Microsoft appears to have won a significant round against Google in the two companies' legal fight over Kai-Fu Lee, a former Microsoft vice...

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Microsoft appears to have won a significant round against Google in the two companies’ legal fight over Kai-Fu Lee, a former Microsoft vice president who left for Google in July.

The dispute centers on a noncompete agreement that Lee signed at Microsoft. It requires him to wait a year before doing the same work at a competing company.

Google contends the contract doesn’t apply since the company is based in California, where state law doesn’t allow such contracts. Google, based in Mountain View, filed a federal suit seeking to override the contract.

Late Thursday, a federal judge tentatively denied Google’s request for a quick decision in its favor. U.S. District Judge Ronald Whyte in San Jose, Calif., said he’ll wait for a parallel case in King County Superior Court to be sorted out early next year.

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The decision, in effect, keeps Lee from engaging in research and development at Google until early next year, since the King County trial won’t start until Jan. 9.

Whyte issued his tentative ruling late Thursday and held a hearing yesterday.

Afterward a Microsoft attorney was optimistic the tentative ruling would become final, but a Google attorney held out hope the judge will change his position.

“For all practical purposes, the Washington case is going to resolve the matter,” said Karl Quackenbush, a Preston Gates lawyer who represented Microsoft at the hearing.

Google attorney Michael Kwun said it wasn’t clear to him that the judge had made up his mind.

“I don’t know that he was indicating at the end of the hearing either direction,” Kwun said.

After Lee joined Google in July, Microsoft sued to enforce the noncompete contract. King County Superior Court Judge Steven Gonzalez will hear that case Jan. 9.

In the meantime, he limited Lee’s work to establishing and recruiting for Google’s new development center in China. Lee was barred from setting the center’s budget or research agenda and from doing work on any products, such as those involving search technology, that compete with Microsoft.

Yesterday’s hearing involved Google’s request for a summary judgment in the federal case.

In a filing, Microsoft suggested that Whyte take one of three steps — dismiss Google’s case and leave the decision to Gonzalez, transfer the case to a federal court in Washington state, or hold off making a decision until Gonzalez has ruled in Seattle.

The tentative ruling minimizes the effect of Google’s federal case, because it becomes moot in July, when Lee’s noncompete contract expires.

Google’s federal case could give both companies clarity about the effectiveness of Microsoft’s noncompete contracts when employees are hired by California companies.

“California has a strong public policy protecting employees’ rights to freely choose where they can work, and we are asking the court to vindicate this right,” Google attorney Nicole Wong said before the hearing.

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