Revenge Of The Papermaster: Apple Exec Countersues IBM - InformationWeek

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11/14/2008
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Revenge Of The Papermaster: Apple Exec Countersues IBM

Newly appointed iPhone chief claims a noncompete agreement he signed with former employer Big Blue is invalid.

Mark Papermaster, the microchip expert that a court last week ordered to stop working at Apple while it hears a breach-of-contract suit brought against him by former employer IBM, has filed a lawsuit of his own against Big Blue.

In court documents filed Thursday, Papermaster argues that the noncompete contract he signed while head of blade server development at IBM is irrelevant to his employment at Apple because "Apple and IBM are not significant competitors."

"IBM primarily provides business enterprise services, while Apple's primary business is the design, manufacturing and marketing of consumer products," Papermaster claims.

Apple named Papermaster senior VP for devices hardware engineering, with responsibility for iPhone and iPod development, earlier this month, despite IBM's lawsuit. IBM sued Papermaster in late October, one day after he informed the company that he would be leaving to join Apple.

IBM claims the move violates Papermaster's agreement not to work for a competitor within one year of leaving IBM.

But Papermaster, in his countersuit, claims that his work at Apple "is completely unrelated to the work he was doing at IBM," according to documents filed in U.S. District Court in New York.

Papermaster also charges that the noncompete agreement he signed is "unreasonably broad in that it purports to impose an unreasonably lengthy time limitation." In the fast-paced tech world, "any trade secrets that Mr. Papermaster possesses would lose their value prior to the expiration of a year," the countersuit claims.

Papermaster also claims that the agreement is invalid because it's meant to apply to work performed in New York State. Papermaster was employed at IBM facilities in Texas and is moving to a California-based company. "Both states hold that such noncompetition agreements are unenforceable as a matter of public policy," Papermaster argues.

Papermaster is asking the court to declare his noncompete deal with IBM invalid and to release him to work for Apple. Also Thursday, the court ordered IBM to post a $3 million bond to cover any costs or lost wages incurred by Papermaster if IBM does not prevail in the lawsuit, which is ongoing.

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