Cisco Sues Over Counterfeit Goods

On Tuesday, plaintiffs Cisco Systems Inc. and Cisco Technology Inc. (both referred to as Cisco) filed a complaint in the Western District of Tennessee against defendants Lamination Service Inc., LSI Graphics LLC, Ezzell Enterprise Inc., HES Limited (doing business as a variety of entities) and unknown individuals for their infringement of Cisco’s trademarks via counterfeit goods.

The complaint stated that Cisco, “the worldwide leader in developing, implementing, and providing the technologies behind networking communications, and information technology products and services,” has a large range of products, such as “networking and communications hardware, software, and services,” for which it has invested billions of dollars and other resources for the development and promotion of said products. Cisco claimed that it has developed goodwill and brand reputation among consumers. Cisco said it uses its trademarks “to identify goods and services as being genuine and authorized” and that the Cisco Marks are distinctive, have a high level of consumer recognition, and are famous.

According to the complaint, the defendants engaged in a “significant and willful infringement scheme” that “involves the production of counterfeit ‘Cisco’ networking products in China, importing those counterfeit products into the United States, and selling those counterfeit products to government and non-government customers.” As a result, Cisco contended that consumers that purchase these products “are duped into thinking they are in fact getting new, ‘factory sealed’ genuine Cisco branded products.”

Specifically, Cisco averred that “when consumers purchase products that are advertised as ‘new factory sealed,’ they believe that they are purchasing genuine products manufactured by Cisco that have not been tampered with from the time the product was sealed in its shipping packaging. Thus, knowing that these products are not actually ‘new factory sealed’ would be highly relevant and material to a consumer’s purchasing decision.” Moreover, Cisco alleged that counterfeit products bearing marks similar to the Cisco Marks “provide customers with a false assurance that the products they have purchased (1) are reliable and conform with Cisco’s high standards, (2) come with applicable warranties, (3) can be placed under a Cisco service support contract (i.e., SMARTnet) without the need for payment of extra amounts for inspection and relicensing, and (4) come with all of the necessary accessories sold with the product that have been selected and approved by Cisco for use with the product.” Subsequently, Cisco argued that this has caused harm to the duped customer, as well as, “Cisco, its brand, and its established reputation.” The complaint provided numerous examples of counterfeit items sold to customers and the subsequent communication between all involved parties.

The defendants are accused of violating the Lanham Act for federal trademark infringement, federal trademark counterfeiting, federal unfair competition, as well as violating the Tennessee Consumer Protection Act and unjust enrichment. Cisco seeks declaratory judgment in its favor; a preliminary and permanent injunction; an award for damages, costs, and fees; restitution; prejudgment interest; and other relief.

Cisco is represented by Lewis Thomason and Sideman & Bancroft LLP.