Papermaster Cleared to Join Apple

With just a month to go before they were due in court, Apple and IBM have resolved their legal battle over whether Apple could hire Mark Papermaster away from IBM, despite a non-compete contract he signed with Big Blue.

Papermaster, formerly IBM’s (NYSE: IBM) vice president of blade development, is expected to lead Apple’s (NASDAQ: AAPL) iPod and iPhone hardware engineering teams starting on April 24.

“IBM and Mr. Papermaster have agreed on a resolution of the lawsuit under which Papermaster will remain subject to all of his contractual and other legal duties to IBM, including the obligation not to use or disclose IBM’s confidential information,” IBM told in an e-mailed statement.

The legal resolution, according to IBM, requires Papermaster to certify in court this July and in October that he has complied with legal obligations not to use or disclose IBM’s confidential or proprietary information in his duties with Apple.

The agreement ends a legal clash that erupted last October 22, 2008 when IBM filed suit against Apple to stop Papermaster from jumping ship.

IBM had claimed it would be in violation a non-compete agreement that bars the 26-year IBM veteran from working for a competitor for a full year.

IBM claimed Papermaster’s deep knowledge of its microprocessor and semiconductor technology should preclude him from working at Apple. A court then issued a temporary injunction barring Papermaster from starting his Apple job.

Papermaster then countersued November 13, claiming the non-compete agreement he signed is too broad and that the two companies are not direct competitors. He also claimed the agreement imposed an unreasonable time limitation and geographic restriction.

Papermaster also filed an appeal in regards to the employment injunction and requested an expedited review, according to an IBM court memo.

Apple issued a brief statement about the issue, which said the “litigation between IBM and Mark Papermaster has been resolved.” The announcement does not indicate the certification stipulation or that Papermaster will report to Apple CEO Steve Jobs, as had been reported and expected of Papermaster.

Since the lawsuit, Jobs has announced a medical leave and tapped Tim Cook, Apple’s chief operating officer, to run the company until his return, expected by the end of June.

Calls to Apple to clarify who Papermaster will report to were not returned by press time.

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