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PayPal Files Suit Against Google over Google Wallet

May 27, 2011

Google vs. PayPalBy Gilbert Falso :: 12:29 AM

Paypal has filed a lawsuit against Google and two Google employees, Osama Bedier and Stephanie Tilenius, who were former PayPal employees.

The lawsuit comes right as Google unveiled their new payment application, dubbed  ‘GoogleWallet’ that allows shoppers to use their mobile phones as a payment device. However, the application is still in beta test mode, and will not be available to the general public until this summer.

In a statement on their website, PayPal says, “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. 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.”

The lawsuit, filed in California’s Santa Clara County Superior Court, alleges that Bedier, a former PayPal executive working on the company’s mobile platform, misappropriated PayPal’s trade secrets when he left to go to work for Google earlier this year.

“Bedier and Google have misappropriated PayPal trade secrets by disclosing them within Google and to major retailers,” reads the lawsuit, available here as a PDF.

The lawsuit, which also lists Tilenius and 50 other unidentified individuals as defendants, seeks unspecified compensatory and punitive damages, and restitution and royalties as well.

Osama Bedier and Stephanie TileniusFormer PayPal employees Osama Bedier and Stephanie Tilenius

PayPal claims that they had worked closely together with Google for three years on developing a commercial platform where PayPal would serve as the payment option for mobile application purchases on Google’s Android phones.

PayPal asserts that Bedier was their senior executive leading and finalizing negotiations with Google during this period, and that he had been logged transferring documents outlining PayPal’s mobile payment strategies to a non-PayPal laptop just a few days before leaving PayPal for Google.

“By hiring Bedier, with his trade secret knowledge of PayPal’s plans . . . Google bought the most comprehensive and sophisticated critique of its own problems available,” the suit says.

Google has not yet responded to the lawsuit.

Filed under → Google, Legal, PayPal