Chinese Man Gets 30 Months For Fake Cisco Sales 161
alphadogg writes "A Chinese man was sentenced to two-and-a-half years in a US prison this week for trafficking in counterfeit Cisco Systems gear. Yongcai Li, 33, will also have to pay the networking company nearly $800,000 in restitution after being the conduit for hundreds of thousands of dollars' worth of counterfeit computer hardware, the FBI said Friday. Prosecutors said he procured the fake gear in China and then sent it to co-conspirators in the US. His alleged co-conspirators have not been charged. Li was arrested by FBI agents on Jan. 9, 2009, in Las Vegas — while the annual Consumer Electronics Show was taking place there. Two years ago, the FBI claimed to have seized more than $78 million worth of counterfeit equipment in more than 400 seizures."
Excuse me, editors? (Score:3, Informative)
2.5 years is not 30 years, it’s 30 months.
Re:Excuse me, editors? (Score:5, Funny)
2.5 years is not 30 years, it’s 30 months.
I'd hate to see how long kdawson is gone when he takes his 30 minute lunch break.
Boss: it was a 30 minute break. You were gone a month!!!
kdawson: Yeah I always get small details like that mixed up. I thought you said months. Sorry.
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I would imagine that Slashdot's editing standards would go up considerably as a result. Go for it Kdawson!!
Re:Excuse me, editors? (Score:5, Funny)
Re:Excuse me, editors? (Score:5, Funny)
Maybe 2.5 U.S. years is actually 30 metric years?
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The nation mourned today after the brutal beating to death of a good joke.
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It's infectious! Stay away! Unclean!
Re:Excuse me, editors? (Score:5, Interesting)
And with good behavior, it could be low as ~25 months.
IMHO, a tad over 2 years prison sentence is a relatively *small* risk, compared to say illicit drug sales, for huge financial rewards ... this may actually *encourage* some to get into selling counterfeit electronics.
Ron
Good thing we only buy Cisko (Score:2)
.. I've not heard of anybody counterfeiting them yet.
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a) that they can track all goods he has sold, believe it or not most criminals don't like to make it easy to track any of their illegal goods.
b) he actually has the money to pay back, he could have hidden the funds in any number of ways to appear bankrupt or at least hide a nice portion off for himself, again he is a criminal and it doesn't take a genius to work out police may one day catch up to you therefore hide some for a rainy day.
The penalty here v
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Seems reasonable.
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Or, they could just use offshore banking accounts...
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Sure you can. Third offense of just possession of cocaine can get you a $250,000 fine in CT. [druglibrary.org] CT isn't known as the most strict state in the union either. NJ has fines up to $300,000 for selling prescription drugs. [newjerseyc...torney.com] Penalties for selling drugs often come with both prison time and fines.
Comment removed (Score:5, Funny)
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:s/1:\$/%/ ;)
P.S.: Hey, you can actually have that replacement right now: :)
http://userscripts.org/scripts/show/62062 [userscripts.org]
Just add the expression in there.
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What gets me is that the Slashdot title is exactly the same as the article title except for "months" being replaced with "years." It'd been more accurate if Kdawson had been lazy about it and just copy/pasted the title. I'd filter him out if it weren't like watching a car accident.
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I look forward to the next Chinese story. Maybe have a Kung-fu connection to enhance the stereotype.
Re:Excuse me, editors? (Score:4, Funny)
Bastards (Score:5, Insightful)
And why not? These guys should be getting just as much time as the other dude.
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Not if they rolled on him for a lighter sentence.
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Perhaps because they cut a deal with the DA's office?
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I think you meant FBI. There is no DA. It's a federal case.
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I think you both mean the AUSA; FBI investigates and arrests (executive branch), it does not prosecute.
Re:Bastards (Score:4, Interesting)
For people outside the US, this whole cutting deals and plead bargain stuff reads like, the whole system of justice is corrupt to the bone by design.
Re:Bastards (Score:4, Insightful)
"Outside the US"? You don't think it happens elsewhere? What do you think informing on your neighbors is all about?
