Cisco is to receive a “substantial sum” from UK broker K2 IT after it was caught trading in grey and counterfeit kit.

The Stockport-based broker agreed to pay an undisclosed settlement figure after admitting that its unauthorised trading activities resulted in a number of counterfeit items being inadvertently transacted by the company.

K2 and its directors, which had been trading kit that had originated from outside of the European Economic Area (EEA), have given undertakings that they will not infringe Cisco trademarks in the future. The company has also incorporated a new business that will transact future sales under an indirect channel partner agreement with Cisco following the trademark infringement dispute.

Neil Sheridan, Cisco’s Director of Brand Protection, Emerging Markets, said he was appreciative of K2’s “constructive approach” and said that the company is now working to ascend through the ranks of Cisco’s authorised programme.

He described the settlement as a “big event” in Cisco’s brand protection strategy. He also referenced police raids on a $10 million London-based Cisco counterfeit ring, which took place in May this year, when he explained: “The issue we are addressing here is primarily parallel import, and as a consequence, there was also some counterfeit product we identified at K2.

“I think you will see some further actions from the information we now have [on K2’s suppliers], which we are now considering how we are going to use.”

Sheridan explained that Cisco had also reached settlements with multiple other firms in recent months but that these cases had not been made public. He said that Cisco has recently introduced tools that have improved its ability to detect trademark infringement.

In the case of K2, Cisco initially identified only a relatively small amount of products that had been sold in the EEA in violation of their trademark rights. It then used these infringements to secure wider disclosure of several years’ worth of K2’s unauthorised trade in Cisco products.

Sheridan continued: “Where people are trading in parallel imports and counterfeit, we do look at that. It’s on K2’s head to know whether or not the kit is EEA-compliant. The law is pretty clear that the onus is on the person who is selling it and I honestly don’t think they took sufficient precautions to prevent themselves trading in infringing products.

“With all the complaints that partners have around the broker market and what impact it has on their business, this action is directly to support our partners to have that level playing field.”

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