Wednesday, 27 April 2016

Lessons from "Please Call Me" Concourt Judgment

Trending yesterday on Twitter in South Africa on World IP Day were two entrepreneurs, each with a great idea. One had just spent fifteen years trying to get compensation from a large telecoms company that had stolen it and had made billions of Rand, and the other was launching three new brands to sit aside alongside a record breaking success in 2015. Both were celebrating.

One’s success highlights what can happen when there is little or no IP or contractual protection in place for an idea, the other the advantage of having a strong sense of IP. Afro-IP blogged on Ali Gregg’s success on Sunday here. Now for Mr Makate and his fight against Vodacom.

The almost hundred page judgment from the constitutional court yesterday makes for exciting, and laborious reading. Exciting in the sense that it documents a brilliant idea coming from a modest yet determined man in the accounting department of a telecoms behemoth and his fifteen year battle for justice all the way to constitutional court, and laborious to anyone not interested in 80 pages dedicated to the difference between estoppel and ostensible authority, if indeed there is one.

In short, Mr Makate invented a concept whereby one could send a message on a cell phone to someone to “please call me” at little charge and which was especially useful in the lucrative prepaid mobile phone market especially when one ran out of airtime, which was often the case. He relayed that to his manager and then to his head of product development asking for 15% of profits compensation for the idea. The company agreed to let the CEO determine the compensation, if there was no agreement on that.

The company then celebrated his idea and made billions then refused to pay him claiming that the idea was theirs, that his claim had prescribed and that the head of product development had had no authority to bind the company.

The case was dismissed in the High Court in an equally exciting and laborious judgment (see earlier Afro-IP post here), leave to appeal to the Supreme Court of Appeal was rejected and Mr then sought justice in the Constitutional Court. Yesterday that court handed down a decision vindicating Mr Makate, castigating Vodacom and ordering that the company abide by its agreement to pay Mr Makate, and negotiate in good faith to determine the exact amount necessary to be paid.

Despite the very long judgement and the hype around this case the lessons to be learnt from it are fairly simple. If you have a great idea outside the course and scope of your employment:

a. document it
b. get an sense of whether it can be patented or how the five different forms of IP can be used to protect it (most lawyers will not charge you for this)
c. use a properly drafted NDA when you disclose it
d. speak to the right person (and even take your attorney along)
e. don’t be naïve – sense the opportunity to reveal your entire idea at the right time

This post here provides further tips for entrepreneurs seeking to protect and exploit their idea. A link to this blogger's discussion on this case on PowerFM on Victor Kgomoeswana's show with Maclean Sibande (CEO of the Innovation Hub) will be inserted as soon the podcast is on their site. You can now view this here.

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