Google showed no hesitation to take on the world's largest software maker Microsoft in a legal battle that began when Kai-Fu Lee left his position of corporate vice-president of Microsoft's Interactive Services Division, in order to head up a new research effort in China for Google. Google is now counter-suing Microsoft.

Google’s plaintiff in the California Superior Court in Santa Clara County, sought to override Microsoft's non-compete provision in order to retain Lee, contending that Microsoft’s clause violated the California laws that gave workers the right to change jobs. Google charged that the provision signed by Kai-Fu Lee while he worked for Microsoft was "overreaching and unlawful".
Google claims that it is trying to create an environment for innovators - an environment it claims does not exist at Microsoft, where the focus is (Google claims) "on litigation and intimidation". Microsoft, however, contends that Google's complaint is a desperate act and is likely to be rejected. In the past, Google had always publicly played down its rivalry with Microsoft, but this new legal battle could see them forever positioned as bitter rivals.

Lee, the most senior executive that Google snagged from Microsoft, may have been recruited either because he led a group working to improve Web searches or because of his past exposure in setting up Microsoft’s China R&D Center. But whichever be the reason, it is going to be a legal battle of which state law applies in the compete but "non-compete" world of technology.