Judge orders IBM to pay $3M to keep Apple exec case going

A federal judge has ordered IBM, which is trying to block a former company executive from taking a job with Apple, to provide a $3 million bond by the end of Friday to keep the case going.

Judge orders newly hired Apple VP to stop work
IBM sues to block executive's move to Apple

In an order signed Wednesday, but posted to the federal court system's database only Thursday, U.S. District Court Judge Kenneth Karas instructed IBM that it must file the bond by 5 p.m. EST.

A week ago, Karas slapped a temporary injunction on Mark Papermaster, a 26-year veteran of IBM, that barred him from working at Apple. Papermaster, who was announced as Apple's new vice president of devices hardware engineering on Nov. 4, was told to "immediately cease his employment with Apple Inc. until further order." Karas has yet to issue an opinion to explain his reasons for that order.

The $3 million bond is designed to pay for any costs or damages that Papermaster might suffer if it's later determined that IBM wasn't entitled to an injunction.

Karas noted that district courts are allowed "wide discretion" in setting the bond's dollar figure, then added: "Based on a careful reading of the letters sent by the Parties to the Court, which are being filed under seal, the Court finds that a bond in the amount of $3,000,000 is appropriate to guarantee payment of the costs and damages that Defendant may suffer, if the injunction should not have been issued."

IBM sued Papermaster Oct. 22, claiming that a noncompetition agreement he signed in 2006 prevented him from working for competitors for a year after leaving the company. According to IBM, Papermaster had information of "highly confidential IBM trade secrets" that would "irreparably harm" the company if he was allowed to work for Apple.

Papermaster, in turn, countered that "Apple and IBM are not even competitors," and argued that the two firms targeted completely different markets, Apple aiming its electronics at consumers while IBM pitches its products to businesses.

The next item on the case's calendar is a status conference slated for next Tuesday in Karas' White Plains, N.Y. court.

For more enterprise computing news, visit Computerworld. Story copyright Computerworld, Inc.