Almost immediately after a state judge ruled yesterday that former Microsoft executive Kai-Fu can work for Google in a limited capacity, Microsoft said it would be willing to settle the lawsuit against Google if the employment restrictions were to remain in effect until next summer, when Lee's noncompete agreement expires, report the AP and CNET. Microsoft general counsel Brad Smith said the company was satisfied with the restrictions and would end all litigation if Google and Lee agree to abide by the judge's order until next July.

Earlier on Tuesday, a Washington state Superior Court Judge Steven Gonzalez ruled that the noncompete agreement Lee signed with Microsoft is valid, but that Lee could immediately begin recruiting staff for Google's development center in China - though he cannot work on products, services or projects he worked on at Microsoft, including computer search technology, pending a trial set for January.

Both Google and Microsoft claimed victory on Tuesday, writes the New York Times, but the legal battle will continue in Seattle, in January, in a Microsoft lawsuit that seeks a broader application of the noncompete clause. And, even before then, the two sides will be court in October for a hearing on a countersuit that Google filed in California.