Judge raises stakes in Apple vs IBM exec case
IBM’s legal action to block a former exec taking up a position with Apple has become a high stakes game. Not only is Mark Papermaster countersuing IBM, but the judge in the original case has ordered the firm to pay a $3 million deposit into court.
The payment was mandatory for IBM to continue with the case and, more specifically, the injunction which current bars Papermaster from taking up his Apple job. It’s not unusual for a court to ask for such a bond, which would compensate Papermaster for his legal expenses and other costs if he prevails and the injunction is ruled invalid. However, the large sum shows what a major deal the case is to both sides.
IBM is suing to uphold a one-year no-compete clause in Papermaster’s contract after he left to head Apple’s iPod and iPhone hardware division. Papermaster has now launched his own legal case demanding IBM stop trying to block him from working.
As well as the arguments he’d already spoken about (that Apple and IBM are not direct competitors and that his new work covers a different area to his previous post), he’s pointing to a confidentiality agreement he signed with IBM as proof that he won’t share any company secrets with Apple.
Papermaster is also arguing that while New York (where he signed his IBM contract) allows no-compete clauses, such terms aren’t valid in California (where Apple is based) and are of questionable legality in Texas (where he lives), so they can’t be upheld in this case. It will be interesting to see whether the court mentions that point in its final judgment: the whole concept of no-compete clauses would take a serious knock if they were effectively limited to particular states.
Lawyers for the two sides are scheduled to meet for a status conference in the New York court today.
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