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Cisco On Combating Gray Market, Fraudsters ‘Undercutting’ $1.2B In Legit Channel Business With Counterfeit Goods

‘There are temptations out there. Be aware, be careful, especially in these times. There are many fraudsters out there that are trying to cheat you out of legitimate business. And if it’s too good to be true, it probably is,’ says Al Palladin, Cisco’s legal director of Global Brand Protection, to the company’s ‘good guy’ partners.

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Tell us about Cisco Global Brand Protection and how the team is working to combat the selling of counterfeit goods.  

I have the honor of leading the Cisco dedicated Brand Protection team. Basically, we are a branch of law enforcement—we’re part of the Cisco legal organization—and the team was set up about 17 to 18 years ago, primarily focused on issues relating to product diversion. That is, when partners cheat, lie, [or] commit fraud and then we see that product polluting other marketplaces. Historically, products like that move from East to West. We’ve had issues in Asia-Pacific and in the Middle East and Africa, [as well as] issues in Central and Eastern Europe. But we’re also seeing these issues crop up in countries like the United States, especially now, in the past couple of years given the constraints in the supply chain. Our team is focused on those types of products. But more and more, we are focused also on the issues of counterfeiting of Cisco’s products, either illegally using our trademarks or those who are unofficially upgrading Cisco base units. An example would be getting a switch with 24 ports and the basic version of software and adding ports from 24 to 48 and going from Essentials [operating system] OS to Advantage OS, creating fake labels, and then passing it off to unsuspecting customers. That has been a growing problem over the years and unfortunately, it’s affecting our switching products and our transceivers. These are products that are created outside of the Cisco supply chain and our control, where somebody basically rips us off from an intellectual property perspective.

The essence of our work is protecting all of the investments that the company is making into intellectual property. The team itself is about 50-people strong—women and men are located in 15 countries around the globe. We are a team of investigators and detectives that follow leads that are given to us by customers [and partners] that are disgruntled because when they find products like these failing them, they, of course, contact Cisco’s technical support and in many instances, when our engineering colleagues look at [the products], they have to tell the customer, ‘Sorry, this has nothing to do with Cisco. This is a fake, and where did you get it?’ My team is responsible for following the troves of information and going back to the suppliers. It’s also a team of intelligence analysts and forensic experts and engineers that pick apart these products and tries to determine the origin of the source.

 
 
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