Google and Microsoft settle exec spat

Microsoft has settled its lawsuit with rival Google over the hiring of Kai-Fu Lee, an expert in speech recognition technology and the man who founded Microsoft's China research lab in the late 1990s.

However, the settlement came only after the case threw up some embarrassing revelations, predominantly for Microsoft.

Microsoft said in a statement: "The parties have entered into a private agreement that resolves all issues to their mutual satisfaction. The terms of the agreement are confidential and all parties have agreed to make no other statements to the media regarding it."

Google announced in July its plans to hire Lee to head up its China research lab. Microsoft immediately filed suit in Washington against Lee and Google, arguing that Lee was violating a one-year non-compete agreement that was part of his Microsoft contract.

The tug-of-war over Lee was seen as Microsoft's latest attempt to thwart Google's growing influence.

In its suit, Microsoft had sought monetary damages as well as an injunction upholding the non-compete clause and other provisions of Lee's contract, including terms barring him from sharing Microsoft trade secrets. Google filed its own case in California, asking a judge to strike the non-compete clause. That matter had been moved to federal court. The case was schedule to go to trial on 9 January.

Google released a statement from Lee, who is now president of engineering, product and public affairs for Google China, which said that he was "pleased with the terms of the settlement".

Court filings in the case show that Microsoft had paid Lee more than $3m since August 2000 and more than $1m last year alone.

Greg Sandoval writes for CNET News.com