PayPal sues Google for stealing mobile payment 'trade secrets'

Hours after Google (NASDAQ:GOOG) unveiled its Google Wallet mobile payment solution Thursday, eBay-owned digital commerce solutions provider PayPal filed suit claiming the web services giant misappropriated "trade secrets" when it hired away PayPal mobile executives.

The suit, filed in California's Santa Clara County Superior Court, alleges that Google Vice President of Payments Osama Bedier--a onetime senior PayPal exec--plundered his former employer's mobile strategy when he signed on with Google earlier this year. Bedier "is now leading Google's efforts to bring point of sale technologies and services to retailers on its behalf," the complaint states. "Bedier and Google have misappropriated PayPal trade secrets by disclosing them within Google and to major retailers."

The suit goes on to state that between 2008 and early 2011, Bedier was part of a PayPal team negotiating with Google to institute PayPal as a funding option for Android Market premium app purchases. "At the very point when the companies were negotiating and finalizing the Android-PayPal deal, Bedier was interviewing for a job at Google without informing PayPal of this conflicting position," the lawsuit alleges, adding that Google Vice President of Commerce Stephanie Tilenius--another PayPal alum--violated contractual obligations by recruiting Bedier, with whom she worked for a number of years.

"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 PayPal Senior Director of Global Communications Amanda Pires on the company's blog. " 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." The PayPal suit also lists 50 unidentified defendants.

Google announced Thursday it will align with U.S. network partner Sprint (NYSE:S) and financial services providers MasterCard, Citi and First Data to roll out a Near Field Communications-based contactless payment platform enabling subscribers to purchase goods and redeem coupons and loyalty rewards via Android smartphones. Google Wallet is presently in field tests in New York City and San Francisco, and is slated to roll out to additional markets in the coming weeks.

For more:
- read this PayPal Blog entry

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