Monday, November 17, 2008, 11/17/2008 03:29:00 PM

Judge Mandates $3 Million Bond in IBM v. Papermaster Case

By Todd
Under the Federal Rules of Civil Procedure, Rule 65, a party that obtains a preliminary injunction against another must post a bond with the clerk of court that will protect the enjoined party from damages they might incur if it is later shown that the court's injunction should not have been issued.

The court in the IBM v. Papermaster case set the bond in that departing employee case at $3 million. That's a boatload of money for a guy who is being shut down for only ten days.

We'll continue to keep an eye on this case for you. Papermaster's attorneys are currently arguing that the New York choice-of-law provision in the Papermaster agreement shouldn't be respected. They think that California law would be better for Papermaster - knowing that California law abhors covenants not to compete.

We don't think the judge in New York is going to agree on that front. More soon.

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