Safaricom Sued Over M-Pesa Trade Secrets

Safaricom has been unsuccessful in its attempt to halt the progress of a case regarding alleged intellectual property infringement.

This comes after Safaricom planned to release a product that resembled an innovator's idea which he shared with the company's officials in 2021. Safaricom's request to suspend the petition filed by Peter Nthei Muoki and Beluga Ltd was denied by High Court Judge Josephine Mong'are. The lawsuit alleges that the telco violated Muoki's intellectual property. Muoki had previously taken legal action against Safaricom, claiming compensation for the misuse of his copyrighted material. He further requested the court to instruct the telco to pay him royalties and permit fees for the product, or instead, a total of Sh10 billion.

Safaricom had asked the court to suspend the case's hearing until the determination of an appeal filed by the company. The appeal is against an order requiring Safaricom to produce a list of documents, including a letter to Huawei Technologies (Kenya) Company Limited, proposing a solution for parent-child control product functionality under the M-Pesa platform.

The businessman claims that Safaricom, a Kenyan telecommunications company, copied his mobile wallet product for teens and renamed it "Manage Child Account" under a USSD code. The businessman approached Safaricom officials in March 2021 to discuss his idea but was allegedly informed that it would be difficult to implement since it would target teenagers without identification cards which would require approval from the Central Bank of Kenya. A few months later, the businessman was surprised to see Safaricom testing a product that looked and functioned similarly to his M-Teen Mobile Wallet USSD code, but under a different name.

After filing a legal case, Mr Muoki requested Safaricom to provide relevant documents in the custody of the telco. Alongside this, he also requested other necessary documents including drafts or proposals made by Huawei Technologies for Safaricom and related companies regarding the M-Pesa Parent Child Control functionality. Safaricom has pushed back on releasing the documents on the grounds that Mr Muoki is seeking confidential information associated with the Central Bank of Kenya approving payment systems that the company relies on to operate with regards to MPesa.