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It also seems like people from the US do not like their justice system to be criticized, but we know that a lot of US people agree that justice == revenge.
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Re:Bastards (Score:5, Insightful)
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> Because its quite hard to prove it
It wouldn't normally stop them from being *charged*. In any case, IMO, it should fall into the same category as receiving stolen goods.
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It's obviously because they weren't Chinese, but USians - it's the usual double standards at work.
Good thing... (Score:5, Insightful)
Good thing he didn't download a music album instead. He might of ended up with 3 times that fee.
Signals little for Google et. al. (Score:5, Interesting)
Re:Signals little for Google et. al. (Score:5, Insightful)
The only reason the Chinese govt got involved was pressure from the FBI. The only reason the FBI got involved is that some of those fake Cisco routers had a modified IOS with a backdoor password. I have a suspicion that the Chinese govt was actually involved in selling the compromised counterfeit equipment.
This and many other examples, are why the security specialists highly recommend formatting any new computers or equipment and installing fresh software/firmware from a known good source.
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Here's something I can never solve: how do you reliably reflash a compromised device's firmware? If it's compromised, it could just patch the new firmware you send to it, or claim it reflashed it when it didn't do anything.
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Well assuming they left the pins accessible (at least on home routers they are nearly always brought out to pads for a header, I dunno about the pro stuff) and you have a suitable firmware image you can take control of the processors IO BUS over the JTAG (or similar) port and use it to program the flash chip. Such programs are sometimes reffered to as "debrickers"
You can either flash a full firmware image this way (doable but very slow) or you can program a minimal boot image and then install everything els
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True; pressure from the FBI probably had a large part behind this- either way, I hope that China will continue to cooperate with other countries in cracking down with counterfeits. China has to start cleaning up.
I don't believe China is overly concerned about counterfeits. In fact, they probably view it as a benefit. As a country, instead of paying Microsoft for copies of Windows or Cisco routers, they can get virtually identical products for very cheap.
The manufacturers like Apple, Dell, Cisco, etc are not going to pull out of China any time soon so their aren't even jeopardizing their trade relations from that respect. The problem will come when China's rampant inflation and climbing workers wages no long make
Re:Signals little for Google et. al. (Score:4, Interesting)
There's a difference between a counterfeit and just copying something.
Counterfeiting is generally bad, because even within China, people need to know if what they're buying is legit. I'm sure even the Chinese government doesn't want to buy a piece of equipment that is an inferior copy rebadged with the name and product ID of something reputable (eg. Cisco).
Whereas, copying an item so it's identical, but just rebadging it with your own name (eg. Siskow) is only an affront to the legalities of patents and copyright. At half the price, I'm sure the Chinese would be happy to buy your Siskow product.
On the one hand you have fraud (or at best a trademark violation), on the other you have patent/copyright infringement.
What constitutes "fake" hardware? (Score:4, Interesting)
Re:What constitutes "fake" hardware? (Score:4, Informative)
Even if the units are coming off the exact same production line (some factories, reportedly, occasionally run extra shifts for counterfeiters), some of the components used may be rejects (ie. functional, but outside of spec; think chip fabs) from the legitimate production run; units not tested as rigorously with minimal quality control.
With that said, even if the unauthorized units are exactly identical, which in the real world is unlikely to the be the case as I've explained above, in regards to the law, it's still counterfeiting.
Ron
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Re:What constitutes "fake" hardware? (Score:5, Interesting)
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If the goods where made on the company's own production line, that would be theft rather than counterfeit. The products made in that factory belongs to the company regardless of quality control or time of manufacture.
Re:What constitutes "fake" hardware? (Score:5, Insightful)
There's a lot that can go wrong with counterfeit hardware, even if it's made in the same factory. Out-of-spec components can be used in place of the high quality ones originally specified by the Cisco engineers. Cheap lead-based solder could be used with the RoHS label. Speeding up the production process can lead to shoddy workmanship. They probably aren't paying inspectors to check the assemblies. Toxic waste could be dumped in the garbage.
