanced" is a bit of a stretch, when you consider that the two complaints were filed within days of each other in mid-July and their Answer is dated August 11, but a lawyer's job is to advance every possible argument. Microsoft really doesn't want this heard in California, and you can't blame them. I wouldn't either. But their argument is that they got a temporary restraining order already in Washington State, so Google and Dr. Lee can't ask for summary judgment in California, that they are barred by collateral estoppel and/or res judicata. That is a bit of a stretch too, but hey. Microsoft requests that the California complaint be dismissed and that they get their legal fees regarding the matter paid, as per the agreement, which has a clause that loser pays.

The Confidentiality Promises

By my reading, the non-compete issue is the least of Dr. Lee's worries. That only lasts one year. It's the rest, the confidentiality promises, that last for the rest of his life. It reads in part like this:

During my employment and at all times thereafter, I will not disclose to anyone outside MICROSOFT nor use for my purpose other than my work for MICROSOFT: a) any MICROSOFT confidential or proprietary information or trade secrets; or b) any information MICROSOFT has received from others that it is obligated to treat as confidential or proprietary.

There's more, but that is enough to give you the flavor. But think about this man's skills and experience. They are suing him in advance of any known violation. Where can he work now, for the rest of his life? Doing what? Whether a court, even in Washington, will uphold such a timeframe in a field as narrow as this seems doubtful to me, and I have to wonder at Microsoft's nerve in even asking an employee to sign such a document. On the other hand, nerve has never been in short supply in Redmond.

So you can get the taste of the litigation, without having to lift a finger even to click on a PDF, here is Google's and Dr. Lee's RESPONSE TO MICROSOFT CORPORATION'S NOTICE OF PENDENCY OF OTHER ACTION, as text.

*************************

STEPHEN E. TAYLOR (SBN 58452)
JAN J. KLOHONATZ (SBN 111718)
STACEY L. WEXLER (SBN 184466)
[address, phone, fax, emails]

Attorneys for Plaintiffs
GOOGLE INC. and KAI-FU LEE

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

GOOGLE INC. and KAI-FU LEE,

Plaintiffs,

v.

MICROSOFT CORPORATION,

Defendant.

__________________________

Case No.: C 05-03095(RMW)

GOOGLE INC.'S AND KAI-FU
LEE'S RESPONSE TO MICROSOFT
CORPORATION'S NOTICE OF
PENDENCY OF OTHER ACTION

(PURSUANT TO CIVIL L.R. 3-13)

Pursuant to Civil Local Rule 3-13(c), plaintiffs Google Inc. ("Google") and Kai-Fu Lee ("Dr. Lee") responds as follows to defendant Microsoft Corporation's ("Microsoft") Notice of Pendency of Other Action.

I. RELATIONSHIP OF THE ACTIONS

In the case pending before this Court, Google and its employee, Dr. Lee, seek a declaration that the covenant not to compete contained in Dr. Lee's employee agreement with his former employer, Microsoft, is an unlawful restraint of trade, and thus is invalid and unenforceable pursuant to well-established California law and public policy. Google and Dr. Lee filed their complaint in this action in the Superior Court of the State of California for the County of Santa Clara on July 21, 2005. Microsoft thereafter removed the case to this Court on the basis of diversity jurisdiction on July 29, 2005, acknowledging that Dr. Lee is a California citizen.

From August 2000 through mid-July 2005, Dr. Lee, a computer scientist, worked for Microsoft in the State of Washington. Prior to that time, Dr. Lee had been employed by two California companies, and from late 1998 until approximately August 2000, by an affiliate of Microsoft in China. Dr. Lee signed the Microsoft employment contract at issue in this lawsuit upon his return to Washington from China in August 2000. The covenant not to compete contained in that agreement provides, in pertinent part, as follows:

While employed at Microsoft and for a period of one year thereafter, I will not: (a) accept employment or engage in activities competitive with products, services or projects (including actual or demonstrably anticipated research or development) on which I worked or about which I learned confidential or proprietary information or trade secrets while employed at Microsoft . . . .

See Microsoft's Notice of Pendency of Action, Exh. A, at p. 5:1-4.

On or about July 5, 2005, while on sabbatical, Dr. Lee informed Microsoft he intended to resign his position at Microsoft and was considering employment with California-based Google. On his last day of employment with Microsoft, July 18, 2005, Microsoft served Dr. Lee with a complaint filed in the Superior Court of the State of Washington for King County. That action is entitled Microsoft Corporation v. Kai-Fu Lee and Google Inc., Civil Case No. 05-23561-6. The complaint in

1.

the Washington action alleges that Dr. Lee violated the terms of his employment agreement with Microsoft by accepting employment with Google, that Dr. Lee's conduct "threatens to disclose" or Dr. Lee "inevitably will disclose" Microsoft's trade secrets to Google, and that Google tortiously interfered with Microsoft's contract with Dr. Lee by offering him a job. See Microsoft's Notice of Pendency of Other Action, Exh. A, at pp. 8:13-10:7.

On July 19, 2005, Dr. Lee moved to California to begin his employment at Google. He is a citizen of the United States and is currently living in California. While he is expected to spend time in China as part of his job responsibilities for Google, traveling to and from California during the course of his overseas assignment, Dr. Lee will at the same time report to and remain in ongoing contact with senior management and other employees with whom he will be working at Google's headquarters in Mountain View, California. Dr. Lee intends to maintain permanent residency in California while he is on overseas assignment in China. Dr. Lee's employment agreement with Google provides that he is not to disclose any confidential or trade secret information of his former employer to Google.

