PayPal sues over Google Wallet

Google execs accused of stealing trade secrets from eBay subsidiary

PayPal, the online payments subsidiary of e-commerce giant eBay, has filed a lawsuit against Google and two of its executives, alleging they stole mobile payment technology trade secrets.

The legal action against the web giant came hours after the two executives named in the suit, who were formerly PayPal employees, helped launch Google's new mobile payment system, Google Wallet.

Osama Bedier had been PayPal vice president of platform, mobile, and new ventures until late last year, and joined Google as its vice president of payments in January this year.

PayPal is accusing Bedier of misappropriating "PayPal trade secrets by disclosing them to Google and major retailers".

Stephanie Tilenius has worked as vice president of e-commerce for Google since February 2010, but according to documents filed with Superior Court of the State of California, county of Santa Clara, she served as a consultant to eBay until March 2010 following an eight-year stint as global head of products.

Tilenius is accused of breaking her contractual agreement with eBay by hiring Bedier and attempting to poach a number of other former colleagues still working at PayPal.

The suit also claims that Bedier acted as a go-between for both companies when they collaborated over a joint, three-year mobile payments strategy involving Android smartphones that concluded a few months ago.

PayPal also alleges that Bedier downloaded sensitive information about its mobile payment plans to a personal computer days before he left the firm.

The suit accuses Google of buying "the most comprehensive and sophisticated critique of its own problems available" when it hired Bedier, with "his trade secret knowledge of PayPal's plans and understanding of Google's weaknesses as viewed by the industry leader".

A spokesperson for Google told Computing that the company so far had no comment to make on the PayPal allegations.

Google's launch of its Wallet application for Android in the US yesterday is the web giant's latest attempt to challenge PayPal's market dominance following its introduction of Google Checkout in 2006.

In the UK, mobile operator O2 recently confirmed it would launch a mobile wallet solution in the second half of 2011.