PayPal lawsuit targets Google’s Wallet

Google yesterday launched its long-awaited mobile payments system, Google Wallet – but may soon be having to open up its own wallet, thanks to a lawsuit from PayPal.

Launched yesterday, Google Wallet is a contactless payment system based on near field communication (NFC).

But PayPal alleges that Google has based the service on its own trade secrets, after hiring PayPal executives Osama Bedier and Stephanie Tilenius earlier this year.

Tilenius is accused of having broken her contractual obligations by persuading Bedier to join Google.

Bedier, formerly PayPal’s vice president of platform, mobile and new ventures, is now Google’s vice president of payments. The suit, filed in the Superior Court of the State of California, alleges that he “misappropriated PayPal trade secrets by disclosing them within Google and to major retailers”.

According to the suit, Paypal and Google spent three years working together on a deal whereby Android phone users would be able to pay for mobile apps using Paypal.

“At the very point when the companies were negotiating and finalising the Android-PayPal deal, Bedier was interviewing for a job at Google – without informing PayPal of this conflicting position,” says the suit.

It claims that just a month before leaving PayPal for Google in january this year, Bedier transferred up-to-date versions of documents outlining 27 PayPal’s mobile payment and point of sale strategies to his non-PayPal computer.

PayPal claims that Bedier had already decided to move to a job at Google when he did this, and had no legitimate reason for obtaining an update on PayPal’s strategies.

“Sometimes the behaviors of people and competitors make legal action the only meaningful way for a company to protect one of its most valuable assets – its trade secrets,” says Amanda Pires, senior director of PayPal global communications.

“We treat PayPal’s ‘secrets’ seriously, and take it personally when someone else doesn’t.”