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PayPal Accuses Google of Poaching Mobile Payment Trade Secrets, Personnel 103

Posted by timothy
from the department-of-human-resources dept.
jhernik writes with a selection from eWeek Europe's short story on a snag facing Google's new mobile payment system: "PayPal, eBay's payment service, has sued Google over its new Google Wallet service, accusing the search engine of poaching trade secrets for use in its mobile payment service. The suit, filed in Santa Clara County Superior Court just hours after Google unveiled its Wallet payments sheme, alleges that two key executives who created the near-field communication (NFC) service used company secrets about mobile payments to fashion its own service."
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PayPal Accuses Google of Poaching Mobile Payment Trade Secrets, Personnel

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  • Google snatched ip away from somebody else and rolled it out as their own...

    Good thing they suck at execution these days (Wave, etc)

  • Fuck Paypal. (Score:1, Interesting)

    by Anonymous Coward

    How many indie projects have they held ransom so far? It mystifies me why people even still use Paypal for -anything-. Skip the middleman and send a cheque, that's what the post office is for. Stop giving money to those criminal goons.

    • You're forgetting that checks don't work so well for international transfers.

    • Re:Fuck Paypal. (Score:5, Insightful)

      by Grishnakh (216268) on Saturday May 28, 2011 @01:50PM (#36274470)

      Checks are far, far too costly.

      There's nothing stopping someone from sending you a bad check. What happens if you cash it? Your bank charges you a bounced-check fee, not them, YOU. (And yes, their bank changes them a fee too.)

      Why do you think just about every retail place has stopped accepting checks now? They're inherently a bad system, and the cost of dealing with a bad check is too high.

      When you're selling old shit on Ebay or Craigslist or whatever, a $30 bad-check charge will eat up your profits for several items, not just that one. It just isn't worth it.

      On top of that, it's too slow. It takes several days for stuff to arrive in the mail, but you also don't know how prompt the buyer is in paying for his shit; some of them sit on it for days before paying. Then you have to wait 10 days for the check to clear before you can send their stuff. Meanwhile, they're bitching because it's taking 3 weeks for them to get their item. And what if something goes wrong? What if the buyer didn't pay at all? This is very, very common on Ebay for some reason: I'd guess that fully 5% of buyers never pay for their items. This number isn't pulled out of my ass, it's what happened to me when I sold all my old Transformers on Ebay a few months ago. With Paypal-only payments, you file an unpaid item dispute, and if payment doesn't show up on Paypal in 1 day, then you re-list and void the old transaction. With checks and the USPS, you have to wait a week or two.

      Sending a check would be fine if the vast majority (like 99.99%) of buyers were honest, but they're not.

      • Re:Fuck Paypal. (Score:4, Insightful)

        by DCFusor (1763438) on Saturday May 28, 2011 @07:15PM (#36276382) Homepage
        I personally use checks for quite nearly 100% of my purchases, and I suppose I'm "lucky" to live in an area where 100% of retailers take them. Or, if you forget, an IOU, even on a napkin.

        The dishonesty issues are better dealt with by mechanisms like, say, jail. All you people who make sure schools can't teach morality -- it's on you @@sholes. Not my fault you've moved society from "don't do wrong" to "don't get caught". Use the wire fraud system when someone writes you a bad one. It would only take a few more doing this to make even the more ignorant criminals wake up.

        I like having the records of what I spend -- it's helped me stay rich once I got there by seeing where the money goes. Yeah, you can do that other ways, but the bank is a nice paper pusher and cheaper than one I'd hire.

        Ever heard of a business account, you know, like you have to have if you're a legit business, rather than a freeloader avoiding taxes and regulations? They clear checks right now, and I mean right now -- and I get a phone call immediately if a deposited check doesn't fly. Maybe you're just too dumb to bank-shop and get a good one?

        And yeah, I'm a luddite -- a weird thing for an ex dev and current physicist. I've had all the other payment options, and 100% of them have been hacked more than once, till I just gave up on them. But at the small town bank, if something goes wrong, I can just offer to take my business across the street. And, so far, 100% of the time -- if I even feel the need to say that -- it's enough and "nothing ever happened, please have a nice day and keep your business with us".

