PayPal accuses Google of stealing trade secrets
Saturday 28 May 2011
Paypal, the online payments company owned by eBay, has slapped Google with a lawsuit claiming the search engine giant stole its trade secrets ahead of the launch of its mobile payments system.
PayPal filed a suit against Google and two of its executives in a California court, saying legal action was the "only meaningful way" to protect its technology. The legal battle comes as excitement around "wave and pay" technology on mobile phones is soaring. PayPal said it had spent the past year developing next-generation mobile payment technology for retailers.
Google triumphantly launched its own contactless payment system on Thursday. But the shine was taken off Google Wallet by the PayPal lawsuit.
Amanda Pires, PayPal's senior director of global communications , said it was "generally not our thing" to spend time in court. "But sometimes the behaviours of people and competitors make legal action the only meaningful way for a company to protect one of its most valuable assets: its trade secrets."
PayPal's ire was partly aimed at a former executive, Osama Bedier, who it claimed had "misappropriated PayPal trade secrets by disclosing them within Google and to major retailers".
Mr Bedier worked at PayPal foralmost a decade. He left his role as vice-president of platform, mobile and new ventures in January to take up a similar role at Google.
A spokesman for Google said: "Silicon Valley was built on the ability ofindividuals to use their knowledge and expertise to seek better employment opportunities, an idea recognised by both California law and public policy. We respect trade secrets, and willdefend ourselves against these claims."
Mr Bedier's job, PayPal said, was to bring mobile payment and point-of-sale technology to retailers. It added: "Through this work, he had an intimate knowledge of PayPal's capabilities, strategies, plans, and market intelligence" around mobile payments.
Mr Bedier has yet to respond to PayPal's claims.
Stephanie Tilenius, who worked at eBay from 2001 to 2009 before joining Google, was also named in the suit, which alleged she had violated her contractual obligations by poaching Mr Bedier and other PayPal employees.
PayPal pointed to commercial talks it held with Google between 2008 and 2011 over serving as a payment option for mobile app purchases on Google's Android market. "During that time, PayPal provided Google with an extensive education in mobile payments," it said, with Mr Bedier leading the talks for Paypal. "At the very point when the companies were negotiating and finalising the Android-PayPal deal, Bedier was interviewing for a job at Google – without informing PayPal of this conflicting position," the suit alleged, calling it a breach of Mr Bedier's responsibilities as a PayPal executive.
The Google Wallet app would launch this summer, the group said. Earlier this month Orange launched the first contactless payment phones in the UK in conjunction with Barclaycard.
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