After 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.
What 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.
Reading 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?"
If 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.
I'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.
This 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.
Talent 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
It'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.
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
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?
You have to look at the lawsuit separately from whatever feelings you have towards either company. I'm not a huge fan of Paypal but it seems as if they have a good case against Google. I wouldn't want a employee giving trade secrets to a competitor, especially if that competitor was Google.
Because 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.
If 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
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).
This 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.
I'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.
Reading 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.
It'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.
Makes 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.
[+] [-] olivercameron|15 years ago|reply
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...
[+] [-] abraham|15 years ago|reply
You have that switched.
> Google hired Bedier after another former eBay executive, defendant Stephanie Tilenius, solicited and recruited him.
[+] [-] yanw|15 years ago|reply
[+] [-] ryanbigg|15 years ago|reply
"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.
[+] [-] DevX101|15 years ago|reply
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|15 years ago|reply
[+] [-] android2|15 years ago|reply
[+] [-] brown9-2|15 years ago|reply
[+] [-] dangrossman|15 years ago|reply
[+] [-] jasonkester|15 years ago|reply
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.
[+] [-] tvon|15 years ago|reply
[+] [-] unknown|15 years ago|reply
[deleted]
[+] [-] meow|15 years ago|reply
[+] [-] qasar|15 years ago|reply
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|15 years ago|reply
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...
[+] [-] brown9-2|15 years ago|reply
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?
[+] [-] FeelsGoodMan69|15 years ago|reply
[+] [-] itg|15 years ago|reply
[+] [-] lurker19|15 years ago|reply
[+] [-] zengr|15 years ago|reply
[+] [-] andrewcooke|15 years ago|reply
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|15 years ago|reply
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.
[+] [-] aclark|15 years ago|reply
[+] [-] mikeklaas|15 years ago|reply
http://corp.delaware.gov/whycorporations_web.pdf
[+] [-] unfasten|15 years ago|reply
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).
[+] [-] brown9-2|15 years ago|reply
[+] [-] Sparragus|15 years ago|reply
1. http://en.wikipedia.org/wiki/Osaifu-Keitai
[+] [-] methodin|15 years ago|reply
[+] [-] Tichy|15 years ago|reply
[+] [-] forkrulassail|15 years ago|reply
Mobile was the next obvious step.
[+] [-] erikpukinskis|15 years ago|reply
[+] [-] bmj|15 years ago|reply
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.
[+] [-] olivercameron|15 years ago|reply
[+] [-] ck2|15 years ago|reply
Remember Yahoo Wallet?
[+] [-] ignifero|15 years ago|reply
[+] [-] derwiki|15 years ago|reply
[+] [-] olivercameron|15 years ago|reply