Bill Gates doesn't appear to hold China in very high regard, screaming that it had "f****d" Microsoft, according to court testimony in the Kai-Fu Lee case.

Former Microsoft executive Lee testified that the head honcho had lost his temper over a lack of success in penetrating the Chinese market. Microsoft is suing Lee, a search technology linguistics and translation expert along with new employer Google, over an alleged breach of contract where Lee agreed not to perform work for competing firms for the space of a year.

While overseas reports stated Microsoft is denying Gates made the comments, the local company was not able to confirm this with a public relations representative saying only that they were unaware of the story, later adding only "Microsoft refuses to comment".

In the US, a press statement issued by Microsoft stated: "We are asking the Court to require Dr Lee and Google to honour the confidentiality and non-competition agreements he signed when he began working for Microsoft.

"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. As a senior executive, Dr Lee has direct knowledge of Microsoft's trade secrets concerning search technologies and China business strategies. He has accepted a position focused on the same set of technologies and strategies for a direct competitor in egregious violation of his explicit contractual obligations."

However, the incident is the second attack on the state of the Chinese software market by Microsoft senior executives this year. In June, Microsoft CEO Steve Ballmer surprised many observers after he said software piracy rates in China were as high as 90 percent, adding that this was a fate Microsoft had been forced to accept to gain entry into the Chinese market.

At the time Ballmer quipped he would prefer to see Microsoft's software pirated than that of competing products.

Chinese commercial sources in Australia, who asked not to be named, described Gate's alleged comments as "unhelpful and perhaps difficult", noting the Chinese software market required both a "mutual understanding" and a focus on "longer term" relations.

The court case continues.