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Judge orders newly hired Apple VP to stop work

Former IBM exec blocked from running iPod, iPhone engineering teams

November 9, 2008 12:00 PM ET

Computerworld - A federal judge on Friday ordered a former IBM executive who was recently hired by Apple Inc. to stop working for the company, court documents showed.

U.S. District Court Judge Kenneth Karas ruled that Mark Papermaster, who was announced as Apple's new vice president of devices hardware engineering only last Tuesday, must "immediately cease his employment with Apple Inc. until further order of this court." Karas did not explain his reasons for the order, saying only that he would issue an opinion at a later date.

Friday's move was the result of an IBM motion for a preliminary injunction designed to block Papermaster's move to Apple. On Oct. 22, IBM sued Papermaster, claiming that a noncompetition agreement he signed in 2006 bars 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's allowed to work for Apple.

Apple hired Papermaster to run its iPod and iPhone engineering group. The same day that Apple announced Papermaster's hire, it also said that Tony Fadell, who has been credited with jump-starting the company's iPod business, was leaving his position as senior vice president in charge of the player, but would remain as an adviser to Jobs.

Papermaster, a 26-year veteran of IBM, had been the vice president of blade server development until he resigned Oct, 13. According to court documents IBM filed last month, Papermaster "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." If Papermaster took the Apple job, IBM maintained, he would be a violation of his noncompetition agreement.

In a response filed with Karas on Thursday, the day before the judge ruled against him, Papermaster countered IBM's claims.

"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," the memorandum submitted to Karas read. "Nothing about his new job will implicate any trade secrets from IBM."

Papermaster's objection to the proposed injunction also claimed that "Apple and IBM are not even competitors," arguing that Apple is focused on consumers while IBM targets businesses, particularly large companies.

He also alleged that IBM did not restrict his access to the IBM network or ask him to clean out his desk and leave immediately when he first gave notice on Oct. 13 but instead accepted his two-week notice. "After Mr. Papermaster informed IBM that he had accepted a job at Apple, IBM allowed him to continue working at IBM for two entire weeks, with unfettered access to all of his files and to IBM's entire computer network -- hardly what one would expect when an executive is leaving for a competitor," Papermaster's filing said.

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