Steve Jobs allegedly threatened Palm with patent suit to force anti-poaching agreement

Posted:
in General Discussion edited January 2014
A court document made public on Tuesday revealed that Apple cofounder Steve Jobs threatened to take legal action against Palm if the now-defunct company's CEO did not agree to anti-poaching measures.

Jobs
Steve Jobs at the iPad 2's unveiling.


The filing is part of a civil suit being leveled against a number of top tech companies, including Apple, Google and Intel, that claims the firms participated in illegal anti-poaching activities.

According to an in-court report from Reuters, the defendants tried to keep a number of sensitive documents sealed, but presiding Judge Lucy Koh denied the request, thus making Jobs' statements public.

The 2007 communication between Jobs and Edward Colligan was revealed as part of an affidavit from the former Palm CEO. In it, Colligan claims that Jobs attempted to pressure Palm into an anti-poaching agreement that would block each other's attempts at "stealing" valuable employees.

"Mr. Jobs also suggested that if Palm did not agree to such an arrangement, Palm could face lawsuits alleging infringement of Apple's many patents," Colligan said in his declaration.

The document furnished by the five plaintiffs includes an email correspondence between Jobs and Colligan where the late Apple chief executive alludes to leveraging his company's patent portfolio against Palm if it did not cooperate. In a sworn statement, Colligan described a phone call he had with Jobs regarding employees being "hired away" from Apple by Palm.

"As a solution, Mr. Jobs proposed an arrangement between Palm and Apple by which neither company would hire the other's employees, including high tech employees," he said. "Mr. Jobs also suggested that if Palm did not agree to such an arrangement, Palm could face lawsuits alleging infringement of Apple's many patents."

From Colligan's email to Jobs:
Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal.[...]Palm doesn't target other companies-we look for the best people we can find. l'd hope the same could be said about Apple1s practices. However, during the last year or so, as Apple geared up to compete with Palm in the phone space, Apple hired at least 2% of Palm's workforce. To put it in perspective, had Palm done the same, we'd have hired 300 folks from Apple. Instead, to my knowledge, we've hired just three.
Colligan also made clear that Palm was not intimidated by Jobs' threat of patent litigation and cited a patent portfolio the company acquired from Siemens, saying it too could respond with claims against the iPhone.

Jobs sent a response claiming that Apple employees were being "actively recruited using knowledge supplied by Jon Rubenstein [sic] and Fred Anderson, with Jon personally participating in the recruiting process."

Jobs' reply to Colligan's suggestion:
Just for the record, when Siemens sold their handset business to BenQ they didn't sell them their essential patents but rather just gave them a license. The patents they did sell to BenQ are not that great. We looked at them ourselves when they were for sale. I guess you guys felt differently and bought them. We are not concerned about them at all. My advice is to take a look at our patent portfolio before you make a final decision here.
Judge Koh has yet to decide whether to turn the civil suit into a class action which could cost the defendants "hundreds of millions of dollars," according to plaintiffs' counsel.

Most recently it was reported that Apple CEO Tim Cook was ordered to give a deposition regarding the matter. In addition to Cook, Google Executive Chairman Eric Schmidt and top ranking officials from the other defendant companies including Intel's Paul Otellini are also scheduled to be questioned in the coming weeks.

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Comments

  • Reply 1 of 75


    I'm surprised Apple would make such a threat, I mean, if anything, Palm would be the one suing given the (horrible) business performance. 

  • Reply 2 of 75
    jakebjakeb Posts: 557member
    If anyone else did this, I'd think it was truly terrible. And it is. But Steve did it with such flair. How can you be mad?
  • Reply 3 of 75
    And what's the wording to Jobs threat to sue for the patents. I see two quotes that aren't tied together in the way the headline suggests. Looks more like they were talking about two unrelated issues
  • Reply 4 of 75
    hmmhmm Posts: 3,405member

    Quote:

    Originally Posted by charlituna View Post



    And what's the wording to Jobs threat to sue for the patents. I see two quotes that aren't tied together in the way the headline suggests. Looks more like they were talking about two unrelated issues


     


    It's possible. This is only a section. The turtlenecked one still made an illegal proposition, and now he's gone.

  • Reply 5 of 75
    tylerk36tylerk36 Posts: 1,037member


    I prefer mine poached on toast.  Doh!

