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Re: I-D ACTION:draft-lyons-proposed-changes-statement-01.txt

2004-11-02 08:58:35
Brian,

While this shouldn't be viewed as legal advice on the issue, it is my understanding that, in general, members of an unincorporated association (and participants in IETF activities may be viewed as "members") will have personal liability for the authorized debts and actions of the association. In Virginia, state statutes permit an unincorporated association to become a "limited liability company" by filing articles of organization, maintaining a registered agent in the State, paying certain fees, and meeting certain other requirements. If it were to do so, IETF could limit the usual personal liability of its members. But in the absence of some such liability-limiting legal structure, the general personal liability principles would apply.

Regards,

Patrice
----- Original Message ----- From: "Brian E Carpenter" <brc(_at_)zurich(_dot_)ibm(_dot_)com>
To: "Patrice Lyons" <palyons(_at_)cox(_dot_)net>
Cc: <ietf(_at_)ietf(_dot_)org>
Sent: Monday, October 25, 2004 7:49 AM
Subject: Re: I-D ACTION:draft-lyons-proposed-changes-statement-01.txt


Patrice,

I don't want to argue law with a lawyer :-)

However, in my experience on a couple of non-profit Boards,
and in reviewing some experience of a family member in a
completely different unincorporated association in the UK,
I thought I understood that both fiduciary responsibility
and potential for conflict of interest can only arise
in a budget-holding organization. The IETF isn't one of
those - it has delegated its budgets elsewhere.

   Brian

Patrice Lyons wrote:
Brian,

What corporate (or for that matter unincorporated body) are you talking about here? Even if the IETF remains an unincorporated entity, it should retain the fiduciary responsiblity for overseeing its activities going forward. Incorporation wouldn't change this basic obligation.

Regards,

Patrice
----- Original Message ----- From: "Brian E Carpenter" <brc(_at_)zurich(_dot_)ibm(_dot_)com>
To: "Patrice Lyons" <palyons(_at_)cox(_dot_)net>
Cc: <ietf(_at_)ietf(_dot_)org>
Sent: Thursday, October 21, 2004 4:41 PM
Subject: Re: I-D ACTION:draft-lyons-proposed-changes-statement-01.txt


Patrice,

I'm extracting here soem of your comments to Joel and some
of those to Margaret, because I think there is a single
underlying point to be discussed:

Patrice Lyons wrote:
...
> While there are many reasons why

incorporation of an association is desirable, one important reason for a technical association like IETF to incorporate is the substantial increase in exposure to potential liabilities arising from conflicting patent claims that has arisen over the last few years. In this context, there has been some talk of donation recently of patents for IETF, particularly a group
of patents, for IETF purposes at little or no cost.

What happens if a group of pooled patents is donated to IETF by the very organization that also controls funding for the IETF? What happens if such an organization is under no direct control by the IETF and takes steps that
embroil the IETF in patent litigation?


...

Second, you raised a question about ISOC. While my comments didn't single out ISOC, if ISOC is viewed as a fundraising entity or an actual source of
funds for the IETF, and is also the organization charged with hiring an
Administrative Director for the IETF and supervising his/her efforts such as contracting with third parties for IETF support services, I would again
assert:  where are the checks and balances.

...

Apart from the provision of routine IETF support services, fundraising for
the IETF is a potential source of conflict of interest. To minimize the
possibility that a contributor of funds for IETF purposes might be perceived as having an undue influence on IETF standards setting work, I have proposed that a new, separately incorporated and independent entity called the IETF
Foundation be established to manage the IETF fundraising activities.


...

In any event, the IETF retains the fiduciary obligation to supervise and
control any support services provided to the IETF by third parties,
including any possible new administrative entity that may be established to serve the IETF community. While supervisory responsibility for certain
support services (whether under contract or simply volunteer) may be
delegated by the IETF to others, the obligation to provide general oversight
for such activities resides ultimately with the IETF leadership, in
particular the IESG.


Now we agree that the IETF *is* an unincorporated association, and there
was very strong consensus in earlier discussions that we don't want to
change its fundamental nature and its open door policy. If that is
granted, then the leadership (i.e. the IESG and IAB) are as far as I can
see under no formal responsibility whatever - there's just a social
contract in place (and if that breaks down, we can all go home anyway).
So the *fiduciary* responsibility for supervision and control
and for integrity in fund raising and fund disbursement *has* to lie
with a body corporate in some jurisdiction. That body can join the
IETF social contract by agreeing to accept policy and technical
direction form the IETF leadership, but that doesn't move the
legal responsibility. And that being so, I just don't see the conflict
of interest - if the body disburses funds for purposes other than
what they were collected for, or breaks its social contract
with the IETF, that's a breach of responsibility, but that can
happen in any scenario whatever.

Patent donations don't affect this - a patent is an asset and
so it's really just like more money. Some poison pill would be
needed to ensure that the patent can never be misused, but again
I don't see conflict of interest.

I just don't see how any of this argues for more than one
body corporate.

    Brian










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