II. FURTHER PROCEEDINGS

Microsoft contends that the Court should dismiss this action or stay the proceedings pending the outcome of the Washington state court action. The Washington action is currently scheduled for trial on January 9, 2006, with a preliminary injunction hearing set for September 6, 2005. The Washington state court entered a Temporary Restraining Order against Google and Dr. Lee on July 28, 2005. . . . According to Microsoft, this Court should defer to the Washington state court to "avoid conflicting judgments."

Contrary to Microsoft's request, the California Supreme Court has held in similar circumstances that parallel proceedings in different courts should go forward. See Medtronic, Inc. v. Advanced Bionics Corp., 29 Cal. 4th 697 (2002). In Medtronic, the Supreme Court reversed an antisuit injunction that prohibited the parties from litigating the enforceabilty of the same non-compete provision in Minnesota, while a parallel California action was allowed to proceed. Although the Supreme Court did not prohibit the litigants from continuing Minnesota case, the Court found that the pendency of the Minnesota action did not divest California of jurisdiction. See id. at 708.

2.

This California-based action similarly must be allowed to proceed independently to promote fundamental public policy in California. Since 1872, with the enactment of the predecessor statute to Business and Professions Code section 16600 ("Section 16600"), California has had a well-established public policy of ensuring free movement of employees unencumbered by post-employment restrictions. Section 16600 provides, in pertinent part, that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void."

California's public policy in favor of competition and "freedom of movement of persons whom California-based employers . . . wish to employ," and against contracts in restraint of trade, is deeply rooted. See Application Group, Inc. v. Hunter Group, Inc., 61 Cal. App. 4th 881, 900-01 (1998). California's policy is intended to ensure that its employers remain competitive, and has been held by California courts to outweigh the interest that out-of-state employers may have in enforcing anti-competitive covenants -- even covenants allowed under the laws of other states. See id. "[T]he interests of the employee in his own mobility and betterment are deemed paramount to the competitive business interests of the [former] employer. . . ." Id. at 900 (quoting Diodes, Inc. v. Franzen, 260 Cal. App. 2d 244, 255 (1968)). California steadfastly adheres to its fundamental public policy, notwithstanding that other states hold a differing view. See Hill Med. Corp. v. Wycoff, 86 Cal App. 4th 895, 900-01 (2001).

3.

Google and Dr. Lee submit that this action thus must proceed to resolve the present case under the law of California. This Court's ruling on the pure question of law that Google and Dr. Lee present in their declaratory relief action need not await the outcome of the lengthy and fact-based proceedings mandated by Washington law regarding the enforceability of covenants not to compete. Put simply, Google's principal place of business is in California and Dr. Lee is a California resident. This Court is uniquely situated to determine as expeditiously as possible the rights of the parties under California law.

Respectfully submitted,

TAYLOR & COMPANY LAW OFFICES, INC.

Dated: August 15, 2005
By:___[signature]___
Stephen E. Taylor

Attorneys for Plaintiffs
GOOGLE INC. and KAI-FU LEE

4.


  


The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation - UPDATED | 373 comments | Create New Account
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Ballmer
Authored by: Anonymous on Sunday, September 04 2005 @ 09:47 PM EDT
Yup, we get to see the (alleged) dark side of monkey-boy.

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Off Topic
Authored by: robertd on Sunday, September 04 2005 @ 10:14 PM EDT
Please make links clickable by posting in HTML.

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The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation
Authored by: Anonymous on Sunday, September 04 2005 @ 10:21 PM EDT
How can you hate a guy who brings us comedy like this?! Seriously though, the fact that Balmer is a rude, loudmouthed bully is fairly well documented - I didn't find it in the least surprising that he trashes his office when things don't go his way...

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Ballmer's temper, from The Economist in 1999
Authored by: Anonymous on Sunday, September 04 2005 @ 10:26 PM EDT
Ballmer's temper is old news. From The Economist, April 1, 1999, "Bill's Bull-horn" http://www.econ omist.com/displaystory.cfm?story_id=195914 (subscription required), a 908-word essay with quotes like, "When Mr Ballmer gets excited, it’s time to unpack the earplugs. Dressing down subordinates, he can be heard echoing through the air-conditioning vents at Microsoft. His maniacal shouting has already resulted in throat surgery. Mr Ballmer’s verbal outbursts have also hurt his company’s reputation.". And, when he was MS's chief salesman, "He regularly called up customers who had chosen competitors’ products—sometimes, it is said, with dire threats." This was written when the DOJ trial was going on, and predicted that MS was already on its way down, and that Ballmer was somebody Gates should not have chosen for the top job. That prediction was early, but we hope still turns out to be true.

Tom Mathews. Someday I'll create a non-anonymous account.

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Use of the word "defect"
Authored by: freeio on Sunday, September 04 2005 @ 10:27 PM EDT
"He is doing so by defecting Microsoft for Google"

I looked up "defect" in my Concise Oxford Dictionary (1990) and they
said of it: "- v.intr. abandon one's country or cause in favor of
another."

Notice that Microsoft is using "defect" as a transitive verb, as
opposed to intransitive, which is a tad unusual. Perhaps this is proper legal
usage, but it sure looks strange to a native English speaker. A more accurate
word would be "leaving" but that would not sound bad enough to be
worthy of the suit.

