Inside Gugulethu entrepreneurs’ IP theft fight with Nedbank

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Gugulethu-based entrepreneurs Thandile Jwambi and Nicolas Kutumane accuse Nedbank of stealing their card-blocking invention.
Gugulethu-based entrepreneurs Thandile Jwambi and Nicolas Kutumane accuse Nedbank of stealing their card-blocking invention.

“Unethical” is the word used by Gugulethu-based entrepreneur, Thandile Jwambi, to describe the conduct of Nedbank in the intellectual property (IP) theft case he and his partner are fighting with the bank.

Jwambi and his business partner, Nicolas Kutumane, are accusing the bank of stealing their card-blocking invention.

Last month, the entrepreneurs issued a new High Court summons against Nedbank for allegedly stealing their invention that enables a user to block financial transaction cards and cheques.

All they are looking for is “a fair and reasonable royalty” from the bank, said Jwambi in an e-mail interview with ITWeb.

Jwambi and Kutumane want Nedbank to be interdicted from using the technology and want an inquiry to be held to determine the amount of a reasonable royalty to be paid.

According to the summons, seen by ITWeb, during or about 2013, the plaintiffs identified a need among consumers to protect themselves against banking and card fraud. Consequent upon that identification, and over the period 2013 to approximately mid-2015, the plaintiffs investigated methods of so protecting customers and consumers and devised, developed and implemented a method of and system for activating and/or deactivation and/or blocking financial transaction cards as well as cheques.

It adds the invention provides a particular sequence of data inputs, to further enhance the secure operation of the invention.

“In making the invention, the plaintiffs applied inventive skill, insight and effort; expended valuable time and resources and produced a banking security solution not previously available in South Africa.

“Shortly after making their invention, the plaintiffs received two significant awards for the invention, the first at the My Business Expo held on 14 September 2015 at the Cape Town Convention Centre and the second at a competition held by LaunchLab on 17 November 2015 in Stellenbosch.”

Invention intention

Jwambi says they met Nedbank officials for the first time at the My Business Expo in September 2015 and a month later at the LaunchLab events where they presented their invention to them.

“Nedbank were the main sponsors of the event and part of the adjudication panels,” Jwambi tells ITWeb.

“We made our invention and planned to make it available to all financial institutions to assist them with card and cheque fraud.”

Computer programmers by profession, Jwambi and Kutumane say they have tried to reach out to Nedbank to deal with the issue internally, without success.

“Firstly, and prior to finding out that our invention, or something similar, was being offered to Nedbank card clients, we tried unsuccessfully to communicate telephonically with Nedbank executives to whom we had given full information of our invention at the Nedbank-sponsored My Business Expo and LaunchLab events.”

He explains that later, after finding out Nedbank was using their invention or something similar based on the entrepreneurs’ invention information that they supplied to the bank, they wrote to Nedbank CEO Mike Brown, but were rebuffed by Sean de Necker, a Nedbank executive service support consultant.

According to Jwambi, De Necker informed them that Nedbank “did not have a registered patent with regards to the invention” and furthermore refused to engage in any business transaction with the two.

“During mid-2018, via patent attorneys Smith & Van Wyk, we wrote to Nedbank’s attorneys Bouwers regarding the situation. They immediately responded that they would like to meet with us as they wanted to solve the situation in an amiable fashion.

“During the end of November 2018, we flew to Johannesburg and, accompanied by advocate Frans Arnoldi, we attended a meeting with Nedbank at their attorneys Bouwers. We left this meeting with a feeling that Nedbank, indeed, wanted to settle the matter amiably. During December, we supplied them with recordings and e-mail that we felt proved our case.”

Several months later, Jwambi says, Nedbank and Bouwers called for another meeting that was attended by advocate Arnoldi and Hans Oosthuizen, senior partner at attorneys Couzyn Hertzog and Horak of Pretoria.

“After this meeting, advocate Arnoldi reported back to us that Nedbank still wanted to solve the situation amiably but that Mike Brown first wanted to also listen to the recordings and peruse the relevant documents.

“Months went by with no word from Nedbank, Bouwers or Mike Brown. We finally realised that they were not serious and instructed our legal team to proceed against them.”

He notes that except for the R1 million awarded to them by LaunchLab, which they believed came from Nedbank, and the various promises to settle the matter amiably, they have received no other offer to date from Nedbank.

“It seems they were only involved in the My Business Expo and LaunchLab events to see what good ideas and inventions they could obtain for themselves – for free if possible. A Nedbank executive (name supplied) spelled it out when he said he was representing Nedbank at the LaunchLab event to see if there is any product that Nedbank could benefit from.”

No commercial arrangement

Meanwhile, Nedbank has vowed to defend itself against the two Gugulethu-based entrepreneurs. “Nedbank will defend the matter that is now based on a contractual and a delictual claim, in contrast to their prior patent infringement claim, instituted initially in the Court of the Commissioner of Patent (Patent Court),” the bank says.

“Nedbank Group reiterates its previous stance that the bank has not at any stage infringed any of the rights of the claimants relating to their alleged invention or underlying technology (RASSFI / INSTABLOCK).

“The bank at no time has entered into any commercial arrangement or created a reasonable expectation that any commercial arrangement would be established. Accordingly, Nedbank remains of the view that no compensation is due to the claimants by Nedbank.”

According to law firm Smit and Van Wyk, IP law in SA refers to all legislation concerning patents, designs, trademarks and copyright protection.

The legislation is meant to protect the intellectual property of legal entities, as IP can also carry significant value and is thus vulnerable for exploitation by outside parties.

“With the exception of copyright, intellectual property law in South Africa requires for this property to be registered in order to qualify for protection,” the law firm says.

“If you come up with a brilliant new invention, but do not register the patent, there is absolutely nothing you can do about it if someone else copies your idea and markets it themselves. There are certain requirements that need to be adhered to before you can register something under the intellectual property law.”

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