Legal Training forLegal Training for Committee Leaders Committee Leaders

April 2008

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DisclaimerDisclaimerThis presentation is intended to assist ATIS Committee and Forum Leaders in the identification of legal issues related to the operation of ATIS committees and forums. This presentation does not address every potential antitrust, intellectual property or other legal risk and is not intended to serve as standalone legal advice. Legal counsel should always be consulted when dealing with any antitrust, intellectual property or otherwise legal issues in the context of ATIS work.

® ATIS is a registered trademark of the Alliance for Telecommunications Industry Solutions.

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Legal ConsiderationsLegal Considerations

• Authority to Act• Communications with Governmental Representatives• Intellectual Property Issues• Antitrust Considerations • Importance of Proper Procedures• ATIS Operating Procedures (Consensus, Appeals, etc.)• Administrative Items (E-mail, Meeting Recording, etc.)

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Authority to ActAuthority to Act

It is important to understand legal implications of acting on behalf of the association:– Your actions can give rise to legal liability even if you do not believe

you have the authority to bind the organization.

– Even unauthorized actions can create liability.

– Exercise caution if you are asked to provide your committees’ view regarding, or agreement to, a particular substantive issue.

– Because ATIS Committees are part of the ATIS corporate structure (and are not separate corporate entities), committees cannot execute contracts.

• Committees can recommend that ATIS enter into contracts, establish formal liaisons, etc.

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Communications with Governmental Communications with Governmental RepresentativesRepresentatives

There are both strategic and legal issues associated with communications involving governmental representatives. – ATIS encourages governmental participation in many of its committees;

governmental officials do receive some committee correspondence from the exploder lists.

– As a leader, you should be sensitive to the committee communications.• Routine committee communications to these officials generally do not

raise strategic/legal concerns. • However, communications regarding regulatory strategies,

recommendations for changes to rules, etc. may raise such concerns.– Official correspondence with governmental officials must be

reviewed by ATIS Legal.

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Governmental Representatives on ATIS Governmental Representatives on ATIS Committees’ Exploder ListsCommittees’ Exploder Lists

• ACTA

• ESIF

• HAC (AISP.4-HAC)

• IIF

• IITC

• INC

• IVR FORUM

• NGN

• NIIF

• NRSC

• O5

• OPTXS

• PEG

• PRQC

• PTSC

• TMOC

• TOPS Security Focus Group

• TTY

• WTSC

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Intellectual Property – CopyrightIntellectual Property – Copyright• ATIS respects the legitimate property rights (i.e., patents, copyrights and

trademarks) of intellectual property owners.– Copyright protects “original works of authorship” fixed in a tangible form of

expression.• Copyright owners have exclusive rights to reproduce, distribute, create derivative

works and authorize others to do the same.• All ATIS deliverables are copyrighted by ATIS to protect them from unauthorized

distribution/modification and no ATIS deliverable, or any portion thereof, may be reproduced or distributed without ATIS’ prior written permission.

– ATIS does allow:(1) the reproduction/distribution of documents for purposes of internal Member

company use.(2) the reproduction/distribution of forms to third parties limited to the primary

business of the Member if the form includes the appropriate legend.– Other uses may be permitted on a case-by-case basis.

• If you believe that distribution of an ATIS deliverable to a third party would be necessary/beneficial, let ATIS know.

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Intellectual Property – CopyrightIntellectual Property – Copyright• ATIS’ respect of others’ intellectual property includes copyrights.

– Copyright works (published since March 1989) need not bear the copyright notice “©” to be protected under the law.

– When referencing others’ documents, it may be necessary to obtain permission from the copyright owner; in other cases, it is appropriate to merely include an appropriate citation.

• ATIS can assist your committee in making this determination and in getting permission for use (when appropriate).

• Two of the factors in determining whether permission is necessary: (1) the amount and substantiality of the use; and (2) the effect of the use on the copyrighted work’s value.

• Similarly, ATIS respects the trademarks of others by including the appropriate notation (® or ™) on company/product/service names.

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• Neither ATIS nor its committees will consider any contributions, presentations or other documentation that is subject to any requirement of confidentiality or any restriction on dissemination.– Exceptions are made on a case-by-case basis when necessary.– Certain ATIS committees have executed Nondisclosure Agreements to

facilitate the discussion of sensitive topics or examination of confidential data.

