An information technology (IT) solutions firm, Colour Planet last year sued Safaricom over the name of a soft-loan facility for electricity consumers, known as Okoa Stima.
Safaricom then entered into correspondence with Color Planet in June informing the IT company of its intent to contend the trademark application. A court in Nairobi has now stopped Color Planet from using the name until arguments by both parties involved in the suit are brought to the judge according to Business Daily. Safaricom claims it opposed the registration of the trademark but its claims were thrown out on a technicality.
As a result, BitPesa and Lipisha are facing significant challenges to maintaining their business. A lawyer for the two firms told the Daily Nation that BitPesa is “at risk of collapse” because it’s now unable to conduct its business.
The two firms sued Safaricom for infringing on their rights to acquire and own property, fair administration and economic interests.
BitPesa uses Lipisha as a payment gateway to enable transfers and conversions of bitcoin into other currencies, including Kenyan shillings on Safaricom’s mobile money platform M-Pesa.
Safaricom argument at hearing
During the hearing on Tuesday, Safaricom argued that the suspension of service to Lipisha was justified because of anti-money laundering rules.
The mobile money operator claimed that Bitpesa had failed to obtain authorisation for bitcoin transfers from Kenya’s central bank. As a result, Bitpesa’s transactions through Lipisha and its account at Safaricom contravened AML rules.