PayPal sues Google over stolen Wallet secrets

May 27, 2011
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PayPal sues Google over stolen Wallet secrets

Google Wallet is only just official, and already it has its first lawsuit. PayPal has sprung out of the gate with accusations that Google used trade secrets gleaned from ex-PayPal employees now working on the Google Wallet project. According to the eBay-owned payments firm, ex-exec Osama Bedier took with him "intimate knowledge of PayPal's capabilities, strategies, plans, and market intelligence" which he disclosed to Google after being recruited by Stephanie Tilenius, previously SVP of North America and Global Products; part of Tilenius' agreement with PayPal was not to recruit its employees over to their new Google taskmasters.

"We spend a lot of time and energy creating the things that make PayPal unique and a preferred way to pay for almost 100 million people around the world. We treat PayPal’s “secrets” seriously, and take it personally when someone else doesn’t. So we made a decision today. We filed a lawsuit against Google and two former colleagues who now work there, Osama Bedier and Stephanie Tilenius."

However, not only did Tilenius recruit Bedier, PayPal alleges, but Bedier went on to solicit others among his former colleagues to jump ship to Google.

Meanwhile, PayPal also claims that while it had been negotiating with Google between 2008 and 2011 over being the default payment method for Android Market purchases, Tilenius was also involved in secret recruitment talks with the search giant. "During that time, PayPal provided Google with an extensive education in mobile payments" the company insists. "Bedier was the senior PayPal executive accountable for leading negotiations with Google on Android during this period. At the very point when the companies were negotiating and finalizing the Android-PayPal deal, Bedier was interviewing for a job at Google - without informing PayPal of this conflicting position."

PayPal also claims Bedier has boasted of a DropBox full of confidential company secrets that he is willing to hand over to Google, and will not allow his former employers to examine. The payments firm is demanding not only compensation and assurances that further secrets won't be passed around, but royalties on Google's new Wallet system based on the idea that it's in-part using PayPal secrets.

You can read the full legal documentation here [pdf link]. Google is yet to comment publicly on the suit.


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