Wired is carrying an article rather provocatively entitled, "Google Stole Its Smart Contact Lens From Microsoft. And That’s a Good Thing." While the article makes a few good points, the gist of the headline is dead wrong. I now work at Google, but I was previously an academic myself and received a significant amount of funding from Microsoft while I was at Harvard. (Standard disclaimer applies: This post represents my own opinion and not that of my employer.)
The Wired article gets it wrong when it claims that Google "stole" the smart contact lens project from Microsoft. It's true that Microsoft funded the original project being done by Babak Parviz when he was on the faculty at the University of Washington. Google then subsequently hired Babak (and Brian Otis, another UW faculty) to develop the project further, which was recently announced on the Google Blog. However, I don't think anyone would consider this "stealing". Suggesting that it does is a real problem, since it undercuts the open model used by many companies for funding university research.
It would not surprise me if Microsoft hired former faculty to work on projects that were originally funded by Google's university research programs (which, like Microsoft, provides millions of dollars a year to university projects to undertake research). These kinds of industry research gifts generally have no strings attached. As the recipient of several Microsoft research awards, I could have used the money for anything -- pizza parties for my grad students, extravagant trips to the tropics -- without any repercussions, apart from gaining a poor reputation and probably excluding myself from consideration for future Microsoft awards. Likewise, the research output that these gifts funded had no intellectual property restrictions: the research was wholly owned by the university, and Microsoft received no IP rights whatsoever.
This is a great model for industry research funding. It provides researchers with the maximal amount of flexibility, and does not preclude a researcher from funding one project from multiple sources (even multiple awards from competing companies).
The Wired article does make a good point that Google seems to be doing a good job at taking these kinds of moonshot research ideas (like self-driving cars, Google Glass, and the smart contact lens project) to the next level, beyond the lab. But the implication that Google "stole" the research "from" Microsoft is disingenuous. I am sure most academics, and even Microsoft folks, would agree.