EBay sues Google over mobile wallet application

Online auction firm eBay and its payment brand PayPal have filed a legal challenge accusing Google of using stolen trade secrets to create the mobile wallet application unveiled on Thursday.

Specifically, eBay alleges in the lawsuit (PDF) that two former employees who moved to Google used knowledge gained while working at PayPal to help Google get its product to market first.

The two executives - Osama Bedier, who worked for nine years at PayPal as vice president of platform, mobile and new ventures, and Stephanie Tilenius, who worked as a consultant for eight years - both spoke at the launch of Google Wallet earlier this week.

"By hiring Bedier, with his trade secret knowledge of PayPal's plans and understanding of Google's weaknesses as viewed by the industry leader [PayPal], Google bought the most comprehensive and sophisticated critique of its own problems available," the law suit said.

"On information and belief, Bedier has in fact misappropriated PayPal's trade secrets by sharing its mobile payment, point of sale, and 12 digital wallet information with Google."

EBay also claimed that Bedier transferred documents outlining PayPal's mobile payment strategies to his personal computer before moving to Google.

"Bedier transferred up-to-date versions of documents outlining
27 PayPal's mobile payment and point of sale strategies to his non-PayPal computer just 28 days before leaving PayPal for Google on Jan 24, 2011," it reads.

Google hit back at the claims, though, arguing that staff movement within major firms was commonplace in the industry and that it would dispute the accusations in the courts if necessary.

"Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, an idea recognised by both California law and public policy," they said.

"We respect trade secrets, and will defend ourselves against these claims."

The Google Wallet app will initially be available on Google Nexus S devices using its built-in near-field communication capabilities, and will allow users to pay for purchases at 150,000 US stores.

Mobile operators are also keen to get involved in this burgeoning market. Vodafone, O2 and Orange are all preparing to run the technology on their networks to facilitate payments on the go.