Microsoft (MSFT: news, chart, profile) claimed that Lee broke contracts that he signed when he first joined its ranks, and asserted that his defection to Google (GOOG: news, chart, profile) violates confidentiality and noncompetition agreements.
Redmond, Wash.-based Microsoft is seeking a court ruling that would require Lee to honor the agreements it said he signed.
"As a senior executive, Dr. Lee has direct knowledge of Microsoft's trade secrets concerning search technologies and China business strategies," the software giant said in a statement.
Microsoft claimed Lee's position at its search rival is "focused on the same set of technologies and strategies for a direct competitor in egregious violation of his explicit contractual obligations."
"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," the company added.
News of the suit came the same day as Google announced it had hired Lee as president of its growing China operations, leading its new research center in the Asian country.
The legal action also comes as companies like Microsoft, Google and others like Yahoo Inc. (YHOO: news, chart, profile) are fighting to dominate the market for products to allow computer users to search both the Internet and their own computers.
For its part, Google said it would defend itself "vigorously" against Microsoft's suit and vowed to "fully support" Lee in the matter.
"We have reviewed Microsoft's claims and they are completely without merit," Google wrote in an e-mailed statement.
Lee joined Microsoft in 1998 and founded its Asia research center. He was, most recently, corporate vice president of the company's natural interactive-services division, which develops technology and products for things like speech, natural language, advanced search and help.
In evening trading, Microsoft's stock gave up just more than 1% to $25.86. Shares closed the normal session higher by 2.4% at $26.16. Google's shares fell 2.4% in extended trading to $302.49, after ending the regular trading day higher by 3.5% at $309.90.