Google and Microsoft on Thursday ended an acrimonious legal dispute that had come to symbolise the heightened rivalry between the two companies as they vie for influence on the internet.

The two companies said they had settled a lawsuit brought by Microsoft over the defection last July of a senior researcher, Kai-Fu Lee. A former head of Microsoft’s Chinese operations and its lead researcher in the field of speech recognition software, Mr Lee quit to set up Google’s research and development centre in China.

Microsoft sued Google and Mr Lee, claiming that he had broken a one-year non-compete agreement and that its intellectual property was at risk. Google, meanwhile, accused Microsoft of using the case to try to restrain a competitor. The case had been due to go to trial early next month.

Neither company would discuss terms of the settlement, but in almost identical statements said: “The Parties have entered into a private agreement that resolves all issues to their mutual satisfaction.”

Mr Lee’s role at Google was restricted after a preliminary hearing of the case in September. At the time both sides claimed victory, with Microsoft saying that the terms of the court order would prevent him from playing a significant role in building Google’s Chinese operations in the year that the non-compete agreement was in force, while Google said that the limitations would not impede his role.

Both companies refused to comment further on Thursday on what impact the settlement would have on Mr Lee’s role in the coming months, though Google said that the researcher was in in China and had already moved his family there.