“We have considered all of IBM’s arguments and find them to be without merit,” the three-judge panel of the U.S. Court of Appeals in New York said in its Oct. 22 decision. “Accordingly, the June 26, 2009, order of the district court is affirmed.”

IBM had sought an injunction for the duration of the lawsuit in which it seeks to enforce a one-year non-competition agreement. David L. Johnson, a 27-year IBM veteran, says that agreement isn’t valid because he deliberately signed it in the wrong space.

“We are disappointed in the court of appeals’ decision and are prepared to move forward with proceedings in the District Court to protect IBM from the misuse of our intellectual property and trade secrets,” Doug Shelton, an IBM spokesman, said in an e-mail yesterday.

Dell hired Johnson in May, triggering the lawsuit in which Armonk, New York-based IBM accused him of violating the agreement.

“We’re pleased that the court of appeals has agreed with” the “district court’s conclusion that Dave Johnson is not subject to a non-competition agreement and that there is no reason or justification to keep Dave from working for Dell,” David Frink, a spokesman for the Round Rock, Texas-based company, said in an e-mail.

Dell, who returned to run Dell back in 2007, has struggled to raise Dell’s stock price. He has made significant changes at the company, first by looking to fix its expense line by making deep staff cuts around the world. In addition, he has restructured its consumer business and shifted its focus towards traditional retail and away from its traditional “Direct” to the customer channel.

The company has made a few small acquisitions since his return to the company. Its spent $1.4B on the purchase of storage technology company EqualLogic and also hired David L, Johnson, IBM’s M&A Lead in late 2008 in what many assumed was a precursor to an expanded M&A strategy. Johnson’s first deal occurred last week with Dell’s $3.9B purchase of I/T services firm Perot Systems, based in Dallas, TX.