In Peter Nthei Muoki & Beluga Limited v Safaricom PLC, the High Court was invited to determine a recurring tension in intellectual property law: whether a corporation may lawfully commercialise a concept after it has been disclosed by an innovator, while sheltering behind the principle that copyright does not protect ideas. The Court answered that question firmly in favour of the Plaintiffs, holding that while ideas are not copyrightable, the detailed expression of those ideas is protected, and Safaricom had crossed that line.
The dispute arose from the Plaintiffs’ “M-Teen Mobile Wallet USSD Code”, a parental-control mobile wallet product intended for teenagers and young adults. The Plaintiffs contended that after presenting the concept and detailed operational flows to Safaricom officials in 2021, Safaricom subsequently launched a substantially similar product under the “Manage Child Account” or “M-PESA Go” functionality. Safaricom denied infringement and maintained that the parent-child control functionality had independently been under development with Huawei since 2020, long before the Plaintiffs’ pitch.
The Court identified the central issue as whether the Plaintiffs had proved copyright infringement on a balance of probabilities. In doing so, the Court reaffirmed a settled but often misunderstood principle of copyright law: copyright protects expression, not ideas. Safaricom relied heavily on this doctrine, arguing that parental-control wallet systems are commonplace in the banking and telecommunications sectors and that the Plaintiffs could not monopolise a general concept. The Court agreed with the proposition in principle, citing earlier authorities including Solut Technology Limited v Safaricom Limited and Jack J. Khanjira & another v Safaricom PLC. However, the Court drew an important distinction between a broad commercial idea and the specific manner in which that idea is expressed.
What persuaded the Court was not merely the existence of a similar product, but the detailed structure of the Plaintiffs’ work. The Court found that the Plaintiffs had reduced their concept into a sufficiently detailed literary work through documented USSD menu flows, operational sequences, restrictions, reporting mechanisms, and system responses. In the Court’s view, this went beyond a mere abstract proposal and constituted a protectable expression under the Copyright Act.
Equally significant was the Court’s treatment of evidence relating to independent creation. Safaricom’s defence rested on the assertion that Huawei had independently developed the functionality from 2020. However, the Court found notable evidentiary gaps in that explanation. Safaricom failed to produce key documentary records, including formal instructions to Huawei and the final functional requirements specification. The Court regarded this omission as material and drew an adverse inference against Safaricom. The Judge was particularly sceptical of Safaricom’s explanation that the project originated from informal verbal discussions with the Central Bank of Kenya, observing that a project of such commercial magnitude would ordinarily generate formal institutional records.
The judgment is therefore notable for its evidentiary reasoning as much as for its treatment of copyright law. The Court applied the established test that infringement may be inferred where a defendant had access to the copyrighted work and there exists substantial similarity between the two works. Here, access was not disputed, as meetings between the Plaintiffs and Safaricom officials had admittedly taken place. The Court then inferred copying from the temporal proximity between the Plaintiffs’ disclosures and Safaricom’s accelerated rollout of the product, coupled with the striking structural similarities between the two systems.
Importantly, the Court rejected Safaricom’s argument that the Plaintiffs were attempting to monopolise a functional idea. The Judge emphasised that the Plaintiffs claimed protection over the detailed implementation and expression of the concept, not over the concept itself. This distinction formed the foundation of the Court’s holding.
On remedies, the Court adopted an unusually expansive approach. While it declined to grant a permanent injunction on public interest grounds, noting that millions of users already relied on the product, it nevertheless awarded Kshs. 1.4 billion as damages, calculated at 1% of Safaricom’s M-PESA revenue for the relevant financial year. The Court further imposed an ongoing royalty of 0.5% of future M-PESA revenues for as long as the product remains operational.
The decision is likely to attract considerable debate, particularly regarding the quantification of damages and the causal link drawn between Safaricom’s M-PESA revenues and the impugned functionality. The judgment arguably stretches traditional copyright remedies by anchoring damages to broader corporate revenues rather than demonstrable profits attributable to the infringing feature itself. Nonetheless, the Court appeared motivated by the view that large corporations should not benefit commercially from appropriating independently developed innovations without licensing or compensation.
Ultimately, the case stands as a significant development in Kenyan intellectual property jurisprudence. It reinforces the principle that copyright may subsist in detailed technical and functional documentation even where the underlying commercial concept is unoriginal. More importantly, it signals the Court’s willingness to scrutinise corporate claims of independent development where documentary evidence is lacking. For innovators, the judgment underscores the importance of documenting proprietary work comprehensively. For corporations, it serves as a warning that informal engagements with external innovators may expose them to substantial liability where internal development processes are not properly documented.
