Apple issued a press release today stating that the litigation between IBM and former IBM executive Mark Papermaster has been resolved and that Papermaster will commence employment with Apple on April 24, 2009. Papermaster will join Apple as its senior vice president of Devices Hardware Engineering, reporting to Apple CEO Steve Jobs.
This development takes place 81 days after Judge Kenneth Karas of the Southern District of New York enjoined Papermaster from violating his Noncompetition Agreement by working in a competitive position for Apple. The April 24, 2009 date is significant because it is exactly six months after Papermaster’s October 24, 2008 resignation from IBM. As such, it appears that the parties compromised by agreeing that Papermaster would comply with half of the one-year non-compete period set forth in the Papermaster’s Noncompetition Agreement.
Judge Karas also entered a Consent Order and Stipulated Order of Dismissal with Prejudice today. That Order sets forth the contours of the Parties’ settlement in greater detail. Papermaster can commence work with Apple on April 24, 2009, but he remains under an obligation not to use or disclose any IBM Confidential Information, as that term is defined in his Noncompetition Agreement.
In light of the fact that IBM asserted in its pleadings that Papermaster would inevitably disclose IBM’s Confidential Information by working for Apple, the non-disclosure requirement does create some enforcement dilemmas for the parties. To address those dilemmas, the Order sets forth that Papermaster will contact IBM’s Vice President and Assistant General Counsel Ron Lauderdale if he has questions as to whether specific information meets the definition of Confidential Information. IBM’s determination must be “made promptly, reasonably and in good faith,” but such a determination shall be “final and binding and not subject to review in any way.” Between July 1 and July 15, 2009 and then again between October 1 and October 15, 2009, Papermaster must execute a statement under penalty of perjury that he has not used or disclosed IBM Confidential Information, and that he does not intend to do so.
Judge Karas’s Order also dissolved the November 7, 2008 preliminary injunction in the case and dismissed IBM’s claims and Papermaster’s counterclaims with prejudice