PayPal Sues Google over Wallet Service

Ding ding ding ding – I think we have a record here. Launched yesterday, Google Wallet has already attracted a lawsuit. While patent lawsuits are teh shizzle these days, this lawsuit is a little different, so sadly I can’t trot out my usual ‘software patents bad’ lines (aww). PayPal has sued Google over its Wallet service, claiming that one key former PayPal executive who accepted a job at Google took trade secrets with him.

So, this is a little different than your usual technology lawsuit. It would seem there’s kind of a history to this one, as Google and PayPal were in negotiations to have PayPal become a payment option in the Android Market. These negotiations were led, from PayPal’s side, by Osama Bedier. During these negotiations, Bedier was interviewed for a job by Google, but he didn’t inform PayPal about this.

Obviously, Bedier has intimate knowledge of PayPal’s inner workings and mobile payment technology – which the company had already been working on for a while – and he took this knowledge with him when he moved to Google. At Google, he became responsible for Mobile Payments, so he could’ve definitely put his knowledge to work. To make matters more interesting: he was hired by Google’s Stephanie Tilenius, a former eBay employee (PayPal is owned by eBay).

“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,” writes Amanda Pires, senior director PayPal global communications, “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.”

Google has responded to several media enquiries about the case. “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. We respect trade secrets, and will defend ourselves against these claims,” Google told AllThingDigital.

This is an interesting case. As we all know, most high-profile lawsuits in the technology industry are about one company not being able to compete with another on merit, and considering Google is entering on PayPal’s turf, it’s tempting to classify this as such a case. However, the story of former employees moving around is hard to ignore, and it doesn’t seem at all unlikely that these employees have transferred PayPal’s ‘trade secrets’ to Google.

All in all, yet another one to add to the pile.


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