The successful lawsuit by a small solution provider against Cisco over breeches in its reseller agreement and deal registration program has other solution providers wondering how this might impact their relationships with Cisco and other vendors.
Brian Daucher, attorney for Infra-Comm, which was awarded about $6.4 million in damages from Cisco as a result of the lawsuit, discussed how the case could impact others in the channel in e-mailed responses to questions from ChannelWeb.
What impact will Infra-Comm's $6.4 million jury award against Cisco have on major vendor deal registration and reseller agreements?
I think it sends a signal that General Counsel should be sure that their agreements are reasonable; companies should respect the contributions made by their smaller partners. Companies that get out ahead of this issue will reap rewards, while those that lag will pay a price (and will still have to move to the same position).
What is the message that the jury is sending to big vendors regarding deal registration and reseller agreements?
Don't bring excuses to Court and expect a jury to believe them; juries are discerning. There's a reason we put 12 people on the jury; it's the greatest lie detector device ever contrived.
What impact will the legal precedent set here have with regard to deal registration and reseller agreements?
The agreements are no different than other types of contracts; we all expect people to honor contracts and to be fair. I do think courts will feel more empowered to level the playing field where there are signs of unequal bargaining power and one-sided results.
What is your view of Cisco and how it treats its partners?
I don't think anyone has ever told Cisco no. Cisco has a remarkable track record of success; everyone knows that they have great products. But, Cisco Legal has got to learn when to temper some of that with a more practical approach, if for no other reason than to protect those achievements.
Do you expect Cisco to appeal the verdict?
If past is prologue, then yes. But, at any time Cisco could realize that this is not a case that they should continue to fight. By simply paying the judgment, they could send a positive signal to the channel that they recognize this wrong and are setting it right. The basic instinct is to continue to fight, but the better judgment would be to pay up and move on.
Do you think Cisco will pay the $6.4 million award?
We will collect the money, someday. If Cisco appeals, they will have to post about a $10 million bond, which will guarantee payment if the result is affirmed.
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