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Nedbank robs two Gugulethu entrepreneurs

Entrepreneurs assert that Nedbank stole their proprietary card-blocking technology.

According to TechCentral, two Gugulethu business owners requested an interdict from the Commissioner of Patents’ court in Pretoria to prevent Nedbank from using a card-blocking system that they claim was taken from them.

Nedbank says it will apply to have the patent revoked on the grounds that “the claimed inventions are not new” and are thus “not patentable,” but denies that it stole their patented IT system that enables customers to block bank cards that are suspected of being used for fraud.

Thandile Jwambi and Tatolo Kutumane, two distinguished IT developers from Gugulethu in the Western Cape, created the software in 2015 under the trade name Instablock. They are seeking damages totaling more than R280 million.

Based on the estimated royalties they claim they would have received had Nedbank purchased the software legally, this sum was calculated. Bank card service fees brought in R9.3 billion for Nedbank in 2015.

SA Litigation Funding Company has taken on and is funding the case (Salfco).

After realizing that no banks provided a system that allowed customers to cancel their cards remotely across multiple platforms, such as smartphones, tablets, and ATMs, once they became aware that fraudulent transactions were occurring on their accounts, the two entrepreneurs created the Instablock system. To cancel their cards in the past, customers had to call the bank. The product obtained a provisional patent in 2015.

Numerous banks reportedly expressed interest in Instablock right away, and in September

The two business owners were further perplexed by the length of time it took for them to receive their R20,000 prize money from the LaunchLab competition. They had previously made it known that they planned to use this money to further protect their intellectual property by obtaining a full national patent.

Paschal allegedly discouraged Jwambi from requesting a South African patent on the grounds that such protections were not particularly effective.

To obtain their prize money, the two business owners had to take LaunchLab to small claims court.

Their suspicions that Nedbank and LaunchLab were attempting to thwart their efforts to protect their patent rights were further supported by this. The entrepreneurs won their case in court, and LaunchLab then issued the winnings, which were immediately put to use to acquire a complete national patent.

The two business owners then began tape-recording every conversation they had with the bank. On November 5, 2015, Hassin from Nedbank called Jwambi to inform him that he had presented the Instablock system to the bank’s business development division and pledged to set up a meeting with other employees within the following two weeks to discuss potential business arrangements. Hassin and the bank remained silent for the rest of the day.

When Jwambi visited a Nedbank ATM a few months after the LaunchLab competition, she found that the bank was actually using the card and checkbook blocking system it had ostensibly expressed interest in purchasing. Jwambi then visited Nedbank’s website and saw that the system appeared to be available there as well.

According to Salfco CEO Edward de la Pierre, there is preliminary evidence of Instablock patent infringement. “Nedbank unquestionably lacked or did not use such a system prior to Jwambi and Kutumane introducing it at the MyBusiness Expo and then again at the LaunchLab events. This was repeatedly confirmed by Nedbank staff members. The Commissioner of Patents will now have to make a decision regarding this issue.

According to Doubell, Nedbank immediately authorized a technical and legal assessment after being informed of the alleged patent infringements and came to the conclusion that the patent obtained by Jwambi and Kutumane lacked novelty and inventiveness and was of a non-patentable subject matter. Based on a national and international patent search, this was said.

Old Mutual was initially believed to have violated our patent as well, but after closer inspection, we discovered that this was not the case. It was utilizing outdated technology, which essentially allows anyone to flip a switch to deactivate or activate a card. Our technology differs in that additional security checks must be completed before a card can be activated or deactivated. Due to the multiple layers of security checks required by our technology, card holders can also activate and deactivate their cards using the phones of strangers.

“The card is the first cardless card blocking system in the world and can also be activated or deactivated at an ATM.

“We entrusted Adam & Adams, regarded as the best patent attorneys in Africa, with the task of conducting an international search for our design and then handling the registration’s final and official aspects.”
Casey Makate

De la Pierre claims, in reference to the well-known Kenneth Makate v. Vodacom legal dispute, which was decided in Makate’s favor by the constitutional court in 2016, that “this case has several similarities to the Makate case.” Makate’s “please call me” idea, which enables Vodacom users to send SMSes to other Vodacom users requesting a callback, does not appear to have earned him any money as of yet.

READ MORE: Nedbank discriminated against Sekunjalo, court rules

According to de la Pierre, “Mr. Jwambi and Mr. Kutumane approached us because they lacked the resources to take on the banks. “In the Makate case, all that existed was an unpatented idea. It’s a patent right here. That is the distinction. We examined the proof they provided to us through Jwambi and Kutumane, and after discussing it with our legal team, we decided to support them.

A patent and technical report claiming the Instablock system is exclusive are included in the summons against the banks.

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