IBM to keep tabs on Papermaster's new position at Apple

Posted:
in General Discussion edited January 2014
As part of his settlement with IBM last week, Mark Papermaster will be required to sign and submit court-governed declarations every few months saying he hasn't divulged any of the company's trade secrets while performing his new duties at Apple.



In a five-page Southern District of New York court filing dated yesterday, and signed by attorneys for both parties, Papermaster agrees to check in with Big Blue whenever he's not sure whether he's about to tread on confidential information. Â*According to the document, the two sides reached the settlement last Friday.



Papermaster will also submit signed declarations, one in July and another in October, confirming he has not disclosed any of IBM's secrets nor does he intend to, under penalty of perjury. Â*Similar arrangements are seldom seen publicly, although a case pitting two well-known companies like Apple and IBM has attracted more attention than most non-compete disputes. Â*The agreement clears Papermaster to go back to work on April 24.



The full declaration he'll sign, which is due in the first two weeks of July, and again during the first two weeks of October, can be seen below in full.



If Papermaster has any questions over whether certain information is confidential or if he wants to disclose once-confidential IBM information, he will have to ask IBM Vice President and Assistant General Counsel Ron Lauderdale first. Â*Lauderdale will make the determination "promptly, reasonably, and in good faith," and his decision is binding and not subject to review, meaning Papermaster risks a perjury conviction if he doesn't follow Lauderdale's directions.



These conditions expire on October 24, one year after Papermaster's departure from IBM. Â*At that time, the lawsuit and countersuit will be dropped. Â*If either or both parties violate the consent order, they could be held in contempt.







Any further terms of the settlement, financial or otherwise, were not listed in the court filings discovered by AppleInsider. Â*Yesterday Apple announced Papermaster would be joining the company as chief of iPod and iPhone development in April, noting briefly that "The litigation between IBM and Mark Papermaster has been resolved."
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Comments

  • Reply 1 of 29
    hmurchisonhmurchison Posts: 12,220member
    With large companies laying people off by the thousands

    how in the hell does an individual have to sign a declaration

    to a former employer as a stipulation?



    That is NOT a free market for employment and in my eyes a

    breach of Papermaster's privacy.



    Truth is IBM made the investment in Papermaster and there was

    quid pro quo the got an outstanding employee. Had IBM sent

    Papermaster packing to the unemployment line he'd have precious

    few right to do anything but collect a pittance in UI benefits.



    I think this was likely an agreement to provent a protracted legal

    battle but I have a hard to believing that our Government would back

    such frivolous cases.
  • Reply 2 of 29
    Ridiculous.



    Sounds like IBM lost, but had to get something out of the deal to save face and to make it appear like their fears could be justified.
  • Reply 3 of 29
    As any serious development involving Papermaster experience will show first results long after this 6 month period, what is IBM going to win?
  • Reply 4 of 29
    Quote:

    In a five-page Southern District of New York court filing dated yesterday, and signed by attorneys for both parties, Papermaster agrees to check in with Big Blue whenever he's not sure whether he's about to tread on confidential information. According to the document, the two sides reached the settlement last Friday.



    Papermaster will also submit signed declarations, one in July and another in October, confirming he has not disclosed any of IBM's secrets nor does he intend to, under penalty of perjury. Similar arrangements are seldom seen publicly, although a case pitting two well-known companies like Apple and IBM has attracted more attention than most non-compete disputes. The agreement clears Papermaster to go back to work on April 24.





    Papermaster will join Apple 6 months after his appointment and submit 2 sworn declarations to the Court certifying that he has not disclosed or used in his work for Apple any of IBM's secret intellectual property. By agreeing to do so, Papermaster will be able to cut in half the duration of the one year non competition clause he signed just 2 years ago.



    IBM was well within its rights to insist that the provisions of the non competition clause be enforced by Courts. By the way, intellectual property means that it belongs to IBM, just like physical goods.



    Employees are not free to discard the non competition agreements they sign just because they restrict the employment they can seek.



    Apple is familiar with non competition agreements and cannot ignore them. Steve Jobs and Apple are not free to steal the intellectual property which belongs to IBM.





  • Reply 5 of 29
    Quote:
    Originally Posted by Virgil-TB2 View Post


    Ridiculous.



