Court Order Stops IBM Executive Working for Apple

By Eric Blair
18:10, November 9th 2008
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A United States District court has released an order barring former IBM executive Mark Papermaster from joining Apple. Papermaster was to replace ‘father of iPod’ Tony Fadell, who left the company for family reasons.

Papermaster, who had been an employee of IBM for 26 years, most recently as vice president of IBM’s blade development unit, wants to move to Apple in Fadell’s old position as vice president of devices and hardware engineering.

But the U.S. District Court for Southern New York would not have it. The court ordered Papermaster to “immediately cease his employment with Apple Inc. until further order of this court,” on Friday. The ruling was cast for fear that Papermaster would break a non-competition agreement with his old company and reveal IBM trade secrets to Apple.

The order, which was the result of a lawsuit filed by IBM on October 22, is the only thing that currently stops Papermaster from joining Apple, after IBM’s offers on October 20 of a pay raise as well as the option to accept one year’s salary if he promised not to go to a competitor left him unfazed. He resigned the next day, and Apple was forced to take the matter to the court.

The company has stated that their former employee is “in possession of significant and highly confidential IBM trade secrets and know-how, as well as highly sensitive information regarding business strategy and long-term opportunities.”

Apple’s competition with IBM is in the fields of servers, personal computers and microprocessors, where Apple’s Xservers and Apple’s recently-acquired California-based semiconductor company P.A. Semi are of note, says IBM.

According to IBM’s reckoning, Apple will use the latter semiconductor company as well as Papermaster’s know-how “to design microprocessors for incorporation in a variety of electronic devices, including handheld devices.”

"IBM will be irreparably damaged" if Papermaster works for Apple and "inevitably" discloses trade secrets, IBM said.

Mr. Papermaster’s lawyers call IBM’s claim “absurd” and rebut that “Apple hired Mr. Papermaster not because of any specific knowledge or experience he gained at IBM, but for his general skill as an engineer and his strong management skills, knowing full well that he will need to learn the iPod and iPhone technology 'on the job,'" and that “Nothing about his new role will implicate any trade secrets of IBM.”

His lawyers maintain that IBM focuses on large enterprise applications meant for businesses, while Apple focuses on consumer electronics, and they point out that IBM allowed Papermaster to work at the company for two weeks after he announced his defection to Apple, and allowed him unrestricted access to his files at IBM as well as to the entirety of the company’s network.

Papermaster will “suffer severe hardship if he loses his dream job and is forced out of the rapidly changing electronics industry for a year,” they maintain.

The next court date is set for November 18 and both sides will reconvene then.



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