So not only does this make for a trouble-prone product for the customer, it also costs Cisco extra. A customer who paid for a box labeled Cisco is going to expect the same customer service as one who purchased actual legitimate Cisco hardware. They're going to send the crappy boxes in for warranty replacements on Cisco's nickel. And if the quality is sub-par they're going to be complaining about crappy Cisco hardware when it's not Cisco's fault, affecting their brand image.
In some cases the counterfeiters are fencing stolen but legitimate merchandise, but in most cases they're producing low-quality knock-offs.
Re:What constitutes "fake" hardware? (Score:5, Interesting)
On top of all this, this kind of story will hurt Cisco's brand image as well. Next time you go out to buy something from a small electronics store, you may decide to go with a different brand since you know for a fact that many counterfeit Cisco products have been packaged and sold as the real thing.
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Or you buy it from a trustworthy dealer, like you would with any mission-critical piece of networking gear.
If your network is important enough that you're going to put Cisco gear in it, the last place you ought to be shopping for routers is some hole-in-the-wall second-hand computer store or, even worse, eBay.
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If you see an actual Cisco device at a retail shop, and buy it for anything other than learning/private lab purposes... you're a moron. Cisco doesn't retail Cisco gear, they retail Linksys gear.
Look again. Linksys equipment all carries the Cisco logo these days, in addition to the Linksys branding. Sure, none of it looks like Cisco routers, but counterfeits of anything could still damage Cisco's brand.
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Cheap lead-based solder could be used with the RoHS label.
Just FYI, lead-based solder is superior to RoHS. Even the "cheap" stuff. When people talk about "cheap, lead-based solder" they actually mean inexpensive.
If I could find someone using actual lead solder for my circuitry, I'd buy it in a heartbeat over the RoHS. As an example, had the solder on the original XBOX 360 been lead instead of RoHS, the solder wouldn't have broken under heat stress & they'd have had fewer problems with the red rings showing up.
We use the RoHS to keep the hippies quiet(er).
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Yes, by "cheap lead-based solder" I meant inexpensive. Counterfeiters are all about reducing costs to the absolute minimum required to collect your money.
But if there's lead in a box labeled RoHS, and it's disposed of carelessly, lead is reintroduced back into the environment. It would be handled without safety precautions.
I'd rather have durable lead soldered parts than RoHS equipment, too. But if it's labeled RoHS, I would be OK tossing it in the trashcan rather than paying to drop it off at the recycl
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Not really the cheap you intend, but USA military often removes the RoHS solder for the old fashioned lead solder. They do this because there is a LOT of data to back up the lead solder, and lead-free solder hasn't been studied enough. Their putting trusting something they know (good and bad on lead) instead of an unknown (lead-free).
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We use the RoHS to keep the hippies quiet(er).
Afaict manufacturers use the lead-free solder everywhere because it's the only way to make products legally sellable in europe and it's cheaper for them to take the higher cost and failure rate of lead free solder everywhere than to set up two totally different production and stock handling processes for different markets.
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There's a lot that can go wrong with counterfeit hardware, even if it's made in the same factory. Out-of-spec components can be used in place of the high quality ones originally specified by the Cisco engineers. Cheap lead-based solder could be used with the RoHS label. Speeding up the production process can lead to shoddy workmanship. They probably aren't paying inspectors to check the assemblies. Toxic waste could be dumped in the garbage.
All the things you say are true. They could also be using parts that were tested and found to be sub-spec, so you could end up buying a router that was made on the actual Cisco assembly line, but was known to be defective and supposed to be destroyed (or made up from similarly condemned components). That's just yet another thing to worry about, even for apparently identical "genuine" equipment.
I would have no problem buying, say, bootleg clothes or backpacks made in the same factory as the real deal, but
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What makes clothing special or different from electronics? Do you think clothing can't be made "sub-par"? That insulation placed in cheap knockoff down jackets can't be made from coarsely chopped chicken feathers that do nothing to keep you warm? That weak plastic connectors or zippers can't be substituted for durable connectors? That the fabric can't be cut against the weft so that it hangs at funny angles, or ravels instantly? That inadequate hems aren't used so the clothes fall apart after a wearing
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Where did most people get their toxic pet food from? The guy with the blanket on the sidewalk or from the stores?
