PayPal accuses Google of stealing trade secrets

Posted by elena On Friday, May 27th 2011 in Business

Online payment service PayPal and its owner eBay filed a suit against Google on Thursday, accusing the Internet company of having obtained trade secrets from two former PayPal executives and used them to build their new Google Wallet service, which was announced earlier that day.

PayPal also started legal action against Osama Bedier and Stephanie Tilenius, two Google executives who had previously worked for the eBay subsidiary. The online payment operator accused Bedier of having revealed trade secrets to Google, which he had obtained while working at PayPal. The company accused Tilenius of having recruited Bedier, thus violating a contractual agreement she had with eBay. PayPal filed suit against Google claiming that the latter had stolen trade secrets and used them to build their new mobile payment system Google Wallet.

Osama Bedier is currently vice president of payments at Google Inc. He joined the company this year, on January 24, after having worked for nine years at PayPal. During his time with the online payment operator, Bedier led negotiations on a possible collaboration between PayPal and Google, which would have made PayPal payments available on Android-equipped mobile phones. The lawsuit against Bedier claims that he was at the same time negotiating for a job with Google. He is also accused of having tried to recruit other PayPal employees. Tilenius, who at the moment is vice president of e-commerce at Google, worked at PayPal between 2001 and 2009. She started working for Google in February 2010 and she served as a consultant to PayPal until March of the same year.

Google announced on Thursday that they were planning to introduce a mobile payment system that would make it possible for Android-equipped smartphones to be used as digital wallets. Soon after this announcement, PayPal filed suit against the Internet company. A spokesperson for Google said that they have not yet seen a copy of the complaint and are therefore unable to make a comment. Both Bedier and Tilenius took part in the Thursday event, where the new Google service was first presented.

PayPal, a subsidiary of eBay, is currently the leader on the mobile payments market, but the future mobile wallet service from Google may pose a serious threat to the online operator. Google's mobile wallet system will use Near Field Communications (NFC) technology and is scheduled to be launched this summer in the United States.