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PayPal sues Google + ex-PayPal VP for Google Wallet
- derwiki 15y agoThat article was entirely unhelpful. What are Osama and Stephanie's backgrounds, and why do they deserve to be sued?
- olivercameron 15y agoRead the lawsuit, it says everything you need to know: http://www.ebayinc.com/assets/pdf/fact_sheet/2011_PayPal_DOC.pdf http://www.ebayinc.com/assets/pdf/fact_sheet/2011_PayPal_DOC...
- olivercameron 15y agoAfter reading briefly through the lawsuit[1], it seems that Osama Bedier was working as a senior manager at PayPal creating a product similar to Google Wallet (referred to as a "mobile payment" point of sale). He then interviewed and left for Google (whilst PayPal and Google were in negotiations for a separate business deal), and PayPal claims that he used trade secrets from PayPal to help Google create Wallet. Stephanie Tilenius broke her contractual agreement with eBay after she recruited Bedier (and attempted to recruit many other PayPal employees). "Bedier was the senior PayPal executive accountable for leading negotiations with Google on Android during this period. At the very point when the companies were negotiating and finalizing the Android—PayPal deal, Bedier was interviewing for job at Google without informing PayPal of this conflicting position. Bedier’s conduct during this time amounted to breach of his responsibilities as PayPal executive." I'm not a lawyer, but it looks like they have pretty good reason to be upset. 1. http://www.ebayinc.com/assets/pdf/fact_sheet/2011_PayPal_DOC.pdf http://www.ebayinc.com/assets/pdf/fact_sheet/2011_PayPal_DOC...
- abraham 15y ago> ... [Bedier] not only used trade secrets from PayPal to help Google create Wallet, but also poached Stephanie Tilenius ... You have that switched. > Google hired Bedier after another former eBay executive, defendant Stephanie Tilenius, solicited and recruited him.
- olivercameron 15y agoThanks, updated.
- yanw 15y agoThey can be 'upset' all they want it doesn't necessarily mean the case won't be thrown out, remember this is merely paypal's side of things.
- erikpukinskis 15y agoI'm sure this makes it at least a little harder to hire talent. I wonder how much. I know I'd never work for a company that thought it owned me, and was entitled to control who I could recruit to work with me after I left. I wonder how many other people feel the same way.
- olivercameron 15y agoIt's not that PayPal want to control their employees after they move on, it's that they want to maintain their trade secrets and make sure the employees actually stick to what they agreed to in their contracts.
- redwood 15y agoThis is silicon valley, the wild west. Everyone knows the direction technology will take, it's execution that's so tough. I see Google paying a settlement on this one just like they did with adwords http://news.cnet.com/Google,-Yahoo-bury-the-legal-hatchet/2100-1024_3-5302421.html http://news.cnet.com/Google,-Yahoo-bury-the-legal-hatchet/21...
- bmj 15y agoReading the complaint, it's not just that a PayPal employee went to work at Google. According to the complaint, Bedier (one of the defendants) was negotiating a payment deal between Google and PayPal while interviewing with Google. And soon after Bedier left, Google apparently scuttled the entire deal. And there's the matter of Bedier putting PayPal strategy documents on his personal machine days before leaving PayPal for Google. Of course, we're only hearing one side of the story at this point, but at least from PayPal's perspective, this isn't just about losing a couple of executives to Google.
- zs11 15y agoOsama Bedier was a big deal at PayPal. He ran the whole mobile and point-of-sale organization. Everyone know who he was, and everyone was shocked when he left for Google. This could get ugly.
- FeelsGoodMan69 15y agoHopefully, this means Paypal sees Google as a legitimate threat. Good. The world could only improve if Paypal ceased to exist.
- zengr 15y agoAnd why is that?
- ianl 15y agoPaypal, at least in my experience gouges its customers at every turn. For instance, the exchange rates they used are generally highly outdated. However, I have not used Paypal in several years so they might have fixed that.
- suking 15y agoBecause he doesn't understand how hard it is to easily allow payments when so much fraud is out there - especially once you go int'l. He's just naive.
- mishmash 15y agoPaypal has a long documented history of freezing accounts for ambiguous reasons, often with little or no recourse for the account holders. One quick/recent example: http://www.theindiestone.com/community/viewtopic.php?f=20&t=588 http://www.theindiestone.com/community/viewtopic.php?f=20...
- dangrossman 15y agoThere's nothing ambiguous about that case. Accepting pre-orders and "donations" is an enormous risk for a payment processor. The merchant isn't sending anything out in exchange for the payments. They could fail to complete or send the product. The risk continues to increase the more pre-orders come in. The merchant can't substantiate that they can fulfill the orders since they have no history of shipping that product in the past. If they were taking payments through a real merchant account (why aren't they? well, they'd have a real tough time getting underwriting to allow it), the bank's risk department probably would've frozen them or required establishment of a risk reserve account too.
