When Judge Kenneth Karas order Mark Papermaster to “immediately cease his employment with Apple,” he also order IBM to post a bond of $3 million by November 14, 2008. The court reported on Thursday that IBM had met that deadline and posted the bond one week ago.
The $3 million bond was put in place to pay Papermaster should the court decide IBM’s case is without merit and the injunction against Papermaster shouldn’t have been granted. Final damages will be decided by the court, but they won’t exceed the bond amount.
Apple announced on November 4 that Papermaster would join the company as senior vice president of Devices Hardware Engineering. However, IBM says that Papermaster has knowledge of “significant and highly confidential IBM trade secrets” that would “irreparably harm” the company if he is allowed to work for Apple.
The court issued an injunction forbidding him from working for Apple until the case could be settled, but Papermaster went on the offensive last week and countersued IBM.
Papermaster contends that IBM’s noncompetition agreement precludes him from working for any Business Enterprise or any major competitor of IBM. The lawsuit argues that since IBM business enterprise services and Apple’s business is the design, manufacturing and marketing of consumer electronic products, the two are not major competitors.
He also said that when he accepted the job at Apple, he signed an Intellectual Property Agreement in which he agreed not to disclose or bring onto Apple property any “confidential, or proprietary, or secret information” of IBM.