Notice that Microsoft is in essence considering itself grand and sovereign
enough that to leave Microsoft is beyond bad and is in effect treasonous. This
is instructive of the level and use of power with which we are dealing.

None of this is surprising, but it certainly does reveal the attitudes involved.

---
Tux et bona et fortuna est.

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..funny choise of whiny words, Microsoft's "defection". ;o)
Authored by: Anonymous on Sunday, September 04 2005 @ 10:33 PM EDT
..first time I saw that word "defection", was back in the
Cold War days, when the Soviet Union whined "defection"
when good people left Communism, dictatorship, censorship
and the KGB for democracy and freedom in places like the
United States of America. ;o)

..aaah, those were the days.

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Corrections
Authored by: ankylosaurus on Sunday, September 04 2005 @ 10:55 PM EDT
'Tis unusual for it to be so far down the list, but...

---
The Dinosaur with a Club at the End of its Tail

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Good Cop Bad Cop
Authored by: belzecue on Sunday, September 04 2005 @ 10:56 PM EDT
Sure, Ballmer's the Bad Cop, but with MS I'm having trouble figuring out who's
the Good Cop.

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NDA not the same as no-compete
Authored by: emmenjay on Sunday, September 04 2005 @ 11:14 PM EDT
In the past I've signed both NDAs and employment contracts with no-compete
clauses -- and they are not the same thing. I note that PJ is using the terms
interchangably and I suspect that may be wrong.

An NDA generally refers to some specific information. Company X will show me
their secret information, but I must undertake never to share it with anybody.
NDAs often do not have specific lengths.

A no-compete simply specifies that you won't work on similar stuff for a
specified period (often a year) after leaving.

You often get non-employees who will see your secrets to sign NDAs.

e.g.

I worked, last year, for a company that built software to manage the way an
operating system scheduled jobs.

My no-compete agreement meant that, after I left, I could not work on a similar
project for a competitor for 12 months.

However I know how many of their propriety algorithms work, and my NDA prevents
me from disclosing that forever. In fact, even without the NDA I might have
problems there -- violating trade secret laws.

So regardless of the outcome of the dispute on no-compete, there is a second
(bigger) issue of disclosing trade secrets. I suspect *that* is where things
might get ugly.

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One sided agreements
Authored by: Anonymous on Sunday, September 04 2005 @ 11:15 PM EDT
Does anyone have any advise on how to handle one-sided boilerplate contracts
like the one that is in this case when getting employment? Or is simply a
choice to sign it (and hope the courts keep the deal non-egregious) or work
someplace else (where you're competitive enough to negotiate your own
contract?!)?

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An earlier incident
Authored by: Anonymous on Sunday, September 04 2005 @ 11:49 PM EDT
Microsoft threatened a startup with the non-compete clause during the dot com days: Mooning the Giant

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Summary as I see it
Authored by: Anonymous on Sunday, September 04 2005 @ 11:59 PM EDT
This scenario happens a lot in the IT world.

I am not a lawyer, and in fact I have not read all the legal documents, so what I say here may not be right. I will not feel insulted if someone corrects me :-).

I am surprised that MS can use the NDA to stop someone being employed. The non-compete agreement is probably the main force here. The NDA could only dictate secrets of specific technologies that are specific to MS, and it would be as hard for MS to proove that the NDA was about to be broken than it would be to proove that someone walking past your house was about to burgle it that night.

The non-compete is to stop you using the experiences and/or training MS gave or financed in order to help a competitor. This is easier to do. However, no matter what, you cannot put limitiations on someone that stops them using their skills and/or trade to earn a living.

Obviously Lee was either poached by Google or deserted MS (or a combination of both) to do similar work for the competitor. Google, knowing perfectly well what was going to happen, got Lee to move to California in order to try and head off the inevitable suite. MS - also knowing the lay of the land - are doing their best to make sure the suite sticks.

This fight is not a clear-cut issue of good or evil. There are no good guys nor bad guys here. MS obviously feels that Lee's 7 years (or whatever) at them means that inevitably Lee would disclose MS secrets and use skills learnt at MS to Google's advantage, and are probably right. Google think that MS are trying to prevent them from giving opportunities to top professionals in order to hold back competition, and they are probably right too.

It is difficult to know exactly what MS can do about it. Even if Lee does not work at Google directly he can set up a company in China or somewhere that develops technology that Google indirectly purchases. Probably what will happen though is that MS execs will calm down and after a year or so an agreement is made with MS and Lee enabling him to continue his career. The industry, especially sections of it, is smaller than people tend to think. People move about as part of the natural flow of things. It does not pay to get too much of a reputation for being unpleasant. An agreement is logical.

Do not get me wrong - I have little love for MS. I think they are monopolistic and that they hold back technological advancements contrary to what they claim. However - do not think that Google are whiter than white here. They almost certainly employed Lee to do for them what Lee did for MS, and to use his experiences, if not his direct knowledge, he accumulated there.

Web Sig: Eddy Currents

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Virii and Worms aren't enough
Authored by: Anonymous on Monday, September 05 2005 @ 12:13 AM EDT
Now we have to contend with Microsoft Assassins? That's a marketing ploy. Buy
Microsoft Windows or we'll kill you.

