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The Strange Case Of The $1.5-Billion Idea Without A Patent

Artemis

February 26, 2024
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The Strange Case Of The $1.5-Billion Idea Without A Patent

In the early 2000s, Ari Kahn, a telecoms engineer, was overwhelmed by the sheer volume of voicemails he received daily. Most of these messages simply requested a callback, prompting Kahn to devise a solution. He envisioned a service that would allow people to send a simple SMS message instead of leaving a voicemail.

Kahn, who worked as a data consultant for MTN, South Africa’s largest mobile operator, dubbed his invention “Callme.” He filed a patent application in January 2001, and the patent was granted on the same day. MTN launched the Callme service a day later, and it quickly gained popularity, reaching market saturation within a month.

However, a twist emerged when Nkosana Makate, a trainee accountant at Vodacom, South Africa’s second-largest mobile operator, claimed he had come up with the idea for the Callme service. Makate presented his idea to his boss five days after Kahn had briefed MTN’s lawyers for the patent application.

Despite not filing a patent application or receiving a patent, Makate’s claim gained traction. In 2019, South Africa’s Constitutional Court found that Makate had invented the service and ordered Vodacom to pay him “reasonable compensation.”

The legal battle between Makate and Vodacom has been ongoing for over a decade, with various twists and turns. Vodacom initially denied Makate’s claim, but later acknowledged that MTN had invented and patented the service before Vodacom launched its own version.

The court ordered Vodacom to pay Makate a percentage of the revenue generated by the Callme service from 2001 to the date of judgment. This settlement could potentially amount to billions of dollars.

The case highlights the importance of intellectual property rights and the legal complexities surrounding innovation and ownership. It also sheds light on the competitive nature of the telecommunications industry, where companies often engage in fierce competition to gain market share.

Despite the legal battles, the Callme service has revolutionized the cellular industry, providing a convenient and cost-effective way for people to communicate. Its astounding adoption rate is a testament to the ingenuity of its creators and the widespread need it fulfilled.

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