• To facilitate, promote and disseminate the work of its Forums and Committees, it is necessary that each contributor grant ATIS the rights necessary to adapt, copy, and publicly distribute any contribution.– Let ATIS staff know if you see contributions that include copyright notices

or other purported restrictions on use.

Intellectual Property – ConfidentialityIntellectual Property – Confidentiality

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Intellectual Property – PatentsIntellectual Property – Patents• ATIS Forums and Committees may develop deliverables that refer to or

require the use of patented inventions. – No discussion of license terms may occur within ATIS Forums or

Committees; all such discussions must occur directly between the owner of the patented invention and prospective licensees.

– ATIS encourages the disclosure of patents as early as possible.• If a patented invention is essential to an ATIS standard, ATIS must

receive assurance from a patent holder that:– He does not hold or currently intend on holding any invention that would

be required for compliance with the proposed standard; or– He will make a license available without compensation or under reasonable

and non discriminatory terms and conditions.• Disclosures and assurances are to be made in writing to the ATIS

General Counsel.

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Antitrust ConsiderationsAntitrust Considerations

• A significant area of concern for associations and their members is antitrust liability.

– Antitrust laws promote competition by prohibiting certain actions among existing or potential competitors.

• Industry committees are, by their nature, combinations of competitors.

– Generally speaking, the prohibited actions include:• unfair methods of competition and deceptive practices that affect

commerce; and • combinations, contracts or conspiracies that unreasonably

restrain trade.– Parties subject to liability may include participants, individual

members, corporate members and associations and there are both civil and criminal penalties associated with violations.

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Antitrust ConsiderationsAntitrust Considerations• Per se Unlawful: certain activities are regarded by the courts as so

lacking in pro-competitive benefits that they are presumed to be unreasonable and illegal per se– Price-fixing;

– Certain types of boycotts; and

– Allocation of territories of markets.

• Rule of Reason: other activities must be analyzed to determine whether they are illegal.– Courts balance the perceived threat of harm to competition against the

likelihood that it will yield pro-competitive efficiencies. • Is the act an unreasonable restraint on competition? The

reasonableness depends upon all of the facts and circumstances of a particular situation – the particular business, effect of restraint, purpose of restraint.

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Sensitive Discussion TopicsSensitive Discussion Topics• ATIS recommends avoiding sensitive discussion topics (during official

meetings and “off the record” during the coffee break).– Price or pricing policies, including costs, discounts, etc.– Contractual terms including commercial liabilities, warranties,

guarantees, or the particular terms and conditions of sale.– Sales/production quotas, territories, allocations, boycotts, market share.– Confidential or proprietary information.– Individual company statistics, inventories, merchandising or

marketing methods/plans.– Particular competitors or customers (particularly customers to whom

services will or will not be offered).– “Arm-twisting”, trade abuses, exclusion or controlling competition.

• If you are concerned that such issues may be brought up by others during a meeting, ATIS Legal can provide guidance or may be available to attend.

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Importance of Proper ProceduresImportance of Proper Procedures

– There must be openness with no barriers to participation.– There must be timely and adequate notice of the initiation and

development of the Issues and Resolutions. – The resolution process should have a balance of interests.– There should be appropriate notification of the various steps of

the development of the resolution.– There should be careful consideration of all the views and

objections, and these should be properly answered or addressed.– Unresolved objections should be reported to the

members/participants of the industry committee.– Careful meeting records should be kept.– There should be an appeals process in place.

• The following mitigate the risks of industry activities:

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ATIS Operating ProceduresATIS Operating Procedures• Establishing and adhering to good operating procedures are

key to ensuring that proper procedures are followed within ATIS.

• ATIS Operating Procedures (OP) are well established and based on the principles of openness, equity and due process.– A current version of the OP is posted on the ATIS website at

www.atis.org/atisop.pdf

• ATIS OP covers topics such as:– Committee Leadership;

– Consensus;

– Appeals; and

– Other Administrative Items.

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Committee LeadershipCommittee Leadership• ATIS’ Committee/Forum leaders are key to ensuring that proper procedures are

consistently followed.

