Cisco awarded 'seven-figure sum' in grey-market case against Gen-X IT
Vendor claims victory against defunct Manchester-based reseller, but administrator's report states Cisco had sought £35m
Cisco has been awarded a "seven-figure" sum by the High Court in its long-running saga against Manchester trader Gen-X IT.
In a statement released today, Cisco said that two Gen-X IT directors accepted a court ruling in favour of the vendor and agreed to pay a "significant" settlement.
Alan Gould and Kelley Stewart accepted that they had infringed Cisco trademarks by dealing in counterfeit products and parallel-imported products - sometimes referred to as the grey market.
Neil Sheridan, Cisco director of brand protection, said: "This action, together with other successes we have had with the City of London Police, demonstrate the strength of Cisco's enforcement of its intellectual property rights.
"We have obtained significant remedies from Alan Gould and Kelley Stewart, which show that the directors and senior management of companies that choose to infringe Cisco's rights can and will be the target of Cisco's enforcement action.
"Last year's UK Supreme Court decision that trading in grey products, as well as counterfeit products, can result in criminal prosecution is further proof that trading outside Cisco's authorised distribution network will have consequences."
Sheridan was referring to a ruling last year involving a UK-based firm which imported designer clothes from outside the EU, without the manufacturer's consent.
The landmark Supreme Court case ruled that trading of this nature is a criminal offence.
Gen-X saga
Cisco and Gen-X IT have been clashing for over a decade, with the Manchester reseller caught trading counterfeit Cisco products in 2005.
This latest episode saw Gen-X IT go into administration, initially expecting a financial penalty of nearly $2m. Gen-X later said it feared the settlement would "greatly exceed" this amount.
An administrator's report posted on Companies House in January stated that Cisco was seeking £35.1m from Gen-X, but at this time the final amount had not been decided.
CRN has attempted to contact Gould and Stewart for comment.
Justin Harling, CEO at Cisco Gold partner CAE, said that vendors have made good progress over the last few years to stamp out counterfeit trading in the channel.
High-profile cases involving Oracle, Hewlett Packard Enterprise and Plantronics have seen guilty channel firms fined millions of pounds.
Commenting on the issue of counterfeit trading in general, Harling said: "We still hear about it a little but not very much at all now. We rarely come across it in the market at this point.
"I doubt the manufacturers would ever want to claim that the battle on this one is won, but huge progress has been made. It's not that it's a non-issue, but it's as close to that as it has ever been at this point.
"We've ended up getting real clarity from the manufacturers about what is acceptable and what's not. The level of enforcement that has taken place has been important, and I think there is just better intelligence on supply chains now, so everything is traceable, which makes a significant difference."