PayPal goes on the defense, sues Google over trade secrets

Well, that didn't take long at all. Having only announced Google Wallet yesterday, Google is already facing some distaste for the service from the competition, namely -- PayPal. Summed up in what turned out to be a 28 page PDF statement.

PayPal is claiming protection of trade secrets as the reason for the lawsuit, and that Google allegedly lured PayPal executives Osama Bedier and former general manager and vice president of PayPal Merchant Services Stephanie Tilenius away from PayPal.

If what PayPal alleges turns out to be true, then we're guessing this will be a long drawn out case that could have some serious implications for those involved.

Source: PayPal Blog; Thanks, to all who sent this in!

 
There are 31 comments

tecknical says:

eh another butthurt corporation that goes sue happy whenever someone comes treading on their territory.

Parker Clack says:

I find it funny that they have the PDF of their lawsuit listed using Google Docs.

Android2010 says:

Paypal is not going to win Google is more powerful like apple is.

uansari1 says:

This means Paypal knew this service was being announced and was waiting in the wings with their complaint ready to go. It takes at least a few weeks to write an intellectual property complaint, not to mention the research that requires.

Who cares. Paypal is pretty much only good for ebay, that's pretty much all.

GilmourD says:

And eBay isn't any good anymore... So... LOL

bumpandrun says:

I agree, it's become a retail price sales site.

I don't use it as much anymore. You can get stuff cheaper at Amazon.

uansari1 says:

People selling things privately also accept paypal..I wonder what it will take for google to allow peer to peer transfers between private parties.. Just take a look at the marketplace forums here or at xda..everyone wants paypal. I just bought a Nexus S and posting through paypal was a pita. If you don't use it often your account is arbitrarily limited most of the time.

PensHockey says:

If this is all true, shouldn't the ex employees be facing charges for revealing company secrets? I understand that google has more money that's why they go after the company.

goodwla says:

Actually they will probably go after them both, the company and the people. I would guess that they will wait until the corp settlement is done, then file the personal suits because it would remove any question. It will be a long drawn out process…

DarknesSx says:

Paypal is feeling the competition against the internet giant, Google, with Google Checkout and now Google Wallet... PayPal won't stand a chance so they better act quickly... much like what is happening with Apple VS SAMSUNG,,, SAMSUNG made Apple then when they were about to surpass them Apple took a move to try eliminating the competition... NEXT Generation will be Android RULED with NFC and Google Wallet+Checkout :D

Fumetsu says:

Speaking as someone who loves Android and would never own an Apple device, if you read the detail of the case against Samsung on This Is My Next, Apple actually has what could be a strong case. TouchWiz, in many places, does look like a ripoff of iOS. Nilay Patel did a really good job breaking down each of Apple's claims. I think it'll be a tough one for Samsung to defend.

jhilario72 says:

My understanding is that you can't claim IP on the UI, you can only sue if the source code is infringed upon. So no problem that TW and iOS look similar.

violent23 says:

I hope Paypal loses, and goes broke. All they are, is a safe haven for crooks. Their whole business model is based around the idea of protecting the criminals as it makes them more money than protecting the online stores that use their service. All you ever need to do is purchase a digital product while using a proxy. Then tell paypal you were not the one who made that purchase. You will get your money back 100 percent of the time. Not to mention any other product all you need to say is the product was not as promised/described, and you will get your money back as well, when you send the product back just fill the shipping box with rocks. All Paypal cares is there a shipping label. You can have no returns posted all over your online shop, it does not matter as Paypal will give a return without your permission any time they want.

BoNg420 says:

Fuck paypal, they are a horrible company and when I was big into ebay selling, they fucked me over hundreds of dollars on a few occasions, also ebay is a horrible company too. I hope that ebay eventually goes under.

kembry says:

Finally some competition in the point of sale space! This business desperately needs it. I understand that Paypal wants to keep its dominant market position, but this is a space that needs innovation and Paypal can't really do it with no viable competition. Too many other companies have tried and failed in this. Amazon Payphrase, Citigroup, Western Union and Google's own checkout service have had limited success in this space, and as a result, Paypal has become a de facto monopoly. I hope Google does really well in this space...and I hope Paypal innovates their way out of this, so it forces both systems to become better for the consumer.

