The Network Hub

Oct 28 2008   3:00PM GMT

Cisco busted for crushing one of its channel partners

Shamus McGillicuddy Shamus McGillicuddy Profile: Shamus McGillicuddy

Sometimes the little guy wins.

According to our sister site,, Cisco Systems has to fork over $6.4 million to a former channel partner. A jury in Orange County, Calif., found that Cisco had poached a customer from its value-added reseller (VAR) Infra-Comm and then kicked the VAR to the curb when the company’s owner sued Cisco for damages.

Infra-Comm had accused Cisco of violating its deal registration agreement by taking a prospect for a $1.5 million IP telephony deal from the VAR and handing it to AT&T. After Infra-Comm sued, Cisco kicked the company out of its partnership program, costing the VAR about 90% of its business. Cisco countersued Infra-Comm, alleging that the VAR had violated a contract and was unlawfully continuing to use Cisco’s name to do business. The jury agreed that Infra-Comm had unlawfully used Cisco’s name, but declined to award Cisco any damages.

This is all a very sordid story, and the court case may have set an important precedent about the nature of relationships between vendors and channel partners. To find out more about it, read SearchITChannel’s stories about the verdict and the lawsuit.

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