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PayPal Sues Google Over Mobile Payments

Google is accused of stealing the technology, and a key person, behind Google Wallet.

On the heels of the announcement of Google Wallet yesterday, PayPal and eBay have filed a lawsuit (pdf) against the company and two former employees who are now Google’s leads on mobile payment system, for poaching employee PayPal employees and sharing secrets with Google. Just hours after the announcement, PayPal wrote on its 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.

Tilenius, Google’s vice president of commerce, previously worked at PayPal and eBay. She is accused of poaching Bedier while he was PayPal’s Vice President of Platform, Mobile, and New Ventures.

The two announced Google Wallet yesterday.

Erick Schonfeld of TechCrunch posted Google’s response to the lawsuit:

“Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognized by both California law and public policy. We respect trade secrets, and will defend ourselves against these claims.”

Schonfeld suggests this is a knee-jerk reaction from PayPal, and points out this isn’t the first of employment disputes in Silicon Valley:

When Apple poached IBM’s Mark Papermaster to head up its chip development, IBM sued. The two companies eventually settled out of court. In many ways, this is a PR move on PayPal’s part more than anything else. It is not like they are going to get an injunction to stop Google from going into mobile payments. But it’s a bad PR move because it shows exactly how scared they are that Google is going to succeed.

Deep Dive

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Illustration by Rose WongIllustration by Rose Wong

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