Chicago (IL) - IBM will keep a very close eye on Mark Papermaster, its ex-top executive and Apple's new chief of iPod and iPhone hardware development. New court filing reveal that the two signed a declaration which legally binds Papermaster to check in with IBM's legal counsel whenever he's unsure if anything about his new job at Apple might clash with IBM's trade secrets. In addition, Papermaster is required to sign and deliver two such declarations in July and October and repeat, under penalty or perjury, that he has not violated a non-compete agreement with IBM. These conditions are set to expire after October 24, 2009, a date one year after Papermaster left IBM.

As TG Daily reported yesterday, Apple announced that Papermaster is now clear to step in on April 24 as the new chief of iPod and iPhone hardware development. The consumer electronics giant hired Papermaster as a successor to Tony Fadell who recently retired but retained his "advisor to the CEO" status. However, a settlement between IBM and its ex-"top exec" comes with some fine print. According to the usually well-informed AppleInsider, Papermaster signed court-governed documents which state he has not divulged IBM's trade secrets while working for Apple.

The document legally binds the executive to check in with IBM's vice president and chief counsel Ron Lauderdale whenever he's unsure if anything about his new job at Apple might violate the non-compete agreement he signed with IBM on June 21, 2006. If Papermaster pursues problematic activities at Apple despite Lauderdale's possible objection, which is not subject to review, he could face a perjury conviction. In addition, Papermaster must sign two more such declarations, one in July and another in the first half of October. These requirements are set to expire on October 24, which would coincide with one full year after Papermaster resigned at IBM, at which time IBM's lawsuit (and Papermaster's countersuit) will be rendered null.

IBM's insurance policy

A copy of the five-page declaration, obtained by AppleInsider, specifically states that Mark Papermaster "has not" and "does not intend" to disclose or otherwise use in any way IBM's trade secrets other than "information that IBM has publicly disclosed or which otherwise has become public." In addition, the document says that Papermaster "will abide by determination" of IBM's legal counsel, which will be made "promptly, reasonably and in good faith." Both parties agree that IBM's determination shall be "be final and binding and not subject to review in any way."

Such an unexpected turn of events throws new light on the sudden resolution over Papermaster's employment dispute which also speaks of IBM's fear that its chip expert could misuse trade secrets to develop competing products for Apple. Despite the fact that Apple appointed Papermaster to lead its iPod and iPhone hardware teams (who share little in common with IBM's server technology), Big Blue apparently wanted this insurance policy. One could read this as an indication that IBM does not entirely trust either Papermaster or Apple. In addition, it may also indicate Apple does in fact plan substantial hardware changes for future gadgets. If true, then this plan might indeed call for minor "borrowing" of chip designs used in servers.

Conclusion

In my opinion, Apple, IBM and Papermaster are all treading the fine line between the desire to take full advantage of Papermaster's chip expertise and the need to do the right thing. Apple's press release yesterday pronounced the litigation between IBM and Mark Papermaster "resolved," having highlighted Papermaster's product and technology experience without emphasizing his chip expertise and deep knowledge of server architectures.

If the carefully worded official statement is any indication, Apple has no interest in downloading Papermaster's "IBM brain." However, the acquired P.A. Semi engineers and publicly stated intention to design system-on-a-chip solutions create the basis for a reasonable doubt that there is, in fact, more going on behind the curtains at Cupertino than meets the eye (or at least what Apple's PR would like us to believe).