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You proved them wrong PJ
Authored by: rm6990 on Monday, September 05 2005 @ 12:35 AM EDT
All over the net you read people stating (including SCO) that you are biased and
that all of your articles are biased. I must say this article proves them wrong.
Like me, despite liking Google as a company better than Microsoft (I'm willing
to bet you do anyways), you tended to side with Microsoft (at least it looks
like it, you agreed with a lot of their points). To me, Mr. Lee is trying to
weasel out of an agreement he signed. He should own up to his end of the bargain
(minus the lifetime NDA, I think that is ridiculous). Despite me disliking MS, I
think I am going to side with them on this issue.

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Microsoft on the forefront of trade relations with China
Authored by: John_Doe#1 on Monday, September 05 2005 @ 12:53 AM EDT
Kai Fu Lee: Following His Heart To The Miracle Of Google

Google is now considered to be the place to work now.

Can you imagine what China would think of Ballmer and his insolent little tirades?

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mucho dinero in taxes . . . maybe not!
Authored by: nerd6 on Monday, September 05 2005 @ 01:18 AM EDT
I read a story a while ago about how

1) Microsoft was complaining about Washington state not spending enough on education and could they please spend an extra $1 billion so Microsoft would have a better pool of graduates available to hire?

and

2) Washington state was complaining about how Microsoft was dodging their state sales taxes by shipping all their product out of a small office in Nevada, a state with no corporate income tax. Loss of revenue for Washington state... greater than $100 million per year!

Citi zen Microsoft

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The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation
Authored by: spodula on Monday, September 05 2005 @ 02:25 AM EDT
To they take into account the state of the tech?

Because I have found MSN search next to useless compared to Google. Google also
has a much cleaner front page and better advanced search facilities.

I personally dont see what use MS tech would be to Google other than for a good
laugh with collegues over the water cooler.

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That's no death threat.
Authored by: Anonymous on Monday, September 05 2005 @ 02:33 AM EDT
He is going to "bury" the man like he did before. So he is going to
repeat an action that did not leave the man physically dead. This can only make
sense when he is talking about business, not life.

And he is going to "kill Google". Now Google is not a person.
"Death threats" against companies are, sad as it may sound,
entrepeneurosis and sportsmanship: keeping the competitor alive and hating him
for having to do so are not part of the American dream.

Microsoft does so only when it is necessary to fend off being considered a
monopoly, like what it did with Apple. And don't you believe that there had
been no price to pay for Apple.

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OT - mobster holds a gun to your head
Authored by: azrael on Monday, September 05 2005 @ 02:52 AM EDT
> if a mobster holds a gun to your head and tells you to sign over your business to him

Something very similar happened not long ago... hmm I suppose this is off topic..

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Dangers to the US software industry of actions like this.
Authored by: Anonymous on Monday, September 05 2005 @ 03:22 AM EDT
The danger to the US software industry of ever tighter
legal restrictions, is that the industry will move it's
headquarters overseas to places like China or India,
which are not so restrictive.

The simple solution for Google would be to move Dr Lee and
their web search HQ to China now. Do this and there will
be no problems.

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NDA's are unequal these days
Authored by: Anonymous on Monday, September 05 2005 @ 03:35 AM EDT
The problem with NDA's is that every (EVERY!) company in the IT field requires
any IT personel to sign one.

What this means is that anybody wanting to work in the IT field must sign an
NDA, no matter what company he ends up with.

This basically makes NDA's into unequal bargaining positions as there really
isn't any choice for the employee.

In my home country, the Netherlands, this particular aspect makes NDA's pretty
much unenforcable for everybody except the hightest level management staff.

In this particular case, the employee is a high level manager, and he chose to
work for a direct competitor of the very work he had been doing at MS. In the
Netherlands, this would probably mean Dr. Lee can forget about his new job. If
he got a job outside the search engine field, he'd probably been alright. Then
again; if Google just hired him out to, say, Adobe, for a year, then got him
back in to work on the search technology, everything would be okay.

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The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation
Authored by: inode_buddha on Monday, September 05 2005 @ 03:40 AM EDT
It never fails to amaze me how ugly these guys can get when their own tactics
are turned upon them. Isn't there a word for that?

---
-inode_buddha
Copyright info in bio

"When we speak of free software,
we are referring to freedom, not price"
-- Richard M. Stallman

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Ballmer Insanity Plea
Authored by: Anonymous on Monday, September 05 2005 @ 03:46 AM EDT
He could/should plead insanity. There's plenty of evidence. Time to trot out
this old link again: http://jokke.dk/media/balmer.html

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The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation
Authored by: troll on Monday, September 05 2005 @ 03:53 AM EDT
If you were Mr. Schmidt, how safe would you be feeling today?

Well, I wouldn't feel very safe.

On the other hand, if I were Mr. Mark Lucovsky I would be scared, very scared.

Can you imagine Mr. Balmers reaction to Mr. Lucovsky statements?

Yours truly ...

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Remember Borland
Authored by: chriseyre2000 on Monday, September 05 2005 @ 04:57 AM EDT
H ere is where Microsoft were sued by Borland for poaching key staff.

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Yes PJ, I'm positive
Authored by: Anonymous on Monday, September 05 2005 @ 05:11 AM EDT
It was a metaphor, you say. Likely it was, but are you positive?

PJ, I've read your opening paragraphs several times over in an anxious search for a sign of irony or humor, or indeed any kind of trope that would distance you from the apparent meaning of your words. Unfortunately, I perceive no other message other than the serious suggestion that Steve Ballmer threatened murder, with force and arms, and with malice aforethought. Do you go on to conclude that when he says he's "done it before", he is actually confessing to prior acts of murder?

