14 DAY TRIAL // Just hours after Google unveiled its Wallet mobile payments system, PayPal, the biggest payments system online, has announced that it's suing Google, more specifically, two Google employees that used to work for PayPal. The claims are misappropriation of trade secrets, breach of contract and a few others.
"Spending time in courtrooms is generally not our thing. We prefer to compete and innovate, serving our customers by offering the best way to pay and be paid. That’s how you really win," PayPal's Amanda Pires writes, just before the "but."
"But sometimes the behaviors of people and competitors make legal action the only meaningful way for a company to protect one of its most valuable assets – its trade secrets," she says.
"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," she announced.
Osama Bedier, was VP of Platform, Mobile and New Ventures at PayPal, and was one of the first employees and a key person at the company. Google made him an offer last fall and managed to convince him to switch sides in January this year.
People move back and forth all the time in Silicon Valley, Google has plenty of employees leaving for greener pastures, or 'bluer' since it's usually for Facebook. But PayPal isn't upset about that, what it is upset about is the 'trade secrets' that Bedier took with him.
And it's not just empty words, PayPal knows exactly how the former VP took off with said secrets, on his personal laptops, personal email account and even via the file sharing and sync service Dropbox.
PayPal alleges that Bedier had deep info into the company's strategy, its plans and future products. PayPal also accuses Bedier of negotiating with Google the inclusion of a PayPal option in the Android Market, while he was also talking with Google about joining.
There are more details in the lawsuit and the accusations seem more serious than it is usually the case with such suits.
PayPal also sued Stephanie Tilenius, which left in 2009. According to the company, she breached a contract claim that prevented her from recruiting anyone from PayPal, which she did with Bedier and at least a couple more former PayPal employees.
Google hasn't responded yet, saying it hadn't received the lawsuit, but it should be interesting to hear the other side. Whatever the case, it looks like the war is about to escalate in the mobile payments space, a market with too big of a potential to not fight for it tooth and nail.