Gugulethu entrepreneurs’ R280m case against Nedbank hits legal hurdle

The case of two Gugulethu entrepreneurs who last month took on Nedbank over the alleged infringement of their Instablock patent has hit a legal hurdle, but will go on, the attorney who represents the two entrepreneurs said today.

On 18 June Jwambi and Kutumane applied to the court of the Commissioner of Patents in Pretoria for an interdict to stop Nedbank from using the card-blocking system they say was stolen from them. The two were demanding more than R280-million in damages.

The two alleged that Nedbank stole the idea which they presented in a pitching competition hosted by LaunchLab in Stellenbosch in 2015 and which was sponsored by the bank.

Nedbank denies that it infringed upon the two entrepreneurs’ patent (see this story). This, while LaunchLab says it did not conspire with the bank to steal the patent (see this story).

The case of two Gugulethu entrepreneurs who last month took on Nedbank has hit a legal hurdle

Jwambi and Kutumane’s attorney, SA Litigation Funding Company’s (Salfco) Edward de la Pierre, confirmed to Ventureburn by phone today that the case has been “withdrawn for technical reasons” but stressed that the two would reissue the summons shortly.

De la Pierre explained that the case had to be withdrawn because the two had not appointed a patent attorney to act in a permanent position on the case, as is required when defending a patent case.

A patent attorney had merely signed the necessary legal documents on behalf of the two entrepreneurs. It is however required that such an attorney represent both parties in the matter itself.

De la Pierre said a patent attorney AJ Rabie Attorneys had been appointed to act on behalf of the two entrepreneurs in the case, but that the case would need to be reissued because of this change.

The two entrepreneurs, De La Pierre and AJ Rabie are expected to meet on Monday to discuss the case, he said.

Ventureburn contacted Nedbank’s attorney for the case, Bouwer’s Theo Doubell, but he was not immediately available to comment.

Nedbank on 4 July issued a statement in which it noted that the summons served on the bank on 18 June 2019 was withdrawn on Tuesday (2 July).

It said following the appointment of a new set of attorneys by the claimants and an impending fresh summons that is expected to be served on Nedbank, the bank has ” little option but to proceed with the revocation of the patent”.

“The revocation proceedings were instituted after the patentees threatened Nedbank with patent infringement. The revocation proceedings are based on the patented inventions not being novel and or the scope of the patent being overly broad,” it said in the statement.

Onto sixth attorneys

Meanwhile it’s emerged that De la Pierre is the sixth attorney that the two have had since 2016 when they began pursuing the case.

When asked by Ventureburn whether this was indeed so and what the reason was for the two having changed attorneys so frequently, Jwambi said there were various reasons why the attorneys in the past had later decided not to represent them.

He claimed a central reason was that many cited a “conflict of interest” because Nedbank was a client of theirs.

Nedbank denies settlement offer

Yesterday Jwambi claimed to Ventureburn that Nedbank wanted to reach a settlement over the alleged patent infringement before the two last month applied to the court to stop the bank from using the card-blocking system.

“These guys wanted to settle,” Jwambi said. He explained that the offer took place “at the end of January or the beginning of February” via the bank’s attorneys.

However the bank, he said did not offer a settlement figure, instead the bank’s legal team he said eluded to an earlier offer of R1-million, which was facilitated by incubator LaunchLab.

“(Nedbank) said if you your client is offered R1-million they (the two entrepreneurs) would obviously reject it,” he said.

However when contacted Nedbank’s media spokesperson Sharda Naidoo denied that there had been any move by the bank to make a settlement.

‘We’re not trying to make a quick buck’

Jwambi meanwhile yesterday said he’s “not bothered” over comments some on Twitter have made that he and Kutumane are looking to make a quick buck from the case.

He pointed out that if internet entrepreneur Mark Shuttleworth could sell his tech company Thawte in 1999 to Verisign for R3.5-billion (about $575 million at the time), then the R280-million is not an unreasonable amount to ask for.

He said since the case appeared in the media he’s received calls from people who he “hasn’t spoken to in a long time”, who have joked with him about getting a R1-million from the case. “I think it’s a pretty standard thing (that people do),” he added.

Jwambi said he and Kutumane currently generate an income by doing graphic design and website work. He added that Kutumane had to sell his car at one time to fund the case, since the pitch three years ago.

Jwambi added that the two have been unable to commercialise the Instablock with any other banks, as other banks told them to sort out the legal issue with Nedbank before they could deal with the two of them.

Read more: We did not conspire with Nedbank against Gugulethu entrepreneurs – LaunchLab
Read more: Nedbank denies it stole patent from Gugulethu entrepreneurs

Editor’s note (5 July 2019): The story has been amended to include a statement that Nedbank issued yesterday in which the bank said it would proceed with the revocation of the patent, based on the patented inventions “not being novel and or the scope of the patent being overly broad”.

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