Papermaster was sued by IBM earlier this month over the breach of a non-compete contract he had with the Big Blue.

IBM’s argumentation was upheld by the court: Papermaster had to respect his previous engagement with the company and restrain himself from working for IBM’s competitors for one year. Tough luck for Apple, which looked to have some solid plans for Papermaster.

As expected, there’s also another pack of bad news for Mark: his IBM contract also stipulates that he is not allowed to approach other IBM employees about coming over to Apple. This restriction will be enforced for two years.

At IBM, Papermaster was part of an "elite Integration & Values Team", a team composed of aroundl 300 persons, withmany of them looking rather appealing to Apple’s management.

It remains to be seen just how will Steve Jobs’ lawyers talk their way out of this legal trouble,