How the used gear industry is winning the fight against counterfeiters

A used gear dealer shares tricks for detecting counterfeit gear, but says the biggest issue is Cisco's lack of cooperation

Without Cisco's help, how accurate are our attempts to discern what is real from what isn't? I feel as if we are chasing our tail on some of the lower end items. Holograms, perpendicular logos, approved vendors, even serial numbers used to be good indicators of real product, but now they are easily being counterfeited. We figure something out today and tomorrow the counterfeiters are able to replicate it. Feels like the blind trying to help the blind? What's your take?

We cannot guarantee authenticity, but we can cast doubt on it - and we err on the side of caution. If there are suspicious markings or signs, we pass on the item. We could be less intense about it, but we really have only our name and reputation to use in our competition with Cisco for business. The last thing I would want is some inadvertent mistake to give Cisco more ammunition. We just need to be very careful.

Do counterfeit parts or components cause damage to a server or network?

I've never heard of anything like that. I've heard of badly repaired items causing problems, but no counterfeit items actually causing physical damage.

We have been offered supposedly new "factory sealed" equipment at discount levels approaching 50 per cent off of normal Cisco list price. How is this possible on the gray market?

Cisco gives discounts to many customers, and on certain deals, better than 50 per cent off. We also purchase a huge quantity of overstock new items from Cisco partners and Cisco customers who lost a deal, cancelled a project, etc. - in fact about 30 per cent of my current inventory is "new in box" surplus gear.

Has this UNEDA tried to contact Cisco at any level about working with Cisco to eradicate counterfeiting?

We have, in three certified letters and in numerous overtures in the press. (Including here - we really do want to meet!)

Cisco, and many manufacturers for that matter, say that by educating each other we are adding to the counterfeit problem. This seems to me a way for them to paint counterfeiters and used equipment dealers with the same brush.

There is a common belief in the secondary market that Cisco likes to use the grey = black message, and it is really unfortunate. Nothing could be further from the truth. The secondary market is overwhelmingly good people making a living reselling a good product.

Another concern Cisco has with grey marketers is with the license transfers. I've read many grey market case laws and the first-sales doctrine that support the grey market trade, however it's still a little unclear. Would you be able to expand?

Long answer required - but yes, our strongly held belief is that embedded/included software transfers with the sale of a product. If this were not the case our whole industry would not exist, but neither would eBay and most other resale businesses. Cisco carefully words its position with phrases like "may violate" but in my opinion it's pretty transparently toothless. There are many cases that have supported the transfer of embedded IP and suffice it to say in such a limited venue that the transfer of such IP does not seem to be an issue.

What are some of the best tactics to prevent the buying/selling of counterfeit?

Don't buy off eBay, buy from a reputable and well-known reseller, and demand a good warranty with indefinite return.

Mike, what do you feel is the biggest hurdle in partnering/aligning the used resellers with Cisco in an effort to combat counterfeit gear?

I really don't know. We are ready and willing to meet. I believe there is a very strongly held belief that grey = black, but we should really be viewed no differently than Juniper. We compete but can also cooperate. I hope it happens.

With your maintenance options, how would we get software updates and how would we know if Cisco requires an inspection? If a SmartNet contract is created, does that guarantee that Cisco will honor the contract?

With a valid license you can generally get bug patches and such, but for major revision updates you need SmartNet, or you need to re-buy a license. Keep in mind that the vast majority of products do not require updates, like fixed configuration switches, and as equipment ages most customers standardize on a given revision and rarely deviate.

So, for a company that's considering the used market for the first time (times are tough), what key questions should we be asking the vendor?

How long have you been in business? What warranty do you offer? What technical support capabilities do you have (number of certified technicians, hours support is available)? Also ask if the vendor stocks and tests everything it sells prior to selling it. With the right vendor you can save a lot of money, and I think you'll find the customer service, support, warranty, unbiased advice, and responsiveness exceed your expectations. Give it a try!

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