Ownership of intellectual property rights: Did Vodacom 'sell' its rights in Makate v Vodacom?
| DOI | https://doi.org/10.47348/SAIPL/v9/a2 |
| Author | Forere, M.A. |
| Pages | 18-34 |
| Citation | (2021) IPLJ 18 |
| Published date | 10 December 2021 |
| Date | 10 December 2021 |
18
https://doi.org/10.47348/SAIPLJ/v9/a2
OWNERSHIP OF INTELLECTUAL
PROPERTY RIGHTS: DID VODACOM
‘SELL’ ITS RIGHTS IN MAKATE V
VODACOM ?
*
Associate Professo r in Law, University of the Witwatersran d
ABST RACT
The case betwe en Mr Makate and Vodacom, which was de cided by the highest court in
the land — the Cons titutional Cou rt, raises i nteresting i ntellectua l property qu estions;
was found to have been i n breach of an agre ement to reward a for mer employee who
conceived an idea th at led to the development of a prod uct known as ‘Please C all Me’
while still employe d by Vodacom. In the main, th e dispute is now about fair co mpensation
payable to Mr Makat e. It is argued herein that the d etermination of fair co mpensation is
predicated on t he determination of ow nership of the ‘Please Call Me’ produ ct. This paper
Copyright Act a nd the Patents Act, even though the pro duct was never patented, which,
in turn , makes compens ation to Mr Makat e even less determ inable. Accordin gly, it is
argued herei n that any determ ination of compensat ion must be based on how the in dustry,
in general, an d Vodacom, in par ticular, has rewarded its e mployees who have conceived
workable ideas in the p ast. Thus, compensat ion cannot be based on ma rket value.
KEYWORDS: Intel lectual prope rty right s; employment; invention s; workplace
intellectu al property rig hts; employee compensation; copy right; patent
The COVID-19 pandemic has shaped our lives in more ways t han one can
imagine. With lockdowns implemented i n most countries, employees were
forced to work remotely, with some job responsibilities more challenging th an
others to adapt to remote works tations. Accordingly, employees have had to
be innovative in discharg ing their mandates. There is no doubt that i nnovation
raises questions of ownership of int ellectual proper ty rights emanat ing from
such inventions/creations by employees. Accordingly, there is no other time
that I have been so inundate d with questions about the ownership of intelle ctual
property r ights from colleagues and employees f rom other companies than
during the COVID -19 pandemic. On the other hand, employers conspicuously
remind employees that any intellect ual property right s arising from their work
as employees vests in their employer. As an example, at the star t of online
teaching and lear ning as a result of the COVID-19 pandemic, the website of
my employer — the University of the Witwatersrand — placed a notice on its
* BA Law; LLB (Lesoth o); LLM (Essex); PhD (Bern).
(2021) IPLJ 18
© Juta and Company (Pty) Ltd
https://doi.org/10.47348/SAIPLJ/v9/a2
home page indicating that any i ntellectual proper ty rights per taining to the
e-resources developed by the in stitution’s employees belongs to the University.
Whereas the South Af rican law governing copy right and patents is clear
that intellectua l property right s vest in the employer when there is a contract
of employment, it would appear that employees can bypass t hese statutory
provisions, as happened in Makate v Vodacom. Yet, one wonders whether this
is a case where Vodacom gave away its rights on a silver platter by allowing
the case, which is embedded in t he ownership of intellectual p roperty, to be
determined by cont ract law. The only time Vodacom appeared to conte st this
product as its own proper ty was in one sentence where t he company raised
a defence ‘that in terms of the applicant’s employment contract, the idea in
question was Vodacom’s property for which the applicant was not entitled
to compensation’,1 but this argument was not pursued beyond this si ngle
sentence. The abandonment of th is argument by Vodacom, and the approa ch
taken by the cour t to decide the case as purely a contractua l obligation without
taking into a ccount the underlying sou rce of contract, namely the ownersh ip
of the programme in conte ntion, was disappointing, es pecially in light of the
decision of the Supreme Court of Appeal i n King v South African Weather
Service where the cou rt stated that:
[A]gency law principles, which wer e developed in the context of tort l aw, do not necessarily
in the fram ework of vicarious liability shou ld apply. Again, it appears to be wrong t o apply
delictual ‘pr inciples’ without more to deter mine questions of ow nership in the arcan e area of
copyright es pecially since policy consid erations must differ.2
Makate v Vodacom is about an employee, Mr Makate,
who was employed as a trainee accou ntant in 2000 by Vodacom. Owing to
airtime, M r Makate came up with the idea t hat would enable a person who
does not have airtime to se nd a message to another par ty asking them to cal l
back. Mr Makate approa ched Vodacom’s Director of Product Development
and Management with a view to explore the v iability of this idea.3 The pai r
verbally agreed to give it a tr y and that Vodacom would reward Mr Makate
should the idea be viable.4 They did not set the amount of reward at the t ime,
although Mr Makate ha d indicated that he would want 15% of the proceeds.5
They also agreed th at, should they not reach an agreement with regards to the
Vodacom would determine Makate’s share. The idea was developed into what
was, and is known tod ay as, ‘Please Call Me’, and it became a commercial
success for Vodacom. Vodacom reneged on its promise and Makate
1 Makate v Vodacom (P ty) Ltd 2016 (4) SA 121 (CC) para [15].
3 Makate v Vodacom (n1) para [4].
4 Makate v Vodacom (n1) para [5].
5 Ibid.
OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS:
DID VOCADOM ‘SELL’ ITS RIGHTS IN MAKATE v VODACOM? 19
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