PayPal has sued Google and two of its top execs, both former PayPal employees, for stealing trade secrets that helped the search company break into the multi-billion dollar mobile payments industry.
Hours after Stephanie Tilenius, Google’s VP of Commerce, and Osama Bedier, VP of Payments, announced Google Wallet, a groundbreaking initiative to make mobile payments commercial, PayPal filed a 28-page lawsuit in California accusing Google and the two employees for misappropriating information and actively poaching other PayPal employees.
Tilenius joined Google in October 2009 as VP of Commerce after serving in various leadership roles at PayPal and eBay since 2001. Bedier jumped from PayPal’s VP of Platform, Mobile, and New Ventures to become Google’s VP of Payments in January 2010.
According to the complaint, Telenius repeatedly asked Bedier to join Google, even though she was under contract not to solicit PayPal execs for at least a year. However Tilenius allegedly sent Bedier this Facebook note in July 2009:
“How are you? Hope the wife and kids are well… hard to believe you have 4 kids, they all just be so big now. I heard from a little birdie that you might be open to bigger and better challenges, I have a HUGE opportunity for you, would love to chat if you are interested.”
Bedier, meanwhile, has been accused of actively poaching PayPal execs and leaking PayPal secrets to Google. “As an executive at PayPal, Bedier acquired knowledge and custody of several PayPal trade secrets. Bedier knew or had reason to know that his knowledge of PayPal’s trade secrets was acquired under a circumstance giving rise to a duty to maintain the secrecy of those trade secrets or limit their use,” the complaint reads. “Plaintiffs are informed and believe and on that basis allege that Bedier has misappropriated PayPal trade secrets by using or disclosing them in his new capacity at Google.”
Unsurprisingly, Google plans to put up a fight. “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,” a spokesman said.
Awkwardly, in the months before Bedier left he was negotiating for PayPal to be integrated into Google Checkout at the Android Market. He was also recruiting PayPal colleagues to join him when he left, the complaint alleges.
PayPal has been trying to break into the mobile payment industry, from digital wallets to working to provide major retailers with point-of-sale terminals that enable mobile payments. It’s similar, but not quite what Google Wallet does.
However, it does have a lot in common with Jack Dorsey’s Square.
By the way, if you too were alarmed that Tilenius’ Facebook message made it into the complaint, fear not. As a general rule, Facebook doesn’t release user content sought in private litigation without the consent of the user, a spokesperson said.
Editor’s note: This story was updated at noon ET (May 27th) with comments from Google and Facebook.
Copyright © 2010 Ziff Davis Publishing Holdings Inc.