My answer to your question is emphatically yes, I'm positive, and I strongly urge you to reflect upon whatever it is within yourself that made you publish such a statement, which is excessivley mean and manifestly preposterous. And while I agree that public protest against Ballmer's behavior would be a good idea, I strongly advise against characterizing his statement as a literal death threat, which would only make it easy to pass off Microsoft's critics as hysterical and fanatic.

I feel a bit pedantic spelling out something that ought to be obvious, but anyone with basic knowledge of English recognizes that, although his language is obscene and aggressive, what he's talking about is putting Google out of business. A little knowledge of context makes it clear; it has been reported a number of times recently that Microsoft means to confront Google directly, and Microsoft has a well-known, checkered history of targeting competitors for utter ruin (we all know that they've "done it before").

To be clear, I think that Steve Ballmer in particular, and the Microsoft corporation in general, are among the most vulgar corporate gangsters in all of history, and to use a metaphorical expression, they've gotten away with murder too many times. His obscenity and violent imagery reveal a puny and vicious mind, and Microsoft's angry obsession with successful competitors is bizarre and sick. But worse than that, Ballmer has made as plain as you could ask for that Microsoft's intentions are anti-competitive, will benefit no one but themselves, and may very well be illegal. Here we go again. No wonder the lawyers are denying it, because there is now a real risk to Microsoft, in that Ballmer's quotation may be used as damaging state of mind evidence in a future anti-trust trial. Will these guys never learn? It seems that Ballmer and Microsoft are not only amoral, but also incorrigible.

But it really gets my hackles up when the people who ought to be the Good Guys behave as if, because of all this, it is fair game to accuse someone like Ballmer of anything without the slightest restraint, no matter how vicious, and no matter how reality-challenged. This is not a game. To accuse anyone of threatening murder, even a vile and loathsome creature like Steve Ballmer, is extremely serious and should only be made on the basis of very persuasive evidence. In the public's perception, a frivolous remark such as PJ's will only blur the lines between The Right Side and The Wrong Side, which ought to be bright and clear. Some people may actually start feeling sorry for Steve Ballmer, try to imagine that.

Advocates of fair competition and the free exchange of ideas have the higher ground -- don't descend to their level. Don't become what they are.

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How can they stop him, in China
Authored by: Anonymous on Monday, September 05 2005 @ 05:27 AM EDT
I got the impression that the injuction was against Dr Lee, not Google. In any
case, google wasn't a party to the original contract.

If Dr Lee immediately accepts employment in China, what can the courts or
Microsoft do - I assume they can do nothing, unless Dr Lee is silly enough to
return to the US.



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The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation
Authored by: dmarker on Monday, September 05 2005 @ 05:51 AM EDT

No matter what I have said about MS in the past (and I have said a lot - very
negative), IMHO MS seems to have a case in regard to Dr Lee going to Google.

As for Ballmer's petulant raving rants and chair throwing. Whats new ?. This is
classic MS at its best (or worst :)

Cheers

Doug M

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It's already started
Authored by: belzecue on Monday, September 05 2005 @ 05:58 AM EDT
GOOGLE Search:

Results 1 - 10 of about 12,600 for "I'm going to" "kill
Google" with Safesearch on


MSN Search

Web Results Page 1 of 20,960 results containing "I'm going to"
"kill Google" (0.41 seconds)


Almost double the results from MSN.
Good golly, MS really is killing Google!
In the bowels of MSN, Ballmer must be cracking the whip double-time:

BALLMER: "Faster, you worthless webmonkeys... PEDAL FASTER!!"

:-)

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Echos of Borland vs MSFT
Authored by: Anonymous on Monday, September 05 2005 @ 06:06 AM EDT
This whole case reminds me of the old Microsoft/Borland 1996 lawsuits suit -- when Microsoft had been apparently offering multi-million dollar packages to key people from Borland's projects aparently in order to cripple Borland.

Note that in those court cases it was reviewld that Anders Hejlsberg (the guy behind Borland's Delphi and now behind C#/.NET) was offered a $1.5 million signing bonus - doubled to 3 million when Borland counter-offered. Paul Gross, Borland's' Senior VP, and 34 other employees over 30 months were hired from Borland by Microsoft.

Microsoft shouldn't sound so shocked to see the same thing happen to them.

(ps, anyone remember more details of that period -- rumors of the period are that the recuriting went as follows: A limo picks you up from Borland at lunch time - and you're given an offer with an incredible starting bonus conditionally on accepting it before lunch was over -- supposedly one guy said he'd have to talk to his wife to get her OK since she had just opened a small business in santa cruz; and apparently it was instantly offered that microsoft would pay for the relocation)

If I recall, the out-of-court settlement's terms were never revealed.

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What a load of nonsense
Authored by: Anonymous on Monday, September 05 2005 @ 06:55 AM EDT
I can't believe how sensational and irrational you're being about Ballmer's
comments. Hire body gaurds? In the event of his [Schmidt's] death?

A ridiculous over-reaction on your part, I think.

I appreciate that you were scared by the possibilities after SCO's comments, and
rightly so, but you are twisting this situation in a way that a Hollywood script
writer would be proud of.

