Paypal accuses Google Wallet of stealing "trade secrets"

A great deal of media attention has been showered upon the announcement of Google Wallet and Offers, mobile electronic payment system and discount programs currently under development by the search giant. It didn’t take much time, however, for another major corporation to put a damper on the seemingly innovative and unique plans by filing an intellectual property lawsuit.

PayPal alleges that “trade secrets” were misappropriated by a former senior executive, Osama Bedier, who was led negotiations between the two companies to collaborate on mobile payment options and took a job with Google shortly thereafter.

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Bedier had “intimate knowledge” of PayPal’s development of “capabilities to provide large retailers with next generation 'mobile payment' point of sale technology and services," the lawsuit states. The company believed that Google Wallet has striking similarities to their plans that are not coincidental, and that Bedier took strategic Paypal documents with him when he left the company.

The lawsuit also names former eBay-executive-turned-Google-employee, Stephanie Tilenius, for violating contractual obligations by recruiting Bedier away from PayPal.

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“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,” PayPal senior director Amanda Pires wrote in a company blog post regarding the situation. “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.”

A Google spokesperson issued a very brief statement regarding the allegations by email to the Washington Post on Friday.

“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,” that statement said. We respect trade secrets, and will defend ourselves against these claims.”

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It’s difficult these days to keep innovation inside corporate walls, especially since employees are rapidly cycling in and out and non-compete agreements are difficult to enforce.

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