‘Reverse Royalties’ Order In Developer’s Case Against Safaricom Sets Precedent

A Kenyan court has ordered Safaricom to pay a local developer an indefinite percentage of its M-Pesa revenue, a novel remedy that legal experts say could reshape how intellectual property disputes are resolved between individuals and dominant corporations.

The High Court on May 8 directed Safaricom PLC to pay Peter Nthei Muoki and his company Beluga Ltd KES 1.4 B (about USD 10.8 M) in damages plus an ongoing royalty of 0.5 percent of gross M-Pesa revenue annually for as long as the company operates its parent-child wallet feature, M-Pesa Go, or any similar functionality.

The ruling marks the first time a Kenyan court has attached a recurring revenue share to a copyright infringement judgment against the telecoms giant.

It’s also the first time an individual developer has successfully sued the East African telecoms behemoth in a copyright dispute, while representing a rare victory for a solo innovator against a corporate giant in a region where such David-versus-Goliath legal battles almost never succeed. A separate case in 2025 ended in defeat for another developer who had sued over a “reverse call” feature, with the court ruling that ideas shared without a confidentiality agreement are not protected.

Justice Josephine Mongare, who delivered the judgment, noted the disproportionate scale between the parties. “Even David can prevail against Goliath,” she said, referring to the biblical narrative.

Muoki developed a concept called the M-Teen Mobile Wallet in October 2020, a system allowing parents to monitor and control teenagers’ spending through simple USSD menus compatible with basic phones. He registered the design with the Kenya Copyright Board before approaching Safaricom executives in early 2021.

After a meeting in June 2021 at a Nairobi restaurant, Sitoyo Lopokoiyit, then managing director of M-Pesa Africa, told Muoki the product was not workable because the intended teenage users lacked identification cards, requiring central bank approval.

Seventeen months later, in November 2022, Safaricom launched M-Pesa Go, a product with near-identical functionality targeting children aged 10 to 17.

Justice Mongare found that Safaricom had failed to produce critical internal design documents and that the company’s explanation of independent development through Huawei Technologies was not supported by credible evidence.

“It is not the duty of the CBK Governor to advise Safaricom on product features,” the judge stated, questioning why a major telecommunications firm would act on undocumented verbal instructions. The court also drew adverse inferences from Safaricom’s inability to produce material evidence of internal conception.

The royalty structure was calculated based on M-Pesa’s revenue growth following Muoki’s pitch. According to court documents, M-Pesa revenue rose from KES 82.65 B in the financial year before Muoki’s disclosure to KES 107.69 B in the following year, a 30 percent jump. The court reasoned that ongoing payments would fairly compensate the inventor without disrupting service for millions of users.

Justice Mongare described the KES 1.4 B award, equivalent to one percent of Safaricom’s M-Pesa revenue for the 2024 financial year, as a “negligible cost” to the company relative to its scale.

Safaricom has secured a 30-day suspension of the judgment and has said it will appeal. The company has not issued a public statement on the ruling.

The judgment comes as Safaricom reported record earnings for the financial year ended March 2026. M-Pesa revenue grew 13.4 percent to KES 182.7 B, contributing 45.6 percent of the company’s Kenya service revenue. Group net income reached 99.7 billion shillings, the highest in its history.

For independent developers in Kenya, the case provides a rare blueprint for protecting their work. Muoki’s success hinged on two key steps: registering his design with the copyright board before approaching Safaricom, and documenting his pitch in detail.

“If you submit an unsolicited concept without a confidentiality agreement, you have no claim,” said the judge in a separate 2025 case that dismissed a similar suit against Safaricom. “Copyright law protects the expression of ideas, not the ideas themselves.”

Muoki’s documented USSD menu flows and system structure qualified as protectable expression under Kenyan law, whereas a simple concept note did not.