Ballmer is talking metaphorically. There is no question of that. He is more than
likely talking about Eric Schmidt, and the references to 'burying him again' are
most likely a reference to Eric's time at Novell and maybe Sun.

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Knowing what?
Authored by: Anonymous on Monday, September 05 2005 @ 08:48 AM EDT
So far Google beat MS anytime when it comes to the Google markets. It seems to
me that anything MS knows Google knew long before. What could mr. Lee possibly
know that may be considered a secret for Google?

[ Reply to This | # ]

The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation
Authored by: Kevin on Monday, September 05 2005 @ 10:00 AM EDT

PJ, your "get a lawyer" advice isn't entirely feasible, even if it would hypothetically lead to the best outcome.

These agreements are commonly presented to the employee at any time between the start date and months afterward - after the employee has already left the previous job and taken up duties at the new one. And they're presented "under the gun" - on pain of summary dismissal. Given the US policy of "employment at will" - where the employer has the right to dismiss (and the employee has the right to quit without either needing to state a reason), that behaviour is perfectly lawful.

The argument has been advanced that a contract signed under such circumstances may be void for failure of consideration (since the employer offers no consideration other than continued employment, which employment could be rescinded five minutes later if the employer chose). I don't know of many jurisdictions other than California, however, that have accepted it.

What's particularly disturbing about Lee's agreement is that it contains no provision exempting trade secrets that were divulged through no fault of his. Courts have held that such an agreement can keep a person from employing trade secrets that are no longer secret, after the former confidant has disclosed them to others.

There is a serious imbalance in power here. Most of the corporate world takes the position, "here is the standard agreement, take it or leave it." And for far too many employees, leaving it isn't viable. Few have the necessary resources to go into business for themselves. And believe me, word will get around that you left because of a legal dispute with your former employer. What new employer will hire you after that?

Lawyers, and the Third Estate in general, can't help very much with that. Help from the Fourth Estate is sporadic at best.

My opinion is that an honest indenture would be fairer. After all, under a contract of indenture, the employer has no right of summary dismissal.

---
73 de ke9tv/2, Kevin (P.S. My surname is not McBride!)

[ Reply to This | # ]

"*We* have enough trouble." ?
Authored by: Anonymous on Monday, September 05 2005 @ 11:10 AM EDT
"Please don't ever donate anything to Linux, okay? We have enough
trouble."

Got a lot of lines of code in the kernel, have you?

I read Groklaw. I post on Groklaw. But I'd like to think that I've got a
strong enough grip on reality that I don't think that I *am* Groklaw or can
speak *for* Groklaw because of that.

[ Reply to This | # ]

RIAA Lawsuit News (off-topic?)
Authored by: Anonymous on Monday, September 05 2005 @ 12:14 PM EDT
I hope that Groklaw will start covering the RIAA's "anti-piracy" campaign, which IMO is just as dangerous to FOSS as anything done by Microsoft. Their actions are shifting the balance away from IP being about sharing, to IP being about absolute ownership where independent programmers are criminals.

If you're interested in this, dear reader, here's a legal blog on the subject, via BoingBoing. "Patricia Santangelo is the first person threatened with a RIAA file-sharing lawsuit to opt to defend herself, rather than simply settle for thousands of dollars ... the RIAA lawsuits are self-sustaining: that is, the cost of running their shakedown operation was less than the settlements it generated, so there was no reason to expect an end to the legal attacks on thousands of Internet users."
Recording Industry vs The People Boing Boing

[ Reply to This | # ]

bit like the "Official Secrets Act"...
Authored by: Anonymous on Monday, September 05 2005 @ 01:45 PM EDT
When I finished my employment in the armed forces, one of the things I had to do
as part of my discharge was to read a paragraph or two of legalese and sign off
that I understood that I was not to disclose to any unauthorised party any
classified information that I may have encountered during my service. This
"Promise" they got Dr. Lee to sign looks very similar in effect...
just hasn't got the full force of law behind it though... merely contract law if
that.

[ Reply to This | # ]

Three things
Authored by: Anonymous on Monday, September 05 2005 @ 03:08 PM EDT
1) Hands up all those that want a job with Microsoft now.

2) Ballmer's knowledge of biology and English grammar is somewhat lacking. He is also not a very nice man.

3) I found this on the BBC: The princess and the frog

Alan(UK)

[ Reply to This | # ]

  • Some links - Authored by: Anonymous on Monday, September 05 2005 @ 04:58 PM EDT
On the "update", Microsoft claims amount to a form of human slavery
Authored by: dyfet on Monday, September 05 2005 @ 03:19 PM EDT
At least that is the most "dramatic" version of how I read it...

[ Reply to This | # ]

Ok, obvious stupid question...
Authored by: Anonymous on Monday, September 05 2005 @ 03:23 PM EDT
But nobody seems to have noticed yet, so I get to ask...

If all this is about a 1 year non-compete agreement required of all m$
employees, then how come its only an issue for Mr. Lee, but not for Mr.
Lucovsky.

Mr Lucovsky tells Ballmer face to face he's leaving for Google, Ballmer bashes
the furniture and (presumably) throws him out of the office. BUT, Lucovsky
apparently still goes to work for Google.

Lee tries the same thing and M$ sends the Horsemen of the Apocalypse, the
National Guard, a platoon of lawyers and the kitchen sink out to stop him.

Inconsistent? Hmmmmmmm...