• ATIS’ Committee/Forum leadership: – Consists of either a Chair and Vice Chair or two Co-Chairs;– Serve two year terms with a limit of two consecutive terms (i.e., leaders cannot serve more

than 4 years consecutively); and– Should remain neutral in all discussions and not influence the disposition of issues.

• Election of Leadership Procedures (Section 4 of the OP)– Leadership elections must be announced at the meeting prior to the election and require 30

calendar days notice in advance of election.– Nominations are solicited from the appropriate selecting bodies and sought from the floor at

the time of the election.– Election is by secret ballot, except election by acclamation when there is one candidate.– Election is by simple majority of present members in good standing. – Elections may be held by electronic balloting (at least one half of the committee/forum

funding companies in good standing must vote and at least 10 business days must be provided).

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ATIS Operating ProceduresATIS Operating Procedures• As discussed in Section 7.1 of the OP, ATIS Standards are

developed by “consensus” and followed voluntarily by the industry. – Appendix A explains balloting requirements for American

National Standards (ANS).

• Consensus is not defined by a specific numerical benchmark, but is “substantial” agreement among participants/ interest groups.– Interest Group = companies materially and/or directly affected

by the outcome or result of an issue or question being called.

– Substantial Agreement = more than a simple majority, but not necessarily unanimous agreement.

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Consensus (Section 7.1 of the OP)Consensus (Section 7.1 of the OP)• Consensus is a “Gaining of Understanding” by a group.

– Consensus requires that all views and objections be considered and a concerted effort be made to resolve objections.

• Additionally, no interest group dominates the discussion.– A participant’s silence is considered as support for a

proposition.– Consensus has been reached when each person involved can

honestly say to the others:• I believe that you understand my point; I understand your point.• I can support that consensus has been reached because I believe it

was arrived at in a fair and open manner, regardless of whether it is my first choice or whether my company agrees with it.

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Consensus (Section 7.1 of the OP)Consensus (Section 7.1 of the OP)• When there are questions or disputes:

– Objecting participant(s) should be asked to state a rationale.• It is not acceptable for a participant to say they object without stating the

rationale for the objection; the objection should be captured in notes.– An opportunity should be provided for discussion aimed at achieving

full understanding and consideration of the objection.

– Polling can be used as a tool for reaching consensus.

• If a question arises as to what consensus is, offer to remind the committee of terms of Section 7.1 of the OP.– Err on the side of caution and redundancy (for instance, the actions or

statement under consideration should be displayed).

– Be prepared to move to the next agenda item.

• In rare cases, the committee may not reach consensus on an issue. If this situation occurs, then a No Industry Agreement (Section 5.3.7 of the OP) resolution exists.

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Appeals Process (Section 13 of the OP)Appeals Process (Section 13 of the OP)• Informal appeals/complaints may be made to: (Sub)committee

chairs/co-chairs or Primary Company Contact (PCC).– Every effort should be made to encourage the parties to reach a

mutually agreeable solution.

– Inform ATIS Legal when a complaint has been made or is reasonably likely to be made.

• Formal appeals should be made in writing to ATIS General Counsel after exhaustion of committee processes.• Within 30 days of committee final determination.

• Written response will be given within 30 days.

• If necessary, a hearing may be held before an appeals panel of three individuals not directly involved.

• Decision within 30 days.

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Administrative ItemsAdministrative Items• ATIS e-mail distribution lists:

– Are to be used for ATIS business purposes only. – Are not to be used for third party sales or marketing materials.– Should never include:

• Libelous statements (those that contain: (1) false information; (2) malicious information; (3) statements that are injurious to the reputation of another);

• Copyrighted information without prior written consent to distribute; or

• Antitrust-sensitive issues.

– Contact ATIS staff if you see any violations of this policy.

• As explained in Section 9.1 of the OP, meeting notes should contain:– Attendee list, agenda, points noted, Agreements Reached, oppositions or divergent

views that are specifically made “for the record,” Action Items, and attachments.

• Avoid ambiguities, Action Items without specifics and verbatim phrases (these are meeting notes, not meeting minutes).

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Questions, Comments?Questions, Comments?

Thomas GoodeGeneral Counseltgoode@atis.org(202) 434-8830

Deirdre CheekAttorneydcheek@atis.org(202) 434-8847