PayPal sues Google over mobile wallet 'trade secrets'

PayPal has launched legal action against Google, claiming that they stole key secrets in order to launch their new 'Google Wallet' mobile payment service after two top executives defected.

article 1306493971167 0C490A8A00000578 887448 636x365 - PayPal sues Google over mobile wallet trade secret
Defection: Osama Bedier, former PayPal executive and now Google's Vice President of Payments, at the launch of Google Wallet on Thursday (AP)

Google's much anticipated 'mobile wallet' service - which uses a special chip in modern smartphones to let users pay for things by waving their phone over a paypoint - was launched by the search giant on Thursday in New York.
But it was immediately hit with the lawsuit from PayPal - the online payment firm owned by eBay - claiming that Google had used trade secrets they obtained when they headhunted a top PayPal executive, Osama Bedier, in January this year.
With the mobile payment market predicted to become a huge moneyspinner in the near future, and with other major players like Apple and Visa also expected to join the fray soon, the lawsuit could turn into a very bitter battle between the two web giants.

The lawsuit alleges Google lured away Bedier - now Google's vice president of payments - earlier this year to obtain trade secrets that they then used in setting up Google Wallet.
The departure of Bedier - one of PayPal's longest serving employees and a man widely seen as a future leader of the company - reportedly came as a huge shock to the firm when he left in February.

The suit further alleges that Bedier was actually interviewing for the job at Google at the same time as he was leading negotiations for PayPal to handle sales in Google's application market for phones running on its Android software.
PayPal also claims that a second former executive who defected to Google, Stephanie Tilenius, also took trade secrets with her. Google has yet to respond to the claims.
Google Wallet uses an NFC (Near Field Communication) chip, similar to the technology that powers contactless credit cards and travel cards such as London's Oyster system. While currently very few phones have an NFC chip - Google's own Nexus S, launched last December, was one of the first - they are predicted to be present in many new smartphones, including frequent speculation that Apple's iPhone 5 will feature one.