IBM wants info from Apple execs in Papermaster case

Gregg Keizer
3 December, 2008
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IBM has asked for information from several unnamed senior officials at Apple as part of the discovery process in the lawsuit to block a former executive from joining Apple, according to court documents made public yesterday.

Those documents also revealed that the federal judge overseeing the case denied IBM’s request to postpone the trial while awaiting a decision from an appellate court.

U.S. District Court Judge Kenneth Karas rejected IBM’s call to delay the trial of Mark Papermaster, the 26-year veteran of the company who resigned in October to take a senior position at Apple, where he was to head iPhone and iPod development. IBM made the request after Papermaster appealed Karas’ Nov. 7 ruling that forced him to stop working at Apple.

IBM objected to the simultaneous pursuit of both the original lawsuit and the appeal, arguing that the former should be delayed until the results of the latter had been decided.

“There is little point in requiring this Court and the parties to expend the very substantial efforts required to prepare this case for trial in February if the question of Mr. Papermaster’s ability to commence his proposed new employment at Apple is to be determined by the Court of Appeals in late January or early February,” said IBM’s lawyers in a memorandum to Karas dated Nov. 21.

Instead, said IBM, Karas should put the trial on hold until Papermaster’s appeal is heard.

Karas turned down IBM, writing on the memo: “The Court sees nothing wrong with Mr. Papermaster’s decision to expeditiously appeal the preliminary injunction and to try this case. Accordingly, the Court has adopted, with minor changes, the schedule greed to by the Parties.” He then set trial to begin on or after Feb. 24, 2009.

Papermaster went to the U.S. Court of Appeals for the Second Circuit in the hope that it will overturn Karas’ injunction that prevents him from working at Apple. Karas barred him from the California company after five days on the job, agreeing with IBM that he might cause “irreparable harm” to his former employer.

At the heart of the lawsuit is a 2006 non-competition agreement that Papermaster signed. IBM claimed that the agreement barred him from working for competitors for a year after leaving the company. According to IBM, Papermaster had information of “highly confidential IBM trade secrets” that would damage the firm if he was allowed to work for Apple.

Elsewhere in the documents posted yesterday were references to requests by both IBM and Papermaster for depositions and documents as part of the discovery process, under which the parties are allowed to gather evidence.

IBM apparently has asked to depose several “senior executives of nonparty Apple Inc.,” according to the company’s memo to Karas. Those executives, however, were not named. Earlier filings had spelled out Apple’s recruiting of Papermaster, and said that he interviewed in October with, among others, CEO Steve Jobs and the senior vice president, Tony Fadell, who currently heads the company’s iPod business. Fadell is stepping down from his post, but will remain as an advisor to Jobs.

Stephen Madsen, an attorney with Cravath, Swain, & Moore of New York, the firm representing IBM in the case, was not immediately available to answer questions about who at Apple had been asked to provide information.

For his part, Papermaster has asked that IBM turn over documents his lawyers believe pertain to the case.

In its memo, IBM noted the requests in a footnote. “Our conviction that the trial preparation will be substantial has been heightened by discovery demands just served by Mr. Papermaster, which seek, among many other things, ‘all documents since 2006 concerning IBM’s business plans’ [and] ‘all documents concerning IBM’s server business segment,’” the footnote stated. IBM said that it had been served those requests, and others, on Nov. 20.

Papermaster has countersued IBM, arguing that the non-competition agreement is unenforceable and too broadly written, while IBM has had to post a $US3 million bond to cover any costs or damages that Papermaster might suffer if Karas’ injunction is, in fact, overturned.

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