The High Court of Kenya has ordered Safaricom PLC to pay KES 1.4 billion in general damages to software developer Peter Nthei Muoki and his company, Beluga Limited, after finding that the telecom operator infringed on copyright protections. Justice Josephine Mong’are ruled that Safaricom used detailed USSD menu structures shared by the developer to build its child-focused products, M-Pesa Go and Manage Child Account. The court also imposed an ongoing royalty of 0.5% of gross M-Pesa revenue from March 31, 2025, for as long as the child account features remain in operation.
Background of the Dispute
The case, Peter Nthei Muoki & Beluga Limited v Safaricom PLC, centered on a digital financial concept developed for teenagers. Peter Nthei Muoki created the M-TEEN Mobile Wallet in 2020. The platform was designed to allow parents to set spending limits, monitor transactions, and manage financial activity for their children through USSD-based menus.
Between March and June 2021, Nthei presented detailed system designs, workflows, and USSD menu structures to Safaricom executives. The proposal was rejected. However, about 18 months later, Safaricom launched M-Pesa Go and Manage Child Account, products that the court found closely mirrored the submitted design structure. Justice Mong’are ruled that the materials shared were not abstract ideas, but detailed expressive work protected under copyright law.
What the High Court Found
- USSD Menu Structures Are Copyright-Protected Expression
Safaricom argued that the concept of a parent-controlled child account is a common financial services idea that cannot be owned. The court agreed that general business concepts are not protected. However, it drew a distinction between an idea and its expression.
The judgment stated that Nthei did not only present a concept. He provided structured USSD workflows, menu trees, and system logic that constituted original literary work under the Copyright Act. The court found that Safaricom’s implementation reproduced this structured design in a way that went beyond coincidence.
- Originality Does Not Require a New Market Invention
The court clarified the difference between copyright and patent protection in Kenyan law. A patent requires novelty and a completely new invention. Copyright requires originality, meaning the work must originate from the creator and involve independent intellectual effort. Even if similar products exist in the market, the specific way an idea is structured, documented, or coded can still be protected. In this case, the court found that Nthei’s system design met the originality threshold.
- Burden of Proof in Claims of Independent Development
Safaricom maintained that its partner, Huawei Technologies Kenya, had independently developed the youth wallet product before Nthei’s pitch. The court rejected this defense due to lack of supporting documentation. The judgment noted that when a company claims independent creation, it must provide verifiable records such as development timelines, design documents, and technical logs.
Safaricom was unable to present a consistent paper trail linking Huawei’s alleged prior work to the final product launch. The timing between the pitch and product release also weighed against the company.
Damages and Royalty Order
The High Court awarded KES 1.4 billion in general damages to Peter Nthei Muoki and Beluga Limited, an amount calculated as 1% of Safaricom’s FY2024 M-Pesa earnings. In addition to this one-off payment, the court ordered Safaricom to pay an annual royalty of 0.5% on gross M-Pesa revenue starting from March 31, 2025.
The royalty is set to remain in place for as long as the child account features stay active on the M-Pesa platform. According to the court, this structure was meant to compensate the developer for the use of his protected work while still allowing Safaricom to continue offering the services to the public.
Why the Court Allowed M-Pesa Go to Continue Operating
Despite ruling in favor of the developer, the court declined to shut down M-Pesa Go or related child account services. Justice Mong’are noted that the services are widely used by parents and children across Kenya. Halting them abruptly would disrupt daily financial activity for millions of users. Instead of an injunction, the court opted for monetary compensation and a continuing royalty structure.
Safaricom has disputed the ruling and stated that it intends to challenge the decision at the Court of Appeal. The company maintains that its technology partner independently developed the product. The High Court has granted a 30-day stay of execution, allowing Safaricom temporary relief while it prepares its appeal.
Legal Principles Clarified by the Case
The judgment in Peter Nthei Muoki & Beluga Limited v Safaricom PLC has been closely watched for how it interprets Kenya’s Copyright Act in the context of digital products.
- Idea vs Expression in Tech Design
The court reaffirmed that ideas are free for all to use, but detailed technical expression such as structured menus, workflows, and system logic can be protected.
- Copyright Threshold in Software Work
The ruling confirms that software-related documentation and interface design can qualify as literary works when they show original intellectual effort.
- Proof of Independent Creation
Companies accused of infringement must provide clear evidence of independent development, especially where timing and access to designs are disputed.
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.