Thread by @senamisomoyo

Its that time of the week again good people #IPThursday, where we bring Intellectual Property chats to social media.

The following thread concerns 20 years of exploitation. It’s the story of the “Please Call Me” case.

Our story begins in the year 2000. It centers around Nkosana Kenneth Makate, @makate_nkosana who was an intern at Vodacom. Vodacom is one of Africa’s biggest network providers, it is largely owned by Telkom and UK telecoms giant Vodafone.

At the time, Makate was in a long distance entanglement with his then girlfriend, a student, who would later become his wife. As many of you know, long distance entanglements are not easy.

However, those who have been or are involved in them will tell you that they require one big thing, COMMUNICATION. At the time, this was often done with letters and if you were lucky, looooong phonecalls with your person.

Makate and his girlfriend experienced difficulties in this regard. The main issue was that she hardly had money to buy airtime and call him. Back then phonecalls were expensive, so often he would have to initiate the calls. As you can imagine, that’s a very tricky space.

So Makate came up with an idea whereby a cellphone user who had no airtime would be able to send a request to the one who has airtime to call them. (Ladies, if he wants to, he really will! 😂)

He reduced his concept to writing (because your ideas are worthless when they are in your brain!). He then went to his mentor at Vodacom, Mr Lazarus Muchenje for advice on how he could sell it to any of the cellphone service providers, including Vodacom itself.

Muchenje advised him to approach the the next key figure in our story, the head of product development at Vodacom, Phillip Geissler.

Geissler and Makate agreed that they would use his idea to make a new product and see if it would be commercially viable. If it was successful, Makate would be paid a share of the revenue made from it. He wanted approximately 15% initially.

The shady stuff in this story started early on. Those familiar with my threads will know about acts I label as “Exploitation 101”. Geissler pushed Makate to agree that negotiations for his share of the money would take place later, after they see how commercially viable it is.

Legally, this is called pacta de contrahendo, an agreement to negotiate in future. You know, like when your boyfriend gives you a promise ring and says he’ll propose to you in the future, and nawe you say “yes I’ll rock your promise ring” 🤡.(Anyway, This will be important later)

If they failed to agree when negotiations came, the Vodacom CEO would decide how much to pay him. This is because it was customary for Vodacom to launch products without board approval, just to see how they would perform first. And then deal with serious admin later. Sounds dodgy

So Vodacom developed and then launched their new product “Please Call Me”. We all know how it works, if you don’t, you’re probably very rich! 😂 PCM enabled a person with no airtime to send a message to another asking them to call back.

“Please Call Me” was a huge success. On the first day of operation, about 140 000 people used it.  It was free until the end of 2000 and thereafter, it only cost users 15 cents per request.

Vodacom were excited about the service and internally, they sent a newsletter praising Makate for his idea. I mean why wouldn’t they? It was simple, but genius and the first of its kind. Vodacom went on to make billions of rands from “Please Call Me”.

There was one big issue though. Vodacom had still not negotiated compensation for the use of Makate’s idea. Despite asking for a meeting to discuss pay, he had not received a cent. To be honest, I don’t think they had the intention to pay him and this is why....

Vodacom decided to create a false narrative about who created the concept. When the media called, Vodacom said that the concept was created by their CEO Alan Knott-Craig in Geissler’s office. Knott-Craig would then publish his autobiography including this lie.

Geissler and Knott-Craig said that they asked two security guards outside their offices to use their phones and see if it works. They obviously fabricated this story so that they wouldn’t pay Makate his share.

Approximately 2 and a half years later, Makate left Vodacom and sought about trying to get his share of the Please Call Me revenue. It wasn’t until 2005 that Makate decided to take Vodacom to court.

His case was tricky for a few reasons:

1. Makate and Vodacom had an oral agreement and although they are enforceable in court, its always a “he said she said” situation which is hard to prove if the other party is committed to lying.

2. Vodacom had not agreed how much to pay him, they had only agreed to negotiate with him in the future. So he wasn’t really suing for a specific amount, which I find is often easier. Plus, they were saying that there was no agreement in the first place.

3. He had waited too long to bring it to court and the matter had now expired or “prescribed”.

Let me start by explaining what Prescription is. Basically, when a dispute arises, you have 3 years to bring your claim before a court. If you don’t do so, it expires.

Thats the simple definition, however, it doesn’t apply to certain cases such as rape. Rape cases do not expire or prescribe.

