Call it a win for the little guy.
An Orange County judge recently awarded a local reseller of Cisco Systems Inc. gear roughly $6 million in damages, ending a long-running lawsuit.
In a suit filed in early 2007, San Juan Capistrano-based Infra-Comm Corp. charged that Cisco broke contracts related to its incentive programs and other reseller agreements.
Infra-Comm alleged that Cisco broke a promise of exclusivity and improperly inked a $5 million deal with another reseller.
The suit alleges that in early 2006, after working for years with Infra-Comm to develop a large sale of Cisco products and services to Newport Beach-based real estate owner Irvine Company, Cisco asked AT & T; Inc. to take Infra-Comm’s place in the deal.
Cisco allegedly disclosed Infra-Comm’s design information, sales pitch and extended the same pricing to AT & T.;
After the suit was filed, Cisco ended Infra-Comm’s status as an authorized reseller, so it no longer could resell its products and services to some 40 of its customers.
Infra-Comm says it lost 90% of its revenue and was forced to lay off most of its workers and close two offices because of it.
At its peak, the company had yearly revenue of more than $5 million and around 16 workers here, according to spokeswoman Eileen Rauchberg. The company now has only a few workers.
Infra-Comm had been a reseller of Cisco’s telecommunications gear since 2000.
In addition to damages, Cisco also lost a countersuit it filed against Infra-Comm.
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Scene from “Wrath of the Lich King”: game set to debut this week |
That suit alleged Infra-Comm broke its contract with Cisco for various reasons, including a contract regarding the use of Cisco’s trademark on its Web site.
A spokesperson for Cisco said the company is considering an appeal.
The Infra-Comm win, although small, has ramifications for all of the small companies that are resellers of Cisco’s networking gear.
“You could almost hear the collective cheer among Cisco partners who have been bullied time and time again by the networking leader that likes to send the message into the sales trenches that those partners that don’t walk the Cisco line will pay and pay dearly,” said Steven Burke in a blog on CRN.com, the Web site for trade publication Computer Reseller News. “Solution providers long subjected to such abuse hope the landmark ruling against Cisco will help to change those one-sided agreements and the bullying in the sales trenches.”
The $6 million in damages is small for Cisco, which had a recent market value of about $100 billion.
“It’s more about the damage to Cisco’s image,” Burke said.
Blizzard’s Wrath
Irvine’s Blizzard En-tertainment Inc., a unit of France’s Vivendi SA, is gearing up for the big launch of the latest installment of its blockbuster online game “World of Warcraft,” in which millions of players face off over the Internet.
The highly anticipated “World of Warcraft: Wrath of the Lich King” is set to roll out this week.
Blizzard is hosting midnight events at a handful of locations around the world for diehard fans, where some developers and executives are set to meet players and sign copies of the game, including a special collector’s edition.
The most recent “World of Warcraft” installment, “The Burning Crusade,” came out in early 2007 and sold 3.5 million copies within its first month.
“World of Warcraft” now counts more than 11 million active players, each who pay a subscription rate of about $15 per month.
Smith Micro’s Dell Deal
Aliso Viejo-based Smith Micro Software Inc. signed a deal with computer maker Dell Inc. for software that allows laptop computers to connect to the Internet in a variety of ways.
Smith Micro’s software is set to run what Dell calls a “universal connection manager” that allows a mobile PC to go online via wireless, dial-up, Bluetooth, Ethernet or mobile broadband connections.
Smith Micro didn’t say how much the deal is set to add to sales. The company has been increasingly diversifying away from making software for cellular service providers, including its one time top customer Verizon Wireless, a unit of New York-based Verizon Communications Inc.
Lately the company has been pushing its connection management software that runs on a PC or mobile device and allows for a wireless connection to the Internet though the carriers’ networks.
For the third quarter, Smith Micro reported revenue of $27 million, up 31% from the same period a year earlier.
Excluding costs for taxes, stock compensation and other charges, Smith saw profits of $8 million, up 15% from the same period a year earlier.
On the same day it announced third-quarter results, Smith Micro said it bought some intellectual property, patents and technologies from Acton, Mass.-based startup Tatara Systems Inc.
Terms of the cash deal weren’t given, most likely because the deal was small.
SmithMicro said it’s set to “attain some of the engineering team responsible for development of these products and services.”