        Like paper ballots, it's a lot harder to cheat this system, you're not being very smart to call for ditching it. So you got hosed. Karma -- or sloth. Takes one or the other.
        • by Grishnakh (216268)

          You're kidding, right? A business account for selling a few old things on Ebay once in a blue moon? WTF is wrong with you?

          • by DCFusor (1763438)
            A business account only takes a couple minutes a the bank to sign a couple papers -- if you also have a personal account, they know what to fill in for you. Mine is very low cost...and very nice for the features. Nothing is wrong with me, it's the easiest way to get things done sometimes. In case you didn't know, setting up as a "real business" has some very attractive tax benefits if your business and your toy habit have some overlap. The hassle really comes in if you have "employees" -- states really
        • by RockDoctor (15477)

          and I suppose I'm "lucky" to live in an area where 100% of retailers take them.

          You're lucky, and I don't even know which continent or country you're in.

          The last time I wrote a cheque was ... I'm not sure - some time in the early 1990s? I haven't seen a chequebook of mine since the last time I was clearing out the old box of bank statements from about then, and I think I took the chequebook back to the bank for them to destroy then. (I can't remember if they accepted them.)

          As for a retailer that would acc

          • by DCFusor (1763438)
            Partly luck, and partly skill. I'm in Floyd County, Virginia. Proud home to all kinds of crazy people, about 20k of us, and one stoplight. The surrounding counties, like the one VA Tech is in, are much more dense, but they take my checks there too. I'm from DC -- an ex big city boy. I really prefer this to that by a country mile. The diamond to turd ratio in humans is vastly better here. Many people are entrepreneurs, as the commute to "anywhere that has jobs" is too long. The niceness is self-sustain
            • by RockDoctor (15477)
              Sounds almost idyllic. Shame you posted the location to Slashdot - either the powers-that-be will descend upon you like vengeful Furies for daring to be happy, or Slashdot readers will descend upon you like ... well, you get the message.
              • by DCFusor (1763438)
                Luckily, the last time the powers that be tried that, we repelled them, with some effort, "but you should have seen the other guy". As far as them reading this far down in an old story on slashdot....it might as well be one of the more private chat rooms at this point. And to the extent it attracts other cool geeks here -- that was the point.
    • Re: (Score:2, Insightful)

      by nospam007 (722110) *

      Is that you, Grandpa?

  • Dear Paypal... (Score:5, Interesting)

    by realityimpaired (1668397) on Saturday May 28, 2011 @12:53PM (#36274116)

    Prior Art... Cellphone-based mobile payment options have been available in Japan, India, even Kenya for years... some of these services have been available since before PayPal existed. And if that isn't enough of a prior art for a portable mobile payment system using an electronic network, I have an Interac card and a Visa I'd like to show them... the Interac network has existed since before the Internet (as it is today) existed, ditto Visa's electronic transaction network.

    It is basic electronic security... beyond that, all you need is a unique user ID and a way to bill that user ID back to the customer. Giving somebody a unique account number isn't exactly a trade secret: banks have been doing that for as long as banks have existed. Putting a password/PIN on that isn't exactly a trade secret: that's been done in computer science for almost as long as computers have existed. How is any of what they're doing a trade secret?

    • Re:Dear Paypal... (Score:5, Interesting)

      by jhoegl (638955) on Saturday May 28, 2011 @01:16PM (#36274258)
      There do seem to be an increasing number of companies jumping on the anti-google wagon.

