Apple inks settlement deal with A123 Systems over poaching case

Article by Andrew Christian, on May 18, 2015

A settlement agreement has been reached by Apple Inc. and battery maker A123 Systems LLC to resolve a lawsuit that accuses Apple of poaching scientists to develop an electronic car. According to a May 11 filing in federal court in Boston by lawyers for A123, the parties have entered a deal, inked a term sheet, and are currently drafting a final agreement.

The filing didn’t indicate the terms of this agreement. The suit was filed in February, claiming that five former A123 workers (which include the head of its venture technologies division and three scientists) left to work for Apple’s car-battery division in breach of their agreement not to work for a competitor within a year of departing A123 Systems.

This lawsuit gives away a view of a portion of Apple’s product development plans, telling the public that experts in the car industry are being hired by the company. According to sources, Apple has been looking into car development and is hoping to start producing an electric vehicle by 2020 at the earliest.

However, it’s possible that it may choose not to continue with this project. Typically, it takes 5 to 7 years for automakers to develop a car. This suggests that Apple has set aggressive goals and this may mean that it is gearing up to compete with Tesla Motors Inc. and General Motors.

Apple has yet to comment on this report. Apple is facing some pressure to deliver new products that can drive growth for a firm that already has the biggest market capitalization. Investors are worried that smartphone sales have reached their peak. CEO Tim Cook wants the company to enter new categories.

Topics: apple, a123

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