I'd love to see a few good competitors in this space. I'd love to see these players in this space:

1. Paypal
2. Google
3. Amazon
4. Microsoft
5. Apple

All have deep enough pockets to accomplish real innovation and force something that would benefit the consumer.

daveyhimself says:

F*ck paypal and all their fees. They're just as bad as ticketmaster.

cgtyoder says:

I think you mean, PayPal goes on the *offense." It's (relatively) hard to "go" on the defense.

nyc_rock says:

Ha! Yes. I was going to post the say thing. If google was suing paypal then that would be defense.

Duffin says:

Come on, Paypal's just mad that Google is muscling in on their territory. I'm really sick of the recent lawsuits meant only to stifle new competition. I know it's gone on for decades, but it seems to happen more often these days. There's a difference between protecting your IP and just being lazy. It's a lot easier to sic your lawyers on a competitor than it is to make your product BETTER to actually compete.

sookster54 says:

I have never had problems with Paypal since 1999, I try to use it as often as I can for MMO game monthly fee, Steam and D2D purchases and Newegg purchases, I don't like to throw around my CC info on sites that don't have Paypal. Yes ebay has gone to crap, but Paypal hasn't and it's widely supported.

ottscay says:

Paypal is a PITA if you move or change banks, but otherwise it's a serviceable payment service. That said, I seriously doubt Paypal can win this, unless they can show that Google actually utilized their IP (in which case their should be specific patents and other items involved).

This lawsuit smacks of the older anti-hiring clauses, which have been shown to be anti-competitive (and hence not legal). When it comes down to it Paypal is pissed that Google went out on its own rather than cut them into a slice of the pie.

Id love to see some competition. Paypal is a PIG, behind the ball in technology and dont focus on turning their business into something people would actually WANT to use. the only time you think of pay pal is ebay. (it usually goes something like this - "sh!t, i have to use paypal") They have the infrastructure in place as far as accounts receivable and customer setup, they should be working on mobile NFC payments and implementing lower fees with a larger user base. IMO, they are the new Blockbuster video. If they were half intelligent, they would team with Google and utilize their power and technology (the nexus s NFC, soon to be in a lot of phones) to work together.

PIGS! let them eventually die off

kalex says:

Paypal is horrible. All their "protection" is garbage. All they do is charge high fees without offering any protection for its users. They can freeze your account, take your money for no reason and good luck getting that reversed. Their customer service is horrid. I hope they loose and just fold. With all the competition coming from google, amex and others its going to be tough times for paypal really soon.

Oh and isn't it illegal for companies to form anti poaching agreements? I thought that alot of tech companies got fined for it. If google is offering more money to paypal workers and paypal is not doing anything about, tough shit. Workers should be free to work wherever they want. if you are talented engineer you should be compensated

TheNinja says:

Boo hoo...PayPal is crying now because they finally have some serious competition and might even have to resort to providing some good customer service from now on (instead of the "yeah, whatever, we're the only game in town" attitude that they normally exhibit). I hope PayPal loses this one, and loses badly. They deserve it.

Mr Bigs says:

Pay Pal is of no benefit to sellers at all. They always back the buyer no matter what and screw the seller.

violent23 says:

Exactly! The only useful service they have is for purchasing. If you are an online store they will let anyone rob you blind, only for the reason that backing the seller would cost them more money than backing the buyer. Of course you will not find out about these problems until Paypal has taken all of your money from your account and has a hold put on it.

JJsnyder says:

Several legal sites see a PayPal win. Paypal wallet has been around for years. Do we really think Google will be able to provide the customer service to the end user when trouble comes about using NFC?

Here a timeline of the events.

http://www.rictechs.com/paypal-vs-google-a-timeline-of-stolen-secrets-15...

The news follows the launch of a trial in Palo Alto, Silicon Valley which enables both local consumers and all of PayPal's 2,000 headquarters staff to use Bling Nation's mobile contactless payments solution to make purchases at a range of local merchants. This was April 2010 by the way.

red5hark says:

Just like when Apple realised how good the SG2 Was they ...s**t their pants and sued...

Diandraz says:

I hope Google does really well in this space...and I hope Paypal innovates their way out of this, so it forces both systems to become better for the consumer and i can download (selena gomez wallpaper for free)