      I like Google because of their search engine, I use their gmail because it is efficient for personal things and their anti spam is very good.
      I use the front page to pull feeds from other sites and get a quick glance at things.
      I use Android based phones because I like their business model.
      But if Google ever does me wrong, I will find alternatives.
      Businesses really dont have to try this hard to smear Google, eventually they will buckle under their own weight or because some idiot will get into a position they shouldnt be in and make a decision that harms the consumer. I know this is an inevitability, so do most smart consumers. Let it go companies, right now you just look petty.
      • Re:Dear Paypal... (Score:4, Informative)

        by sydneyfong (410107) on Saturday May 28, 2011 @02:06PM (#36274586) Homepage Journal

        I'm not saying Google is doing anything wrong, but let's *assume* that Google is doing shady things (like "stealing trade secrets" as alleged by Paypal) to harm their competitors, shouldn't those competitors be allowed to bitch and moan too?

        It doesn't always have to be you (or the customer) who's harmed before they can be rightfully accused of any wrongdoing.

        • Re:Dear Paypal... (Score:5, Insightful)

          by Jafafa Hots (580169) on Saturday May 28, 2011 @03:48PM (#36275256) Homepage Journal

          How did we get to the point where using ideas - ANY ideas (apart from "how to kill" ideas), is ever considered wrongdoing?

          We've managed to make illegal the very process that allowed human culture to develop in the first place.

          • by Ixokai (443555)

            Its not about using "ideas". Its about stealing specific, actual information that another company kept secret that is of material value to their business.

            Trade secrets are not some new or novel thing; let's say I come up with a recipe for this great and awesome sauce that makes everything taste wonderful. Obviously, I want to keep that secret. So I make my employees sign a NDA on the recipe, and I go out of my way to not reveal exactly what is in it and the process of mixing that I go through.

            If you analyze

            • "Is that really all that unreasonable of a thing to allow?"

              yes.

            • by gottabeme (590848)

              I think that is unreasonable. Trying to keep something a secret is risky by definition. It makes perfect sense for a competing company to try to compete by duplicating their competitor's product. While it may be unethical, that doesn't mean it should be illegal. I think their recourse should be only to sue the employee with whom they had a contractual agreement. If they had no such agreement with a competing company, I say "tough cheese.". That's business. Try harder to keep your secrets or diversify so yo

              • by Ixokai (443555)

                "Real" business, where its okay to bribe someone into breaking a NDA. "Real" business where its okay to go tap someones phone. "Real" business where you can break someones knees if they're getting in on your turf.

                Your idea of "real business" has to be run by sociopaths -- worse then the current ones already are.

                There's nothing wrong with duplicating a competitors product: that's good business. That's NOT theft of trade secrets: theft of trade secrets is inducing someone into breaking their agreement to keep

                • by gottabeme (590848)

                  I didn't condone any of those things. However, while bribes are immoral, in the private sector they ought to be legal.

                  Keeping secrets is risky business, and there should be no legal protection for doing so. Patents and copyrights are bad enough.

                  Ideas don't belong to anyone, they belong to everyone.

                  • by Vegeta99 (219501)

                    Agreed. I don't understand the grandparent's argument that I'm morally any worse because I got one of my competitors employees to squeal.

                    If the cops do it to a suspect, and the information is about a murder, its cool, but if I do it in my business it's not? Why should I be worried about the other guy's consequences? The cops don't worry about the squealer getting shot a block away from the police station after he squeals, do they?

          • by gottabeme (590848)

            Yes. You have hit the nail on the head. Makes me want to build a time machine and go back to the stone age and "invent" a wheel. Oh, wait...doing that would "infringe" on someone's imaginary "property" probably.

            The way things are going, the rate of progress is going to slow down instead of continuing to increase. The future is going to laugh at us in bewilderment--the past already is.

        • by mcgrew (92797) *

          AFAIC they can get as evil as they want to other companies. When they get evil to users like some other companies *coughsonycough* then I'm done with them. I could give a rat's ass what one big government-owning corporation does to another.