[ Reply to This | # ]

The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation - UPDATED
Authored by: geoff lane on Monday, September 05 2005 @ 04:04 PM EDT
Perhaps we now know why Google needed to raise money last week :-)

You can buy a lot of talent with $2B. Especially if it is already thinking of
moving.

Suppose Google did make an all out effort to attract unhappy but important
people from MS. It would certainly significantly slow development in some
important projects, possibly making Vista even later. It would be an
interesting corporate war.


---
I'm not a Windows user, consequently I'm not
afraid of receiving email from total strangers.

[ Reply to This | # ]

Remember Gary Kildall !!!!
Authored by: DarrenR114 on Monday, September 05 2005 @ 07:05 PM EDT

The man really died under mysterious circumstances in 1994 ...

You can read about the bad blood between him and MS and the hints about MS ripping him off all over the net - but a good start is here:

Gary's Story

scuttlebut at the time was that he had proof through buggy behavior that MS-DOS was a rip-off of his CP/M.

I'm thinking that the Billions of dollars of a lost empire is a very powerful motive that Stevie B. wasn't just talking in metaphors.

---
No job is too small for dynamite ...

[ Reply to This | # ]

The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation - UPDATED
Authored by: Steve Martin on Monday, September 05 2005 @ 07:58 PM EDT

Microsoft has accused Dr. Lee of breaching a formal, written policy, allegedly set forth in a document he signed, requiring him to return after his sabbatical term ended. Senior Microsoft VP Eric Rudder, who declared to those facts under oath, has now admitted, also under oath, that no such written policy is set forth in the documents signed by Lee.

Okay, IANAL, so forgive me if this seems like a dumb question, but does this mean that in one of these cases, Eric Rudder committed perjury?

---
"When I say something, I put my name next to it." -- Isaac Jaffee, "Sports Night"

[ Reply to This | # ]

Ballmer == Khrushchev
Authored by: Anonymous on Tuesday, September 06 2005 @ 12:52 AM EDT
We will bury you!

Separated a t birth?

[ Reply to This | # ]

I work in this industry
Authored by: Anonymous on Tuesday, September 06 2005 @ 01:26 AM EDT
I work in this industry (as an engineer and programmer ... a pretty good engineer, and a reasonable programmer). I'm the sort of person you should hire if you want a 350km diameter dish radiotelescope, or a machine to help you model whether the stuff at Oak Ridge is 'safe and effective'. Or if you would like a new Playstation.

And no, neither I nor my employer will guarantee that the results of the above are accurate. We will sign a contract to do the work, but we will not sign a contract accepting liability for being wrong.

But this spat, this intimidation, is very off-putting. It does not encourage me to give my best. It pretty much encourages me to find some other field of human endeavour to apply my talents to.

Now, which of you guys and gals will claim to be better than me at radiotelescopes, 'fires and explosions simulation', and playstations ?

Those that are better --- and surely there are some --- are you programmers, engineers, physicists, astronomers, lawyers, or what ?

And if the lawyers don't claim to be better at radiotelescopes and playstations, is there a chance that you can make your contribution by getting Microsoft, and SCO, and Google, and the rest of the rabble-rousers to calm down and keep out of the way ?

I could use their help. But not their bullying. Keeping the 500-million-processor computer that is the Internet working is hard enough at the best of times. Living under the threat that a court might deprive me of my money or liberty, or might deprive my employer of his money (and stop him being able to pay me for my services) is just not what I want to do. Does the judge know any better than I ?

I have a family to raise. Kids to teach. A life to live.

[ Reply to This | # ]

NDAs and non-competes standard, but that doesn't make them fair
Authored by: dcf on Tuesday, September 06 2005 @ 02:55 AM EDT
Non-disclosure agreements are universal in the tech industry, and non-compete
clauses are probably nearly universal, and I suspect that most job-seekers
assume, like I did, that attempting to negiotiate their terms would result in at
the very least point-blank refusal and most likely withdrawal of the job offer.
Which is not to say that that assumption is correct, but unless you have unique
skills and know that the potential employee *needs* you, you aren't likely to
test the assumption unless the terms of the agreement are particularly
unreasonable.

NDAs are typically perpetual, though the one I signed at least explicitly
excludes anything which is generally known within the industry, anything which
was not obtained by breaching the agreement, as well as my own knowledge,
skills, and talents. The one Kai-Fu Lee submitted as Exhibit A to his
Declaration in support of the Motion for Summary Judgement explicitly excludes
only information "generally known to the public". IANAL, but that
seems narrower to me.

More interesting, though, is the fact that the agreement Dr. Lee signed looks
like standard boiler-plate. That suggests that even someone with his reputation
and stature doesn't have the leverage to negotiate broader protection for
himself (or maybe just that he just didn't think to do so).

Anyway, IMHO some form of NDA is reasonable. If you work for a bank, and
therefore have access to the bank's assets as well as assets the bank holds on
behalf of its clients, you can't abuse your position by taking those assets,
either while you are an employee or when you leave - that's theft. Well, a tech
company's primary assets aren't cash, they are (1) the skilled employees of the
company, and (2) intellectual property, whether in the form of information,
trade secrets, proprietary code, etc. The company can't prevent the employees
from leaving (though non-compete agreements attempt to reduce employees'
incentive to leave and prevent them from going to a direct competitor to limit
the damage when they do). And of course, outside of science fiction, the
company can't erase any knowledge from employees' brains before they leave. So,
they do the next best thing, which is to get the employee to agree not to
disclose that information, so that they can hold the employee liable if they
breach that agreement.

