Safaricom Sued Over M-Pesa Trade Secrets

Safaricom has failed to halt the hearing of a case of alleged intellectual property infringement after planning to launch 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 denied Safaricom’s application to suspend the petition filed by Peter Nthei Muoki and Beluga Ltd, who have sued, alleging that the telco infringed on his intellectual property.

Mr Muoki filed a lawsuit last year, asking for compensation for losses and profits resulting from the infringement of his copyright, as well as for the court to order Safaricom to pay him royalties and licencing fees, or to order Safaricom to pay him Sh10 billion for the product.

Safaricom has asked the court to stay the case’s hearing, scheduled for October 31, pending the outcome of an appeal the telco filed against an order directing it 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.

“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), alleging that the telco intended to launch a product called ‘Manage Child Account’ via a USSD code.

The businessman, on the other hand, claims that the product is similar to his ‘M-Teen Account,’ an M-Pesa sub-wallet for people aged 13 to 17 and 18 to 24, also known as digital natives or Generation Z, to improve parental control over their spending habits.

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

Although the product was allegedly rejected by the company, Mr Muoki claims that the Safaricom officials he allegedly met informed him that they were considering a similar idea.