Optical components

Cisco Fakes: A $76M Business

Law enforcement officials said yesterday they've seized more than $76 million in counterfeit Cisco Systems Inc. (Nasdaq: CSCO) components and labels, the result of more than 400 raids across multiple agencies.

That announcement, made yesterday by the U.S. Department of Justice and U.S. Department of Homeland Security, is the first indication of how much counterfeiting of Cisco optical modules might be going on. (See Feds Seize Cisco Fakes.)

Agencies that have tracked down counterfeiting operations during the last few years include U.S. Immigration and Customs Enforcement and U.S. Customs and Border Protection. The Royal Canadian Mounted Police were involved, too, and had their own announcement of a $2 million raid yesterday.

The problem has been pervasive enough that the FBI even started up something called Operation Cisco Raider to combine 15 ongoing cases. That led to $3.5 million in fake goods seized, with 10 convictions notched.

The release doesn't specify what type of counterfeit gear was seized, but it's possible that much of the $76 million is related to optical modules. The timeframe is right; the raids involved go back to at least 2005, and Cisco began inserting proprietary microcode into its modules sometime before 2003. (See Use Our Optics, or Else! and UTStarcom Unveils Phone.)

That microcode is what's spurring a counterfeit module business in the first place. Cisco's software is keyed to reject any modules that aren't Cisco-authorized, even though Cisco uses a standard type of module available from several vendors.

According to the module vendors, counterfeiters are buying up "regular" modules and slapping fake Cisco labels on them. (See Optical Raids!)

— Craig Matsumoto, West Coast Editor, Light Reading

njguy 12/5/2012 | 3:46:21 PM
re: Cisco Fakes: A $76M Business Just curious. Is this our federal government's job? Do they do it for all industries, like the fake designer purses on the street in NYC?
bored_lurker 12/5/2012 | 3:46:20 PM
re: Cisco Fakes: A $76M Business Yes and yes. Here is an article about an arrest in fake purses about a month ago:


prs6str 12/5/2012 | 3:46:08 PM
re: Cisco Fakes: A $76M Business What's the point of having a trademark or a patent if it isn't protected?

Beyond that and just as important, Cisco gear is used in critical infrastructure. If someone was not simply trying to make a buck, but was purposefully trying to get these fakes into certain networks and had trojan capabilities, that could potentially be devastating.
vrparente 12/5/2012 | 3:45:01 PM
re: Cisco Fakes: A $76M Business On their web site they provide the command line instruction to type to disable the key check. All of this is not necessary to use third party msa packages like SFP, XENPAK, XFP,etc.
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