Safaricom Faces Legal Action for Intellectual Property Theft

Safaricom Under Legal Fire for Alleged Intellectual Property Breach
PHOTO - Bloomberg - Safaricom Under Legal Fire for Alleged Intellectual Property Breach
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Kenya’s largest mobile operator, Safaricom, is facing a lawsuit over allegations of intellectual property theft. Two individuals, Peter Nthei Muoki and Beluga Ltd, have accused Safaricom of planning to launch a product that closely resembles an idea they shared with the company’s officials in 2021.

High Court Judge Josephine Mong’are has rejected Safaricom’s request to suspend the case filed by Muoki and Beluga Ltd. Muoki took legal action in 2022, seeking compensation for the gains and profits resulting from the alleged infringement of his copyright. He also requested the court to order Safaricom to pay him royalties and licensing fees, or alternatively, to direct Safaricom to pay him $68 million for the product in question.

The product in dispute, called ‘Manage Child Account,’ was introduced by Safaricom using a USSD code. Muoki claims that this product closely resembles his own creation known as ‘M-Teen Account,’ which is an M-Pesa sub-wallet designed for individuals between the ages of 13 and 24. It aims to enhance parental control over spending behavior. Muoki initially approached Safaricom in March 2021 to discuss his idea. However, during the meeting, he was informed that implementing the product would be challenging since it would target teenagers without identification cards, requiring approval from the Central Bank of Kenya.

Subsequently, Safaricom mentioned that they were contemplating a similar idea. Muoki was surprised to discover Safaricom conducting a test run of a product very similar to his innovation, albeit under a different name, just a few months after their meeting.

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Muoki successfully applied to the court to compel Safaricom to provide supporting documents that he believes the company possesses. Safaricom objected to this application, arguing that Muoki was seeking confidential documents related to the Central Bank’s approval for a crucial payment system linked to M-Pesa.

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