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Cisco Faces $1.3 Billion Fraud Lawsuit

Lawyers for Cisco Systems may have to do some pretty fancy footwork to avoid a $1.3 billion lawsuit by Vox2Vox.

The San Jose, Calif.-based computer-networking equipment maker is facing fraud charges after Miami-based U.S. District Judge James L. King declined to dismiss the case Friday.

Miami-based Vox2Vox, which is out of business, offered hosted telecommunications and VoIP (telephony) services and products. Now the company is seeking compensatory and punitive damages saying Cisco committed "fraud, fraudulent inducement, negligent misrepresentation and violated the Florida Deceptive and Unfair Trade Practices Act."

The company is owned by Ella Cisneros, a member of the prominent Venezuelan family that has other telecom and broadcast holdings.

The trouble, according to Vox2Vox attorneys Ferrell Schultz Carter Zumpano & Fertel P.A., started after the company was persuaded to join Cisco's Powered Network Program.

The deal sounded great to Vox2Vox, which began preparations to develop its VoIP products for Cisco. That was until a May 1 letter from Cisco said it was abandoning its unified messaging product business, known as uOne.

The Cisco Unified Open Network Exchange (Cisco uOne), part of Cisco AVVID (Architecture for Voice, Video and Integrated Data), was a voice and unified messaging application for Cisco's CallManager and was even slated to support industry standard Internet messaging protocols such as LDAP, IMAP, MIME, SMTP, and HTTP.

But after one month, Cisco scrapped the idea leaving Vox2Vox in a pinch. Vox2Vox filed a suit on June 19, 2001. Cisco asked to dismiss the case but has now been denied.

Attorneys for Vox2Vox released statement Monday suggesting that the mega networking company should have known that uOne was a dud and alerted Vox2Vox as a precaution.

Cisco spokesman Steve Langdon told Reuters that; "the suit is without merit and the amount preposterous. We are comfortable with the facts (of the case)."

The suit is now expected to go to trial unless the two companies can reach a settlement.