Apple and IBM settle legal dispute over hiring of Mark Papermaster

Apple and IBM finally resolve dispute over hiring of former IBM executive Mark Papermaster

The legal battle between IBM and Apple over the hiring of Mark Papermaster has come to an end, as Papermaster has been cleared to begin work at Apple starting on April 24, 2009.

The legal dispute between the two tech heavyweights began this past October when Apple hired away Papermaster from IBM, where he was an important executive and top manager. Apple initially hired Papermaster to take over its iPod and iPhone division, a position which opened up after Tony Fadell, also known as the father of the iPod, left the company to spend more time with his family. Others have reported, though, that Fadell left as a result of key differences regarding the initial design and future direction of the iPhone.

In any event, IBM didn't take too kindly to Apple poaching some of its top talent, and commenced litigation to prevent Papermaster from leaving and working for Apple. Papermaster was well-known and respected as a server expert and chip guru, and IBM asserted that in his position as a top executive and manager, Papermaster was privy to a significant amount of confidential and proprietary information about IBM's processors and server technology. As such, IBM was fearful that Papermaster would help Apple develop rival products, and that the trade secrets Papermaster acquired as a high level employee at I.B.M would necessarily come into play in his role as head of Apple’s iPod and iPhone division. In defense of its stance, IBM noted that Papermaster was subject to a covenant not to compete agreement that he signed as part of his contract with IBM. The covenant not to compete agreement specifically forbade Papermaster from working at a competing company for one full year after leaving IBM.

Papermaster soon countersued IBM, and counter-claimed that Apple was in no way a direct competitor to IBM, and that under IBM's broad view of what constitutes a competitor, Papermaster would effectively be barred from working at any technology company at all. In disputing IBM's claims, Papermaster asserted that he would not disclose any proprietary information about IBM's processors and server technology, and noted that he was primarily hired by Apple for his managerial skills than for his technological expertise.

Nevertheless, a court ruled in IBM's favor, and held that Papermaster working for Apple might, in fact, cause IBM irreparable harm, and issued a preliminary injunction preventing him from working at Apple. The ruling stated in part,

It is likely that Mr. Papermaster inevitably will draw upon his experience and expertise in microprocessors and the ‘Power’ architecture, which he gained from his many years at IBM, and which Apple found so impressive, to make sure that the iPod and iPhone are fitted with the best possible microprocessor technology and at a lower cost.

Appreciating the fact that Papermaster was left in a position where he was unable to work anywhere, the court put the case on the fast track, with a trial scheduled to begin in February of 2009.

IBM and Apple, however, recently settled their dispute out of court, and in a press release issued today, Apple announced that Papermaster would begin work at Apple on April 24th.  Papermaster will head up Apple’s iPod and iPhone hardware engineering teams, and his official title is "senior vice president of Devices Hardware Engineering", a position that reports directly to Steve Jobs. As part of the settlement between Apple and IBM, Papermaster will have to sign a sworn affidavit twice in 2009 where he represents that he has not disclosed any proprietary information about IBM to Apple. Like this post? Check out these others from iOnApple

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