Via Statesman.com (Austin) -
AUSTIN, Texas — One of the top engineering executives at IBM Corp.'s Austin operations is jumping to Apple Inc. But IBM has filed suit in an effort to keep Mark Papermaster, one of its top executive stars.
Apple announced Tuesday that Papermaster would be the new senior vice president in charge of hardware engineering for the iPod and iPhone.
He will report directly to chief executive Steve Jobs and replace Tony Fadell, who ran the iPod division. Fadell will become an adviser to Jobs. "Mark is a seasoned leader and is going to be an excellent addition to our senior management team," Jobs said.
Papermaster is a 26-year IBM veteran who managed the Power4 and Power5 processor development efforts, two important projects that helped bolster IBM's status as a leading maker of Unix-based computers.
He most recently oversaw IBM's blade server development.
IBM filed suit in U.S. District Court in New York in late October, saying Papermaster's departure violated an agreement he signed in 2006, which barred him from taking a job with an IBM competitor for a year after leaving Big Blue.
The lawsuit describes Papermaster as being part of an elite group of 300 senior executives who have "confidential information concerning the company's strategic plans, marketing plans and longterm business opportunities, including the development status of specific IBM products."
The filing also said the two companies compete in several areas, and that they "will become even more competitive in the future."
That is a reference to Apple's purchase in April of PA Semiconductor, a California designer of low-power chips based on IBM's PowerPC technology.
In the lawsuit, IBM claims that Apple plans to expand its presence in the server business through the acquisition and the Papermaster hiring.
Additionally, IBM said it believes that Apple plans to design its own chips for a variety of devices, including hand-held devices.
Some industry analysts say Apple wants to escape its dependence on Intel Corp., which has been its main supplier of computer processors since 2005. Before then, Apple bought PowerPC chips from IBM and Freescale Semiconductor.
"A lot of us think (the PA Semiconductor acquisition) was to break the hard link they have with Intel," said Rob Enderle, an industry analyst with the Enderle Group. "When you have a single vendor, as they have, it gives them a lot of clout on price, and Steve Jobs doesn't like to pay the market price."
Enderle said it was rare for IBM to resort to a lawsuit over a departing executive. He said Apple will have to be careful about Papermaster's early jobs to make sure IBM does not accuse him of stealing trade secrets.
"Apple clearly has been sued in the past, and they will go to extreme lengths to make sure that IBM won't have a claim against (intellectual property) they produce."
In the lawsuit, IBM said it offered to give Papermaster a substantial raise if he would stay with the company and also offered to pay him a year's salary if he agreed to refrain from working for a competitor for a year.
According to the lawsuit, Papermaster resigned the next day. He could not be reached for comment.
IBM didn't go to court to keep two other former senior executives from jumping to rivals.
Jeff VerHeul went to work for Advanced Micro Devices Inc. in 2005 after 25 years at IBM. Chekib Akrout left IBM that year to join Freescale. He now works for AMD.
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