        • by erroneus (253617)

          They should be allowed to bitch and moan. But they shouldn't be allowed to sue. In the job market today, employees are all far too undervalued with the exception of the C-level which are typically over-valued. (Yeah, I know, I'm giving away my blue-collar nature.) Fact is, if Paypal valued their employees well enough, they couldn't be coaxed into jumping ship for another company. They leave for one reason only -- "better job." And "better job" doesn't always mean more money. It could mean free basket

      • Companies sue Google because of "deep pockets" and jealousy. The game only works on the big (who could pay, like Google) and the small (who can't afford to take you to court, so settle). Look around. The original fight against net neutrality was ISP's who get paid by their subscribers, wanted extra revenue from Google, who already pays at their end for bandwidth -- trying to double dip - for no other reason than they thought Google had the bucks. They might have moved on to NetFlix now, but there's no r
      • The fact that a successful company has a slogan "do no evil" makes me think that something is seriously wrong with consumer protection.

    • by Anonymous Coward

      Prior art doesn't apply in this case. Please understand what you're talking about before spewing that nonsense. Paypal's complaint is that Google hired one of their existing employees who had prior knowledge of upcoming paypal business strategies, contracts, and people they would approach for the service. The former paypal employee then used Paypal's trade secrets and internal business policies and code to set up a competing service and then to contact the companies and offer the Google Wallet service inste

    • by scragz (654271)

      Prior art only applies to patents, not trade secrets. They are pretty exactly opposite sides of the IP landscape. There could be some algorithms behind the scenes or in any other number of secret locations that would still be secret.

      • Prior art only applies to patents, not trade secrets. They are pretty exactly opposite sides of the IP landscape. There could be some algorithms behind the scenes or in any other number of secret locations that would still be secret.

        That's true, the specific phrase "prior art" is normally only used when dealing with patents, but you also can't claim something as a trade secret if it's already publicly known. I'm curious about what Paypal is claiming as secret, since I'm sure Google has plenty of people capable of developing this kind of system without stealing any secrets from Paypal (whom I didn't even know had a mobile payment system).

    • by grapeape (137008)

      Agreed...Paypal can DIAF. I had heard horror stories but ignored them and continued to use them for years, mainly to pay for stuff but once in a while to sell on ebay. About a month ago I had been cleaning my basement and ran across some collectibles that I had no use for but were worth a decent amount so I listed them....have no negative feedback at all, have never had a payment dispute and have been a member for 9 years, a few days before 3k worth of auctions are about to close I get a notice from paypa

      • by Kalriath (849904)

        You do realise PayPal is owned by eBay right? So eBay is actually creating it's own protection racket via a subsidiary.

      • by tlhIngan (30335)

        You had the option of going with a standard merchant account as well. You just have to offer Paypal with eBay.

        Oh wait, most merchant accounts screw with you worse than Paypal - demanding minimum transaction amounts (you must do $1K+ per month, or more), arbitrary holds (21 days? Hah. Some can hold for 90+ days), and all sorts of other crap.

        Trust me, if you want to accept random amounts of money from people, your only option is Paypal. Unless you're a business, you can't accept credit cards at all otherwise.

    • by Ixokai (443555)

      ... uhh, Paypal isn't suing them for patent infringement. "Prior art" has nothing to do with it.

      They're suing them for stealing trade secrets -- trade secrets can be anything confidential that a business uses in, well, doing business. We have no idea what actual trade secrets they are alleging Google stole: that's almost certainly going to be sealed... A trade secret is just information that's important to a business that they attempt to keep secret. It could be a list of businesses who were ready to partne

  • The employees that left simply didn't want to give Paypal their bank account number....

    F paypal.

  • Blurb confusing. (Score:4, Informative)

    by Jartan (219704) on Saturday May 28, 2011 @12:58PM (#36274150)

    Take note that they are not suing over NFC itself. After reading the blurb my first reaction was "they should of freaking patented it". This seems to be about business info instead.

  • the clusterfuck continues. US economic history in three words -- manufacturing, service, litigation.
  • by Anonymous Coward

    Per Engadget [engadget.com], this is Paypal upset that their go-to guy who was negotiating with Google for a deal that would probably have been involved in the Wallet backend jumped ship to Google and helped launch Wallet instead. If the allegations are true, Osama Bedier was working both sides-- while pretending to work for Paypal to negotiate a business deal with Google, he was talking to Google about a potentially lucrative job.

