Cisco resolves fake transceiver suit with Chinese rivals

Cisco Systems and Ciena Corp have reached an agreement to resolve their lawsuit against Chinese companies accused of counterfeiting their transceivers – electronic devices for transmitting and receiving data.

The two companies – Wuhan Wolon Communication Technology and Wuhan Wolon Cloud Network Communication Technology (collectively Wolon) – were being sued under trademark infringement, unfair competition and false advertising laws.

Cisco and Ciena won a preliminary injunction against Wolon in its absence during the summer, which barred them from distributing counterfeit Cisco and Ciena pluggable transceiver modules and labels.

Now, it has agreed to abide by the injunction on a permanent basis, and Cisco and Ciena have agreed to resolve the dispute in order to release all the companies from liability and claims and avoid further costs related to the litigation.

The consent decree also stipulates significant financial penalties should Wolon violate the terms of the agreement, including $10,000 for any counterfeit Cisco and Ciena product placed on sale. It was approved by the judge in the case earlier this week.

The lawsuit is one of several that have been pursued by Cisco to try to disrupt the trade in counterfeits of its transceivers and other networking devices.

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Last year it also won a restraining order against Shenzhen Usource Technology, Shenzhen Warex Technologies, and Warex Technology in another case involve fake transceivers.

That followed an injunction against four other companies - Shenzhen Tianheng Network, Gezhi Photonics Technology, Shenzhen Sourcelight Technology, and Dariocom – towards the end of 2019.

Cisco is waging a war against counterfeiters, , 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 its products only from authorised partners or directly from Cisco in order to minimize the risk of purchasing counterfeits.

Data from IHS Markit indicates that the worldwide transceiver market was worth nearly $7bn in 2018, and it has been estimated that counterfeits account for around 5 per cent or more of all tech equipment sales.