Apple and IBM have settled a legal dispute over a senior executive’s change of employer. Mark Papermaster will be allowed to take up his role at Apple, but must make regular legal vows that he hasn’t breached confidentiality agreements.

Papermaster left his role at IBM last October but the firm went to court to uphold a contract clause which barred him from working for a rival for a year. The dispute centered on whether Apple was a direct competitor and whether he’d be carrying out similar work in his new role.

The two sides reached an agreement last Friday, which has just been made public. In what looks to be a fairly logical compromise, Papermaster will take up his new post as head of iPod and iPhone development on April 24, six months after leaving a role in IBM’s server division.

He’ll have to sign a legal declaration to say he has not and will not disclose any information that’s deemed confidential under his original contract. He’ll then have to sign the declaration again in July and October (at which point the original no-compete clause expires).

During this time, if Papermaster is uncertain whether any information he wants to share with Apple is classed as confidential he must consult IBM’s vice president Ron Lauderdale and abide by his ruling. Even if Apple thinks IBM is being unreasonable in its interpretation, it can’t appeal in court. (That seems to suggest that if there is a gray area, Papermaster would be better off keeping quiet and, if questioned, claiming the idea of the relevant information being confidential never occurred to him.)

There’s no word on any financial element to the settlement. There had been some serious cash at stake, with IBM only getting a temporary block on Papermaster taking up his post in return for depositing $3 million into court in case a judge later ruled the injunction invalid and ordered that Papermaster and Apple get compensation. As the case was settled without the need for a ruling, that money should go back to IBM.

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Entry was posted on Wednesday, January 28th, 2009 at 4:14 pm under Apple, Legal.

Read more entries by John Lister.
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