- android2 15y agoPayPal, that exhalted bastion of ethical business practices, will be very successful in this appeal to public sentiment.
- brown9-2 15y agoEven jerks are sometimes right, or in this case, have legal standing.
- lurker19 15y agoHowever, it helps to pay one's own debt to society before calling in someone else's. I personally had to file a fraud dispute with my credit card company after receiving two promises over two months to reverse an unauthorized charge PayPal put on my card at their own (not a third-party vendor's) behest.
- dangrossman 15y agoI've yet to read a story where PayPal did something unethical, despite the monthly PayPal stories on HN. All of them have involved practices (freezing accounts, almost always with very clear cause, holding funds for 180 days, etc.) that are well within their terms of service AND identical to the policies of every merchant account provider in the US.
- Sephr 15y agoJust because it's in their ToS doesn't make it ethical, only legal.
- ryanbigg 15y agoWhat struck me the most in that lawsuit (which I haven't yet finished reading, but seems pretty compelling) is: "Bedier transferred up-to-date versions of documents outlining PayPal's mobile payment and point of sale strategies to his non-PayPal computer just days before leaving PayPal for Google" and "At the time he left PayPal, Bedier admitted that he had confidential eBay information in locations such as his non PayPal computers, non-PayPal e-mail account, and an account on the remote computing service called 'Dropbox'" It goes on to explain that PayPal has requested that Bedier removes the information from his personal accounts and returns it to PayPal. Bedier has not yet done that. This almost displays intent to share this information with outside sources. Wow. This sounds like a massive shitstorm is brewing.
- andrewcooke 15y agoWhat's with the "Does" in the lawsuit? They are mentioned on the front page, but not anywhere else. I realise "Doe" is "John Doe" - a pseudonym for an unknown person. But I can't see why they are included in the suit (all 50 of them).
- brown9-2 15y agoBecause PayPal is seeking to also sue people whose names they do not yet know: 6. eBay and PayPal (collectively “Plaintiffs”) are ignorant of the true names and capacities, whether individual, corporate or otherwise, of defendants named herein as Does 1 through 50 and Plaintiffs sue said defendants by their fictitious names. Plaintiffs will seek leave to amend this complaint to assert allegations against the Doe defendants when their true involvement in these matters and capacities are ascertained. In other words, PayPal employees that PayPal alleges that the former employees recruited to Google.
- phirephly 15y agoAs I understand it, this is very standard lawsuit boiler plate, such that if they later realize there is another party involved, they can just tell the court, "so-and-so is Doe 1," allowing them to very rapidly fold in new parties without refiling the suit.
- aclark 15y agoWhy is everyone a Delaware corporation? That makes me feel like my company should be a Delaware corporation. ;-)
- mikeklaas 15y agoWhy corporations choose Delaware [PDF]: http://corp.delaware.gov/whycorporations_web.pdf http://corp.delaware.gov/whycorporations_web.pdf
- r00fus 15y agoCorporations choose Delaware because the lawyers who incorporate them (usually contracted from big firms) choose Delaware.
- brown9-2 15y agoSee http://en.wikipedia.org/wiki/Corporate_haven#North_America http://en.wikipedia.org/wiki/Corporate_haven#North_America and http://en.wikipedia.org/wiki/Delaware_General_Corporation_Law http://en.wikipedia.org/wiki/Delaware_General_Corporation_La...
- chintanp 15y agoCheck these detailed answers on Quora, http://www.quora.com/Why-do-a-lot-of-public-companies-incorporate-themselves-in-Delaware http://www.quora.com/Why-do-a-lot-of-public-companies-incorp...
- unfasten 15y agoIf you're really thinking about incorporating in Delaware then you might want to check out this post, "Why incorporating my startup was my worst mistake" http://news.ycombinator.com/item?id=2399139 http://news.ycombinator.com/item?id=2399139 It's about the experience another HN user had incorporating his startup in Delaware and also generated a nice discussion about things to think about before you decide to incorporate (and specifically in Delaware).
- DevX101 15y agoReading the suit, a lot of the evidence that Tilenius recruited Bedier was based on the content of Facebook messages and text messages. Anyone know how they got access to these supposedly private communication? Case in point: "Tilenius reached out to Bedier by text message and again attempted to change his mind. On or about December 3, 2010, Tilenius messaged Bedier, “I still feel like I am missing something, for example what if we increased your offer, would that change things?"
- guelo 15y agoIf these communications occurred from within Paypal's coporate network or using Paypal equipment they could have been gathered using employee spying systems that they might have in place.
