Apple Hires IBM Chip Designer Who Had a Non-Compete Clause

Apple recently hired an IBM chip designer, Mark Papermaster, who was the vice president of microprocessor technology development at IBM. Now IBM is suing Mr. Papermaster for violating a non-compete clause. According to CNET, IBM released the following statement:

"Mr. Papermaster's employment by Apple is a violation of his agreement with IBM against working for a competitor should he leave IBM. We will vigorously pursue this case in court."

Non-compete clauses are tricky things. In the state of California, where Apple is located, non-compete clauses are illegal, and out-of-state non-compete contracts have, in the past, not been enforced (Application Group, Inc. v. Hunter Group, Inc.). However, the court case has been filed in New York, and I'm not a legal expert, so who knows where this is headed.

Link to CNET story.

Apple Has $24.5 Billion in Cash. Now What?

It's time to play that game again. It's called, What Is Apple Going to
Do With All That Cash? Well folks, they're going to continue to sit on
most of it. If they do anything, it will be small acquisitions like the
$278 million dollar deal for PA Semi.

You see, Steve Jobs has no interest in buying someone else's vision.
Apple has its own vision. And what it needs is more people who can help
bend technology toward that vision. Apple has a vision about
smartphones, and the engineers at PA Semi have some skill at making
small processors work in smartphones. They were a match made in heaven.
That's the kind of deal they're looking for.

If you want to check the validity of any Apple buyout rumors, and I'm
surprised hedge funds haven't started this game yet (maybe they're too
busy with the recession), just ask yourself, can Apple take the people
and throw away the hardware (or software or whatever). If the
intellectual property is too valuable to toss, then the buyout rumor
isn't true.