When chief justice Mogoeng Mogoeng put it to Vodacom’s counsel, led by Fanie Cilliers SC, that a man who has invented a product out of which the telecommunications giant generated millions must get nothing, attendees at the constitutional court murmured in disagreement.
The man in question is Nkosana Makate who claims to have invented the “please call me” idea and is subsequently suing Vodacom for compensation.
This was the start of the latest battle — now at the highest court in the land — in the nearly decade-long war.
Cilliers told the court that Makate’s role in developing “please call me”, the free service which enables a user without airtime to send a text to be called back, was small.
“The plaintiff [Makate] has been aided and abetted by big litigation. His contribution to the product was modest,” he argued. Furthermore, Vodacom spent millions in developing the idea and “nobody stole Makate’s idea”.
He further took a swipe at the argument by Makate’s counsel, led by Gilbert Marcus SC, that compensation for “please call me” runs into billions. “If he had gone to market with the product, Makate would not get anything or he would get a small claim.”
Makate recently told Moneyweb the “lucrative” innovation generated billions for Vodacom since its inception in 2001. He estimated that the invention has generated about R70bn for Vodacom and he wants a 15% cut.
However, Cilliers said it was not company policy to enter into revenue-share agreements with employees. “It would lead to corruption.” He added that all agreements need to be approved by the legal department -– which was not the case with Makate.
Makate was a trainee accountant for Vodacom in 2001, which was when he claimed to have come up with the idea for the service. When the idea hit, he spoke to Vodacom’s director on the board and head of product development at the time, Philip Geissler.
Makate said Geissler agreed to pay him a share of the revenues Vodacom would generate from the innovation if it was technically and financially viable.
Cilliers undermined Makate’s argument that Geissler had ostensible (or apparent) authority to enter into revenue share agreements. The board had the power, he said.
However, Marcus refuted this, saying Geissler was a director with a particular responsibility. “He was the man who approved new products within Vodacom and oversaw and managed their roll-out.
“Mr Makate’s evidence of remuneration was clear; he [Makate] wanted to exploit the innovation. But Vodacom says it [please call me] was a donation, which Makate has dismissed,” Marcus said.
The high court case, presided over by Judge Phillip Coppin, concluded last year that Makate had successfully proved the remuneration agreement between him and Geissler. However, Coppin dismissed Makate’s claim on the basis that he did not prove that Geissler did have “ostensible authority” to bind Vodacom in an agreement of compensation.
Marcus said the high court did not take into account that ostensible authority had been already established, as there was an unequal bargaining power between Makate and Geissler.
“Geissler holds himself as representing Vodacom and Makate who was a young man looking to rise through the ranks was relying on that fact. Geissler also never informed Makate that he did not have authority, but he kept stringing him along,” Marcus said.
Marcus asked the court to reconsider the high court’s findings that Makate’s claim against Vodacom had expired (a term known in legal circles as “prescription”), as he did not file the claim within three years of Vodacom going to market with Please Call Me. Makate pursued his initial court bid in 2008.
He said Vodacom failed to supply a date for the commercial and technical viability of “please call me”, as “it said it did not have records or it was not possible to determine when it was viable”.
Judgement was reserved.
- This article was first published on Moneyweb and is republished here with permission