So the matter went to the High Court. Vodacom started by denying the existence of an agreement with Makate. They pushed the story that Knott-Craig came up with the idea. Knott-Craig testified and pushed his lie.

Fortunately, Muchenje testified for Makate and told the story as it actually happened. The court found him to be a reliable witness. Knott-Craig on the other hand was not.

The High Court rejected Vodacom’s story and labelled them as “dishonest”. They really were. Geissler did not even bother testifying. The court accepted Makate’s evidence that he in fact came up with the idea.

However, Vodacom was lawyered up and they were looking for all sorts of loopholes. They came back and said that Geissler had no authority to enter into the agreement on their behalf and they could not be bound by it. This is where things took a left in High Court.

The High Court agreed with Vodacom and said that Makate had not presented proof that Geissler was acting on Vodacom’s behalf. They had found a loophole to escape paying Makate.

Next the High Court dealt with Prescription. The High Court agreed with Vodacom the matter had indeed expired. Makate had waited too long(4 years) to bring it to court. He issued summons in 2005, the claim arose in 2001. Prescription period is 3 years. So dololo claim.

The High Court had dismissed Makate’s claim with costs and didn’t bother considering other issues. So Makate took the matter to the Constitutional Court to appeal all those issues. The first thing he had to work around was whether Geissler had authority to bind Vodacom.

Jafta J in the Con Court agreed with Makate on this and not the High Court. He said Geissler was the head of product development and he was the ultimate force of power when it came to deciding which Vodacom products go ahead. The court said he had authority to bind Vodacom.

With Prescription, Makate argued that the rule infringed on his right of access to court. Because of prescription, he couldn’t bring his claim. Jafta J said that the claim had not expired because Makate was not claiming an actual debt as is usually required for prescription.

Now the Con Court had to decide the most important part, should Vodacom be forced to negotiate with Makate? The Con Court admitted that it is difficult to enforce pacta de contrahendo, agreements to negotiate. However......

....in this case the Con Court ordered Vodacom to negotiate with Makate in good faith and in the spirit of ubuntu within 30 days of the judgment. Makate and his legal team had won in the Con Court! Victory? Well not yet.....

If they failed to agree, the Vodacom CEO would decide how much to pay him. So, negotiations took place and they failed. Vodacom did not agree with Makate’s valuation so it went to the CEO. Before I tell you what happened with the CEO, I must express how disappointing this is....

In many contracts, where parties fail to agree on a valuation, most lawyers refer it to a 3rd party to provide a fair value. An accountant, another lawyer, an actuary or any independent expert. To avoid bias and conflicts.

If me and you get into a disagreement, it cannot be that my mother decides what must happen. She will obviously be biased.

Anyways, rant over. The Vodacom CEO offered to pay Makate R47 million. Makate rejected it and rightly so. It sounds like a lot, but in the bigger scheme of things it’s not. It probably can’t pay Cape Town rent 😂😂😂. He wanted more money and he had support.

The estimated valuation is around R200 Billion. Makate wanted at least 20 billion, which is only 10% of that amount. Also, other service providers probably got licenses from Vodacom to use the concept and paid Vodacom billions in license fees.

So Makate asked to see Vodacom’s financial records so he can see for himself how much money they made from Please Call Me.

Vodacom refused, they said some documents were lost, some didn’t exist or were confidential.

So Makate took Vodacom to court again this year. This time to get them to release their financial records.
Just last week, the high court in Pretoria gave Vodacom 21 days to give Makate copies of financial records, and contracts it had with other service providers.

Vodacom has attempted to frustrate this process as much as possible. From lying to dragging their feet. Probably with the hope that he’ll give up and take anything. This matter started when I was in grade 1, I am now an IP lawyer, 20 years later.

In the Con Court, Jafta J said:
“Vodacom invoked legislation from the height of the apartheid era, to prevent the him from exercising his right of access to court. This leaves a sour taste in the mouth. It is not the kind of conduct to be expected from an ethical entity.”

I agree with the Jafta. Ultimately, the bosses at Vodaworld have to ask themselves what their ethical responsibility is and do the right thing by this man.

Big Lesson: Be careful with your ideas when dealing with any corporation. Especially the big ones. They will use every trick in the book to screw you over. Write everything down. Stay Safe Good People!!❤️💛💚

@threadreaderapp unroll