PayPal sues Google over mobile plans, trade secrets

PayPal sues Google over mobile plans, trade secrets

Summary: Just hours after Google made its mobile payment plans public eBay's PayPal unit sued the search giant

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Well that didn't take long. Just hours after Google made its mobile payment plans public eBay's PayPal unit sued the search giant and two key executives.

The reason---the two Google executives that were the headliners at the company's press conference---were PayPal employees up until recently. PayPal alleges that the executives---Osama Bedier and Stephanie Tilcnius---stole trade secrets that led to Google Wallet.

Regarding Bedier, PayPal said in its complaint:

Defendant Osama Bedier was the senior PayPal executive responsible for Mobile, Platform, and New Ventures. In this role, he was PayPal’s senior leader charged with bringing its mobile payment and point of sale technologies and services to retailers. Through this work, he had an intimate knowledge of PayPal’s capabilities, strategies, plans, and market intelligence regarding mobile payment and related technologies — information constituting in part PayPal’s trade secrets. Bedier left PayPal for Google on or about January 24, 2011, and was put in charge of Mobile Payments. He is now leading Google’s efforts to bring point of sale technologies and services to retailers on its behalf. In the course of his work at Google, Bedier and Google have misappropriated PayPal trade secrets by disclosing them within Google and to major retailers.

In addition, from 2008 to 2011, Google and PayPal were negotiating a commercial deal where PayPal would serve as a payment option for mobile app purchases on Google’s Android Market. During that time, PayPal provided Google with an extensive education in mobile payments. Bedier was the senior PayPal executive accountable for leading negotiations with Google on Android during this period.

As for Tilcnius, PayPal alleges that the executive repeatedly tried to recruit Bedier.

It's unclear where the case will go. EBay filed its lawsuit in the Superior Court of California.

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Topics: Banking, Enterprise Software, Google, Mobility

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116 comments
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  • Oh my

    our employee left and now he is kicking our asses...
    tatiGmail
    • You do need to be careful on these things...

      @tatiGmail

      http://www.justice.gov/criminal/cybercrime/branchCharge.htm

      Sounds very similar to the Boeing V Lockheed Martin. Boeing lost. These types of cases can carry criminal charges as well as prison time.
      Bruizer
      • It is not for the first time for Google: they settled for $2.5 billion in

        @Bruizer: ... 2004 (with Yahoo!, which bought the developer who sued Google) for <b>theft of technology for contextual advertisements.</b><br><br>Yes, you have read it right: the very core technology of their business is not theirs.
        DDERSSS
      • RE: PayPal sues Google over mobile plans, trade secrets

        Not even close. Why? Most consumers don't own airplanes. On the other hand, millions of people use cellphones. Much, much larger scale. My opinion, just think about it. :)
        vern@...
      • vern@...: So theft is legal if it is for consumers?

        @vern@...

        Think about it. And given there are over 600,000 active and certified pilots in the US alone, why do you think this is any different? Although the above case was about rockets, the cases are very similar except Boeing V Lockheed dealt with government contracts. The issues involved, however, are 100% the same.

        That this is larger scale makes no difference and actually might increase the liability exposure to Google to the tune of billions of dollars if they do not play their hands correctly. What Bedier, Tilcnius and Google did was not only un-ethical, it was potentially illegal.

        I am really starting to think handing the reigns to Larry Page was a monumentally <b>bad</b> move.
        Bruizer
      • RE: PayPal sues Google over mobile plans, trade secrets

        @Bruizer
        hopefully any prison time will be in california. they can be one of the 37k inmates to be released for overcrowding
        rxford
      • RE: PayPal sues Google over mobile plans, trade secrets

        @Bruizer

        It impossible to tell.
        It has to be proven that any trade secrets were stolen
        or that any of it is used in Google Wallet.

        Additionally, contracts that limit employee freedom to resign and then work for a competitor are typically not legal or enforceable.
        raggi
      • RE: PayPal sues Google over mobile plans, trade secrets

        @denisrs

        Yes, it is sad that Google paid that troll to go away. They should have fought it. It's only been prior art for 100 ******** years!
        tkejlboom
      • @raggi

        But contracts not to bring customers, specific data, specific contacts and tons of other things are fully enforceable.

