M-Pesa patent row referred to tribunal


An M-Pesa agent serves a client in Nairobi. M-Pesa is emerging as a pivotal arm of Safaricom’s operations. File

A suit filed against Safaricom by an innovator over money transfer technology M-Pesa has been referred to the Industrial Property Tribunal for determination.

Commercial court judge Daniel Musinga declined an application by Safaricom to dismiss the case for want of prosecution, saying the proper forum to determine the issues arising from the suit was the tribunal.

Mr Christopher Ondieki sued the mobile provider three years ago saying he invented M-Pesa’s upgraded technology which allows users to transfer money in US dollars and in Kenya shillings and to and from bank accounts.

(Read: Safaricom taken to court in fresh copyright row)
Mr Ondieki argues in an application he filed in 2008 that he forwarded a proposal of the technology to Safaricom and was invited to demonstrate his invention but instead of finalising the deal, Safaricom went ahead to implement it without his consent.

He sought for a permanent injunction blocking Safaricom from using the technology and an inquiry into damages suffered or alternatively an account of profits. On February 21, Safaricom lodged an application, seeking the dismissal of the suit arguing that no steps have been taken by Mr Ondieki after the ruling of Lady Justice Joyce Khaminwa on July 31, 2009.

Lady Justice Khaminwa had held that the High Court had no jurisdiction to handle the matter and directed that the suit be filed in the Industrial Property Tribunal.

No legal capacity

Responding to Safaricom’s move to throw out the suit, Mr Ondieki argued the company’s application was misconceived and an abuse of court process.

He said the Safaricom had no legal capacity to file any proceedings in court after the ruling of Lady Justice Khaminwa who referred the parties to the tribunal.

Furthermore, Mr Ondieki submitted that he had appealed against the ruling of Lady Justice Khaminwa and should be allowed to pursue the appeal.  However, lawyer Ochieng’ Odoul for Safaricom told Mr Musinga that although the innovator had filed a notice of intention to appeal, no steps had been taken to prosecute the suit and urged the court to dismiss it.

But in his ruling Mr Musinga said it did not matter whether Mr Ondieki was dissatisfied with the ruling and had filed a notice to appeal.  

The judge ruled that unless the appellate court states otherwise, “this court cannot purport to have jurisdiction to determine the dispute or dismiss the suit.”

M-Pesa is emerging as a pivotal arm of Safaricom’s operations that has helped sharpen the telecom giant’s competitive edge by locking in some subscribers in a market marked with cutthroat competition.

It accounted for 16 per cent of Safaricom revenues of Sh107 billion in the 12 months to March compared to four per cent in 2009.

(Read: M-Pesa drives Safaricom as profit declines to Sh12.8bn)

Two months ago, another innovator moved to court seeking to stop Safaricom from using a popular service dubbed ‘Maliza Stori’ that allows subscribers to buy more airtime on credit.