  • Reply 6 of 75
    Stuff like this anti-poaching lawsuit can really distract the attention of a company's management, particularly after the multiple shake ups last year. I'm really glad that I unloaded my shares when I did.
  • Reply 7 of 75
    asciiascii Posts: 5,941member
    Maybe Steve just meant that if you hire another company's employees, you run the risk of them repeating some work they did at their old job, and thus open yourself up to patent lawsuits.
  • Reply 8 of 75
    rogifanrogifan Posts: 10,669member
    msuberly wrote: »
    Stuff like this anti-poaching lawsuit can really distract the attention of a company's management, particularly after the multiple shake ups last year. I'm really glad that I unloaded my shares when I did.
    What?!?
  • Reply 9 of 75
    asciiascii Posts: 5,941member

    Quote:

    Originally Posted by msuberly View Post



    Stuff like this anti-poaching lawsuit can really distract the attention of a company's management, particularly after the multiple shake ups last year. I'm really glad that I unloaded my shares when I did.


    Yes, it was while MS was focussed on their anti-trust lawsuit that everyone started beating them, when previously they had been an unstoppable juggernaut.

  • Reply 10 of 75
    If you have a valuable skill you should be able to market that skill to whomever for the highest salary possible. Tech companies getting in the way of that should be punished.

    Seen another way, this anti-compete measure is pretty much a blacklist that hurts someone's ability to earn a living.
  • Reply 11 of 75

    Quote:

    Originally Posted by jakeb View Post



    If anyone else did this, I'd think it was truly terrible. And it is. But Steve did it with such flair. How can you be mad?


    Rockefeller had flair too. Come to think of it, so had the moustached madman.


    Evil is evil, and flair or style is unrelated.

  • Reply 12 of 75

    Quote:

    Originally Posted by lightknight View Post


    Rockefeller had flair too. Come to think of it, so had the moustached madman.


    Evil is evil, and flair or style is unrelated.



    Bill Gates is not moustached, nor particularly angry.


     


    Cheers

  • Reply 13 of 75
    matrix07matrix07 Posts: 1,993member
    minicapt wrote: »
    Bill Gates is not moustached, nor particularly angry.

    Cheers

    Bill Gates has voice of a chipmunk though. Is that evil, or flair?
  • Reply 14 of 75
    matrix07matrix07 Posts: 1,993member
    technarchy wrote: »
    If you have a valuable skill you should be able to market that skill to whomever for the highest salary possible. Tech companies getting in the way of that should be punished.

    Seen another way, this anti-compete measure is pretty much a blacklist that hurts someone's ability to earn a living.

    I don't think this will end up good for anyone involved. Is the information first surfaced from Jobs' bio?
  • Reply 15 of 75
    cnocbuicnocbui Posts: 3,613member


    I think a hard rain is gonna fall for this one.

     

  • Reply 16 of 75
    stelligentstelligent Posts: 2,680member

    Quote:

    Originally Posted by jakeb View Post



    If anyone else did this, I'd think it was truly terrible. And it is. But Steve did it with such flair. How can you be mad?


    Flair in an email? It only seems that way because you know and idolize who wrote it. Change the author to Larry Page and will you see flair anymore? Regardless of wrote it, these words were careless, arrogant and could come back to haunt Apple. For sure, it's another issue that Apple could do without right now.

  • Reply 17 of 75
    asciiascii Posts: 5,941member

    Quote:

    Originally Posted by Technarchy View Post



    If you have a valuable skill you should be able to market that skill to whomever for the highest salary possible. Tech companies getting in the way of that should be punished.


    You should be free to market it and they should be free to say no. For whatever reason they want, whether it's because they don't like you or because they don't want to p-off the company you currently work for that they might want to partner with on something one day.

  • Reply 18 of 75
    jragostajragosta Posts: 10,473member
    matrix07 wrote: »
    I don't think this will end up good for anyone involved.

    I disagree. It will turn out to be a tempest in a teapot and I doubt if it's a major issue for Management. If there's any truth at all to the allegations, then the companies were wrong to reach such an agreement.

    If they did it, they know it's wrong and will simply sign a consent decree agreeing never to do it again and the problem will go away.

    If they didn't do it, they'll still sign a consent decree just to get the DOJ off their backs by agreeing not to do something that they wouldn't have done anyway.

    The whole thing will go away.
  • Reply 19 of 75
    rogifanrogifan Posts: 10,669member
    This is the type of story that tech blogs find juicy but the average joe could care less about.
  • Reply 20 of 75

    Quote:

    Originally Posted by minicapt View Post


    Bill Gates is not moustached, nor particularly angry.


     


    Cheers





    Does he have style?

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