Now Hear This!

Mark Papermaster -- the engineer who IBM took legal action against for breach of a non-compete agreement after he attempted to move to Apple Inc in early November -- will start in his new position at the iPhone maker on April 24.

IBM announced it settled its preliminary injunction with Papermaster Tuesday, allowing the EE to move to Apple where he will lead the company's iPod and iPhone hardware engineering teams as senior VP of devices hardware engineering, but with a few strings attached.

After Papermaster left IBM to begin employment with Apple, IBM claimed such a move violated Papermaster's non-compete agreement, inked in IBM's home state of New York in 2006 and stating that he could not work for an IBM competitor for a year after leaving the company.

Papermaster, a 26-year IBM veteran who worked on the PowerPC architecture and most recently worked in IBM's blade server division, argued that there are "significant differences between IBM's business (focused on large-scale machines for business) and Apple's business (focused on consumer-oriented) electronics" and, as such, Apple should not be considered a competitor to IBM. In contrast, IBM argued that, post Apple's buy of PA Semi, the company did compete with it because PA makes MPUs based on the PowerPC architecture.

A judge agreed with IBM, saying that attempt to distinguish between large-scale and consumer electronics are mute points because electronic devices--large and small--are powered by the same type of intelligence, MPUs. As Papermaster is considered a PowerPC expert, he was held back from his employment at Apple.

With the preliminary injunction concluded, he's free to move on, but not until six months after his leaving IBM (on the April 24 start date).

Papermaster will also 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.

Further, Papermaster will be required to certify, in July and again in October, that he has complied with his legal obligations not to use or disclose IBM’s confidential or proprietary information.

And the preliminary injunction will be replaced by a court order under which the court will have continuing jurisdiction over this matter, including compliance enforcement powers, until October 24, 2009, one year after Papermaster’s departure from IBM.

What do you think about the outcome of this legal action? Is it fair that Papermaster how to certify for the next year that he is complying with the non-compete agreement? Share your thoughts on non-compete agreements, Papermaster's situation, and IBM's argument in the matters below.