IBM Fears Papermaster Could Design Rival Apple Chips

IBM is rejecting former employee Mark Papermaster's claim that his move to Apple doesn't violate his non-compete contract because Apple and IBM are not competitors.

"There are very significant problems with Mr. Papermaster's argument and, therefore, with the conclusion he draws from it," says Rodney Adkins, IBM's senior VP for Systems and Technology.

Adkins, in a court filing, notes that IBM manufactures microchips that could be used in Apple devices such as the iPhone and the iPod, and that IBM used to supply Apple with Power PC processors for use in Macs. "The trade secrets and confidential know-how that Mr. Papermaster has in his possession can be used for extensive and far-reaching applications in the field of consumer electronics," Adkins states.

IBM sued Papermaster, who was one of the company's top chip experts, last month. IBM is asking U.S. District Court in New York to block for at least one year the engineer's move to Apple, where he's been named senior VP for devices hardware engineering. Papermaster's position in Cupertino violates "his contractual obligation to refrain from working for an IBM competitor for one year" after leaving the firm, IBM states in its complaint against Papermaster.

A federal court judge ruled Friday that, for the time being at least, Papermaster must not work at Apple.

Papermaster, who was VP over IBM's Blade Development unit, maintains that Apple and IBM don't compete. "To the best of my knowledge, IBM does not design, manufacture, or market consumer electronic products," says Papermaster, in his own filing. "Instead, IBM focuses on high-performance business systems such as information technology infrastructure, servers and information storage products, and operating systems software," Papermaster states.

But Adkins notes that IBM's Power architecture has a broad range of applications. "That technology is not specific to designing microprocessors for server products," says Adkins. "It is also used to design microprocessors for consumer electronics.

The case is ongoing.