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Microsoft filed suit against former exec Kai-Fu Lee and Google claiming Lee and his new employer violated Microsoft's employee confidentiality and non-compete agreement. Lee's job title was vice president of Microsoft's Natural Interactive Services Division and he accepted a job with Google to lead their Chinese R&D. Microsoft want to force Lee and Google to adhere to the agreements Lee signed with Microsoft. Google announced today the creation of Google China R&D and that Lee would be the Vice President, Engineering and President of Google China. "The opening of an R&D center in China will strengthen Google's efforts in delivering the best search experience to our users and partners worldwide," said Alan Eustace, vice president of Engineering at Google in their statement today. "Under the leadership of Dr. Lee, with his proven track record of innovation and his passion for technology and research, the Google China R&D center will enable us to develop more innovative products and technologies for millions of users in China and around the world." Microsoft stated on their website that, "Creating intellectual property is the essence of what we do at Microsoft, and we have a responsibility to our employees and our shareholders to protect our intellectual property. As a senior executive, Dr. Lee has direct knowledge of Microsoft's trade secrets concerning search technologies and China business strategies. He has accepted a position focused on the same set of technologies and strategies for a direct competitor in egregious violation of his explicit contractual obligations." "We have reviewed Microsoft's claims and they are completely without merit," said Google spokesman David Crane. "Google is focused on building the best place in the world for great innovators to work. We're thrilled to have Dr. Lee on board at Google. We will defend vigorously against these meritless claims and will fully support Dr. Lee." While Crane claims otherwise, Microsoft may have merit to their suit. Google and Microsoft have emerged as major competitors in both the search. Google sits on top of the search heap, MSN, a Microsoft enterprise, is a solid third. Many of the services the two companies offer attached to their search engines are quite similar and compete for advertising directly. With two such large companies, the rules might be a little different. There are going to be some negotiations for sure. It might not end up in court, but Dr. Lee will probably be riding the fence for a while and if Microsoft has an ironclad no compete agreement, Google and Dr. Lee will either pay a very large sum of money to Microsoft or, as has been done in the past with other Microsoft defectors, Dr. Lee might be without a job. The drama continues.