Inventor must now squeeze payment out of Vodacom, and his corporate investors are expecting a big payday
Nkosana Makate, the inventor of the Please Call Me, will finally sit down to talk money with Vodacom after being cheated for 16 years.
A Constitutional Court ruling this week ended a protracted legal battle by Makate to be paid for the concept he developed in 2000 while working as a junior accountant at the cellular behemoth.
Back then, he asked for a 15% share in revenue if the concept worked. His request was never acceded to.
By now, that 15% would amount to an astronomical R10.5 billion based on estimates produced in the case by Makate’s team.
That is the revenue related to the “induced” phone calls after people receive Please Call Me messages as well as the advertising that is included in these messages.
In practice, Vodacom might seize on the fact that Makate had later asked for R500 million to settle the matter in 2007, before being rebuffed and launching the court case.
It is not just Makate who will be pushing for a major payday.
His case was funded all the way from the high court by Sterling Rand, a Sandton-based “debt investment” company that also funds court cases.
Sterling Rand will now be paid a cut of whatever Vodacom settles for with Makate, giving it every incentive to spend more money on an aggressive negotiation.
“Negotiations will be led by our legal team under instruction,” said Sterling Rand’s Errol Elsdon.
“Mr Makate will be guided by the team. We naturally have a vested interest in the outcome since ... we will receive a portion of the proceeds,” he said by email in response to questions.
In his judgment this week, Justice Chris Jafta accused Makate and Sterling Rand, as well as Vodacom, of legal overkill.
Makate and Vodacom both had four counsel for the case.
In Makate’s corner, three of them were senior counsel (SC) or “silks”, the most highly paid advocates.
Even while criticising Vodacom harshly throughout the judgment, the court made the company pay for only half of the Makate team, complaining that the team was unnecessarily heavy-hitting.
“Two issues were raised in the main. Neither renders the circumstances so exceptional as to justify employment of more than two counsel,” says the ruling.
According to Elsdon, Sterling Rand decided on the appointment of the legal team.
“We adopt a ‘belt and braces’ policy, hence the appointment of three SCs for the Concourt,” he said, adding that they “only retain the best counsel in the country”.
Sterling Rand usually sets aside an amount for a case plus an appeal.
In Makate’s case, they mobilised more money from their UK-based investors.
“Their appetite for investment, if required, is certainly whetted by a major success such as the one we have just had,” said Elsdon.
The court case was not a damages claim – it was a bid to make Vodacom recognise a verbal contract that Makate had made with the company’s head of product development, Phil Geissler, in 2000.
Geissler had told him that if the Please Call Me turned out to be a viable product, Makate’s reward would be negotiated later.
Geissler told him that if they couldn’t agree on Makate’s reward, it would be up to the CEO to decide on it.
The ruling this week turns the matter into a court order that Vodacom negotiate a sum “in good faith” and, if that fails, to have Vodacom CEO Shameel Joosub arbitrate as a “deadlock-breaking mechanism”.
The irony was not lost on the judges.
“While choosing the CEO may not be regarded as a delegation of power to a third party ... it is how the parties in their wisdom formulated the relevant clause,” reads the ruling penned by Jafta.
The ruling overturned the high court’s finding on two legal points while accepting the high court’s original findings on the fact that Makate did in fact invent the Please Call Me.
Doesn’t ring true
Former Vodacom CEO Alan Knott-Craig used to claim that he personally invented the Please Call Me, and he even detailed this “eureka moment” in his autobiography.
The high court dismissed his version as “nonsensical” in 2013, even while it rejected Makate’s case on technical legal grounds.
This week, the Constitutional Court poured more scorn on Knott-Craig for his blatant fabrication.
Knott-Craig even got Geissler, the executive who originally promised to negotiate a reward with Makate, to lie for him in writing during the high court trial.
This was to confirm Knott-Craig’s story of inventing the Please Call Me while observing two Vodacom security guards trying to communicate by using missed calls.
By fighting Makate in the Constitutional Court, Vodacom had “associated itself with the dishonourable conduct of its former CEO”, reads the judgment.
“This leaves a sour taste in the mouth. It is not the kind of conduct to be expected from an ethical corporate entity.”