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Release of Draft Paper on Certificate Authorities

September 19, 1997 Montreal, Canada

The Internet Law & Policy Forum, or "ILPF", announced today that it has released for public comment a draft paper titled THE ROLE OF CERTIFICATION AUTHORITIES IN CONSUMER TRANSACTIONS. "The draft paper is a landmark contribution to understanding the rights and responsibilities of providers and users of digital authentication services for online commerce," said John Montjoy, who serves as ILPF Chair.

The draft paper notes the significant differences between "open" and "closed" payment and authentication systems. In an open system for example, a user may obtain the services of a certificate authority (CA) without regard to any consumer relationship with a bank or merchant. In a closed system, the consumer's relationship is determined by contract and regulations governing payment systems such as credit card limits on loss. The ILPF draft paper notes that current regulatory debate has focused on open systems whereas the clear market trend has been toward closed loop systems.

The draft paper raises and explores significant legal questions in regard to open systems, including:

  • the CA's responsibilities to consumers and what, if any, limitations should be placed on the CA's ability to disclaim liability even in the case of negligence;
  • consumer responsibilities and any limits on liability;
  • merchant reliance on CA even without a prior relationship; and
  • which party to any transaction should bear the risk of loss.

The report was prepared by an ILPF working group led by the law firm Cooley Godward; with technical support from Premenos; and contributions from Netscape, Microsoft, IBM, CertCo, VISA, CommerceNet, DFN-CERT, Entegrity Solutions, Nortel Secure Networks, and Signet. The ILPF draft report is available on the ILPF web site and comment is sought on any aspect of the paper. The paper will be released in final form in January 1998 at the ILPF annual meeting to be held in Seattle, Washington.

Founded in 1995, the Internet Law & Policy Forum (ILPF) is a global organization of Internet-centric companies with a common interest in fostering the growth of Internet electronic commerce and communications. To do so, the ILPF strives to "fill the gaps" between existing law and technological development by examining the legal and policy issues surrounding Internet commerce and communications and, where appropriate, recommending practices, procedures or policies that, if adopted, would reduce the uncertainty and risk associated with the use of the Internet. The ILPF operates as a virtual organization, headquartered in Montreal, Canada and incorporated as a not for profit society in Washington State.

For more information contact:
Ruth Day
, Executive Director

For membership information contact:
Marilyn Malenfant
, Administrative Coordinator

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