    Sounds like IBM lost, but had to get something out of the deal to save face and to make it appear like their fears could be justified.



    I agree, what a bunch of butt-covering silliness. He can whisper anything he wants into Steve's ear.
  • Reply 6 of 29
    I think he should just call Apple before he comes in to work and tell them everything he knows about IBM. Okay, maybe not.
  • Reply 7 of 29
    Quote:
    Originally Posted by Virgil-TB2 View Post


    Ridiculous.



    Sounds like IBM lost, but had to get something out of the deal to save face and to make it appear like their fears could be justified.



    IBM had no case. They probably knew it though.



    I think the whole intent was not about Paperclip, but about providing a negative incentive to other key employees who may be contemplating a similar switch. In that, it probably succeeded. While it won't keep huge companies like Apple from attracting anyone, it will make it harder for smaller companies that lack the legal resources to back an employee in such a situation.
  • Reply 8 of 29
    dreyfus2dreyfus2 Posts: 1,070member
    Maybe the Apple cafeteria should serve confinement loaf for the next six months...
  • Reply 9 of 29
    This reminds me of another famous case where an executive was forced out of a major computer company. He left and created a rival computer company that eventually took over the company that forced him out.



    I don't believe he had a non-compete clause in his contract.
  • Reply 10 of 29
    Quote:
    Originally Posted by Johnny Mozzarella View Post


    This reminds me of another famous case where an executive was forced out of a major computer company. He left and created a rival computer company that eventually took over the company that forced him out.



    I don't believe he had a non-compete clause in his contract.



    Actually I think he did, so the new company couldn't sell to consumers but had to focus on the workstation market, thus creating a robust platform. This is just an IIRC, so if anybody can correct this, please do.
  • Reply 11 of 29
    If they had no case, then why would he be ordered to sign anything?

    Quote:
    Originally Posted by Alonso Perez View Post


    IBM had no case. They probably knew it though.



    I think the whole intent was not about Paperclip, but about providing a negative incentive to other key employees who may be contemplating a similar switch. In that, it probably succeeded. While it won't keep huge companies like Apple from attracting anyone, it will make it harder for smaller companies that lack the legal resources to back an employee in such a situation.



  • Reply 12 of 29
    Quote:
    Originally Posted by Robin Huber View Post


    I agree, what a bunch of butt-covering silliness. He can whisper anything he wants into Steve's ear.



    No he can't and Steve wouldn't let him.



    Countries have laws against companies 'stealing' employees from other companies. Otherwise, one could simply just take best out of a company, destroying it and the lives of those that were left behind.



    IBM was in their right to protect their intellectual property. And for heavens sake, all they wanted in the first place was a guarantee that their annual strategic plans and developments in progress that Papermaster was involved in creating were not disclosed in any manner for a period of one year.



    Certainly Papermaster was not harmed. In fact, such efforts by IBM to retain him or take the actions that they did most likely raised his level of importance.



    Remember, that Apple has done virtually the same for others that have been attempted away. And trust me, Apple, in particular Steve Jobs, appreciates the laws which protects him as it does others.
  • Reply 13 of 29
    hmurchisonhmurchison Posts: 12,220member
    Quote:
    Originally Posted by Abster2core View Post


    No he can't and Steve wouldn't let him.



    Countries have laws against companies 'stealing' employees from other companies. Otherwise, one could simply just take best out of a company, destroying it and the lives of those that were left behind.



    IBM was in their right to protect their intellectual property. And for heavens sake, all they wanted in the first place was a guarantee that their annual strategic plans and developments in progress that Paymaster was involved in creating were not disclosed in any manner for a period of one year.




    Really. Since this is the US what laws in particular are you referencing? Employment law is pretty gray with regards to what rights a former employee has. In fact many states will likely start ruling that non-competes are unconstitutional. Which in a nutshell means that if an employer cannot make an oath to abstain from working in a similar field a requirement of employment it stands that an ex employee would be bound by even more tenous strings to the former company. IBM has no case.



    http://www.sfgate.com/cgi-bin/articl...BUUH12716R.DTL





    In a unanimous decision, the justices said state law since 1872 has forbidden what are called noncompete clauses that restrict management employees' options after they leave a company.



