More Maneuvers in IBM/Apple Lawsuit

IBM plans to depose top Apple leaders in its legal quest to stop a former executive from jumping ship to Apple, according to filings in the case. Meanwhile, the former IBM executive is appealing a court injunction barring him from working at Apple while a court sorts through the legal battle IBM is waging to keep Apple from hiring the long-time exec.

Mark Papermaster, formerly IBM’s (NYSE: IBM) vice president of blade development, has asked an appellate court to overturn New York Federal District Judge Kenneth Karas’ injunction issued November 7 that prevents him from accepting a job running Apple’s iPod and iPhone product development.

Papermaster filed his appeal November 20 in the United States Court of Appeals for the Second Circuit and requested an expedited review, according to an IBM court memo recently filed in the case. The memo also includes a request by IBM to temporarily suspended the initial lawsuit until the appeal decision is rendered. The appeal argument is slated to be heard January 12.

The memo also states IBM intends to depose several senior Apple executives as part of its trial discovery process but does not name specific employees.

“IBM believes that there is no merit whatever in the course that Mr. Papermaster now wishes to follow which is to pursue processing on an expedited basis in both Courts simultaneously,” states the memo, noting that a appellate ruling could affect trial discovery issues.

“One expedited adjudication should suffice and Mr. Papermaster’s current effort to seek two early determinations are ill advised and not a sound use of judicial resources,” states the memo.

As part of the injunction IBM was ordered to post a $3 million bond for potential compensation in case the injunction is determined unjust.

“In IBM’s view it does not make any sense to be pursuing an expedited appeal of the preliminary injunction at the same time that the parties are preparing for an early trial,” states the memo submitted by IBM’s lawyers, Cravath, Swaine and Moore.

Karas has set February 24 as the trial date in the legal saga between IBM and Apple. The clash ignited October 22 when IBM filed suit to stop Papermaster from working at Apple. IBM claims it would be in violation a non-compete agreement that bars the 26-year former IBM leader from working for a competitor for a full year.

In its suit IBM claims Papermaster’s deep knowledge of its microprocessor and semiconductor technology precludes him from working at Apple, or any direct competitor, for one year, according to the terms of the 2006 non-compete agreement.

Papermaster countersued November 13, claiming the noncompete agreement he signed is too broad and that the two companies are not direct competitors. He also claims the agreement imposes an unreasonable time limitation and geographic restriction.

Karas has declined IBM’s request to suspend the initial trial and said both court actions can proceed simultaneously.

“The court sees nothing wrong with Mr. Papermaster’s decision to expeditiously appeal the preliminary injunction and to try this case,” Karas handwrote on the memo document.

Lawyers for both IBM and Papermaster have told they will not comment on their court actions during the legal process.

In asking for the temporary suspension, IBM said trial preparation will be “substantial” given Papermaster’s discovery document demands. According to the IBM memo those demands include all documents since 2006 concerning IBM’s business plans, all documents concerning IBM’s server business segment and identification of all personnel employed in IBM’s public relations department since 2006.

According to the trial schedule both parties must have a list of all witnesses for testimony by January 28. All expert discovery is to be completed by February 13 and trial exhibits are to be ready by February 16. A final pretrial conference is et for February 23.

During the legal fray Papermaster has also switched out his initial legal team, replacing Latham & Watkins with Weil, Gottschalk and Manges as noted in a court filing on December 3.

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