Apple recruits top chip designer, IBM responds with suit

Posted:
in Future Apple Hardware edited January 2014
Apple recently recruited a top chip designer from IBM, resulting in a lawsuit that seeks to prevent the executive from taking his knowledge as "IBM's top expert in Power architecture and technology" to the Mac maker.



Mark Papermaster, who served as IBM's vice president of microprocessor technology development, is set to join Apple within the next couple weeks to begin working closely with chief executive Steve Jobs. According to a report by Tom Krazit of CNet News, IBM's complaint filed in the U.S. District Court for the Southern District of New York indicates that IBM believes this is "an attempt to expand Apple's presence in the markets for servers and chips for handheld devices."



IBM has issued a statement saying "Mr. Papermaster's employment by Apple is a violation of his agreement with IBM against working for a competitor should he leave IBM. We will vigorously pursue this case in court."



AppleInsider is making available both a copy of IBM's 10-page complaint [PDF], as well as the 7-page noncompete agreement [PDF] signed by Papermaster in June of 2006.



PowerPC and PA Semi



Papermaster is the author of a number of papers on chip development at IBM. While Apple has transitioned its Macs from PowerPC to Intel, IBM continues to design and build PowerPC processors for applications from autos to all the major game consoles to workstations and servers. Papermaster's current position has been to manage the company's blade server division.



Apple recently acquired PA Semi, a fabless chip developer that had just introduced a new, highly efficient processor based on a PowerPC design. While pundits immediately began to assume that the company would transition back to PowerPC, the more obvious motivation, cited early by AppleInsider, related to new custom hardware Apple could create using the expertise of PA Semi's brain pool. Jobs later reported that the company would be using the new facilities to develop custom silicon for its handheld devices.



Xserves and blades



CNet observes that "a spruced-up Xserve blade server could be a nice complement to the Mac if Apple ever gets serious about tackling the enterprise market" but also cited analyst Gordon Haff, who "believes that Apple is unlikely to plunge back into the server market headlong after successfully pulling off the transition from a computer company to a consumer electronics company."



A blade server is a high density, self contained server built into a card or module that allows for many independent server "blades" to be packed together in a small space. Apple's 1U Xserve is a slim server, but is not a blade server design. Apple sells its Xserves to broadcasters and video pros, education, and the hospitality industry, such as cruise ships and hotels that rack up Xserves to deliver video on demand services. Building a true blade server would have only a moderate impact on the space consumed by such applications. Given the current size of Apple's server business, it is unlikely the company is desperate to enter the blade server market, even if Papermaster has experience in that product segment at IBM.



It's further suggested that Apple may want to get into the blade server business to support its MobileMe services, writing, "if Apple ever wants to be a major player in the future of Internet-delivered services, it's going to need a lot of computing power at its disposal."



Of course, Apple already has massive power at its disposal, running the iTunes Store as the largest video and music retailer on the planet, as well as the iPhone App Store, the most successful mobile software outlet. It also runs the online Apple Store, one of the most significant online computer retailers, and of course MobileMe, which is pioneering easy-to-use cloud computing services for consumers.



Apple's chip design brain trust



As was the case with PA Semi, the hiring of Papermaster is most likely an effort to build Apple's brain trust in chip development. The expert team Don Dobberpuhl assembled at PA Semi is certainly familiar with IBM's PowerPC technologies already, but Papermaster could provide broader expertise or management experience to Apple. It appears PA Semi will be developing ARM SoC or 'system on a chip' devices that serve as the integrated CPU, GPU, and other functions for mobile devices such as the iPhone and iPod touch. Apple also uses ARM SoCs in its AirPort base stations and appliance servers such as Time Capsule.



Custom designed chips could also find their way into the company's Macs, although the latest crop of notebooks released this month indicate Apple has invested in pairing Intel's CPU with NVIDIA's new controller with relatively powerful integrated graphics. The company has a significant history of building custom parts for new devices or features that were unserved by the generic commodity market.



Suing Papermaster



Whatever Apple has planned for Papermaster, IBM's complaint may not have much to stand upon. CNet notes that "noncompete clauses are generally considered worth less than the paper they are printed on in California," and concludes "Papermaster's hire might wind up as a partial solution to all those questions over what Apple should do with its pile of cash: give a chunk of it to IBM to make this case go away."



Likely for the same reason, IBM has filed its case against Papermaster in New York. The company's complaint describes the 26 year IBM veteran as a member of the "elite Integration and Values Team (I&VT), a group comprising the 300 senior managers of the Company."



