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Almost iPod chief countersues IBM

TGD Staff November 14, 2008 1,010

Chicago (IL) – Mark Papermaster, the ex-IBM executive recruited by Apple to succeed iPod creator Tony Fadell and lead the company’s devices engineering unit, has filed a countersuit against his former employer yesterday. Court documents reveal that Papermaster is challenging his non-compete agreement as being unjust since it blocks him from working for any tech company in the world for one year. The surprising move comes on the heels of a bond set earlier this week, which would allow the executive to seek financial compensation from IBM if the court determines that he was unjustly barred from his position at Apple.

According to InformationWeek, Papermaster argues that the problem with his broadly phrased non-compete agreement with IBM prevents him from working any tech company for one year, not just Apple. And Papermaster noted that his previous work on blade servers at IBM had nothing to do with the work he would do at Apple.  

“Likewise, the ‘significant competitor or major competitor’ prong purports to restrict Mr. Papermaster from going to work for one of these companies even if the work that Mr. Papermaster will be doing is completely unrelated to the work he was doing at IBM,” the court documents read. “These provisions are not necessary to protect any legitimate interests of IBM.”

Papermaster called the non-compete agreement “unreasonably broad” because it “purports to impose an unreasonably lengthy time limitation.” Legally-inclined readers will note these agreements are common in tech business. Papermaster claims his noncompetition agreement serves no purpose in the fast-paced world of technology because “any trade secrets he possesses would lose their value prior to the expiration of a year.”

As TG Daily reported, Tony Fadell recently left his job at Apple for private reasons, although he will continue serving as $300,000-a-year advisor to Steve Jobs. Apple offered Fadell’s job, which now includes responsibilities for future iPhone development, to Mark Papermaster. The point of dispute is Papermaster’s role at IBM: He was a vice president and responsible for blade development including x86, Power, storage blades, chassis, network electronics and the associated ecosystem.

IBM successfully obtained a preliminary injunction and blocked Papermaster’s new job appointment over fears he would take the company’s secrets to a competitor in order to develop competing products. The two parties are scheduled to have a status conference on Tuesday.

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