The recent Constitutional Court decision of Kenneth Nkosana Makate v Vodacom (Pty) Ltd highlighted the importance of regulating the creation, protection and ownership of intellectual property, especially if one is to mitigate litigation.

In this matter, Makate, employed by Vodacom at the time as a trainee accountant conceived the Please Call Me messaging system. Makate entered into an oral agreement with Vodacom’s Director and Head of Product Development according to which Vodacom would experiment with the idea and if it proved commercially viable, Makate would be paid a share of proceeds from the product, subject to terms to be negotiated.

Makate instituted a claim against Vodacom in the High Court after his demands on Vodacom to honour the oral agreement were unsuccessful. In the High Court Vodacom contended that in terms of Makate's employment contract, the idea was Vodacom’s property for which Makate was not entitled to compensation. Vodacom, however, did not proceed with this claim as Makate conceived the idea outside of his scope of work. The matter proceeded to the Constitutional Court, which ordered Vodacom to compensate Makate for inventing the Please Call Me service.

This case highlights the importance of companies having proper policies and procedures in place to deal with the protection and enforcement of their intellectual property in for example, new business ideas, inventions, brands and designs. This will help create certainty for both employers and employees and will also ensure that these important intellectual property assets are properly commercialised in accordance with good business practices.

Submitted by Webber Wentzel