PayPal Files Suit Against Origin of Google Wallet

Yesterday, Google announced their new payment plan for mobile devices called Google Wallet.  Within twenty-four hours, PayPal filed a lawsuit suggesting that Google and two of their executives had overstepped certain boundaries regarding “trade secrets”.

Paypal argues that Google’s two recent hires, Osama Bedier and Stephanie Tilenius, took the knowledge they had ascertained in prior attempts in developing mobile payment devices for PayPal with them to Google. There is some validity to that argument.  Both Bedier and Tilenius were once employed by PayPal.  Not only did they work for them, but were viably instrumental in the development of a prototype for a PayPal payment plan for Android devices.  In Bedier’s case, his time spent with PayPal included attempts at orchestrating deals with Google on the potentiality of such a mobile payment plan.

Unfortunately for Paypal, the deal failed–resulting in the departure of both Bedier and Tilenius in the aftermath.

Google maintains a different stance.  They plan to combat the lawsuit by arguing that the knowledge they took from PayPal were not “trade secrets”, but rather their personal intelligence.  Google suggests that Tilenius and Bedier are within their rights to choose where they would prefer to work. “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”.

The competing arguments in this case are clear, however, the debate on what constitutes personal knowledge of industry and “trade secrets” are open to subjectivity.  The case will inevitably come down to whether such information was inherited through previous collaborations with PayPal, or whether such information was developed through invention.  It is doubtful that PayPal will debate the individual’s right to choose their place of employment.  It is equally unlikely that this suit will impede the progress of Google Wallet–all in all, making this case appear somewhat theatrical.       



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