    (If Paypal are also suing over patents, they're insane-- NFC payments have been available fo

  • PayPal took my money, that's FAR more serious than alleged trade secrets. No police investigation into that though.
  • The title is bullshit. Ebay is not suing because Google is using their trade secrets. As far as I know, any trade secret you can reverse engineer legitimately is fair game. Ebay is suing because Google grabbed two of ebay's key personnel and ebay has information that these key personnel have revealed ebay's secrets to Google and Google is using this illicitly obtained information - despite both non-compete and non-disclosure clauses.

    This way, the suit actually makes sense instead of being a WTF moment.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      Non-competes are illegal in CA, so that can't be the basis of their suit (or at least not a good one).

    • by nospam007 (722110) *

      "Ebay is suing because Google grabbed two of ebay's key personnel and ebay has information that these key personnel have revealed ebay's secrets to Google and Google is using this illicitly obtained information - despite both non-compete and non-disclosure clauses."

      Since Google doesn't have read that NDA nor signed it themselves nor can they identify what knowledge an employee has is illicit or not, how can this be Google's fault?

      Anyway, if the NDA has a fine defined for a violation, they'll just pay it.

      • by fnj (64210)

        The issue is not what Google knows or does not know. The issue is that Ebay can identify what they know to be their plans implemented at Google, immediately after two of Ebay's personnel move to Google.

        Non disclosures and the like (in the US as I know them at least) do not codify what will happen to you if you break them. They simply restrict what you may do. If you break one after signing it, you are violating contract law, plain and simple. The remedy is bringing suit in civil court.

        Google has the poc

      • by Kalriath (849904)

        Since Google doesn't have read that NDA nor signed it themselves nor can they identify what knowledge an employee has is illicit or not, how can this be Google's fault?

        Inducing someone to commit a crime is in itself a crime (and the same for civil violations). This will likely be the basis of their argument.

  • If Paypal had anything worth protecting they they should have patented it. No patent - no protection.

    But it's a Secret, they whine in return. (def. secret: Something that you tell one person at a time.)

    And what if someone else comes up with your "secret" independently? Can you sue them for (re)discovering your Trade Secret?

    The only reason for Trade Secrets is, unlike patents, they never run out.

    eBay essentially says that they own your mind even after you leave their overly restrictive, underpaid, jo
    • by Kalriath (849904)

      Actually, the whole point of trade secrets is that they don't run out, and they don't require publishing. However, unlike patents the catch is that if someone else independently creates it, they do not infringe upon it and you have no basis to file suit. Trade secrets are protected in the same way as patents, other than that one specific case.

  • by Anonymous Coward

    Paypal are upset because Google touched the market first and said "Shotgun!".

  • Firefox playing up. (Score:2, Interesting)

    by Anonymous Coward

    When I opened this article, it said this is a scam site.

  • This sounds like Mini stealing technology from Yugo to me.
  • Doesn't it just come down to breach of contract on the part of the employees that Google poached?
  • This isn't about the technology. It's about Google hiring a PayPal marketing guy who had contacts with the retailers PayPal was going to sign up.

    • by Compaqt (1758360)

      That would actually seem to make some sense.

      Contact information belongs to the employer. It's entered on company computers on company time.

      Even copying it into your own paper notebook means you were using company time to do so, which is uncool regardless of the legality.

  • PayPal Accuses Google of Poaching Mobile Payment Trade Secrets, Personnel

    So Paypal doesn't want Google lightly cooking their eggs...or personnel?

  • "I thought of it first! Mommy! Make him stop!"

    Pathetic and hypocritical.

  • In certain parts of Africa, the cell phone is more ubiquitous than banks or credit card machines. So, a system setup by the locals, (not too many details), allows an individual to go to a filling station and fill his phone with some local currency (kind of currency). Everyone uses this currency. Take a taxi, and the driver will accept your payment via cellphone to cellphone. There are essentially no debit cards in circulation. I am not certain, but I read that there is no transaction fee. A fee is char

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