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CUSTOMER RELATIONSHIP MANAGEMENT NEWS. UPDATED 11 MINUTES AGO.
You are here: Home / CIO Issues / Apple Hires IBM's Mark Papermaster
Apple Hires IBM's Papermaster Despite Noncompete Suit
Apple Hires IBM's Papermaster Despite Noncompete Suit
By Patricia Resende / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
NOVEMBER
04
2008
Apple has hired Mark Papermaster, a 26-year IBM veteran, to lead its hardware engineering team and work directly under Apple CEO Steve Jobs. Papermaster will direct Apple's iPod and iPhone engineering.

Papermaster, a server expert in charge of Big Blue's Blade development unit, is also the subject of a lawsuit filed by IBM.

"Mark is a seasoned leader and is going to be an excellent addition to our senior management team," Jobs said. Papermaster has a bachelors' degree in electrical engineering from the University of Texas and a masters from the University of Vermont.

In an effort to stop Papermaster from working alongside Jobs, IBM filed a lawsuit Oct. 22 in U.S. District Court in New York.

Risk To Competition

IBM listed several reasons for its suit, including protecting the company's intellectual property and its trade secrets, and Papermaster's noncompete contract, which bars him from working for any competitor up to one year after his IBM employment ended. Papermaster, in agreement with the noncompete document, agrees that going against IBM's covenant would cause irreparable harm to IBM.

The 26-year veteran's involvement in IBM's Integration and Values Team, a group of more than 300 senior managers, is also a basis for the lawsuit. The IVT group is responsible for IBM's most significant and challenging issues, according to court documents.

"The confidential information to which Mr. Papermaster has become privy based on his membership in the IVT and employment with the company represents the product of IBM's substantial investment in research and innovation and is critical to IBM's competitive success," court documents say.

Papermaster's noncompete agreement also says that he will not for two years after leaving IBM attempt to lure any IBM employees for employment.

If Papermaster breaks any of the covenants listed in his agreement, he acknowledges responsibility for IBM's request for attorney fees, equitable relief, and money damages.

P.A. Semi Biggest Risk

The greatest sticking point, however, is future competition, according to IBM, because earlier this year Apple acquired P.A. Semi (short for Palo Alto Semiconductor), a direct competitor of IBM's. Apple paid $278 million in cash for the company, but would not discuss what it planned to do with chip manufacturer.

Because of Apple's acquisition of P.A. Semi and hiring of Papermaster, IBM said in court documents, it believes Apple intends to design microprocessors for handheld devices. Apple has had great success with its iPhone, selling six million units in its first year, and with the iPhone 3G, selling one million units in its first weekend. Bringing on a microprocessor expert like Papermaster may be Apple's way of building on that success.

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