Google responds to PayPal trade secrets lawsuit

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[JURIST] Google [corporate website] on Friday responded to allegations of misappropriating trade secrets made in a lawsuit [complaint, PDF] filed by PayPal [corporate website], arguing that it had done nothing illegal. The lawsuit was filed Thursday in the Superior Court of California [official website] following the unveiling of Google Wallet [service website] a mobile payment system to be utilized by Google’s Android phone line. The suit centers on two former PayPal employees, Osama Bedier and Stephanie Tilenius, who PayPal claims were poached by Google following the breakdown of three-year negotiations to make PayPal the payment system of the Android phones. The lawsuit further alleges that Bedier had given Google confidential documents relating to PayPal’s mobile payment strategies and willfully and maliciously shared his knowledge of the company’s trade secrets after leaving PayPal, violating California state law [Cal. Civ. Code § 3426 et seq.]. The lawsuit also alleges that Tilenius assisted in recruiting Bedier from PayPal, violating contractual obligations requiring her to refrain from doing so for a year after her departure from the company. The lawsuit also alleges that Google violated state law prohibiting unfair business practices [Cal. BPC. Code § 17200 et seq.]. In response, Google emphasized that it respects trade secrets [WP report] and that state law and public policy recognize people’s ability to seek better employment opportunities.

In recent years, Google has been the subject of litigation worldwide. In March, Microsoft [corporate website] announced that it would file a formal complaint [JURIST report] with the European Commission (EC) detailing alleged anticompetitive practices by Google. Google has been facing an ongoing investigation [JURIST report] by the EC over allegations of manipulation of search results to highlight Google’s own products and services. The company has faced separate antitrust inquiries in Italy, Germany and France in addition to the EC probe, in which Microsoft-owned Bing subsidiary Caio was one of the original complainants. Microsoft’s announcement came the same day the US Federal Trade Commission (FTC) announced a settlement [JURIST report] with the company over charges that it breached consumer privacy rights and was misleading during the launch of its social networking platform, Google Buzz [service website]. These reports came a week after a New York court ruling rejecting a proposed settlement [JURIST report] in the 2005 suit brought by authors and publishers over the Google Book Search project.

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