The diplomatic impasse between Cisco and the secondary market

United Network Equipment Dealer Association
Am fascinated that Cisco continues to refuse to acknowledge: UNEDA - United Network Equipment Dealer Association Or answer the association's call to help its work against Cisco counterfeiting, despite working with eBay in its VeRO program. Illuminating the issue is Phil Wright's Cisco blog: Protecting Against Gray Market and Counterfeit Goods Phil Wright is the Director of Worldwide Brand Protection for Cisco and his blog provided an email address from which to contact Cisco brand protection: So I contacted Cisco directly with the following question: Why isn't Cisco going after shops that sell Cisco gear on eBay? And Cisco's response: "Our brand protection team is committed to the integrity and quality of Cisco technology and services. The team maintains an on-going, pro-active and company-wide effort to minimize potential damage to the Cisco brand, our customers and partners as a result of counterfeiting and gray market. We have a great relationship with eBay and have a highly effective brand protection program in place with them," responded Phil Wright. "Cisco has registered under the Verified Rights Owners Program VeRO offered by eBay. As intellectual property rights owner registered under eBay's VeRO program, Cisco can report copyright, trademark and other intellectual property rights infringement items or listings through eBay's VeRO Program." "As a result, eBay will immediately remove reported items and/or listings and will suspend repeat offenders." Satisfied with Cisco's answer regarding eBay, I then asked Mike Sheldon, president of the United Network Equipment Dealer Association UNEDA (the Cisco secondary market trade association), why Cisco was not working with UNEDA to combat counterfeit Cisco gear?

Mike Sheldon's reply:

Mike Sheldon
"Cisco’s customers worldwide would reap substantial benefits if Cisco expended as much effort working with the secondary market on eradicating counterfeit equipment as it does as a participant in eBay’s Verified Rights Owner (VeRo) program," said Mike Sheldon - president of UNEDA United Network Equipment Dealer Association. "A cohesive collaboration between Cisco and the alternate network equipment channel would go a long way toward halting the flow of counterfeit goods. Unfortunately, Cisco remains reluctant to tackle this issue with the secondary market’s trade association, United Network Equipment Dealers Association (UNEDA)."

"The No. 1 goal for UNEDA’s 300-plus members is to facilitate an ethical, safe and efficient market for Cisco products. The first article of the UNEDA code of ethics prohibits trading in counterfeit or black market goods. The association actively cooperates with law enforcement and is creating an extensive database of counterfeit detection information to educate members on how to identify black market or counterfeit equipment." "As the president of UNEDA’s board, I continue to extend an open invitation to Philip Wright or any member of Cisco’s senior management to join our efforts. Instead, Cisco seems more intent on fighting the secondary market than fighting counterfeit." "UNEDA couldn’t disagree more!" "The secondary market offers Cisco’s brand the highest resale value in the networking industry by paying top dollar for pre-owned equipment. With extensive inventories we can deliver almost any gear within 48 hours, providing Cisco customers with a resource for emergency procurement as well as years of support and replacement of previous generation equipment." "Additionally, thousands of SMB customers who can’t afford new Cisco equipment are building world-class networks using pre-owned Cisco—and not competitors’ products—thanks to the significant savings they enjoy from the secondary market." "Every great brand—from cars to consumer electronics—benefits from a vibrant resale channel. The secondary market hopes someday Cisco will choose to embrace the channel that has made an enormous contribution to its industry dominance." "Cisco needs to stop labeling secondary marketers as purveyors of fake goods in the name of protecting its brand and get to the real issue: ensuring all Cisco customers receive genuine gear." "I’ve asked this question before--hopefully this time I’ll get an answer: Wouldn’t Cisco better serve our shared community of customers by working with UNEDA to increase worldwide counterfeit detection and eradication?" Mike Sheldon made strong points which appeared advantageous to both Cisco and its customers. So I asked Phil Wright what Cisco's policy was regarding Cisco's engagement of the secondary market?

Phil Wright's reply regarding the secondary market:

Phil Wright
"In order to protect our customer's experience as well as the investments made by our certified partners and authorized distributors, Cisco has employed a policy that we will not engage gray market vendors/brokers," said Phil Wright - director of Cisco worldwide brand protection. "Our guidelines for becoming an authorized reseller of Cisco equipment are clear and open to any company to achieve."

Obviously, a major diplomatic impasse exists between Cisco and the secondary market. Perhaps the opinion of channel expert Ken Presti may be revealing:

Ken Presti
"I think the fundamental disconnect stems from the fact that UNEDA is a voluntary association instead of a top-down managed company that can truly enforce its decisions across the whole organization," said Ken Presti - president of Presti Research & Consulting, Inc. and author of ChannelSurfing with Ken Presti featured on the Network World Cisco Subnet. "Even if UNEDA tries to enforce whatever agreements it might reach with Cisco, it still comes down to how much time and resources are available for that enforcement." "And if you intend to prove someone’s guilt when you suspect they’ve done something wrong, you’d better have a lot of both." "So the question is whether UNEDA would risk alienating their friends and associates to protect a multinational corporation, or push the enforcement issue to the back burner and go sell something instead." "I’m not saying all the UNEDA members are unscrupulous. I don’t think that’s true." "But if Cisco has concerns that the gray market is turning black, then I imagine they would be wary of any industry group that might try to leverage a relationship with Cisco toward stronger legitimacy in the market."

Related story by Ken Presti: Network World - Cisco and UNEDA Should Talk What is your opinion of this diplomatic impasse between Cisco and the secondary market?

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