Independent developer Pierre Nel today filed a complaint of patent infringement against MTN and Nedbank, saying the companies are using a system on which he has held the rights for six years.
Nel says the patent, number ZA 94/10321, covers the system used by Nedbank to sell prepaid cellular airtime from MTN through automatic teller machines (ATMs).
[VIDEO]According to Nel, his patent covers any product or service sold over ATMs or other financial terminals using a vendor database connected to the financial network. This includes cellular airtime sales, lottery tickets bought via cellphone and a range of other transactions.
He also says he presented the system to organisations, including Nedbank, and was turned away. Yet that same system is now apparently in use.
"Because I am a private individual and don`t have corporate backing, they don`t want to deal with me." He believes the patent would be respected if it were held by a corporation, but that big business does not care for the rights of individuals.
[VIDEO]The patent is held by Resdel, a "shelf company" Nel set up.
His process patent covers the use of a separate vendor database, connected to an existing electronic bank network, for the sale of goods and services. It was provisionally filed in 1993 and granted in 1994 after Nel, a 20-year-old student, sold his motorbike to pay for the patenting process.
He says a prior patent search at the time did not turn up any conflicting patents and that his patent has never been challenged.
ABSA is believed to use a system similar to that of Nedbank for the sale of airtime, as is First National Bank, and Standard Bank is believed to be considering a similar system. "I think all banks are looking at this kind of system to use their existing infrastructure for transactions," says Nel.
[VIDEO]He says he approached numerous companies with the idea and offered to license it to them. "I never said I wanted millions. I am willing to license it to anyone based on a royalty payment on each transaction." He says a 0.5% payment on the face-value of each transaction has been offered.
The patent has apparently been recognised by Telkom, which in a tender requirement for landline prepaid vouchers stated that applicants had to license the methodology.
Nel says the complaint is the first pure e-commerce patent to be heard before a South African court, but hopes that it will not come to a legal battle.
"I am hoping to come to some kind of financial arrangement with them. I don`t particularly want to go through the whole long court thing."
[VIDEO]When contacted, Nedbank said it was aware of the action and was considering a statement to the media. None had been issued by the time of publication. MTN was also aware of the complaint but representatives were not available for comment.
The two companies have 10 days to respond to the matter and 20 additional days to present a defence.
Video by Andrea Carrol
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