IBM says Papermaster "has spent much of his career working in IBM's Systems and Technology Group, more specifically developing 'Power' architecture, a set of confidential know-how belonging to IBM, and using 'Power' architecture to design, develop, and manufacture microprocessors and servers based on that technology."



Referencing Papermaster's current position as vice president of IBM's Blade Development unit, the complaint notes that "IBM's blade model servers [are] based on technology other than 'Power.'"



The complaint also says "Apple and IBM are competitors in the design, manufacture and sale of electronic devices, including servers, personal computers, and microprocessors," noting that while IBM sold its PC business to Lenovo, it continues to hold an interest in that company and generates "significant revenues" from it. It also lists Apple's Xserve as a direct competitor to IBM's System x and BladeCenter lines of small servers.



IBM's complaint says "the relationship between Apple and IBM will become even more competitive in the future." It notes Apple's acquisition of PA Semi, and states that "IBM and PA Semi have been competitors since at least 2006, when Apple, then a customer of IBM, considered replacing IBM's PowerPC microprocessors, which Apple used to incorporate in its line of personal computers, with microprocessors designed by PA Semi."



IBM offered Papermaster "a substantial increase in his total compensation package" to stay at IBM, including "one year's salary." The complaint says Papermaster asked for time to consider the offer, then submitted his resignation the next day.
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Comments

  • Reply 1 of 95
    Bwahahahahaha. I don't care what happens to Motorola and IBM. Both traitorous companies. I hope they lose this lawsuit.
  • Reply 2 of 95
    How stupid is this noncompete agreement?



    It appears to mean if you specialise in a certain area, then that means you have to work for the same company for life.



    Imagine if it applied to chefs, or lawyers, or teachers.
  • Reply 3 of 95
    I'll be first inline if this recruit means what I forsee it to mean.



    Come on Apple, get some balls and do what was conveyed to us, back in 1997, and if so, I just might suck it up and return to the Bay area. That is, if it speculates to what this hire and other recent hires may produce.
  • Reply 4 of 95
    Quote:
    Originally Posted by columbus View Post


    How stupid is this noncompete agreement?



    It appears to mean if you specialise in a certain area, then that means you have to work for the same company for life.



    Imagine if it applied to chefs, or lawyers, or teachers.



    It certainly is ridiculous. It's why the world is so fucked up today. Everything is about money and, consequently, competition.



    People say that competition is what drives better products and accelerates technological evolution. This is *completely* false!!!



    Competition and money absolutely slows down technological evolution. IBM will do everything to stop the knowledge from spreading outside its boundaries because it'll lose its competitive edge which would then translate into a loss of money. If competition and money were never an issue, knowledge would spread rapidly and evolution would happen quickly.



    Possibly the most blatant example of slow evolution is the plague that is oil companies that are turning in record profits right now. Oil companies have always slowed down alternative energy inventions by buying rights and sitting on the technology or outright clandestinely sending thugs to kill the inventors that did not accept their offer they couldn't (read shouldn't) refuse.
  • Reply 5 of 95
    "Noncompete's" are worthless, but NDA's aren't. So, if he's called upon to employ knowledge specific to IBM for his new position at Apple, they could be in more serious trouble. This lawsuit is ridiculous because nothing's happened yet. How can you sue for damages when none have been done?
  • Reply 6 of 95
    ksecksec Posts: 1,554member
    LOL, every time i hear law suit in amercia i just cant stop laughing......
  • Reply 7 of 95
    So IBM offers this guy a major increase in his compensation as well as a year's pay if he stays and he still leaves. Why?



    If you want to really keep someone you increase compensation before they're ready to leave, not as a last minute effort.



    If you really want to keep someone you ensure they are in a job they love so much that they would never leave.



    Maybe IBM failed on both counts and Apple presented a future that got him excited again.



    Maybe he looked at his future with IBM and wasn't that excited.



    The fact that IBM failed to keep him says more about IBM than Apple. The way IBM handles this departure may well open other top people there to think about their options also.
  • Reply 8 of 95
    Quote:
    Originally Posted by mdriftmeyer View Post


    I'll be first inline if this recruit means what I forsee it to mean.



    Come on Apple, get some balls and do what was conveyed to us, back in 1997, and if so, I just might suck it up and return to the Bay area. That is, if it speculates to what this hire and other recent hires may produce.



