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PayPal, eBay sue Google over mobile payments secrets

The two companies allege that former employees and Google misappropriated trade secrets

PayPal and parent eBay have filed a suit against Google and two former executives alleging that they have misappropriated their trade secrets in the area of mobile payments and point-of-sale strategies.

The suit filed Thursday before the Superior Court of the State of California in the County of Santa Clara also charges two former employees, Osama Bedier and Stephanie Tilenius, who now work with Google, of breaching their obligations to PayPal and eBay.

Google unveiled on Thursday its Google Wallet, which will let people with special phones pay for goods in retail shops by tapping the phones against a payment terminal.

Bedier has in fact misappropriated PayPal's trade secrets by sharing its mobile payment, point-of-sale and digital wallet information with Google, the suit says.

EBay and PayPal have alleged that Bedier transferred digital documents outlining PayPal's mobile payment and point-of-sales strategies to a non-PayPal computer a few days before leaving the company for Google on Jan. 24 this year. Those documents were critical to its mobile payments strategy, the companies said in the suit.

PayPal and eBay have alleged that Osama Bedier was the senior PayPal executive responsible for mobile, platform and new ventures. In this role, he was PayPal's senior leader charged with bringing its mobile payment and point-of-sale technologies and services to retailers. Bedier had an intimate knowledge of PayPal's capabilities, strategies, plans and market intelligence regarding mobile payment and related technologies, which is information constituting in part PayPal's trade secrets, according to the suit, a copy of which is available on eBay's website.

Bedier was put in charge of mobile payments after he left PayPal for Google. He is now leading Google's efforts to bring point-of-sale technologies and services to retailers on its behalf. In the course of his work at Google, Bedier and Google have misappropriated PayPal trade secrets by disclosing them within Google and to major retailers, PayPal and eBay have alleged.

The plaintiffs also allege that Google hired Bedier after another former eBay executive, Stephanie Tilenius, solicited and recruited him. In doing so, Tilenius violated her contractual obligations to eBay. Before and since his arrival at Google, Bedier has also violated his obligations to eBay by soliciting and recruiting PayPal employees to work at Google, the complaint said.

Bedier also represented PayPal in negotiations with Google between 2008 and 2011 for using PayPal as a payment option for mobile app purchases on Google's Android Market, without informing PayPal that he was interviewing for a job at Google, according to the complaint.

Google scuttled a deal with PayPal to build a competing product with former PayPal employees and executives at the helm, it said.

Google said Friday that Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy. The company said it respected trade secrets and would defend itself against the claims in the suit.  

PayPal said in its blog that spending time in courtrooms is generally not its thing. But sometimes the behavior of people and competitors make legal action the only meaningful way for a company to protect its trade secrets, one of its most valuable assets.

John Ribeiro covers outsourcing and general technology breaking news from India for The IDG News Service. Follow John on Twitter at @Johnribeiro. John's e-mail address is [email protected]


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