Much for inventors to learn from ‘please call me’ saga

Former trainee accountant Nkosana Makate is set to become a very rich man following a court ruling in South Africa that ordered telecommunications giant Vodafone's local subsidiary, Vodacom, to negotiate compensation with him for his "please call me" text idea.

The young South African has spent years fighting his former employers to get remuneration for an idea he came up with while working in their Johannesburg offices, which the company subsequently took to market and claimed as its own.

But an eight-year court battle has now concluded in his favour by judge Chris Jafta of the constitutional court, who ordered Vodacom to commence negotiations with its former employee to determine “reasonable compensation” for his innovation.

ExpandAutoplay

Image 1 of 3

Former Vodacom chief executive Alan Knott-Craig

The whole saga began in 2000 with a long-distance love affair between Makate (39) and his then student girlfriend that was proving difficult to maintain, as the latter rarely had money to buy credit for her phone to call him.

In a bid to overcome this stumbling block to his love life, Makate came up with the "please call me" text idea, which he then discussed with Vodacom board member and director of product development and management Philip Geissler.

The service allows users to send a text free of charge to someone asking that they be called back.

Following the talks, Makate’s idea was put into a proposal and concept document and then trialled for its viability. Geissler then orally agreed to pay the young man a 15 per cent share of the revenues it generated for Vodacom.

To everyone’s surprise the service fast became a popular method of communication for millions of poor South Africans keen to reach out to others. About 140,000 customers made use of the service on its first day in operation.

A 2001 development plan for Please Call Me said Vodacom could make between 239,000 and 322,500 rand (€13,900-€18,800) a day from people using the service.

But rather than stick to the agreement made with Makate, Vodacom refused to negotiate a compensation figure with the innovator.

Indeed, the court heard that Vodacom's then chief executive, Alan Knott-Craig, went on to claim in his autobiography Second is Nothing to have come up with the idea, saying it was sparked by observing two security guards trying to call each other without having airtime.

Internal newsletter

However, the court rejected Knott-Craig’s claim, not least because an internal Vodacom newsletter and magazine, circulated long before the biography was published, praised Makate for his innovative thinking in relation to the service.

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.”

The initial legal dispute in the high court went Makate’s way in terms of the applicant successfully proving he had an oral remuneration agreement with Geissler.

However, the substance of the claim was dismissed because it was not proven Geissler had the authority to bind Vodacom to such an agreement

The high court also found that Makate’s window to claim against Vodacom had closed, as he did not file for compensation within three years of the company going to market with the service, a time limit set out under commercial law.

But rather than back down, Makate persevered. And the constitutional court has eventually ruled in his favour. It stated the three-year limit did not apply as, under the relevant act, the time limit only began from “the date on which the debt arose”.

However, the applicant was requesting an order forcing Vodacom to commence negotiations to determine compensation for the profitable use of his idea, rather than one to settle the debt.

In addition, the judge ruled that Geissler did in fact have the authority to make such agreements on behalf of Vodacom and he maintained that Knott-Craig’s version of events were “a lie” and “false narrative”.

The judge has given Vodacom, which has yet to comment in a meaningful way, 30 days to begin compensation negotiations with Makate.

The telecommunications company has reportedly made tens of billions of rand from the service since its introduction on the basis of the call backs it has generated and the advertising that accompanies each text message.

It is reported that Makate is still seeking the 15 per cent of revenues that was agreed with Geissler in 2000.

Makate’s victory also appears to have quashed any feelings of ill-will towards Knott-Craig, who left Vodacom in 2008.

“I have no hatred; I have no bad feelings; I respect the man,” Makate told Gauteng province talk radio station PowerFM in an interview following the ruling.