The legal battle between Vodacom and Kenneth Makate over the invention of the Please Call Me has been going for over 10 years.
According to Vodacom, the Constitutional Court directed Vodacom Group CEO Shameel Joosub to determine the amount of reasonable compensation that is owed to Makate, due to Vodacom and Makate’s negotiation teams failing to reach an agreement.
“Vodacom considers the matter as finally settled and closed,” said Vodacom.
Makate, however, said: “I haven’t reached any deal with Vodacom, I was dumped with some determination that the deal was done.”
Makate added that he would be reviewing the matter, and then taking it up further.
Back to the beginning
The battle began in 2008 when Makate slapped Vodacom with multiple summons documents, accusing them of pulling out of an agreement to pay him for his Please Call Me service idea.
Vodacom responded by saying that while Makate came up with the idea, it was done within his scope of employment – making it Vodacom’s property.
Makate argued that since he worked in finance, and not a department pertaining to business ideas, the development of the idea was not within his scope of employment.
Makate also said that his boss at the time, Philip Geissler, verbally assured him that he would received compensation.
However, Vodacom argued, Geissler didn’t have the authority to promise Makete anything.
Makate wanted R6.75 billion from Vodacom, but in 2014, the South Gauteng High Court dismissed Makate’s case against Vodacom with costs.
Makate appealed this ruling, saying that the dismissal of the case “paved the way to the Supreme Court” – adding that he would take the battle to the Constitutional Court if needed.
After the Supreme Court of Appeal rejected Makate’s application, he indeed took the matter to the Constitutional Court.
In April 2015, Makate filed papers that argued the Supreme Court of Appeal was denying him his “constitutional right to access the courts,” as well as the “right to own property by refusing to hear the appeal”.
On 26 April 2016, the Constitutional Court found that Vodacom was bound by the agreement it made with Makate, and instructed the telecoms giant to enter into negotiations about what constitutes fair compensation for the Please Call Me idea.
As part of the judgement, the Constitutional Court said Vodacom lied about who had come up with the idea, and added that former Vodacom CEO Alan Knott-Craig had created a “false narrative” regarding its origin.
This was in response to Knott-Craig including in a book he wrote that he had come up with the Please Call Me idea, which he claimed to be his own brain child.
Complicating matters further is that the true inventor of the Please Call Me is said to be Ari Kahn, who created the “Call Me” technology in 2000 during his tenure at MTN as lead R&D consultant.
Kahn revealed that the Please Call Me patent “entered the public domain in 2007 when MTN failed to pay a yearly annuity”.
Following his court victory, Makate said he would ask for 15% of all revenue Vodacom accrued through the Please Call Me service.
While this total had been R6.75 billion in 2013, it had since climbed to R10.5 billion, he said.
The negotiation process with Vodacom hit a hurdle soon after it started, though, and was marred by battles between Makate and his financial backers.
Backer Stirling Rand asked Vodacom to withhold at least half of any settlement it was going to pay because it believed that Makate and his lawyers would agree to a deal with Vodacom that excluded it.
This request was upheld by the High Court in Pretoria.
Additionally, Christiaan Schoeman, owner of Raining Men, said that Makate had also received funding from him and his company before cancelling an agreement between the parties to “take it all for himself.”
The negotiations then stalled again after Makate brought them to a halt when he applied to the courts to seek clarification over the meaning of the Constitutional Court order.
Vodacom filed an answering affidavit to Makate’s court application, accusing Makate of “in effect asking the Constitutional Court to issue a new order in the form of a share of revenue as the sole methodology for determining reasonable compensation”.
Vodacom wanted to engage in a process that considered various computation methodologies, rather than the simple 15% of revenue demanded by Makate.
In its financial results released in November 2017, Vodacom noted that the negotiations with Makate were still ongoing – and in April 2018, Vodacom reportedly offered Makate R10 million,which he refused.
Two months later, Vodacom and Makate reached an agreement prohibiting the disclosure of any information regarding their settlement negotiations to the public.
Earlier this month, it appeared that the battle had reached its conclusion when Vodacom said it was going to pay Makate “reasonable compensation.”
However, Makate claimed that he had not agreed to a payout – to which Vodacom responded by saying that Joosub was allowed to break the deadlock as per the Constitutional Court order.
After oral hearings on 4-5 October 2018, Joosub met with both Vodacom and Makate’s legal representatives to convey his decision.
However, Makate appears unlikely to accept whatever Vodacom is planning on giving to him – meaning that the fight looks set to continue.