Court Denies Cisco Systems’ Motion for Summary Judgment
Cisco Sued for Multiple Contractual Breaches
PondelWilkinson Inc.
Eileen Rauchberg or Evan Pondel
310-279-5980
erauchberg@pondel.com
epondel@pondel.com
An Orange County judge has denied Cisco Systems, Inc.’s motion for summary judgment on contract claims in a lawsuit filed against it by Infra-Comm Corporation, a San Juan Capistrano-based reseller of communications systems.
The lawsuit reveals a cautionary tale of how a corporate giant may bully a partner when business is on the line. In its lawsuit, former Cisco reseller Infra-Comm alleges that Cisco breached an exclusivity promise, and instead, improperly took an IP telephony deal valued at more than $5 million to another reseller AT&T.
In the lawsuit filed January 2007, Infra-Comm said that Cisco breached contracts related to Cisco’s Opportunity Incentive Program (OIP) deal registration, including its Indirect Channel Partner Agreement (ICPA).
At stake is the manner in which Cisco conducts business with resellers. After filing the lawsuit against Cisco, Cisco terminated Infra-Comm’s status as an authorized reseller and Silver Partner and with it, Infra-Comm’s ability to resell Cisco products and related services to 40 active Infra-Comm clients. As a result, Infra-Comm lost 90 percent of its revenue, closed its two offices, and had to lay off most of its employees.
Background on Lawsuit
Infra-Comm began serving as a Cisco indirect channel partner in 2000, helping Cisco sell communications systems nationwide. The lawsuit alleges that in January 2006, after working for years with Infra-Comm to develop a large IP telephony sale, Cisco invited AT&T to take Infra-Comm’s place as reseller on the opportunity, including disclosing Infra-Comm’s work and extending the same pricing to AT&T.
The lawsuit says that Cisco authorized AT&T’s alternative sale to the customer during the period that Infra-Comm held a valid deal registration. It further alleges that Cisco then ignored its own promise to renew Infra-Comm’s registration and now sells virtually all Cisco products and services to the same customer through AT&T.
A copy of the lawsuit can be viewed electronically at www.infra- comm.com.
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