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Yes, that situation was a bit different. It was a crooked manufacturer selling phony products to various companies. And the scale was more massive than the midnight production runs of the "ordinary" counterfeiters. But the nature of the problems are comparable. Low quality ingredients sold as if they were high quality.
This is also a problem in the aircraft replacement parts industry. Counterfeiters are stamping low strength bolts with markings indicating high strength parts. Inspectors are unable to see the
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I'm sure I remember an "air crash investigation" episode about an accident caused by counterfeit parts, I don't remember whether it was a full blown crash though.
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Or more seriously, a couple years ago huge amounts of pet food were found to have had melamine additives that test positive for proteins instead of using an actual protein made from wheat glutein, causing many pets to painfully die from renal failure. And how many knock-off toys made with lead have been recalled in the past few years?
Those weren't knock-offs. They were the actual licensed products (like Thomas the Tank Engine products) sold by the American companies that hired the Chinese factories. The deadly pet food was sold in stores by American and Canadian manufacturers. And there's no such thing as "glutein".
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I will learn to spell protein and gluten correctly.
I will learn to spell protein and gluten correctly.
I will learn to spell protein and gluten correctly.
Sorry, teacher.
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Or it could just be assembly line "overrun"; products that are in every way exactly like the products sold but simply not accounted for in the normal production run.
Imagine Cisco ordering production of 1,000 routers and the factory producing 1,100 routers and keeping 100 off the books. Those 100 are completely identical to the rest but merely "left over" from the production run.
Re:What constitutes "fake" hardware? (Score:5, Interesting)
And if the quality is sub-par they're going to be complaining about crappy Cisco hardware when it's not Cisco's fault, affecting their brand image.
All true. Do you know if Cisco is honoring warranties on the counterfeits. Surely when you call in a TAC case, they know from the serial number if it's legitimate or not.
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Oh, so you mean the counterfeits would actually be better? lead solder isn't "cheap" in the way you mean: it does not develop "tin whiskers" like tin-based solder does. Lead solder is also a lot more resistant to fatigue and breakage due to vibration, shock, etc.
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Surprise, I answered this about two hours ago. [slashdot.org]
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Cheap lead-based solder could be used with the RoHS label.
That's actually a better solution then the damn ROHs compliant crap that's being used. No end of problems from Tin Whiskers causing shorts and failures. Hell I think the ROHs issue was dreamed up just to ensure the damn hardware would fail in less time then it used to. Engineered Obsolescence so people have to replace it more frequently (Buy Buy Buy) is the name of the game nowday instead of selling a quality product that will last for 10 years.
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Oh, dear, yes. I've had just this happen with Adaptec controllers: this sort of nonsense is extremely common in low-end "pizza-box" servers. I've cost such vendors money and gotten the compoany I worked for barred as a customer when shown the non-spec detritus that was inside them, read the vendor the riot act on their contract, and shipped back the whole pallet of servers for them to replace components with the parts we actually ordered. The idiot over in purchasing kept buying non-approved hardware from t
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Toxic waste could be dumped in the garbage
In China they already dump the toxic waste from manufacturing the legit products straight into the town storm drains.
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The question is, what counts as counterfeit hardware? Is he taking, say "genuine" Cisco hardware (as in, made in the same factory just not with the Cisco name on it) and selling it as real Cisco hardware, is he taking inferior components to make his hardware, is the hardware functional?
To a very large degree, it doesn't much matter whether he's using the same components as are found in the official Cisco hardware.
