Microsoft is asking King County Superior Court Judge Steven Gonzalez to issue a preliminary injunction that would block Lee from working for Google before the trial, which is slated for January. The judge already issued a temporary restraining order in July. Google argues that if Lee is kept off the job until the trial, he will miss the important autumn recruiting season in China, which often determines where Chinese college students will work after they graduate.
"This is a case about whether Dr. Lee should be required to live up to his promise," Microsoft's lawyer, Jeffrey Johnson, said in opening arguments of the two-day hearing. Johnson is a lawyer with Preston Gates & Ellis, a Seattle firm.
Johnson claimed that Lee's conduct both before he left Microsoft and before the temporary restraining order was issued showed that he will not live up to the terms of a one-year noncompete agreement if allowed to work with Google.
The attorney cited a May 7 e-mail that Microsoft says Lee sent to Google CEO Eric Schmidt and co-founders Sergey Brin and Larry Page in which Lee said he was a "corporate VP at Microsoft working on areas very related to Google."
"He was saying, 'Look what I did at Microsoft -- and look what I can do for you,'" Johnson said.
Johnson added that Lee's efforts to help Google began while he was a vice president at Microsoft and still on the company's payroll. That included helping Google with recruitment and advising the search giant on job candidates, and forwarding to Google executives a Microsoft paper that discussed Redmond's China strategy.
"He did all of this while he was still a Microsoft employee," Johnson said. Johnson said that after Lee left Microsoft and before a restraining order was imposed, Lee attended a meeting with Schmidt and other top executives about Google's own plans for China.
Microsoft lawyers do not plan to introduce witnesses at the hearing, while Google has called Lee to the stand and plans to call Alan Eustace, vice president of engineering at Google.
Google has brought in high-powered legal counsel to fight Microsoft. John Keker, a partner with San Francisco law firm Keker & Van Nest, was a defence attorney for Frank Quattrone in the investment banker's high-profile trial and was the chief prosecutor in the federal government's 1989 prosecution of Oliver North following the Iran-Contra scandal.
In his opening argument, Keker argued that if Lee were allowed to join Google before the trial he would only work on setting up a China office and would do nothing on speech and search technologies, ostensibly two areas of biggest concern to Microsoft.
He said that in his most recent role at Microsoft, Lee was in a different part of the software giant's organisation than either MSN, a direct competitor to Google, or research efforts in China.
"Microsoft has exaggerated who Dr. Lee is. They have exaggerated what he has done. They have exaggerated what he plans to do at Google," Keker said.
Keker also argued that the document that Lee sent to Google was stripped of all confidential information. He added that Washington state law typically doesn't favour noncompete contracts and that Lee's agreement with Microsoft should be narrowly interpreted.
"He is a very special person" with a unique appeal in recruiting Chinese students, Keker said of Lee. "Those qualities are his and not Microsoft's."
Microsoft introduced several videotaped depositions. Microsoft Chairman Bill Gates and CEO Steve Ballmer said Lee had responsibilities that stretched well beyond his main duties as speech researcher at the company.
Ballmer said Lee was "the godfather" of the company's China research efforts, and Gates said Lee was one of the top two Microsoft executives when it came to designing Microsoft's China strategy.
"He'd certainly be one of the top two influential people in what we did," Gates said. At another point, Gates characterised Lee as the "most prolific" and "most energetic" advocate that Microsoft needed to change its China strategy, authoring several 20- to 30-page memos. At one point, sipping from a Diet Coke, Gates also said that Lee helped with government relations, even helping draft a letter to a top Chinese official.
Johnson noted that Microsoft has had a fair amount of success in China, but that success comes after early stumbles. "I feel like we have some 'secret sauce' in terms of how we do business in China," Ballmer said in his deposition.
The testimony comes as Microsoft argues that Lee was key to its China strategy. Google argues that it has been years since Lee was responsible for hiring and staffing Microsoft's Chinese operations.
Lee briefly took the witness stand before a lunch break. His personal attorney, Brad Keller of Byrnes & Keller in Seattle, noted that Lee had worked for both Apple Computer and Silicon Graphics. before going to work for Microsoft, and avoided disclosing any confidential material from those companies to Microsoft.
Lee also testified that, while at Apple, he helped set up an academic research centre and a research and development facility in China. Keller asked Lee whether Microsoft had concerns about a conflict before opening Microsoft's China facility. "No," Lee responded.