    Nearly every other state allows such agreements, said Richard Frank, a San Francisco lawyer who has represented companies on both sides of the issue.



    The ruling "advances the strong California policy favoring open competition and employee freedom," said Frank, who was not involved in the case. "Those have been drivers of the state's economy, especially in the technology area."




    IBM will claim victory but they've had none.
  • Reply 14 of 29
    Quote:
    Originally Posted by Alonso Perez View Post


    I think the whole intent was not about Paperclip, but about providing a negative incentive to other key employees ...



    Quote:
    Originally Posted by Abster2core View Post


    Certainly Paymaster was not harmed. In fact, such efforts by IBM to retain him or take the actions that they did most likely raised his level of importance ...



    I'm guessing iPhone autocorrection?
  • Reply 15 of 29
    mark2005mark2005 Posts: 1,158member
    Quote:
    Originally Posted by BlackSummerNight View Post


    If they had no case, then why would he be ordered to sign anything?



    So as not to get into stuck in litigation that would drag out beyond Apr 24.



    He was not "ordered" to sign anything. This was a compromise that both Papermaster and IBM agreed to in order to end the litigation. The Court, as well, was agreeable to see it end.
  • Reply 16 of 29
    Quote:
    Originally Posted by hmurchison View Post


    I think this was likely an agreement to provent a protracted legal

    battle but I have a hard to believing that our Government would back

    such frivolous cases.



    I think you're giving our government too much credit. I'd be willing to bet the Supreme Court would have been happy to rule on this.
  • Reply 17 of 29
    cubertcubert Posts: 728member
    Ahhhh.....brings back memories of the NDA that I had to sign last year in exchange for a 6 month severance package when I left the hospital I was working at.



    See, it pays to be in a few porn flicks and then have your boss find out - they run for the hills scared at what the public's reaction will be and all the potential negative publicity. Quite a good way to get out of a job you don't like.
  • Reply 18 of 29
    Quote:
    Originally Posted by Johnny Mozzarella View Post


    This reminds me of another famous case where an executive was forced out of a major computer company. He left and created a rival computer company that eventually took over the company that forced him out.



    I don't believe he had a non-compete clause in his contract.



    Actually he did and he was sued (unsuccessfully; better yet, Apple settled out of court to save face) on similar stupid grounds. See below an excerpt from the excellent book Apple Confidential:



    "Jobs’ resignation didn’t appease Apple. On September 23, the company filed a suit against Jobs and Page, enjoining them from using any proprietary information and charging Jobs with dereliction of his duties as chairman."
  • Reply 19 of 29
    neilmneilm Posts: 589member
    Quote:
    Originally Posted by hmurchison View Post


    "In a unanimous decision, the justices said state law since 1872 has forbidden what are called noncompete clauses that restrict management employees' options after they leave a company.

    ...

    The ruling 'advances the strong California policy favoring open competition and employee freedom,' said Frank, who was not involved in the case."



    Although it may turn out to be a sign of things to come, it's worth emphasizing that the case cited above was in California, whereas IBM filed its case in New York. On the face of it IBM didn't seem to have made much of a case for themselves here, and the resolution comes down to Papermaster having to certify that he's not doing what both he and Apple said he wouldn't be doing anyway.



    These issues are a balancing act. A company has the right to its intellectual property, but individuals have a right to choose where to work in their chosen field.



    As usual the lawyers did OK though...
  • Reply 20 of 29
    thttht Posts: 3,108member
    Quote:
    Originally Posted by Alonso Perez View Post


    Actually I think he did, so the new company couldn't sell to consumers but had to focus on the workstation market, thus creating a robust platform. This is just an IIRC, so if anybody can correct this, please do.



    Yup. Jobs, who also brought 5 very talented Apple folks with him to form NeXT, was sued by Apple and he had to agree to build computers that didn't compete with Apple's computers. If the same thing happened today, I think it would be a very long and protracted fight as Jobs' heart is in consumer devices and he really doesn't care that much about corporation or even educational machines that much.



    What happens next with Papermaster? Uh, business as usual. OS X will be the core of all Apple devices short of the iPod shuffle/nano/classic. With him replacing Fadell, and Rubenstein, I'd imagine Apple will be branching out to devices beyond iPod touches or iPhones.
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