Judge rules Cisco's reseller agreement as unfair

A court judge's ruling on Cisco's reseller agreement could set off a flurry of lawsuits from partners who

believe their business has been harmed by the network giant's Indirect Channel Partner Agreement (ICPA). Judge Gregory H. Lewis in the California Superior Court in Santa Ana, Calif., presiding over a trial between former reseller Infra-Comm and Cisco, ruled that parts of Cisco's ICPA were "unconscionable", reports ChannelWeb. "Unconscionable" refers to a contract or parts of a contract that is one-sided in favor of the person who has the superior bargaining power.

Infra-Comm sued Cisco for allegedly snatching a $5 million opportunity away from the reseller and turning it over to AT&T. Cisco, in turn, claims Infra-Comm harmed the networking giant's busines and misused its brand name.

This week, the judge found three provisions in Cisco's ICPA unconscionable: that the partner is not provided with an opportunity to negotiate the terms of the contract when using Cisco's Web site to renew contracts; that Cisco could terminate a reseller agreement with only a month's notice, or without notice at the beginning of each year; and that the ICPA limits damages to what a reseller pays Cisco over the course of three months for services and products, which could be unfair to longtime resellers.

A Cisco spokesperson told ChannelWeb that the provisions in question were common in the industry and that it would continue to vigorously defend Infra-Comm's allegations.

More from Cisco Subnet:Tolly's review of IPexpert vs. Internetwork Expert CCIE labsCisco refreshes CCIE security lab examCisco Attendant Console end-of-sale announcementCisco channel partners can now shave up to 61% off talent recruiting costsCatching USB data thievesInsider’s view on how to decide what Cisco code versions to run

* Cisco warns of ASA, PIX vulnerabilities

*

*

*

Go to Cisco Subnet for more Cisco news, blogs, discussion forums, security alerts, book giveaways, and more.

Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.
Related:

Copyright © 2008 IDG Communications, Inc.