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PayPal Sues Google Over Mobile Payment Secrets


Google Inc. was sued by PayPal Inc., the fastest-growing unit at online marketplace EBay Inc. (EBAY), over claims it misappropriated trade secrets from PayPal’s mobile- payment business.

Osama Bedier, a former PayPal executive now at Google, stole PayPal’s confidential information, the company said in the lawsuit filed yesterday in state court in San Jose, California. Stephanie Tilenius, another ex-PayPal executive now at Google, violated contractual obligations by recruiting Bedier, PayPal said.

Bedier “is now leading Google’s efforts to bring point of sale technologies and services to retailers on its behalf,” according to the complaint. “Bedier and Google have misappropriated PayPal trade secrets by disclosing them within Google and to major retailers.”

Both companies are trying to move into storefronts from online transactions and build their mobile businesses. PayPal, based in San Jose, California, is working with major retailers to develop a new type of point of sale system — the equipment next to cash registers where consumers swipe credit cards.

Google, based in Mountain View, California, yesterday unveiled two services to let consumers pay merchants and download coupons with a tap of their mobile phones.

Aaron Zamost, a Google spokesman, said in an e-mail that the company hasn’t received a copy of the suit and can’t comment until it has reviewed it.

Android Talks

PayPal also alleges that Bedier, who left the company in January, discussed a job with Google while simultaneously leading negotiations to make PayPal a payment option on Google’s Android Market. He didn’t disclose the job-related talks, a breach of his fiduciary duty, the company said.

Tilenius, who left EBay in 2009, was under contract not to recruit employees, PayPal said. She messaged Bedier on Facebook Inc.’s social-networking Web site, telling him she had a “HUGE” opportunity for him, and sent him e-mails and text messages offering advice while he interviewed for a position, according to the complaint.