        This is not a case of person A simply taking a job at company B.
        Bruizer
      • There was no prior art and Google even stole the actual code

        @tkejlboom: .. this is why the compensation was that big.

        Contextual advertisements "mechanics" was created shortly before 2000. There are could not be actual prior art since even search itself mainly appeared only in the late 1990s.
        DDERSSS
    • Message has been deleted.

      Will Pharaoh
    • RE: PayPal sues Google over mobile plans, trade secrets

      @tatiGmail
      I wonder what type of non-disclosure agreements they signed when they left eBay....
      ;)
      rhonin
      • RE: PayPal sues Google over mobile plans, trade secrets

        @rhonin They probable signed before they went to work for ebay.
        isuzu803
    • RE: PayPal sues Google over mobile plans, trade secrets

      @tatiGmail
      So what, if you leave a company, are you not allowed to speak Englisg or use your own skills.

      This is an employee using their skills and knowledge to help with developing a competing product, not a criminal theft clone and stealing of code/designs.

      Would you stop an architect going from one business to another, incase he draws a similar squaring F-U-C-K-I-N-G building. Lord help us from the IT Litigators.

      Perhaps PayPal should pull their headr out of their asses and deliver a product to market, instead of petty litigation.
      neilpost
      • RE: PayPal sues Google over mobile plans, trade secrets

        @neilpost I am afraid you have it completely wrong. This isn't a case of an employee just using his skills at another employer. The information he is using is proprietary knowledge that his former employer spend millions of dollars researching and developing. This is theft of intellectual property that belongs to the employer, not the employee.
        KirkGraves
      • RE: PayPal sues Google over mobile plans, trade secrets

        @neilpost I have plenty of doubts that people working for PayPal can develop something new and useful. Their IT staff is one of the dumbiest in the world. If the guy brought something to Google then at least it will go in a smarter hands.
        alexfed
      • RE: PayPal sues Google over mobile plans, trade secrets

        @neilpost
        You really have no idea of business laws do you. When you leave a company for a competitor in the same feild you sign confidentiality forms saying you will not share your inside knowledge to benefit a competitor or other company. thats like working at Ford as a designer of a new enginbe then chevy says hey we will pay you more then you go there and give them Fords new engine info and they release it. Thats highly illegal. You might want to take a basic high school business law class to get a clue.
        Fletchguy
      • RE: PayPal sues Google over mobile plans, trade secrets

        The rub is how proprietary is the knowledge he is using. It isn't illegal for him to use knowledge he gained during employment at PayPal; it may be illegal if he disclosed that knowledge to Google, if he signed (and most likely did sign) a non-compete agreement.

        The legal aspect of what he did is what the court will have to determine.

        Personally, I dislike both companies, as the ultimate loser is we, the consumers.
        Get-Smart
      • You are the prime example of what is wrong.

        @neilpost

        That, and silly software patents but that is another issue.

        This is not about an employee speaking the same language at Company B after leaving Company A.

        This is about an executive employee at Company A dealing with Companies C, D, E on behalf of Company A but doing it with the interests of Company B in mind. Then the executive employee leaves Company A for an executive employee position at Company B and brings Company A's project with him.

        Unethical and potentially illegal. "Do no evil" means nothing anymore; but that ended with the Google Books project: The incarnation of EVIL :-(

        Personally, I think Google can make this work and PayPal would have messed it up beyond belief that does not matter.
        Bruizer
      • Unfair Competition is Wrong, Even if Stolen from a Lesser Competitor

        @neilpost <br>Fletchguy is right, although "non-compete" clauses or agreements as such are usually construed by the courts in favor of the employee because everyone has a basic right to work. What will be construed in favor of the former employer, however, are the unfair competition and trade secrets clauses and agreements -- which are the heart of the matter here. Consumer might win -- Google will probably keep the technology and pay big time fees and damages to PayPal for a long time.
        equity44