While a big blow to Apple, the case is far from over. In a deposition today, Papermaster said that in the 25 years he has worked at IBM, they have never competed directly with Apple.
While that seems like a bit of a stretch (remember the 1984 commercial? Those weren’t Blackberry drones marching around), it does seem that, at least on …erm…paper, Papermaster’s new role isn’t something that would constitute a threat to IBM.
However, with iPods and iPhones likely to have some new in-house ARM Cortex built chips from recently acquired PA Semi, the relationship gets a bit more murky.
In reality, this whole incident reaks of bad blood between IBM and a departing employee. According to court papers, IBM "counter offered" Papermaster a significant raise. Papermaster refused because he wanted the opportunity to work directly with Steve Jobs.
IBM risks losing to ability to attract talent with this type of behavior.