Court cases force Safaricom to adopt caution in dealings with innovators

Safaricom Chief Executive Bob Collymore says court battles have made the company more cautious in dealing with innovators. [PHOTO: FILE]

BY MACHARIA  KAMAU

NAIROBI, KENYA: The many court cases filed against Safaricom are turning to be both frustrating and a drain on the firm as it fights to protect what it says are its intellectual property rights.

The court battles have at the same time made the company wary of partnering with innovative Kenyans, afraid that they might in future lay claim to an innovation that the company makes.

The firm has in numerous instances been accused of intellectual property theft. It has been taken to court by a number of individuals and companies alleging that the telecommunications firm had copied their ideas and modified them to develop ground breaking products that are now earning it billions of shillings.

Among the products whose originality the telco has had to defend include its mobile money service, M-Pesa and the recently launched mobile banking facility M-Shwari, which is a partnership with Commercial Bank of Africa (CBA).

Safaricom Chief executive Bob Collymore said the cases are frustrating for the firm due to the resources that it has to spend.

The firm, he added, has also become cautious in dealing with innovations that are not from its employees. “People tend to see us as a bit of an easy target and think that they can take us to court, get us to settle out of court and make easy money… it is a little frustrating for us and we end up spending a lot of resources on the cases,” he said in an interview.

Collymore said there are usually non-disclosure agreements signed between a person showcasing an innovation to Safaricom and the company has not contravened the terms of these agreements.

A lot of stuff

“We will not talk to you unless you have signed a non-disclosure agreement. Once that is in place, the person must understand that we have a lot of stuff that is ongoing within the company,” he said.

He said Safaricom is a big idea factory and just because one has an idea does not mean it does not have something similar.

 “In pretty much of the cases, none of the people that have filed a suit against us has been able to demonstrate before a judge an idea they shared with us and what we copied…we have never had an intellectual property case settled against us or made an out of court settlement,” he said. Several people have claimed being behind the idea that led to the launch of Safaricom’s mobile money product M-Pesa and argued that the firm should acknowledge their contribution and share proceeds from the returns.

Others that have challenged the firm include microfinance institution Faulu Kenya that sued the firm for allegedly using its idea to launch its M-Shwari service.

The service, offered in partnership with CBA bank, enables M-Pesa customers to run bank accounts on their cell phones and can borrow micro loans of up to Sh20,000. Faulu Kenya said the phone service company had allegedly copied what was its idea and product. The micro lender runs a similar service with Airtel Kenya called Kopa Chapaa.

Redesign and launch

It further claimed that it had shared a similar concept with Safaricom Limited.

The integrated communications provider allegedly went ahead to redesign and launch the product in the market despite a non-disclosure agreement with Faulu. However, the micro-lender  lost the case.