- esrauch 15y agoPaypal has company phones that log all your text messages?
- guelo 15y agoI'm speculating but it is definitely possible, for example http://www.cellular-spy.com/ http://www.cellular-spy.com/
- kluikens 15y agoIIRC, BlackBerry phones can be managed remotely. A nice use case for this feature is to shut down and wipe a stolen/lost phone with confidential information on it. I also believe that data (call log, text messages) can be retrieved remotely. I'm going out on a limb here in saying this, so I'll go look for something to cite. EDIT: BlackBerry Enterprise Service is what I was thinking of. There's a least one tool that you can use with BES, Retain by GWAVA, that will track and store your employee's text message.
- husein10 15y agoNot sure about paypal but I'm a lawyer at at a publicly traded financial services company and all communications on company blackberries (bbm, sms) automatically get logged along with all emails. All of these communications are searchable via a system we use for discovery during litigation. The law isn't the employee's friend here...employees have no reasonable expectation of privacy on company devices.
- qasar 15y agoTalent moving from company to company is not new in SV. And to be more specific, if you've been working you're whole career in maps technology and then move to maps division in another company, that shouldn't be shocking. Also, I have a hard time believing this one guy was the entire lynch pin on wallet and was the difference between Google doing it or not. A payment wallet is not a new concept. This is a clear sign of paypal's weakness. Rather than compete, sue. It's like zuckerberg said: If you guys were the inventors of Facebook, you'd have invented Facebook. I'm not a lawyer, just an engineer so maybe i'm missing something but doesn't seem as dramatic as some of the comments here imply
- brisance 15y agoIt's neither the career move nor the concept of the e-wallet that is in dispute... refer to the Mark Papermaster hiring fiasco that involved Apple and IBM a few years ago. The complaint is about a high-level executive acting against the company's interests while being employed in that capacity by stealing company information. I'm not a lawyer but I seem to recall quite a few similar cases e.g. someone from Coca-Cola who jumped shipped to Pepsico (or was it the other way around) and got charged with violating trade secrets laws. Edit: OK I got the details of the Coca-Cola/Pepsico case wrong. Apparently some Coca-Cola employees tried to profit from selling trade secrets to Pepsico. Article here: http://www.allbusiness.com/crime-law-enforcement-corrections/criminal-offenses/11497994-1.html http://www.allbusiness.com/crime-law-enforcement-corrections...
- brown9-2 15y agoI have a hard time believing this one guy was the entire lynch pin on wallet and was the difference between Google doing it or not Perhaps not, but as the filing alleges, he was the person in charge of negotiating a deal with Google for Paypal to provide these Wallet-like services at the same exact time he was interviewing at Google for a job. That sounds like the definition of conflict of interest to me. As an aside, I wonder what the interview process is like for someone Google is hoping to poach like this? Wonder if he had to interview with Andy Rubin a few days after/before appearing on the other side of the negotiating table from him?
- jasonkester 15y agoThis seems like a good illustration of the principle: "Ideas are worthless. Execution is what matters." Paypal had the idea first and a good 10 years worth of trying to make it work (payments from mobile devices was, after all, their first product, even pre-dating online payments). And in this case, they even had some of the same team working on the idea, but they just couldn't make it happen. Google could, and did, so they'll win. I can understand why PayPal would be upset. But really this just strikes me as another reason why we shouldn't get too worked up about the value of ideas.
- Sparragus 15y agoHow can this be trade secrets? Japan has been doing this for years! [1] This is not new technology. 1. http://en.wikipedia.org/wiki/Osaifu-Keitai http://en.wikipedia.org/wiki/Osaifu-Keitai
- forkrulassail 15y agoWe've had M-Pesa in South Africa for ages. Mobile was the next obvious step.
- ignifero 15y agoMakes one think that we are moving from a world of corporations to a world where only people matter, and everyone works as a contractor directly with a VC.
- ck2 15y agoI am not sure how but I hope Google beats the heck out of PayPal. Remember Yahoo Wallet?
- Tichy 15y agoWhat could be secret about a mobile wallet? The technology involved can hardly be secret? The idea itself isn't original, either.
- methodin 15y agoThis seems like a desperate move. I'm not aware of the timelines but it seems ridiculous that Paypal just sat around knowing their "secrets" were taken to Google and hoped the person(s) that took them would remove all traces and not divulge them to Google. Would make me believe that Paypal was incapable of actually delivering a quality product and Google seemed like a more viable candidate for actually getting the idea implemented. Lawsuits like these are increasingly only a mechanism for the lazy or inept to feel validated. I guess this is why we're told ideas are pretty much worthless.