In PayPal and its parent company eBay filed a lawsuit against Google on 26 May 2011 for allegedly stealing trade secrets related to mobile payments and point-of-sale strategies. Coming within hours of the unveiling of the Google Wallet, which is a mobile wallet system from the search giant, the lawsuit also accuses two former employees of PayPal, Osama Bedier and Stephanie Tilenius, who now work for Google, of breaching their obligations to their former company.
This lawsuit filed before the Superior Court of the State of California in the County of Santa Clara highlights the growing instances of wide range of companies from traditional finance to Internet and software giants coming into conflict with each other while trying to corner a major chunk of what has often been described as a $1 trillion opportunity in mobile payments. The popularity of the mode of payment through mobile phones is set witness high growth in the future.
eBay and PayPal have alleged that few days before joining Google on January 24, 2011, Osama Bedier had transferred digital documents outlining PayPals mobile payment and point-of-sales strategies to a non-PayPal computer. Those documents are said to be of critical importance to the mobile payments strategy of the two companies. It has also been alleged that Osama Bedier had been negotiating a deal for PayPal to handle sales of apps in the Android Market, but at the same time he was also interviewing for a job at Google.
According to PayPal, its mobile payment ecosystem had been under development for last 10 years, and being a senior executive responsible for mobile payment and point-of-sales strategies, Osama Bedier had access to most of the intel developed during this period. He had intimate knowledge of the companys capabilities, strategies and plans regarding mobile payment and related technologies. After leaving PayPal, Osama Bedier has been leading Google's efforts in the field of mobile wallet.
The copy of the lawsuit is currently available on eBays website. The suit says, By hiring Bedier, with his trade secret knowledge of PayPals plans and understanding of Googles weaknesses as viewed by the industry leader (PayPal), Google bought the most comprehensive and sophisticated critique of its own problems available.
The lawsuit also alleges that Stephanie Tilenius, who had left her job as an eBay executive in late 2009 before joining Google, solicited and lured Bedier to Google. In doing so, Tilenius is alleged to have violated her contractual obligations to eBay. Before and since joining Google, Bedier has also violated his obligations to eBay by soliciting and recruiting PayPal employees to work at Google, according to the lawsuit. Stephanie Tilenius, currently serving as Googles vice president for commerce and payments, has described Google Wallet as the next generation of mobile commerce.
The security system built in the Google Wallet includes the need for a PIN number and normal credit card encryption. In case the mobile is lost, the payment system can be disabled with one phone call.
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