The escalating rivalry between Microsoft and Google erupted on Tuesday as the software giant sued to prevent one of its top engineers from defecting to run the search engine company's new China operations.

Kai-Fu Lee, who had been in charge of Microsoft's Beijing research and development centre before moving to head office in Redmond, wason Tuesday named president of Google's China business and the first head of its planned R&D centre in thecountry.

Microsoft said it had filed lawsuits against both Google and Mr Lee to force him to honour confidentiality and non-competition agreements he had signed with the software company.

The agreements, which are signed by all new Microsoft employees, are designed to prevent workers from moving to a direct competitor for a year after leaving the company, or hiring other Microsoft employees or disclosing the company's trade secrets.

Tom Burt, deputy general counsel at Microsoft, said the company often reached agreements with former employees that let them work for a competitor in a position that did not overlap directly with their former responsibilities, but Mr Lee, who resigned onMonday, did not try to negotiate this kind of release.

The fight over Mr Lee threatens to mar one of Google's most important international initiatives.

Its Chinese R&D centre, due to open later this year, will give Google a toe-hold in a country that already accounts for one of the world's largest internet populations.

Hiring a leading Chinese expert to build a team of local engineers was yesterday billed a sign of Google's long-term commitment to the market.

That was before Microsoft's legal intervention.

Full Story.