Software Asset Management (SAM) is a tricky, but essential task for all organizations. Whilst most businesses concentrate on staying on top of compliance for major software vendors (Tier 1), such as Microsoft, Adobe, Oracle and IBM, there are hundreds of thousands of Tier 2 & 3 software vendors whose deployed applications also need to be licensed correctly. In the case of Cisco software, that task was made much more difficult as pirated versions of its software, including fake license certificates, were allegedly distributed to unaware customers. 

In this case, filed in US courts in November 2019, Cisco Systems & Cisco Technology (“Cisco”) have pointed the finger directly at Shoc Networks LLC (“Shoc Networks”) and its former incarnation; Daldan Technologies / DT Networks, which were both owned and operated by a Mr. Ronald Reed. In its filings, Cisco accuses Shoc Networks of the following:

• Reselling stolen and/or pirated Cisco software licenses to other resellers and end customers who they have duped into buying unlicensed copies of Cisco software at cut-rate prices. 

• Distributed unlicensed copies of Cisco software along with copies of counterfeit and/or illicit software license claim certificates that had been mocked up to look like genuine Cisco software license claim certificates 

• Undermining Cisco’s brand, goodwill, and reputation with customers and its authorized partners.  When Cisco requested that Shoc Networks cease and desist their sales of these unlawful and infringing software licenses, Shoc Networks refused, confirming that they intend to continue their unlawful and infringing conduct unabated. 
  
  

The court is told that Ronald Reed began infringing Cisco’s IP rights, via DT Networks, in 2016 through an Amazon.com storefront, by listing “Cisco OnDemand Port Activation License”. However, Cisco only licenses end-users via authorized channels and therefore, it claims that the licenses were obviously infringing its copyrights.  

Cisco sent a “Cease & Desist” letter to DT Networks on 8^th of September 2016. A response was received on 18^th of October to intimate that DT Networks was being permanently shut down and Cisco expected that to be the end of the matter – no further legal action was pursued. However, in 2018, Cisco discovered that Shoc Networks, owned and operated by Ronald Reed, had started distributing Cisco software to not only end-users directly, but also to at least one channel partner with offices in Canada and across the USA. 

Cisco investigations found that Shoc Networks was incorporated one week before it received the letter stating that DT Networks was shutting down in 2016. 

Cisco software being distributed by Shoc Networks was a concern to Cisco because only authorized channel partners are permitted to distribute it and Shoc Networks was not authorized to resell, nor use any Cisco branding or trademarks. Upon further inspection of the branded licenses sold, Cisco alleges that they were either pirated, or stolen. 

Cisco also states that the software accompanying the license certificates were counterfeit and mocked up to look like genuine software license claim certificates. 

Of course, Cisco sent a Cease & Desist letter to Shoc Networks in August 2018 and to preserve all evidence of license purchases/sales it had made. Surprisingly, Shoc Networks allegedly responded by saying that it was not going to stop selling Cisco software despite the Cease & Desist request. 

In the court filing, Cisco continues to list damages and harm to its brand and its business as it requests an injunction from the court to restrain Shoc Networks et al, from further infringing its Intellectual Property and Copyrights. 

Whilst the courts decide on a course of action, which is likely to be a full-blown trial in 2020 or an out of court settlement between Cisco and Shoc Networks, from a Software Asset Management perspective, there are now many corporate Cisco customers who could be running unlicensed Cisco software. Unfortunately, the burden of buying genuine software is squarely on the shoulders of the end-user and if any unlicensed software is discovered by any vendor, expect to remedy it immediately and chase the mis-seller for a refund afterwards. 

As always, it is essential to maintain a mature SAM program with SAM tooling that is effective and possibly also checks for cracked/counterfeit software licenses, coupled with proactive SAM personnel who can use the data to minimize risk. 

Xensam: Next Generation SAM Software