Secrets (Definitely) don’t make Friends

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By Jennifer Williams

Reviewed by Cynthia Amis

Alleged stolen trade secrets, corporate battle, employee scandal and behind the curtains business. This all sounds like the adage on an advertisement for the next Wall Street movie starring Michael Douglas. Yet it is actually some of the discussion being tossed around when talking about the recent lawsuit involving PayPal and Google concerning forms of online payment.

There are two players at the center of all the intrigue, both of whom worked as high-ranking employees at PayPal and interestingly enough now both work for Google. Osama Bedier was once a senior PayPal executive responsible for the mobile payments aspect of PayPal. He left PayPal for Google in January 2011. At Google he is also in charge of Mobile Payments. The other person involved, Stephanie Tilenius, also left PayPal for Google at the end of 2010. The story goes that Google and PayPal were in discussion about using PayPal as the form of payment in the Android Phone Market, which is owned by Google. Osama was in charge of those negotiations for PayPal at the time, while simultaneously being interviewed for his current position at Google. Osama left PayPal after being solicited and recruited by Stephanie. PayPal claims that this violated her contractual obligations to the company. Once Google hired Osama, negotiations between the two companies ceased, upon the heels of which came the strikingly similar Google option called Google Wallet.

PayPal wasted no time in filing the lawsuit against Google, Osama, and Stephanie claiming that Osama and Google are misappropriating PayPal’s trade secrets.  PayPal claims that as its Vice President, Osama knew that Google was viewed as a competitor and was briefed on analysis showing what Google’s weaknesses were as well as what PayPal’s plans were in light of this analysis.  This information is viewed as trade secrets. In the claim, PayPal states  “Bedier transferred up-to-date versions of documents outlining payment and point of sale strategies to his non- PayPal computer just days before leaning PayPal for Google on Jan 24, 2011. “ See for full court document. PayPal further claims that by placing Osama in charge of the mobile payment business, Google basically ensured that he would misappropriate his trade secrets and that Osama has refused to properly return his trade secret information.

Another aspect of the lawsuit is that PayPal claims that Google recruited Osama while he was employed by PayPal and was negotiating against Google. At the precise time that a deal between Google and PayPal was being finalized and ready to sign, Osama was being recruited by Stephanie and was in a job interview process with Google. After Osama accepted the job at Google, the deal was renegotiated yet never finalized by Google and in April of 2011 it was announced that Google did not want to partner with PayPal.

The only word that has come from Google is that it will defend itself against these claims and that it respects the notion of trade secrets.  For now, only time will tell what the outcome of the lawsuit will be but there certainly does seem to be a lot of force behind the allegations that PayPal is making.


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