Even if the hardware he's selling is 100% identical to Cisco hardware, it isn't Cisco. This means that if I buy something thinking that it's Cisco, and have a problem, I'm going to call up Cisco and complain about it. And then they're going to tell me that I don't have their hardware. I'm wasting their time (and money)... And I've got a product that nobody is going to support
Re:What constitutes "fake" hardware? (Score:5, Interesting)
I have some "fake" Cisco WIC cards for the 2600 series here in a couple of routers. I'll tell you that they work just as well as regular Cisco WIC cards, and the systems you install them into can't tell the difference. These have been running reliably for years now.
Cisco is begging for a counterfeit market for their parts, because they mark up prices to insane levels.
True, it's the research, development, documentation, and support that makes their products great, but charging what they charge is just stupid.
Here's an example;
Intel 2-port 10Gig network card, $2500.00
http://www.cdw.com/shop/products/default.aspx?EDC=1352161 [cdw.com]
Same EXACT card but branded as Cisco costs over $14000.00
http://www.cdw.com/shop/products/default.aspx?edc=1424619 [cdw.com]
Yes, these are the same cards, my company has several of the large ASA firewalls that these go into, and the Intel cards. Sit them side by side and they are identical. At most, different firmware, but I doubt it. I've never actually tried since we can't be dorking around with production equipment.
Newer Cisco routers and switches are now using licensing for features and ports, so installing non-Cisco-extortion-priced parts won't really be an issue anyway. Reference the 3750-E/3560-E switches and those new 1900/2900/3900 series routers.
Re:What constitutes "fake" hardware? (Score:5, Insightful)
Why would Cisco give free support on bogus S/Ns? (Score:2)
I haven't worked with Cisco support all that much, just a few times with some access routers, WIC cards and miscellaneous software BS. But I'm pretty sure they always wanted my serial number or SmartNet info, and to get the latter you have to supply a serial number.
Why wouldn't Cisco just reject these products because the serial numbers are wrong/bogus/nonexistent? It seems unlikely the counterfeits would have legitimate serial numbers, or if they cloned a range, ones that couldn't be flagged.
And since wh
Re:What constitutes "fake" hardware? (Score:5, Informative)
Anyone who has purchased Cisco hardware knows that the price does not include support.
Support is a separate line item that must be added to the purchase order.
Re:What constitutes "fake" hardware? (Score:5, Interesting)
This. This right fucking here. This is why I don't care if something hurts Cisco. They're bastards on their pricing and turning EVERYTHING in to an extra charge. Read the fine print, read the instructions twice, and keep a good hold of your wallet when you go in to buy Cisco. You are getting in to a product that will probably run you 4-5 times the already overblown up front price tag they initially show you once you get through licenses, support, etc.
I've started building linux firewalls for small to medium businesses on recycled hardware. Businesses that were seriously considering (and often buy) hugely overpriced Cisco systems that don't really deliver... well... anything for their astronomical price. It works out a helluva lot better, and they never *need* support. Once you get in to enterprise level needs, you should be dealing with Juniper and the like since they actually deliver something amazingly capable for the price. Unlike Cisco.
Why the hell is Cisco still in business, again?
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Keifer Southerland and that chick who opened "Mr. Show"
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Cisco is still in business because of their marketing department.
For small to medium business a linux firewall works but a Sonicwall product has arguable merit. It requires less electricity to use, is easier to manage by any technician that walks in the door, USEFUL support contracts are available at minimal cost, and I challenge you to assemble a content filter / antispyare / antimalware / gateway antivirus solution on Linux that is anywhere close to as good.
No I don't work for SonicWall and to be honest
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I have never had better support then I got from all of these companies. They work with you to solve all issues and you talk to people who know
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I suspect that you are NEVER going to see 64 bit clients from Cisco (well, maybe in 5 years). On the other hand, we use Shrew Soft's VPN client to talk to our ASA and PIXs without any problem...
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Support is a separate line item that must be added to the purchase order.
At my last job, when I was working with sales reps and PC Connection, a piece of software I was looking at purchasing could not be sold without support, regardless of whether or not you wanted it. It was a separate line item, but for what it's worth, the vendor didn't actually list the price of their product without the support included anyway. The two items together came to the vendor's advertised price.
