Safaricom taken to court over M-Pesa trade secrets


Safaricom PLC headquarters in Westlands, Nairobi. FILE PHOTO | DENNIS ONSONGO | NMG

Safaricom has failed to stop the hearing of a case of alleged infringement of intellectual property after planning to roll out a product similar to an innovator’s idea who shared his invention with officials of the country’s largest telco in 2021.

High Court judge Josephine Mong’are dismissed Safaricom’s application seeking to suspend the petition filed by Peter Nthei Muoki and Beluga Ltd, who have sued, alleging that the telco infringed on his intellectual property.

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Mr Muoki moved to court last year seeking to be paid for gains and profits derived from the infringement of his copyright and for the court to order the telco to pay him royalties and licensing fees or alternatively, the court to direct Safaricom to pay him Sh10 billion for the product.

Safaricom has asked the court to suspend the hearing of the case, which is slated for October 31, pending the determination of an appeal the telco has filed against an order directing it to produce a list of documents including a letter to Huawei Technologies (Kenya) Company Limited to propose a solution for parent-child control product functionality under the M-Pesa platform.

“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 judge ruled.

Mr Muoki has sued Safaricom and Huawei Technologies (Kenya), claiming that the telco wanted to launch a product known as ‘Manage Child Account’ under a USSD Code.

The businessman, however, says the product is similar to his product known as ‘M-Teen Account’, an M-Pesa sub-wallet for persons within 13-17 years and 18-24 years popularly known as digital natives or Generation Z to enhance parental control on their spending behaviour or patterns.

Mr Muoki says he approached Safaricom officials in March 2021 to discuss his idea. But after a meeting, he was allegedly informed that it would be difficult to implement the product since it would target teenagers without identification cards, a move that would need approval from the Central Bank of Kenya.

And although the company allegedly rejected the product, Mr Muoki says the Safaricom officials he allegedly met informed him that they were mulling over a similar idea.

A few months later, Mr Muoki says he was shocked to see Safaricom conducting a test run of a product that is a copy and paste of his innovation but under a different name.

He says the Manage Child Account product has an uncanny resemblance and functionality to his M-Teen Mobile Wallet USSD code. After filing the case, Mr Muoki successfully applied for the court to compel Safaricom to produce the documents he says are in the telco’s custody.

Other documents are a proposal or write-up for M-Pesa Parent Child Control product/functionality by Huawei Technologies to Safaricom and others.

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Safaricom has opposed the application, arguing that Mr Muoki was seeking confidential documents relating to CBK approval for a critical payment system operated by the telco with respect to MPesa.

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