Telecommunications giant Safaricom PLC has been ordered by the High Court to pay businessman Peter Nthei Muoki Ksh.1.4 billion in damages over the infringement of a USSD mobile technology linked to the M-Pesa platform.
In a landmark ruling delivered on Friday, the court found that Safaricom unlawfully used the businessman’s MTIN Mobile Wallet USSD application without proper authorization or compensation.
The court ruled that the company’s actions amounted to negligence and violation of intellectual property rights protected under Kenya’s Copyright Act.
Apart from the Ksh.1.4 billion compensation, the court further directed Safaricom to pay royalties amounting to 0.5 percent of M-Pesa revenue annually beginning March 31, 2025. The payments are expected to continue for as long as the technology or similar systems remain operational.
The judge, however, declined to issue a permanent injunction against the continued use of the service, noting that ongoing royalty payments would sufficiently compensate the inventor.
During the proceedings, the court criticized Safaricom for allegedly failing to provide crucial documents required in the case. The ruling also affirmed that Peter Nthei Muoki remained the rightful owner of the MTIN Mobile Wallet USSD code.
The judgment is being viewed as a significant victory for independent innovators and software developers in Kenya, especially in disputes involving large corporations and intellectual property rights.
The decision could also have wider implications for Kenya’s technology and telecommunications sector, particularly on how companies engage with local innovators and protect proprietary technologies.
M-Pesa, one of Safaricom’s flagship products, remains the country’s leading mobile money platform and a major contributor to the company’s revenues. The latest ruling may potentially expose the firm to additional financial obligations depending on the outcome of any appeal process.
Safaricom is yet to issue an official public statement regarding the ruling.