    Huh? What are you refering to
  • Reply 9 of 95
    Quote:
    Originally Posted by SpamSandwich View Post


    "Noncompete's" are worthless, but NDA's aren't. So, if he's called upon to employ knowledge specific to IBM for his new position at Apple, they could be in more serious trouble. This lawsuit is ridiculous because nothing's happened yet. How can you sue for damages when none have been done?



    I agree non-competes are worthless, but all he has to do is not disclose the salient information in the NDA which isn't hard.



    If I'm building an X at IBM under an NDA and I go to Apple and they say, build me an X, I can do so without effect from the NDA, as long as I don't say "hey, I built one just like this at IBM, with these features...".



    Anyway this is a yawnfest except that it's a another confirmation that Apple is getting into the chip design business. Good on 'em.
  • Reply 10 of 95
    irelandireland Posts: 17,570member
    I just deleted some honesty
  • Reply 11 of 95
    irelandireland Posts: 17,570member
    Quote:
    Originally Posted by SpamSandwich View Post


    "Noncompete's" are worthless, but NDA's aren't. So, if he's called upon to employ knowledge specific to IBM for his new position at Apple, they could be in more serious trouble. This lawsuit is ridiculous because nothing's happened yet. How can you sue for damages when none have been done?



    That's a fair point. Steve could end up in court having to admit to Mac touch though. Sue!!
  • Reply 12 of 95
    nasseraenasserae Posts: 3,153member
    This reminded me of the movie "Pay Check". I guess some companies are suffering from extreme condition of paranoia
  • Reply 13 of 95
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by SpamSandwich View Post


    "Noncompete's" are worthless, but NDA's aren't. So, if he's called upon to employ knowledge specific to IBM for his new position at Apple, they could be in more serious trouble. This lawsuit is ridiculous because nothing's happened yet. How can you sue for damages when none have been done?





    I think the value of non-compete contracts vary by state. From what I understand, the state of California won't enforce such a contract, but if he's really from New York, that may be different. And this is a federal suit as well.





    Quote:
    Originally Posted by mdriftmeyer View Post


    I'll be first inline if this recruit means what I forsee it to mean.



    Come on Apple, get some balls and do what was conveyed to us, back in 1997, and if so, I just might suck it up and return to the Bay area. That is, if it speculates to what this hire and other recent hires may produce.





    I can't piece together anything that makes sense here.
  • Reply 14 of 95
    Lol, that was somehow funny to read. Its ironic that last time S.Jobs consider IBM as Darth Vader and now he recruits someone from IBM, though I understand why. Can't wait to see what kind of processor will Apple produce from PA Semi
  • Reply 15 of 95
    Quote:
    Originally Posted by JeffDM View Post


    I think the value of non-compete contracts vary by state. From what I understand, the state of California won't enforce such a contract, but if he's really from New York, that may be different. And this is a federal suit as well.











    I can't piece together anything that makes sense here.



    i think he is talking about a return to PowerPC





    I cant see that happening though
  • Reply 16 of 95
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by skottichan View Post


    i think he is talking about a return to PowerPC



    I cant see that happening though



    And they were already using PPC in 1997.



    It was the sentence structure was what gave me trouble, I couldn't tell what it was saying.
  • Reply 17 of 95
    kolchakkolchak Posts: 1,398member
    Quote:
    Originally Posted by columbus View Post


    How stupid is this noncompete agreement?



    It appears to mean if you specialise in a certain area, then that means you have to work for the same company for life.



    No, it doesn't. Read the agreement. It has the standard clause limiting it to one year after he leaves the company. He's free to legally work for whomever he wants to after that year is up.
  • Reply 18 of 95
    Based on a thorough reading of both documents, Papermaster will just HAVE TO chill, until a year from now.



    It means PA Semi/Apple will need to do without Papermaster's expertise, for the next 12 months.



    Either it delays Apple's chip design; takes Apple's chip design in a potentially different direction than if Papermaster were involved; OR demonstrates that Apple's engineers were able to accomplish the same or better, without Papermaster.



    At any rate, it's all a moot point now that IBM has gone All Legal.



    At the rate those lawsuits get strung out, it will be a year from now before you know it, and things will play out.



    I meant to title this:

    Legally Papermaster will have to chill until Oct 25, 2009, not 08
  • Reply 19 of 95
    ouch, guess we have to wait for another year for iPhone 3G 2nd Gen
  • Reply 20 of 95
    hmurchisonhmurchison Posts: 12,257member
    Apple's not going to get into Blade Servers and the Enterprise.



    Papermaster is probably going to work on some new unannounced

    mobile product.
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