Comparing Apples and Oranges: Faulu Kenya on Shaky Ground in Intellectual Property Suit Against Safaricom

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It was naive of the Plaintiff [Faulu Kenya] to suggest that it was the only entity to recognise the potential of the mobile phone platform to reach potential customers with banking products. – Faulu Kenya Deposit Taking Micro-Finance Limited vs Safaricom Limited HCCC No. 756 of 2012 at page 13.

This blogger has come across a recent High Court ruling in the Faulu Kenya vs Safaricom case. Faulu Kenya made an application for temporary injunctions to restrain the Safaricom from offering to its subscribers and the public generally, the cash saving and advance product called M-Shwari howsoever both during the pendency of its application and the entire suit. To recap briefly, the M-Shwari row arose late last year when Faulu Kenya claimed it was the first entity to come up with the idea of a mobile money service that allows users to save, borrow loans and earn interest using their mobile phones. As a result, Faulu Kenya moved to court to claiming that Safaricom had infringed former’s copyright rights in a concept paper containing the idea.

The Honourable Judge Havelock, in the present ruling, dismissed Faulu Kenya’s application with costs awarded to Safaricom. From an intellectual property perspective, Faulu Kenya appears to have exposed serious flaws in its copyright claim, including its understanding of rights under copyright and the offence of infringement. Therefore this blogger concurs with the ruling of the learned judge.

Comments:

A good starting point would be to examine each of Faulu Kenya’s submissions in this matter as summarised on page 11 of the ruling:

i. To the extent that the respondent has and offered to the market the offensive product, it infringes on the applicant’s [Faulu Kenya’s] copyright to the work.

The subject matter of Faulu Kenya’s rights under copyright is its concept paper which relates to the idea of a mobile money service that allows users to save, borrow loans and earn interest using their mobile phones. Therefore the question, one must ask is whether Safaricom have carried out any restricted act relating to the literary work claimed by Faulu Kenya?

In the opinion of this blogger, the fact that Safaricom has offered a product or service similar to the concept described by Faulu Kenya does not fall within the definition of infringement contained in section 35 of the Copyright Act.

ii. To the extent that the respondent has not evidenced having had the concept in the offensive product in the manner proposed by the applicant, prior to receiving the applicant’s proposal and concept on 25th February 2011, then it is more likely than not that the offensive product is a reproduction in a material form of the applicant’s concept and therefore an act of infringement of the copyright therein.

Faulu Kenya appears to be cleverly shifting the onus of proof from itself to Safaricom. However this blogger submits that the onus solely rests on Faulu Kenya using the popular three-pronged test for proving infringement, namely: (a) Similarity, (b) Causal connection between original work and infringing copy; (c) Copyrightability of the original work. Faulu Kenya ably deals with requirement (c) at pages 8 and 9 however as we have seen above, requirement (a) is absent since there are two separate copyrightable subject matter both relating to the same idea. The same reasoning could be extended to requirement (b). This requirement relates to the question of access, which presupposes that the original work and the infringing copy fall under the same category of work as defined in the Act.

All in all, this blogger submits that it is both factually and legally impossible for Faulu Kenya to claim that the Safaricom M-Shwari service is an infringing copy of its concept paper therefore this defeats any claim by Faulu Kenya on the grounds of intellectual property infringement.

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