Hoswell Mbugua Njuguna t/a Fischer and Fischer Marketing Concepts v Equity Bank Limited & another [2017] KECA 186 (KLR)
The bottom line
#A businessman who pitched his mobile savings idea to Equity Bank lost his appeal because he couldn't prove the bank actually used his concept in M-Kesho.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether there was a substantial difference between the appellant's 'Weka Usaidike' concept and the respondents' M-Kesho product
- 2.Whether the information disclosed by the appellant to the bank was confidential
- 3.Whether the bank breached an obligation of confidence and made unauthorised use of the appellant's information to his detriment
- 4.Whether the appellant proved a cause of action founded on the equitable doctrine of breach of confidence
Key legal issues
#Elements of the equitable doctrine of breach of confidence
The court adopted the three-element test from Coco v A.N. Clark (Engineers) Ltd as restated in Fraser v Thames Television: confidentiality of the information, circumstances importing an obligation of confidence, and unauthorised use to the claimant's detriment.
The court traced the doctrine from Fraser v Thames Television through Coco v Clark, Halsbury's Laws and Wade v British Sky Broadcasting, emphasising that the information must have the necessary quality of confidence, must not be public property or public knowledge, and must be capable of being realised in actuality. The obligation may exist without any contractual relationship between the parties.
Whether the appellant's information was confidential
Confidentiality was established: although mobile banking and scratch cards were in the public domain, the appellant's synthesis of them was his own and not publicly accessible.
The court held that the trial court took a superficial view in finding no confidentiality merely because the underlying elements were public. The appellant had applied his mind to existing public information and developed his own niche, the details of which were not accessible to the public until disclosed to the bank. Gurry's inaccessibility criterion and Saltman Engineering were applied.
Whether there was unauthorised use of the confidential information
There was no breach: the new concept M-Kesho was fundamentally different from the original concept and the appellant failed to discharge the burden of proving infringement.
The onus lay on the appellant, per Sanitam Services v Rentokil. The evidence showed the original concept was a rudimentary scratch-card scheme, untested for security and viability and without a legal framework (no agency banking then permitted). M-Kesho was an elaborate transactional account system developed as a logical progression of the bank's own pre-existing M-Commerce innovations. No cogent proof of use was tendered.
Distinction between copyright and confidence
Copyright protects the expression or process, not the idea; confidence protects information, whether written or oral, but the obligation ends when the information enters the public domain.
Relying on Fraser v Thames Television and Copinger and Stone James, the court distinguished copyright, a negative statutory right against copying that is good against the world and time-limited, from the common-law equitable doctrine of confidence, which requires the information to retain its confidential character and cannot protect ideas once public.
Legal principles established
#- To succeed in a claim for breach of confidence a plaintiff must establish that the information was of a confidential nature, that it was communicated in circumstances importing an obligation of confidence, and that there was unauthorised use of the information to the detriment of the communicating party.
- Copyright protects the expression or process by which an idea comes to fruition, not the idea itself; the law of confidence protects information and ceases once the information becomes public knowledge.
- Information may be confidential even where built on public-domain material, if the maker has applied his mind and produced a result not accessible to the public; but the burden of proving infringement lies on the claimant.
- An appellate court will interfere with trial court factual findings only where they are based on no evidence or the judge acted on wrong principles.
Court orders
#- 1.The appeal be and is hereby dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 599 of 2010
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Court of Appeal Rules (Rule 29) from the High Court
Relief refused
#All prayers in the plaint (injunction, damages for breach of confidence, account of profits, receiver, payment of sums due)
The appellant failed to prove unauthorised use of his confidential information by the bank; the original concept was not used in M-Kesho
Costs
Appeal dismissed with costs
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Where a plaintiff sues, relying upon breach of confidence, he must establish three elements. These are: (1) that the information was of a confidential nature; (2) that the information was communicated in circumstances importing an obligation of confidence; and (3) that there has been an unauthorised use of the information to the detriment of the person communicating it (i.e. the plaintiff).
we are persuaded by the authorities cited above, that confidentiality of the original concept was established.
There was no cogent proof tendered by the appellant on infringement and it is our finding that the original concept was not used by the bank.
We order that it be and is hereby dismissed with costs.
Issues in the judgment
#The Saltman Engineering citation appears inconsistently in the judgment, at one point as (1948) 65 R.P.C 203 and elsewhere as [1963] 3 All ER 413 and 65 R.P.C 205.
The appellant's trade name is spelled both 'Fischer and Fischer' in the cause title and 'Fisher and Fisher' in the body of the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Hoswell Mbugua Njuguna t/a Fischer and Fischer Marketing Concepts v Equity Bank Limited & another [2017] KECA 186 (KLR)", Case Analysis (2017). Civil Appeal No. 295 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/186/eng@2017-11-17
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.