Cisco sues Tennessee, Chinese companies for counterfeiting

Networking specialist Cisco has filed a lawsuit against Tennessee and Chinese companies and individuals it accuses of trading in versions of its products.

The suit alleges that Lamination Service, LSI Graphics and Ezzell Enterprise – all of Tennessee – and Chinese company HES Ltd and 50 unidentified individuals of producing counterfeit networking devices in China, importing them into the US and selling them to “government and non-government customers.”

“Customers purchasing such products are duped into thinking they are in fact getting new, ‘factory sealed’ genuine Cisco branded products, causing significant harm not only to the duped customer, but also to Cisco, its brand, and its established reputation,” says the complaint.

It also alleges that LSI has had 370 federal government contracts during the period from 1983 to 2019, including 117 signed since the start of 2010, and 15 of those specifically involved Cisco products.

Federal customers included the US Army, Centers for Disease Control and Prevention, Nuclear Regulatory Commission, Federal Emergency Management Agency, Department of Veterans Affairs, and Internal Revenue Service.

Anti-Counterfeit Packaging Market by Technology, End-Use Industry and Region - Global Forecast to 2025

The action cites an enforcement operation carried out by Chinese authorities in August 2020, which targeted HES and resulted in the seizure of over 1,200 counterfeit Cisco products, including switches, routers, wireless controllers, power supplies, and transceivers.

Police also seized 500 counterfeit Cisco labels, eight rolls of counterfeit Cisco security labels, and 50 counterfeit Cisco carton boxes, which the company says is evidence of “a very active and sophisticated counterfeiting operation from China, pumping out large quantities of counterfeit [Cisco] products.”

US Customs and Border Protection (CBP) has also seized a number of counterfeit Cisco products, claims the suit, citing a string of cases between August 2016 and August 2019.

Cisco is waging a war against counterfeiters, with some success, but the premium pricing their equipment commands makes them a constant target. In 2019, the company seized more than $625,000-worth of fake devices in a single day.

The company recommends that customers buy Cisco products only from authorized partners or directly from Cisco in order to minimize the risk of purchasing counterfeits.

The case (2:21-cv-02139) is being heard in the US District Court for the Western District of Tennessee.

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