Vexall wins case, breaks Telkom’s pharmacy software dominance

The high court has ruled in favour of Dis-Chem-backed technology company Vexall after Telkom subsidiary Business Connexion (BCX) sought relief against what it said was an unlawful use of its pharmacy software.

In October, BCX lodged a case in the high court against Vexall and a number of other parties alleging Vexall had acted unlawfully by poaching BCX employees, its customers and unlawfully appropriating its intellectual property in relation to a computer programme called Unisolv — considered to be the industrystandard software for use by private retail pharmacies.

About 70% of all scripts processed in SA are dispensed using Unisolv, which BCX first developed in 1993.

Some BCX staff members involved in developing and implementing Unisolv resigned last year to join Vexall.

BCX claims the resignations were orchestrated, while Vexall says the workers were either retrenched as part of a substantial cost-cutting exercise or resigned to seek job security elsewhere.

In its application to the high court, BCX had sought relief on allegations of collusion, solicitation, springboarding and the use of confidential information against Vexall and most of its employees, in addition to the enforcement of restraint of trade provisions against some of the Vexall employees.

On Thursday, the high court dismissed with costs the application brought by BCX against Vexall and 47 other respondents, most of whom are Vexall employees.

In a statement yesterday, BCX said it had noted the judgment passed down by the high court.

“As would be expected, we are disappointed by this ruling,” the company said.

“We are studying the judgment and taking advice on the implications and effect of this judgment.

“We will decide on further actions, if any, once we have received the advice requested.”

The case before the high court is the latest chapter in a series of legal disputes between the two companies involving the Unisolv software.

In February, the Competition Tribunal ruled in favour of Vexall to stop BCX from abusing its dominant position in the pharmacy software industry.

At the time, the tribunal said BCX was prohibited from selling or offering a licence for its “Unisolv” software on condition that a customer purchase value-added services from BCX. The ruling followed submissions made by both companies at the Competition Tribunal, which adjudicates on cases brought to it by the Competition Commission.

The commission investigates abuse of dominant positions by companies and M&A.

Vexall had accused BCX, which holds the copyright to Unisolv, of forcing its customers to purchase valueadded services together with the software licence.

The Competition Act prohibits a dominant company from selling goods or services on condition that the buyer must purchase unrelated products.