Vodacom negotiations with Please Call Me idea-man “strictly confidential”

Vodacom and Please Call Me idea-man Kenneth Nkosana Makate have declined to even comment on whether they have met to discuss a settlement on the 16-year legal fight.

Spokespeople for both parties said there is a strict confidentiality agreement binding them.

“It is not possible to provide any comment on the negotiations between the two parties,” Vodacom told MyBroadband.

This comes after Makate’s legal representatives at Stemela & Lubbe Inc. said in February that he would return to the negotiating table with Vodacom.

“It is noteworthy that this is the first time (since the negotiations ended in a deadlock in December 2017) that Vodacom has given any indication that it wants this matter to be settled,” Stemela & Lubbe stated.

Stemela & Lubbe said that since they first challenged Vodacom CEO Shameel Joosub’s compensation offer of R47 million, the company opposed every step to finalise the matter.

Its comment came after Vodacom said it “remains open to constructive dialogue and good faith negotiations”.

The parties are back in the Constitutional Court after years of costly litigation.

The dispute between Makate and Vodacom dates back to 2007, when he sent letters of demand to the company stating he was promised compensation for his idea.

Makate pitched his idea of a method to “buzz” someone else’s phone without airtime on 21 November 2000 while he was a trainee accountant.

Vodacom’s product development team shaped Makate’s idea into what became Please Call Me, launching in March 2001.

Emails between Vodacom product development manager Philip Geissler and Makate show his request for a reward would be raised with then-CEO Alan Knott-Craig.

“As for rewards. All staff are expected to assist the company to achieve its goals. That is part of normal business. As for you and your assistance. Once the product is launched (and assuming its successful) I will speak to Alan. You have my word,” Geissler said.

Makate launched legal action against Vodacom in 2008.

The case went through the High Court and Supreme Court of Appeal, which both ruled in favour of Vodacom.

It landed in front of the Constitutional Court in 2016, which ruled that Makate was owed compensation.

MTN had patented and launched a similar product — also marketed as “Call Me” — in January 2001.

However, this issue was ultimately disregarded, and the Constitutional Court ruled on Vodacom’s promise to Makate regarding a discussion with the CEO about a reward.

Vodacom contended that Geissler had no authority to commit the company to such an agreement.

However, the Constitutional Court did not buy Vodacom’s argument. It ruled that Geissler had the ostensible authority to conclude such a contract.

South Africa’s apex court ordered Vodacom and Makate to negotiate compensation in good faith.

Foreseeing a breakdown in talks, it designated Vodacom’s CEO as the deadlock breaker, in line with Geissler’s original email promising a discussion with Knott-Craig.

According to court documents, Makate demanded R20 billion, and Vodacom countered with R10 million.

At the same time, there was a flurry of legal action, and Makate’s legal team demanded documents and data from Vodacom about the revenue Please Call Me generated.

Vodacom said it didn’t have the Please Call Me revenue data Makate’s team was demanding.

This caused negotiations to drag on.

Makate’s team ultimately abandoned their court application to compel Vodacom to provide the data, saying they no longer needed it to calculate how much he was owed.

A dispute between Makate and his funders also took an ugly turn, potentially causing delays.

When talks ultimately deadlocked, it triggered a clause in the Constitutional Court’s ruling that gave Vodacom’s current CEO the responsibility of determining suitable compensation.

Shameel Joosub, Vodacom CEO

Joosub returned with an offer in January 2019 of R47 million for Makate’s “Buzz” idea.

Makate rejected the money, calling it “shocking” and “an insult”.

He launched legal action in the High Court, arguing that Joosub had made a mistake in his calculations.

The High Court found in Makate’s favour. Vodacom appealed, and the Supreme Court also found in Makate’s favour.

However, it was a close ruling, with a panel of five judges split 3–2.

The critical difference between the two judgements was that the majority said Vodacom should use Makate’s revenue share models to calculate the compensation he was owed.

The minority judgement said Joosub’s models were fine but that he calculated the compensation over the wrong timeframe.

All five judges agreed on one issue: Joosub erred by only calculating Makate’s compensation over five years.

Both the majority and minority judgements said he should’ve calculated the compensation over at least 18 years.

Had one more judge concurred with the minority ruling, Joosub would’ve had to recalculate the compensation using his models.

Vodacom has launched a last attempt to appeal to the Constitutional Court to overturn the Supreme Court’s ruling.

In its Constitutional Court papers, Vodacom said if the minority judgement were to be implemented, Makate’s compensation would’ve been about R186 million.

When MyBroadband asked Makate’s attorneys in February how much they would settle for, they said it was premature to discuss any amounts.