[Foundation-l] What do we do in the event the Foundation fails?

[Angela Beesley]

I'm forwarding this on behalf of Ethan Zuckerman, a member of the
Wikimedia Advisory Board.
http://wikimediafoundation.org/wiki/Advisory_Board#Ethan_Zuckerman

---------- Forwarded message ----------
From: Ethan Zuckerman <ethanz at gmail.com>
Date: Apr 19, 2007 11:58 PM
Subject: Re: [Wikimedia Advisory Board] What do we do in the event the
Foundation fails?
To: advisory at lists.wikimedia.org


Angela, thanks for pointing me to this discussion. I'll respond via
you, if that's okay - I think actually subscribing to that list would
likely destroy either my workday productivity or my mail client. Do
feel free to forward.

Standard disclaimers apply - I am not a lawyer, though I hang out with
a lot of them, and I look forward to putting some of these questions
in front of people who think about trademark and intellectual property
for a living. Some of the questions implied in this thread are hard
for any lawyers to answer - very few lawyers are smart about more than
one legal system, and possible solutions to the Wikimedia survival
question probably require crossing jurisdictions.

The scenarios that worry me most don't involve interplanetary
invasion. They involve massive liability rulings in a libel/slander
suit or intractible conflict within the board of directors. In the
first case, a long process could end with a judgement that bankrupts
the Foundation entity. My guess is that a ruling would attempt to
strip Wikimedia of any money it had raised but wouldn't consider
trademark part of the Foundation's assets for settlement purposes - in
other words, Seigenthaler sues Wikimedia and wins, I think it's
unlikely that the bankruptcy courts would give Seigenthaler the
opportunity to use the Wikipedia trademark as part of the fiscal
damages. That said, Wikimedia would probably fold rather than go
through bankruptcy proceedings. The question then becomes whether a
successor entity could use the defunct Wikimedia trademarks.

One option would be to pursue a "Lots of Copies Keep Stuff Safe"
strategy, much as people are suggesting with the copies of the content
itself. (I think that having an agreement with Archive.org, and with
other digital archives, to periodically store snapshots of the various
wikis would be a very smart thing to do.) If the country foundations
started registering the trademarks under local law, it's possible that
a succesor foundation could license those trademarks - i.e.,
Wikimedia2, a new US 501c3 could be given permission to use the
Wikimedia marks registered under German law by the German Foundation,
for instance. A first step would be to research in what venues
Wikimedia Foundation has registered these marks and consider what
other entities we might want to ask to register marks.

In the incorporation papers for the Wikimedia 501c3, I guarantee that
there's a clause that deals with succession. Under US law, when you
fold a nonprofit, you generally need to transfer assets remaining to
another US 501c3 which has a similar mission and purpose. This last
clause can be interpreted pretty strictly - my partner and I folded a
501c3 under Massachusetts law, and we tried to transfer the remaining
assets (a few hundred dollars, and some stock) to the church we both
attend. The local government refused, on the grounds that the church
doesn't have the same social mission as our NGO - they forced us to
find a different entity, or surrender the assets to the state. One
option would be to pick an entity with a related mission which we
would try to designate as successor, perhaps archive.org, in the case
of the foundation folding. That successor might explicitly accept
control of the mark as part of a succession process. It would be very
difficult to declare a foreign NGO as successor - the US law wants the
entity to be a 501c3.

Before taking either of these concrete pieces of advice, please,
please seek the advice of a real lawyer. But I think the idea of
ensuring that lots of entities have access to the trademark might be a
clever one, though it certainly takes a lot of control of trademark
out of the foundation's hands.

-Ethan