Google Inc.'s ambitious plan to supplant credit cards with smartphones has thrust the Internet search leader into a legal tussle with online payment pioneer PayPal, which contends Google stole its ideas by hiring away two key executives.

Google Inc.'s ambitious plan to supplant credit cards with smartphones has thrust the Internet search leader into a legal tussle with online payment pioneer PayPal, which contends Google stole its ideas by hiring away two key executives.

PayPal painted a picture of betrayal and corporate espionage in a lawsuit filed late Thursday in a California state court, just hours after the unveiling of the "Google Wallet" payment service in New York.

The 28-page complaint alleges the service evolved from research that eBay Inc.'s PayPal had been working on for the past decade.

PayPal fingers two central culprits in the intellectual heist — one of its former executives, Osama Bedier, and former eBay executive Stephanie Tilenius.

In its response Friday, Google contends it merely identified talented candidates to run its mobile payments service and then made them offers that proved too tempting to refuse. "Silicon Valley was built on the ability of individuals to use their knowledge and expertise to seek better employment opportunities, a principle recognized by both California law and public policy," Google spokesman Aaron Zamost said.

The civil complaint alleges Google spent more than two years discussing a partnership that would have relied on PayPal to process payments for an application market set up for Google's mobile phone software, Android.

Google cut off the Android talks earlier this year after it had poached enough PayPal employees to set up its own mobile payments service, according to the suit. The suit doesn't directly connect the application markets system with the technology behind Google Wallet.

Google recruited Bedier, a PayPal executive for nine years, while the two companies were in talks about their alliance. After initially waffling, Bedier left PayPal to become Google's vice president of payments four months ago.

Before leaving, Bedier transferred some of PayPal's secrets to his computer and also uploaded other sensitive information to an Internet storage locker called DropBox, the suit alleged. Bedier also began lobbying for Google to hire other PayPal employees working on mobile payments before he took the new job, the suit said.