Safaricom said that whereas Ouko’s story is to all intents and purposes an attractive tale of an enterprising Kenyan youth with a good business head on his shoulders, it is not a story that has any credibility in as far as his claim to being the inventor of M-Pesa is concerned.
The telco’s defensive statement has, however, left many questions hanging, with Ouko defending himself by saying he “did not own the M-Pesa patent because he is not a good IP lawyer.”
The concept of patenting has been in existence since time immemorial. In Kenya, it is contained under the wider concept of Intellectual Property Rights (IPRs). Many critics have concluded that it is vital that Kenya develops “a strong policy framework surrounding intellectual property rights and in this case surrounding patents in order to have control over the application of technology or technological processes”.
In the innovation businesses, the patent holder takes it all
Safaricom claims ownership of the technology’s intellectual property (IP) rights. The company’s director of corporate affairs Nzioka Waita explained to HumanIPO that the intellectual property rights in the Vodafone Money Transfer (VMT) system, which is the core technology platform running the M-Pesa system, belongs to Vodafone.
Some experts have since said that the inventions may either be products or processes that offer a new way of doing something or give a new technical answer to a problem, which in this case makes Ouko’s claims justifiable.
“It was worse still when I started the whole IP process in 2002. I didn’t know any IP lawyer back then. Even the few firms that I talked to and were willing to take up the challenge, were simply too expensive for me. This led me to start seeking advice ad hoc. It was very easy for the idea to be stolen from the word go,” Ouko said.
According to Waita, Safaricom owns the patent, giving it certain rights of protection from having the invention exploited including making, importing, offering for sale, selling and using the product or process (if the invention is a process).
The IP in M-Pesa is in two forms
He said the IP in M-Pesa is in two forms, including the trademark and the proprietary software design and functionality, adding that the IP in the trade mark M-Pesa is jointly owned by Vodafone and Safaricom in Kenya, while Vodafone owns the trademark outside Kenya.
In response to Safaricom, Ouko said: “You will be surprised that unofficially, I had discussed this idea with some of your staff at Safaricom. It is because I do not have any evidence apart from witnesses that I do not normally talk about it. What I brought was just documentary evidence.”
He explains that he was sent to KECOBO by KIPI way back in 2003, as the former expected him to be aware of what he had to do.
The Industrial Property Act
For a patent application to qualify in Kenya, it must be new, it must involve an inventive step and it must be industrially applicable, according to the Industrial Property Act. According to Ouko, for the idea to be protected it has to be in a form which can be protected and it is always an IP lawyer who can help in that. It should be policy that innovators have access to a publicly available IP lawyer.
Safaricom, however, discounts Ouko’s claims, arguing that even if it were deemed by KIPI to be patentable (which apparently it was not, hence his referral by KIPI to KECOBO), the patentability of his invention would not invalidate the VMT solution or mean that VMT infringed on his invention. Indeed there are other similar platforms the world over such as Obopay, Fundamo or Com Viva.
Ouko said: “Even though I started talking about my idea way back in 2002. I finally received the copyright letter in 2006 and the Certificate in 2012. Safaricom indicates that the first time they talked about the money transfer was in 2003 and filed for the patent in 2006 of which they received a patent in 2007.”
Waita seemed to brush aside Ouko’s argument, saying he was one amongst many Kenyans who used airtime as a cash equivalent.
“By his own admission, his cash transfer system was based on airtime. It did not comprise a ‘wallet’ distinct from the customer’s airtime. Whether that ‘invention’ is patentable or not is debatable. It is also noteworthy that airtime to cash conversion has existed in Kenya from the inception of the prepay voice product,” he said.
Was the idea therefore stolen?
Safaricom’s motives have been questioned by some observers, with some of the opinion that the telco might have hijacked Ouko’s idea, which was at the outset viewed as a “mere business idea”.
According to the Kenya Industrial Property Act 2001, an invention is described as a solution to a specific problem in the field of technology and may relate to a product or a process. Mere presentation of information is, however, not patentable.
Some observers have argued that if Safaricom are aware of this, it would be a surprise if as a giant firm it would fail to pick “a hustler’s idea, use it and just move on.”
Ouko points that the he delivered a letter and proposal to Safaricom about the mobile transfer platform in May 2006 in which Waita challenged him that he would have to demonstrate the novelty of his idea and the inventive step for it to be patentable.
Explaining his ordeal, Ouko said: “In simple terms I lost the patent then simply because I did not have access to a good IP lawyer and I did not have IP law knowledge. However, be sure that did not stop me from bringing over the idea in its crude form. Or maybe it is just because I was in Kenya by then,” he explains.
However, what is disturbing, Ouko says, is that Safaricom Ltd also filed a patent about Mobile money transfer in August 2006.
“Actually, the KIPI officer just looked at it and referred me to KECOBO,” he says, adding, “Secondly the officer I talked to imagined that the whole process of money transfer is a ‘Business Method’ which could not be patented.”
“With that background I will safely tell you that had Safaricom tried to patent the money transfer in Kenya way back in 2006 or even earlier, maybe they might have not managed it. KIPI I must say has also come along way,” he said.
Commenting on this, Ouko said: “It is worth noting that Safaricom never replied to my letter or at any time refer to it.”
On April 25, 2012, Ouko presented another innovation to Safaricom. Unlike in the previous scenario, Safaricom acknowledged receipt of his idea. He says: “Probably as a change from the past, they did acknowledge and I even received an e-mail. I did raise concerns about protection and a possibility of signing a non-disclosure agreement.”
He adds that the officer he spoke to however declined stating that “Safaricom cannot sign documents about issues it did not understand.”
“In fact, the officer even called me and we discussed on phone for some time. He told me to answer a few questions regarding my innovation so that he could decide whether to officially call me for a meeting or not. That was still April 2012. I have not heard from him ever since. I hope I won’t again see the idea floating around thanks to Safaricom,” he said.
He further refutes Waita’s claims as far as the process is concerned, saying the document he deposited with KIPI, or the one I initially sent over to Safaricom, should be revisited as it does have the process.
“Even M-Pesa as done by Safaricom now is not the same as the original one. It has been undergoing lots of changes. Therefore the fact that the original process I sent over is not as robust as M-Pesa you have currently I would say is immaterial,” he says.
On the issue of functionality, Ouko insists that the same document should be revisited as it was made solely by him.
He says the primary reason why he never considered legal redress is because “it costs money to hire competent lawyers.”
A question to Mr. Collymore
“Maybe one last question Mr. Collymore? Why it is that Safaricom is always happy to receive innovations? After which seemingly helpful personnel request for more information and when they have understood the innovations fully you cut all links without even one official reply?” Ouko concluded.