Hewlett Packard Enterprise (HPE) has been awarded £1.95m by the High Court after one of its partners, International Computer Purchasing (ICP), fraudulently obtained more than £1.5m in discounts on its products.
HPE took action against Matthew Archer, ICP's managing director, and the company itself, in a trial which took place in April. HPE claimed Archer and ICP were involved in fraud, conspiracy and inducement of breach of contract.
Specific details of the case were not disclosed by HPE, but in a statement it said the proceedings focused on the "abuse" of HPE's partner programmes and discounts. HPE claims ICP fraudulently obtained more than £1.5m in discounts on HPE products.
Marc Waters, HPE's interim managing director, said the firm is "satisfied" with the verdict.
"Grey marketing is a serious problem for the industry in terms of lost sales, margin erosion, poor customer experiences and reputational damage," he said. "HPE has a well-established grey market avoidance programme and the outcome of this case clearly demonstrates that we will not hesitate to take court action to enforce our rights if required.
"We would also encourage anyone concerned about potential fraudulent activity to contact our brand protection team at and we will investigate as appropriate."
Grey market activity is a long-standing issue in the channel and in recent months some vendors have stepped up their efforts to protect their brands. Headset vendor Plantronics settled a number of cases on the issue since the end of last year.
Andy Dow, HP Enterprise Group director for Tech Data welcomed HPE's strong approach to protecting its brand and the channel.
"It is really good to see HPE taking a firm line on grey product," he said. "It doesn't help the channel and it definitely doesn't help the final customer. So this really is positive action in ensuring a healthy channel and healthy customer base."
One channel source, who preferred to remain anonymous, had little sympathy for partners who get caught up in cases such as this.
"They know they're buying grey," said the source. "They know where the clean stuff comes from and they know where the nasty grey stuff comes form. They don't accidentally get it wrong."
ICP said in a statement:
"We are extremely disappointed and surprised by the outcome. We strongly deny any wrongdoing and must now consider all options available to us."
Infrastructure provider says international sales now make up 51 per cent of its revenue
Suzanne Chappell of TMS plans sailing venture after selling Oxfordshire-based TMS to acquisitive Chess
Withdrawal of credit insurance by some providers a 'reflection' of current challenge facing IT sector, according to MD Steve Soper
SMART's UK managing director joins Lenovo to boost SMB business