PayPal Sues Google for Misappropriated Trade Secrets/Contract Violations

PayPal logoPayPal has sued Google over claims that ex-PayPal executives, who now work for Google, have misappropriated PayPal trade secrets by sharing them with Google as well as other large retailers.

PayPal Inc., a rapidly growing unit at the online marketplace eBay Inc., is suing tech giant Google after two ex-executives allegedly abused PayPal trade secrets and violated contractual obligations.

According to the case, Stephanie Tilenius, an ex-PayPal executive, left PayPal to work for Google in 2009. She was under contract not to recruit PayPal employees once she left, but later sent Osama Bedier, another now ex-PayPal executive, a message on Facebook offering a "huge" job opportunity at Google. She also e-mailed and text messaged him during his interview process to give advice.

But Tilenius' violation of contractual obligations is just the tip of the iceberg. PayPal also claims that Bedier, once entering Google, wrongfully stole and shared confidential PayPal information. The complaint states, "Bedier and Google have misappropriated PayPal trade secrets by disclosing them within Google and to major retailers." PayPal's complaint also mentions that Bedier has guided Google's attempts to "bring point of sale technologies and services to retailers on its behalf."

Bedier allegedly directed discussions to make PayPal a payment option on Google's Android Market while also talking about a job with Google, which he did not disclose to PayPal. PayPal saw this as a "breach of his fiduciary duty."

With both PayPal and Google pushing for mobile payment systems, the competition is heating up, and no one wants to be left behind. For instance, Verizon Wireless, AT&T Inc. and T-Mobile USA teamed up in a joint venture with Discover Financial Services' national payment network to form Isis, and Google announced "Google Wallet" in New York just yesterday.

Google Spokesman Aaron Zamost said that the company has not received a copy of the suit yet, and cannot comment until it does.

Source: DailyTech

Tags: Google

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