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

Hi Patrice,

Just FYI --

The Internet Society currently holds a liability insurance policy 
that covers the IETF Chair, IESG members, IAB members, NomCom 
members, WG chairs (and maybe others that I am forgetting).  This 
insurance is intended to protect IETF leaders and decisions makers 
from the personal liability associated with their IETF activities.
Margaret

At 10:34 AM -0500 11/2/04, Patrice Lyons wrote:
> 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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