Daily Dose of iQ: PayPal Sues over Google Wallet Secrets

May 27, 2011 — Allan Pulga

It begins. As many expected, PayPal is suing Google on grounds that two of its former employees (now senior executives at Google) violated their contracts and stole confidential PayPal information to share with Google and other companies, reports Sam Gustin of Wired.

Yesterday, Google made worldwide headlines, announcing its revolutionary NFC-enabled Google Wallet mobile payment service (see Google Wallet).

"The two executives in question, Osama Bedier and Stephanie Tilenius, are now in charge of Google’s mobile payments initiative, called Google Wallet, which the search giant announced at a press conference in New York on Thursday," writes Gustin. "Although the lawsuit (.pdf) never refers to “Google Wallet” by name, there is an extensive discussion of the nascent “digital wallet” market, and Bedier’s work in this area for PayPal, before joining Google in January."

In a blog post yesterday, PayPal insisted that it would prefer to avoid legal action, and rather "compete and innovate," but in cases like these, it had to step up: "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," wrote Amanda Pires, senior director of PayPal's global communications.

"You can read the entire lawsuit for yourself," she adds. "You’ll see why we believe the law has been violated, and why we needed to take this action to protect PayPal’s trade secrets. That’s worth fighting for."

I'm curious just how much Google will have to pay to make this issue -- perhaps the first of many intellectual property lawsuits related to the Google Wallet concept -- disappear.

Topics: Retail Operations, Wireless Trends, Mobile Industry

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