EBay sues Google over payment service
 

May 27, 2011 13:06:43 (ET)

SAN FRANCISCO (MarketWatch) -- Google Inc. didn't even get a full day to revel in the launch of its new Google Wallet smartphone pay service before eBay Inc. and its PayPal unit sued the online giant for alleged stealing trade secrets for mobile payment systems.

The suit, which eBay (EBAY, Trade ) and PayPal filed Thursday in the Santa Clara Superior Court in San Jose, Calif., claims that Google (GOOG, Trade ) and two former PayPal employees created the Google payment system using proprietary technology developed at PayPal.

The former PayPal executives, Osama Bedier and Stephanie Tilenius, were also named in the suit.

Bedier is Google's vice president of payments and joined the company in January after working as vice president of platform, mobile and new ventures at PayPal. Tilenius is vice president of commerce at Google and joined the company in late 2009.

In an blog posting announcing the suit, Amanda Piers, PayPal's senior director of global communications, said, "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."

In the lawsuit, PayPal said it is seeking "permanent injunctive relief" that also includes damages, reimbursement for compensation paid to Bedier "during the time period he was disloyal" to PayPal, and royalties. See here for the entire lawsuit that eBay and PayPal filed against Google.

Both Bedier and Tilenius led an event Thursday to launch Google Wallet. The service also includes MasterCard (MA, Trade ), Citigroup (C, Trade ) and Sprint Nextel Corp. (S, Trade ) as partners with Google.

In an e-mail, a Google spokesman said the company respects trade secrets and plans to defend itself.

"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," the statement read.

In afternoon trading Friday, Google shares rose 0.5% to $520.55, while eBay was up fractionally to $30.68 a share.

http://www.ebayinc.com/assets/pdf/fa...PayPal_DOC.pdf