Fortinet Ban Stirs Channel

The U.S. International Trade Commission last week ordered the all-in-one security appliance leader to stop selling products that contain its antivirus software and barred the company from providing support or new virus signature updates to those appliances sold after the Aug. 8 ruling.

The affected product, Fortinet&'s FortiGate appliance, combines a firewall and VPN with optional antivirus, antispyware and other features. The ITC order stems from an earlier ruling that Sunnyvale, Calif.-based Fortinet&'s antivirus software violates a Trend Micro patent dealing with scanning for viruses at the gateway.

Fortinet contends that it can still sell its product without virus filtering, but resellers said the virus filtering is what makes the product compelling to customers.

The ITC order bars Fortinet from importing, marketing, advertising, offering for sale or selling the affected product. It does allow Fortinet to continue to provide maintenance releases and virus signature updates for its anitvirus software to customers that purchased the FortiGate product prior to the Aug. 8 order.

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And that&'s where it gets murky. Trend Micro maintains that any Fortinet product sold by distributors or resellers after Aug. 8 is affected by the order.

But Fortinet CFO Hal Covert said any inventory in the hands of distributors or resellers was sold before Aug. 8, and therefore will be supported. “Title transfers at the time we ship product,” Covert told CRN. “So any product in the hands of distributors or resellers prior to the order is not affected.”

Mike Wallace, CFO of Alternative Technology, Englewood, Colo., said the Fortinet distributor will continue to sell the product. “Our interpretation is that since we purchased the product prior to the ruling, we can continue to sell it,” Wallace said.

Even so, Fortinet engineers are working on a new approach to virus filtering that will not violate the patent in question, Covert said. Fortinet will have a software update within 60 to 90 days that avoids the patent issue, he said.

Fortinet reseller partners, speaking on the condition of anonymity, said they will continue to sell and support what their customers want. “We have several deals on the table right now,” said an East Coast partner. “Some customers will decide to go forward and some will choose another direction. I will support them either way.”

A West Coast reseller told CRN that his company will continue to sell Fortinet but that he did add a competing line of security appliances “for insurance. Whether I am supposed to be selling them or not isn&'t as important as whether customers will buy them,” he said. “This may chase some customers away from Fortinet.”

Another option for Fortinet is to sign a licensing agreement with Trend Micro. “We are actively talking with Trend Micro to resolve this,” Covert said. “We want an agreement that is fair and reasonable.”

Lane Bess, president of North American operations for Tokyo-based Trend Micro, told CRN: “We have been very open to options and suggestions from Fortinet. Our goal has never been to put Fortinet out of business. Our goal is to protect our intellectual property and have companies pay us for the use of it.”