MicroStrategy gets ruling over employee conduct

MicroStrategy has won an appeals court ruling in a legal dispute concerning former employees who went to work for Business Objects, a French rival in the business-intelligence software market.

MicroStrategy had complained that the employees used confidential company information to solicit customers for BusinessObjects. The appeals court determined that a “non-solicitation” clause in MicroStrategy’s employment contract was valid and non-ambiguous, and that it prohibited the employees from taking any action that “drives MicroStrategy customers away” from its products, MicroStrategy said Thursday.

The ruling, from the U.S. Court of Appeals for the Federal Circuit, in Washington, D.C., reversed a lower court decision that found the non-solicitation clause invalid.

The case now goes back to the lower court for further proceedings.

Representatives for Business Objects in France had no immediate comment. The company has offices in Paris and in San Jose, California.

It’s the latest example of the problems vendors can face when they hire staff from rivals. Microsoft and Google are in the midst of a dispute over Google’s hiring of a former Microsoft employee, Kai-Fu Lee, to run its research and development efforts in China. Microsoft claims the hiring violates a noncompetition clause in Lee’s contract. Google disagrees.

The ruling between Business Objects and MicroStrategy, based in McLean, Virginia, is part of a broader, ongoing legal dispute that goes back to 2001 and involves several patent infringement claims made by both sides.

On Thursday, MicroStrategy said it had filed an additional patent infringement suit against BusinessObjects. That case, in the U.S. District Court for the District of Delaware, is expected to go to trial in May 2006, MicroStrategy said. It is seeking monetary damages and an injunction.