In a recent legal twist, a high court judge has given the green light for a potentially groundbreaking trial involving Safaricom, the Kenyan telecommunications giant.
The case revolves around allegations of intellectual property (IP) infringement, and it has taken an intriguing turn as the court dismissed Safaricom’s bid to halt the proceedings. Kenyan entrepreneur Peter Nthabi Muoki has accused Safaricom of deploying an M-Pesa feature strikingly similar to his own innovation. The High Court judge in charge, Josephine Mong’are, decided that Safaricom must answer these allegations in court. Safaricom had been planning to introduce a new product called ‘Manage Child Account’ via a USSD Code. However, Muoki claims that he had previously shared a remarkably similar product named ‘M-Teen Account’ with Safaricom.
The ‘M-Teen Account’ was designed as an M-Pesa sub-wallet targeting individuals aged 13 to 17 and 18 to 24, with the primary aim of enhancing parental control over their children’s spending habits. Reportedly, this crucial discussion took place in March 2021.
At that time, Safaricom had expressed concerns about potential obstacles to rolling out the feature, with the lack of identification cards among the target demographic being the most significant hurdle. This compelling reason meant that the product required approval from the Central Bank of Kenya.
Muoki was taken aback when he discovered that Safaricom was testing a product that seemed eerily reminiscent of his own creation.
Consequently, he took legal action, seeking to compel Safaricom to produce documents he claims they possess. Among the documents requested is a write-up pertaining to the M-Pesa Parent Child Control product and functionality by Huawei Technologies, shared with Safaricom and others.
Muoki’s initial application was granted, but Safaricom lodged an appeal against the ruling.
Notably, Muoki is seeking compensation for the gains and profits Safaricom derived from the alleged infringement of his IP copyright. Furthermore, he has requested the court mandate Safaricom to pay him royalties and licencing fees. As an alternative to royalties, he is willing to settle for KES 10 billion in compensation for the M-Pesa product.
In response, Safaricom attempted to suspend the case, citing a pending appeal contesting an order requiring the release of various documents, including correspondence with Huawei Technologies (Kenya) Company Limited.
However, this request to postpone the proceedings was rejected by the court.
Concluding her ruling, Judge Josephine Mong’are declared, “In conclusion, I find and hold that the application by the defendant has no merit and is hereby dismissed with costs to the Plaintiff.”
The trial is scheduled to commence on October 31.
This legal battle is not Safaricom’s first encounter with the courtroom, as illustrated by recent events involving Kenyan musician Bamboo, who won a nine-year copyright legal battle against the company. The court ruled in favor of Bamboo, ordering Safaricom to pay him KES 4.5 million for copyright infringement.