Vodacom (JSE:VOD) is currently in a legal battle with former employee Nkosana Makate, who claims he invented the company’s Please Call Me service, and was promised compensation by the company. However, MTN (JSE:MTN) owns the patent for the service, and also launched the service before Vodacom.
The Vodacom Please Call me court battle essentially revolves around the fact that Makate feels he was not appropriately compensated for his product idea by Vodacom.
Makate said that his boss at the time, Philip Geissler, promised in an oral agreement to facilitate remuneration negotiations with the company.
Former Vodacom CEO Alan Knott-Craig, however, claims that he was behind the Please Call Me idea.
In his biography “Second is Nothing”, Knott-Craig wrote that he was standing on his balcony when he saw two security guards trying to communicate. This is when the idea hit him.
It is not inconceivable that Makate and Knott-Craig independently thought of the concept behind the Please Call Me service.
What we do know is that the intellectual property (IP) rights for the service actually do not belong to either of these parties. It belongs to MTN.
MTN owns a patent on the concept on which the Please Call Me service is directly based, and which was filed on 22 January 2001. Ari Kahn, who previously consulted for MTN, was behind the idea and the patent.
MTN also launched the Please Call Me callback service soon afterwards – six weeks ahead of Vodacom.
“There is a law around intellectual property rights called Patent Law. Unless someone can show a patent to claim inventorship, they cannot claim to be the creator of the service,” Kahn told Eyewitness News.
“So it doesn’t really matter what Makete, or anybody else for that matter within Vodacom, was developing at the time; the fact is they did not progress their ideas into intellectual property rights,” said Kahn.
“They did not launch before MTN launched. By the time Vodacom launched the service, MTN had already delivered millions upon millions of please call me messages on their public network.”
In fact, there is speculation that MTN threatened legal action against Vodacom when it launched Please Call Me in March 2001, but decided not to follow through to avoid a nasty spat between the operators.
But if MTN owns the right to the Please Call Me service, why is there even a battle between Vodacom and Makate about this issue?
Makate may like to avoid highlighting the relevance of MTN’s patent in the case because it can leave him without the legal foundation to claim that he invented the service.
Vodacom may also like to avoid the patent issue because it can feel exposed to additional legal action if it now acknowledges after all these years that its product is based on the intellectual property of its competitor
Legal opinion on Vodacom Please Call Me case
According to a legal expert in the field of intellectual property (IP), if it is the case that a third party such as MTN owns the intellectual property behind the Please Call Me, then neither Vodacom nor Makate would have any legal case to claim ownership of the idea.
Kahn agrees: ”The entire case has been portrayed as ‘the little guy denied his due by the big bully network’, to garner sympathy and obfuscate the fact that he did not actually invent the service.”
“Makate is not only banking on the court ruling to uphold promises made, he is praying that the true facts about who invented the service remain suppressed.”
“Even if promises to reward him were made at the time, in retrospect he has no right to any compensation as he does not hold title to the invention,” said Kahn.
According to another patent expert, who asked not to be named, Vodacom has every right to renege on a commitment to compensate, since on launching their service they discovered the property actually belonged to somebody else.
“Intellectual ownership and rights to compensation are governed by the sovereignty afforded to the inventor under Patent Protection Law. Clearly nobody other than the true inventor has any claim to compensation,” the patent expert said.
Kahn added that since Makate cannot produce a patent he cannot claim to be the inventor.
“He knows this as does his counsel. Not only did he publicly acknowledge failing to get a patent was the biggest mistake of his life, he is fully aware that the MTN Patent exists and that it claims the call me concept in its entirety,” said Kahn.
Kahn said that Zatkovich, who testified on Makate’s behalf, “intentionally misled the court by completely disregarding the Patent Claim”, which covers all variations in the please call me system, including the USSD service launched by Vodacom.
“Patents are enforced by their claims not by their embodiments,” said Kahn.
“While contract law may be open to interpretation, Patent Law is cast in stone. Since he did not invent it, he has no right to claim compensation,” said Kahn.
Still a legal battle
Despite the fact that the Please Call Me patent, and therefore the IP, of the service belongs to MTN, this may not be the end of the legal battle.
According to a legal expert, if an employee were to develop an idea or product while working at the company, the IP would belong to the company. Were he to develop it independently, it would belong to him.
If an employee develops an idea at the company in a role that is unrelated to that task, then he may be entitled to compensation, depending on the contract with that company.
Makate is arguing that he developed the idea in a role unrelated to the task, which may be why the outcome of the legal battle is far from clear.
Makate was asked for feedback regarding the ongoing legal battle, but he said that he would prefer not to talk about the facts of the case outside the court process.