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Fake is a broad definition but simple to describe: it's unauthorized and unsupported by Cisco.
Trying to determine if the fakes are "0% accurate" or "50% accurate" is not really possible, given all the small parts and encrypted firmware, etc. It's counterfit.
Couple things (Score:2)
The big thing that makes it counterfeit is that it says it is made by Cisco and isn't. That right there is what really causes the problem. There's nothing saying you can't make a device like a Cisco device and sell it. In fact, you'll find many companies do. HP's ProCurve switches were made to function a lot like Cisco switches (at least last time I used them, which was some time ago). For that matter you can make cards to plug in to Cisco's gear under your own label. All this is perfectly fine. However, wh
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Crisco?? (Score:1)
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I'm not saying that Cisco makes a greasy vegetable oil product.
But Firefox's spellchecker insists is.
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"You're telling me that Crisco makes delicious pie crusts AND hi-end networking equipment? Sold!"
I've seen support requests emailed in from network admins needing assistance with their "Sysco [sysco.com] routers..."
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coulda been worse... (Score:2)
Just think how much time he'd have gotten if they were *real* Ciscos!
win win for Cisco (Score:5, Insightful)
Farm out production to cheap labor in a country that has little regard for IP. Cisco wins
Get FBI and US justice department to enforce and foot the bill for counterfeiting under the guise of "National security". Cisco wins
In both cases, Cisco wins and in all cases the US citizens lose. We foot the bill, lose the jobs, get Chinese made equipment in our government and pay with tax dollars to support Ciscos business decision.
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Thank you, at least someone wrote up this point. That's the main question I have about this story. Why are my tax dollars going to enforce profitability for Cisco? If the people who got cheap networking equipment feel that they were wronged, let them bring a civil suit or let Cisco file suit on their behalf and on their own dime. You'll notice that criminal sentencing does not provide any restitution to those that were scammed. If the FBI has the time to act as corporate security guards, they need to be dow
China's preferred trade partner status (Score:2, Insightful)
And yet China continues to be a preferred trade partner to the "free" world. What the hell does this even mean anymore? They poison our children with first lead, then cadmium laced jewellery, they hack our networks an infest them with malware/spyware, force labor upon their own children, yet they are our "friends" because we can buy their crap for cheap and sell it at Walmart.
Isn't it time to reevaluate our trade partner status with this country that is set on deceiving us with every opportunity they get?
no, not at all. (Score:2)
What it's time to do is re-evaluate your values.
What goes around, comes around (Score:5, Interesting)
Cisco seemed to put up with this for a while, since almost all of the hardware was kept within China. Then, sometime in the last ten years, I can't remember when, Huawei started selling Cisco-like hardware worldwide. At that point, Cisco sued and forced them to stop all international sales of the disputed products. Later, Huawei rewrote its router code and even licensed code from another American company.
So, what to do with all that surplus manufacturing capacity?
Favor patent and copyright law, or not? (Score:2)
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How had China been very good to Cisco up to that point if (at that time) China wasn't buying much of Cisco's stuff and Cisco wasn't manufacturing in China either?
Imaginary property? (Score:2)
If the routers are just as good as the "genuine" except that Cisco didn't get paid for the use of their name, then is not this another case, when the imaginary property (on "trademark") rears its ugly (if imaginary) head?
Yes, the buyers were lead to believe, they are buying the "real" thing, but that's between them and the seller.
But the US government is involved — on behalf of a fat corporation [yahoo.com], which means, Cisco ought now to be frowned upon, just as the mafiAA members are.
And yet, kdawson see
More a security scare than trademark issue (Score:2)
I'd bet money that 1) this guy is an agent of the Chinese government in some way or another, and 2) a CRC of the microcode for the firmware in these routers would not match the CRC of the microcode in an American-made one.
Think about it. If *I* were China and I wanted built-in industrial espionage capabilities through an undetectable backdoor, this is *exactly* how I'd do it - with trajaned firmware in counterfeit network hardware. You got yer plausible deniability, untraceability, undetectability, and a