IBM and former CIO Jeff Smith settle trade secrets lawsuit

IBM has settled with its former chief information officer after suing the executive for allegedly breaching his contract and leaking trade secrets to cloud computing rival Amazon Web Services.

Jeff Smith

The company claimed Jeff Smith - a former CIO at Australian organisations Telstra and Suncorp - violated a one-year non-compete agreement when he took up a vice president position at AWS after leaving IBM in May.

As a high-ranking executive within IBM, Smith had access to the company's top-level decisions about the development of its cloud computing technology and its upcoming product releases.

The company argued that Smith would use this "highly confidential information" against IBM if he was allowed to take on the role at one of its main competitors.

It also claimed Smith had shared inside information with AWS boss Andy Jassy while employed at IBM.

The court initially issued a temporary restraining order that barred Smith from starting work at AWS in August, but later allowed him to join in "listen and learn mode only" while the case was underway.

Late last month the parties revealed they had come to a settlement, and the lawsuit was summarily dismissed.

Terms of the agreement were not disclosed, however Smith has not taken up the role at AWS.

Earlier this week he was appointed the chief operating officer for global energy management company World Fuel Services. The firm sells fuel and delivers services across 200 countries and territories.

IBM has been contacted for comment on the settlement.

In its lawsuit the company had pushed for Smith's one-year non-compete clause to be enforced by the courts, and for the executive to repay US$1.7 million in stock bonuses.