The High Court has ordered Safaricom PLC to pay about KSh 1.4 billion in damages, as well as ongoing royalties set at a proportion of M-PESA revenue, after finding that the telecom operator infringed a local innovator’s copyright in developing a parental-control feature within M-PESA.
- •The case centered on a product concept known as “M-Teen Mobile Wallet,” developed by Peter Nthei Muoki and his firm, Beluga Ltd.
- •The concept outlined a mobile wallet tailored for teenagers and young adults, allowing parents to set spending limits, monitor transactions, and manage accounts through USSD menus on basic mobile phones.
- •The dispute turned on a basic principle of copyright law: while ideas themselves are not protected, the specific way those ideas are expressed can be.
Muoki said he shared detailed documentation of the concept with Safaricom executives in 2021 but Safaricom later launched a feature within M-PESA, marketed as a child account management tool, that allowed parents to control and track their children’s spending in a similar way.
Safaricom denied the claim, arguing that the underlying idea was not unique and that similar parent-child account controls already existed in banking and software systems. The company said it had been working on its own version of the feature before Muoki’s pitch and pointed to a 2020 proposal from ‘Huawei’ as evidence that the development predated any interaction with the plaintiff.
Safaricom’s defense rested on the argument that it had independently developed a common concept. Muoki’s case focused on showing that the detailed design, particularly the sequence of menu options, commands and system responses, was copied.
Why the Court Sided with Beluga
In its ruling, the court accepted that the general concept of a youth-focused wallet with parental controls was not original. However, it found that the plaintiff’s documentation went beyond a general idea, setting out a detailed structure for how such a system would function. The court maintained that the structure was protected as a literary work.
“Whereas I can agree that the idea for a youth/teen mobile wallet is a common, unprotectable idea within the industry and that similar products can be created around the same concept, in this case, I can draw an inference that Safaricom generated and initiated its product after obtaining the idea and its expression from the Plaintiffs (Muoki and his company) and what they did was implement the idea with a different programmer,” Justice Josephine Mong’are ruled.
The judge found that Safaricom had access to the material through meetings with its executives and that the company failed to provide convincing evidence that its own product had been developed independently. The court pointed to gaps in Safaricom’s documentation, inconsistencies in its explanation of the development timeline, and the absence of key technical records. It also found that the similarities between the two systems were substantial enough to support an inference of copying.
Safaricom’s reliance on Huawei did not resolve those concerns. While Huawei produced a proposal dated September 2020, the court found no clear evidence of a finalized design or formal instructions to proceed at that time. The judge concluded that the material presented did not establish a credible, independent development path that predated Muoki's disclosures.
The timing of events weighed heavily in the decision. Muoki’s pitch took place between March and June 2021, and Safaricom’s product was launched in November 2022. The court viewed this sequence, combined with the similarity of the systems, as consistent with copying rather than coincidence.
What the Court Ruled
Having found infringement, the court declined to grant an injunction that would have stopped Safaricom from operating the feature, citing its widespread use and the potential disruption to millions of customers. Instead, it awarded damages based on a percentage of Safaricom’s M-PESA revenue.
The court set damages at 1% of M-PESA revenue for the 2024 financial year, amounting to KSh 1.4 billion. It also ordered Safaricom to pay an ongoing royalty of 0.5% of M-PESA revenue for as long as it continues to operate the feature or any substantially similar functionality.
In calculating damages, the court rejected Safaricom’s argument that the feature does not generate direct revenue. It found that even if the service is not charged separately, it contributes to overall usage of M-PESA, which in turn drives transaction fees and broader revenue growth.
“This case is a cautionary tale for innovators and corporations alike. For innovators, it demonstrates that even David can prevail against Goliath when the evidence is marshalled properly and the truth is on his side. For corporations, it is a reminder that good ideas do not only originate in boardrooms,” Justice Mong’are ruled.
