Apple’s (AAPL) Steve Jobs Threatened Patent Suit to Enforce No-Hire Policy

By Jan 23, 2013, 8:21 AM Author's Blog  

A court filing made public on Tuesday revealed that Apple (AAPL) cofounder Steve Jobs threatened to file a patent lawsuit against Palm if the now-defunct company’s chief executive-Edward Colligan didn’t agree to stop poaching Apple employees. The court filing is part of a class action lawsuit being leveled against a number of major companies in Silicon Valley, including Apple, Google (GOOG), Adobe Systems Inc. (ADBE) and Intel (INTC), that claims the firms participated in illegal anti-poaching activities to avoid competitive recruiting.

The defendant companies attempted to keep a range of documents secret, but that request was rejected in parts by U.S. District Judge Lucy Koh, according to an in-court report from Reuters. As a result, details of Jobs’ 2007 communications with Colligan, which feature emails between the two executives openly discussing a ‘no-hire’ agreement, have now become part of the public record.

Court documents reveal that in 2007 Jobs called Colligan about Palm’s hiring of Apple employees, and during that call suggested that if Palm didn’t agree, they would face lawsuits “alleging infringement of Apple’s many patents.” Colligan rejected Jobs’s proposal in an Aug. 24, 2007 e-mail saying:

“Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal…Palm doesn’t target other companies-we look for the best people we can find. I’d hope the same could be said about Apple’s practices. However, during the last year or so, as Apple geared up to compete with Palm in the phone space, Apple hired at least 2% of Palm’s workforce. To put it in perspective, had Palm done the same, we’d have hired 300 folks from Apple. Instead, to my knowledge, we’ve hired just three.”

Jobs responded by saying Colligan’s response wasn’t “satisfactory” to Apple because Palm was actively chasing Apple employees.

“I’m sure you realize the asymmetry in the financial resources of our respective companies when you say: ‘We will both just end up paying a lot of lawyers a lot of money.” Jobs wrote in an e-mail to Colligan, a copy of which was attached to yesterday’s filing. “My advice is to take a look at our patent portfolio before you make a final decision here.”

Colligan rejected Jobs’s proposal saying the threat of patent litigation is “just out of line”.

The recent court filings also include internal emails between Google chairman Eric Schmidt and Jobs, with Jobs complaining about Google’s recruiting department chasing Apple staff.

“Eric, I would be very pleased if your recruiting department would stop doing this”, Jobs wrote in an March 7, 2007 e-mail to then-Google chief executive Eric Schmidt.

Judge Koh is currently deciding whether the civil lawsuit brought by five tech workers against a number of top tech companies, claiming an illegal conspiracy to eliminate competition for each other’s employees and drive down wages can proceed as a class action.

(via AppleInsider)

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