Non-competes are another story. Unless you work for a tech company like
Microsoft that wants its fingers in every pie, a non-compete is unlikely to
prevent you from making a living in your general field. However, it might force
you to leave your chosen specialty (unless you've got enough money saved up or
enough skills to do short-term contract work outside that specialty for the year
until the non-compete is up). Suppose you've found a specialty where you really
love to work, but your current company is going down the drain or has become a
miserable place to work; you can't continue to follow your dreams there and you
can't follow them elsewhere. Or suppose you've been layed off, through no fault
of your own. Non-compete clauses are just evil, I would never sign a
non-compete if I felt I had a choice. But I did sign one, because I felt I
didn't have a choice. And apparently, Dr. Lee, despite being a big-shot
researcher, didn't feel comfortable asking Microsoft to alter their boilerplate
contract either. I just hope I never have cause to regret signing one.

From what I've heard, though, the courts haven't been all to kind to companies
when they try to enforce NDAs. Some of them, as a previous poster mentioned,
have been invalidated because employees were required to sign them after they
were already employed, and there was nothing of value given to the employee in
compensation, thus making them unenforceable contracts. Hence the trend towards
making all new employees sign them as a condition of employment, so I probably
couldn't play that card.

On the other hand, I would also guess that it is pretty rare for companies to
actually try to enforce non-competes (in part because the courts haven't been so
kind), in the absence of specific trade-secret charges. That probably explains
why Microsoft might not have sued Google over previous lower-level hires. And I
don't think that's all that specific to the tech industry. Lawyers and
salespeople aren't supposed to take client lists with them, but everyone knows
that clients may choose the person they know over the firm they know.

[ Reply to This | # ]

Windows Desktop Search
Authored by: Anonymous on Tuesday, September 06 2005 @ 03:01 AM EDT
Interesting that the complaint raises Mr Lee's knowledge of the Windows Desktop
Search as an issue. It was described in some close detail by an ex MS Employee
(or contractor ?) in DDJ a couple of years ago.

OMG, does that mean because I read it I'm going to be "killed" by
Balmer too ?

*Runs and hides under bed...

[ Reply to This | # ]

Why sue Google?
Authored by: Anonymous on Tuesday, September 06 2005 @ 09:59 AM EDT
It's pretty standard in non-compete cases to sue the company that did the
hiring, if you can show that they knew or should have known that there's a
non-compete in place. Most places I've been hired require me to provide copies
of any non-competes that are still applicable for their review, so that they
don't find themselves having this problem.

I'm not a lawyer, but I talked with a few when my last employer threatened to
take me and my current employer to court last year. In my state, non-competes
are often interpreted very narrowly, but only if you can see your way through a
trial. Unfortunately, judges may grant a preliminary injunction against an
employer, forcing them to terminate the employment of the employee until the end
of the trial, which the employee then can't afford to go through with. The logic
is that the employer, knowing full well about the non-compete, acts illegally if
it induces the employee to break it. If you only sue the employee, the judge is
less likely to force him to quit; not sure what the logic is.

The related reason for including Google is the standard one for including lots
of people - you hope to play them against each other, hoping that one of the
parties will crack and say something that's not helpful to the others or settle
and get out of it.

[ Reply to This | # ]

Anti-trust and violent statements
Authored by: donford74 on Tuesday, September 06 2005 @ 12:18 PM EDT
<IANAL>
I worked for the Bell System from 1977 through 1983 and for US West from 1984 to
1998. Every single year after 1984, when the Bell System was broken up for
Anti-trust violations, we were required to attend training on anti-trust issues.
One of the things that was emphasized was to never use violent language about
our competitors. Even things like "Our new business plan will destroy
company XYZ" were not allowed. Saying that we would "bury" a
company or "kill" a company was grounds for disciplinary actions
"up to and including dismissal." These sorts of statements are very
serious for convicted anti-trust violators.
<IANAL>

[ Reply to This | # ]

  • Interesting (n/t) - Authored by: Anonymous on Tuesday, September 06 2005 @ 12:48 PM EDT
The Man Who Knew Too Much - the Google-Dr. Lee/Microsoft Litigation - UPDATED
Authored by: The Cornishman on Wednesday, September 07 2005 @ 05:26 AM EDT
The redactions are fascinating in themselves, leaving as they do interesting
hollows in the fabric of the document. In large part they seem to be removals
of quotes from Bill Gates, in "Exhibit 5", which runs to over 100
pages, and is referenced in the footnotes as a Deposition. Has there been a
deposition in this case yet, or is Google quoting from a deposition in another
case? If so, it shouldn't be hard to work out which one, and reconstruct the
redactions! However, I don't have the skills, or the time. Challenge for
someone :)

---
(c) assigned to PJ

[ Reply to This | # ]

"falls within the range of all of Microsoft's business globally"?
Authored by: Anonymous on Wednesday, September 07 2005 @ 06:06 AM EDT
So, he can carve wooden furniture for a living? *Maybe*.

[ Reply to This | # ]

Heirarchal Search by Microsoft
Authored by: Anonymous on Thursday, September 08 2005 @ 07:28 PM EDT
This may be of interest:

http://www.trnmag.com/Roundup/2005/TRN_Research_News_Roundup_9-5-05.html

http://research.microsoft.com/research/pubs/view.aspx?pubid=1456

[ Reply to This | # ]

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