Microsoft settles case over ex-exec

SEATTLE – Microsoft Corp. said late Thursday it had reached a settlement with rival Google Inc. and former employee Kai-Fu Lee, ending a legal battle that had exposed behind-the-scenes rancor between the companies.

In a statement, Redmond-based Microsoft said the three parties had entered into a “private agreement that resolves all issues to their mutual satisfaction.”

Microsoft spokesman Jack Evans would not provide details of the settlement, calling it confidential. Google also declined to comment further.

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 $10 million compensation package.

Microsoft sued Lee and Google in a Washington state court, contending that Lee’s job at Google would violate terms of the noncompete agreement that prohibits him from doing similar work for a rival for one year.

Google responded with its own lawsuit against Microsoft in U.S. District Court in San Jose, Calif.

Because of the settlement’s confidential terms, it’s unclear what tasks Lee can perform until his noncompete agreement runs out.