The case, which was before the South Gauteng High Court, later appealed to the Supreme Court of Appeal (SCA) and now the Constitutional Court, has dragged on for nearly ten years in compensating Makate for the innovation.
However, the nub of the case was a dispute between two parties with an unequal bargaining power – typical of an underdog taking a telecommunications giant to task.
The back story on the case is important to unpack.
It all started with a love affair in 2000 when Makate’s girlfriend (now wife) was a student at the University of Fort Hare in the Eastern Cape and had no money for airtime. A long distance relationship, the lack of airtime and several communication hurdles sparked the idea for Please Call Me, a free service which enables a user without airtime to send a text to be called back.
Makate, a Vodacom trainee accountant at the time consulted his superior and mentor Lazarus Muchenje about Please Call Me, who then advised him to speak to board member and director of product development and management Philip Geissler. Makate’s discussion with Geissler led to the idea being captured in a proposal and concept document.
Negotiations then followed between Makate and Geissler that Vodacom would use the Please Call Me and put the idea on trial for commercial viability. In an oral agreement, Geissler agreed to pay Makate a 15% share of the revenues Vodacom would generate from the innovation if it was technically and financially viable.
Vodacom in 2001 went to market with Please Call Me, which was a game changer for South Africa’s fledgling telecommunications sector.
In a Vodacom internal newsletter and magazine, Makate was praised for his innovative thinking. It read: “Vodacom has launched a new product called ‘Call Me’, thanks to Kenneth [Nkosana] Makate from our finance department. Kenneth suggested the service to the product development team, which immediately took up the idea… ‘Call Me’ has been a big success.”
Despite its success, Vodacom did not negotiate compensation with Makate. In fact, the then Vodacom CEO Alan Knott-Craig in his autobiography Second is Nothing claimed to have come up with Please Call Me when he observed two security guards from a balcony trying to call each other without having airtime.
The initial legal dispute for Makate to be compensated began in 2008 and the South Gauteng High Court case, presided by Judge Phillip Coppin, subsequently concluded that Makate had successfully proved the remuneration agreement between him and Geissler. The court also rejected Knott-Craig’s version of being the brains behind Please Call Me.
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 for compensation. The court also found that Makate’s claim against Vodacom had expired (a term known in legal circles as prescription documented in the archaic Prescription Act 68 of 1969), as he did not file the claim within three years of Vodacom going to market with Please Call Me. Makate appealed the ruling which was later upheld by the SCA.
Constitutional Court findings
However, at the Constitutional Court, Vodacom’s case went downhill. On Tuesday, Justice Chris Jafta did not mince his words in his majority judgement when describing Vodacom’s actions.
