Former Vodacom employee Nkosana Makate reportedly said he is entitled to anything between R28 billion and R110 billion for proposing Please Call Me to his former employer.
The prolonged battle between Makate and Vodacom started in 2005 when he demanded compensation for his idea.
He was unsuccessful in his demand from the mobile operator and launched a High Court case in 2008.
The High Court dismissed Makate’s lawsuit with costs in 2014, but he vowed to fight and took the case to the Supreme Court of Appeal and the Constitutional Court.
The Supreme Court of Appeal rejected his leave for appeal on the grounds that he had “no reasonable prospects of success”.
He then approached the Constitutional Court, which, in April 2016, ruled in his favour and compelled Vodacom to negotiate with Makate to determine reasonable compensation.
Makate asked for 15% of all revenue Vodacom accrued through the Please Call Me service. However, Vodacom dismissed his request.
The negotiations reached an impasse, and, abiding by the Constitutional Court ruling, Vodacom CEO Shameel Joosub stepped in and offered Makate R47 million.
Vodacom said it had reached a settlement agreement with Makate. However, he responded, “I haven’t reached any deal with Vodacom, I was dumped with some determination that the deal was done.”
This sent the case back to the Pretoria High Court, which delivered a judgement in favour of Makate in February 2022.
Justice Wendy Hughes gave Joosub one month to recalculate the offer based on compensation over 20 years – from March 2001 and March 2021.
Vodacom appealed the ruling at the Supreme Court. The case was heard this week, and the judgement was reserved.
Advocate Wim Trengove argued that, based on the Constitutional Court ruling, Joosub had the sole right to determine Makate’s compensation.
He added that the compensation determination method was at Joosub’s discretion and that he did not have to consult externally.
Makate is hopeful that the ruling will go in his favour. “We have presented our case that the High Court order was correct and that it should be upheld,” he said.
Please Call Me intellectual property and patents
Makate said his council submitted that “you have intellectual property (IP) and knowledge that is patentable and that another party is using”.
“Normally, through a patent, a person will be entitled to compensation for twenty years. We have advanced those arguments,” he said.
This is a curious argument, as Makate did not patent his idea, nor could he.
Ari Kahn, who created the Call Me technology in 2000, said Vodacom has, in private, acknowledged him as the inventor of the service.
The SA Patent office granted the Call Me patent to Kahn and MTN and recognised Kahn as the inventor on 22 January 2001.
Vodacom admitted that Please Call Me was invented and subsequently patented by MTN before Makate came up with the idea.
Kahn added that Makate’s proposal differed from the Please Call Me service that Vodacom implemented.
Makate’s proposed “Buzz” – a service to allow a user without airtime to dial a phone number and give a “missed call”.
“Not only was his proposal technically unsupported, but it was also not technically possible since a call could only mature to ringing state if the user had credit,” he said.
“Consequently, his proposal did not progress beyond an idea. Even skilled engineers at Vodacom could not reduce it to practice, and inventions are required by law to be reduced to practice.”
While his idea was never implemented, it did propel Vodacom along a path that led them to the Please Call Me service.
However, said Kahn, the entire issue is that the service was already claimed by MTN and launched before Vodacom.
“So regardless of what he proposed, it had no commercial value because MTN had established Prior Art, and the service was already publicly disclosed before Vodacom launched,” said Kahn.
“Had Makate not proposed anything, nothing would have changed. MTN would still have the patent and IP rights and launched first. And Vodacom would have simply followed by copying the service.”
Makate wants billions from Vodacom
Over the years, the compensation which Makate reportedly said was fair for his Please Call Me idea differed significantly.
Makate has claimed that he is entitled to anything from 5% to 15% of the revenue Vodacom generated from Please Call Me.
The High Court ruling in February 2022 said Makate is entitled to be paid 5% of the total voice revenue generated from Please Call Me from March 2001 to March 2021.
Makate reasoned that the duration of his share over the PCM product, the percentage of entitlement, and the total revenue attained by the PCM product should be considered in assessing his revenue share.
“That total voice revenue includes Please Call Me revenue derived from prepaid, contract (both in bundle and out bundle) and interconnect (MTR) fees as set out in Vodacom’s annual financial statements,” the ruling said.
“Accordingly, his revenue shares are calculated to be R20 billion in total,” the February 2022 High Court ruling stated.
SABC and Newzroom Africa recently reported that Makate feels he is entitled to anything between R28 billion and R110 billion from Vodacom.
The Please Call Me Movement, fighting for “Justice for Makate”, supports his battle against Vodacom and wants the mobile operator to pay him R70 billion for his idea.
To put these figures into perspective, Vodacom’s market cap is R245 billion. That means on the high end, Makate wants a large chunk of the company for sharing his “Buzz” idea with his manager.