Be Wary of the Powerful

When you sue a giant multinational corporation for anti-competitive actions such as forcing end users to purchase their equipment to receive normally free software bug fixes, you have got to be ready for them to come after you from every angle. In jail, it is a little difficult to continue your lawsuit without a settlement out of court.

This is one of those fascinating stories that involve government acting quickly to apprehend a heinous criminal before wondering later, "Er, why exactly was it so urgent to arrest this guy?"

Cisco accused of orchestrating engineer's arrest

The arrest of Peter Alfred-Adekeye was retaliation for a lawsuit, his company claimed

By Stephen Lawson, IDG News Service
April 20, 2011 09:37 PM ET

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Cisco Systems orchestrated the arrest of Multiven founder Peter Alfred-Adekeye last year in order to force a settlement of Multiven's antitrust lawsuit against Cisco, a Multiven executive said on Wednesday.
Multiven, an independent provider of service and support for networking gear, sued Cisco in 2008, alleging that the company monopolized the market for its software. Cisco countersued, charging that Alfred-Adekeye hacked into Cisco's computers and stole copyrighted software.
In May 2010, Alfred-Adekeye was arrested in Vancouver, Canada, on 97 counts of intentionally accessing a protected computer system without authorization for the purposes of commercial advantage, according to his arrest warrant. He could be sentenced to 10 years in prison and a US$250,000 fine if convicted. The arrest came to light only this week after local Vancouver press reported it.

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Cisco Systems orchestrated the arrest of Multiven founder Peter Alfred-Adekeye last year in order to force a settlement of Multiven's antitrust lawsuit against Cisco, a Multiven executive said on Wednesday.

Multiven, an independent provider of service and support for networking gear, sued Cisco in 2008, alleging that the company monopolized the market for its software. Cisco countersued, charging that Alfred-Adekeye hacked into Cisco's computers and stole copyrighted software.
In May 2010, Alfred-Adekeye was arrested in Vancouver, Canada, on 97 counts of intentionally accessing a protected computer system without authorization for the purposes of commercial advantage, according to his arrest warrant. He could be sentenced to 10 years in prison and a US$250,000 fine if convicted. The arrest came to light only this week after local Vancouver press reported it.
After 28 days, he was released on bail, but he has not been able to leave Canada since then, said Deka Yussuf, an executive vice president of Multiven in charge of marketing and public relations. Multiven is based in Redwood City, California, but Alfred-Adekeye lives in Zurich, she said.

The case has been stalled for the past 10 months because the U.S. Attorney's office has not been able to present the evidence required to extradite Alfred-Adekeye, Yussuf said. Alfred-Adekeye's lawyers believe the U.S. officials may have misled Canadian authorities about the need to arrest and extradite him, and they initiated hearings that are going on now in Vancouver to investigate this possibility, she said.
After the arrest last May, Cisco and Multiven settled the civil case in July. But Cisco is behind the entire criminal case, according to Yussuf.
"We believe this is Cisco's retaliation to the landmark antitrust lawsuit that Multiven brought against Cisco," Yussuf said. "It is our belief that Cisco has engineered this entire criminal arrest and litigation against Adekeye to force Multiven to settle."
Before the arrest, Multiven's case had been near to going before a jury, Yussuf said.
Cisco dismissed Multiven's accusation in a written statement.
"This is an absurd claim from Multiven. This case is a matter between US and Canadian governmental authorities. We understand that the genesis of the extradition request was an arrest warrant issued by a U.S. judge, which was based on a criminal complaint returned by a Secret Service Special Agent," Cisco said.
Alfred-Adekeye was unexpectedly arrested while giving a deposition to Cisco's lawyers at Vancouver's Wedgewood Hotel.
Multiven's suit alleged that Cisco forced owners of its equipment to buy Cisco SMARTnet service contracts in order to get software updates and bug fixes. That locks out independent companies such as Multiven, the suit said.
"We alleged that Cisco is harming consumers and the marketplace and competitors like Multiven ... by forcing their customers to purchase SMARTnet agreements with (Cisco) to obtain the critical software bug fixes, which should be made available to any customer who has purchased any software," Yussuf said.
Multiven's concerns echoed those expressed by some customers, who have complained that Cisco should fix its own bugs free of charge just as other companies such as Apple and Microsoft do. Some users have said the problem becomes complicated with second-hand and refurbished hardware. Cisco service contracts can't be transferred from one user to another, so buyers of used gear typically have to send the product in for inspection by Cisco before they can purchase a new contract, which can be an expensive process. Also, there may not be SMARTnet contracts available for discontinued products.
There is a large market for used Cisco equipment, fed by both buyers who can't afford new gear and those who need a router or switch model that is currently unavailable new, according to Brad Reese, research manager at BradReese.Com, which sells refurbished networking gear and services. He estimates the worldwide secondary market for networking gear at $2 billion, with 90 percent of sales being Cisco equipment.
Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

The IDG News Service is a Network World affiliate.

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