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BUSINESS MEETING

The Fairmont Royal York Ontario, Convention Floor

Friday, August 5, 2011 4:00 P.M. to 5:30 P.M.

TORONTO, ONTARIO, CANADA

AGENDA ABA SECTION OFFICERS CONFERENCE

BUSINESS MEETING Fairmont Royal York

Ontario, Convention Floor Toronto Ontario, Canada Friday, August 5, 2011

4:15 – 5:30 PM

I. SECTION, DIVISION AND FORUM ISSUES 1. Approval of the Minutes from the February 2011 SOC Business Meeting

2. Leadership Activities Update/Board of Governors (BOG) Reports (10 minutes) a. Gary A. Munneke, SOC Representative, BOG Operations Committee 3. Reports/Discussion Items (25 minutes) a. Report on the 2011 SOC Fall Leadership Meeting – Salli Swartz, Chair

Representative to the SOC Executive Committee b. New Board/House Section and Division Rotation Charts (Vote by Section and

Division Chairs) – Lee DeHihns, Chair, SOC Operations/Policy Committee c. Update on the work of the ABA Annual Meeting Task Force – Deborah Enix-

Ross, Chair, ABA Annual Meeting Task Force d. ABA Financial/Budget Update – Alice Richmond, ABA Treasurer II. GENERAL ABA ISSUES 4. State of the ABA (10 minutes)

Jack L. Rives, ABA Executive Director 5. Publishing Growth Initiative Update (4 minutes) Timothy Bertschy, Chair, Standing Committee on Publishing Oversight 6. Increasing Section Diversity Efforts (3 minutes) Robert Carlson, Member, Commission on Racial and Ethnic Diversity 7. 2012 ABA Day in Washington (3 minutes) William Hubbard, Chair, ABA Day in Washington III. PRESENTATIONS 8. Special Order at 5:00 PM (25 minutes):

Presentation of the SOC Meritorious Service Award – Brief remarks from Michael Buchdahl, Award Committee Chair; presentation of the award to the winner by ABA President Stephen N. Zack

Report from ABA President Stephen N. Zack Report from ABA President-Elect Wm. Robinson III Report from ABA President-Elect Nominee Laurel G. Bellows

Report from Linda A. Klein, Chair, ABA House of Delegates

9. Passing of the Gavel (1 minute)

10. Presentation of Outgoing Chair’s Gift (2 minutes) Salli Swartz, Chair Representative to the SOC Executive Committee, will make the presentation to Robert A. Zupkus (in absentia). IV. NEW BUSINESS V. SOC INFORMATIONAL REPORTS/MATERIALS

Available as part of the electronic agenda book posted to the SOC’s Website at http://new.abanet.org/sites/portal/SOC_Leadership/default.aspx: SOC Business Meeting Minutes – February 2011 Board of Governors Strategic Action Planning Committee – David K.Y. Tang,

SOC Representative Award Committee – Micah Buchdahl, Chair CPR/SOC Joint Committee on Professionalism and Ethics – Wayne Positan, Chair Operations/Policy Committee – Lee DeHihns, Chair Annual Meeting Task Force – Robert E. Stein, Chair ABA Diversity Center – Deborah Enix-Ross, SOC Liaison

VI. ADMINISTRATIVE MATERIALS

Also available at http://new.abanet.org/sites/portal/SOC_Leadership/default.aspx): SOC “Frequently Asked Questions” for Section Leaders SOC Calendar of Events 2010-11 Committees and Liaisons SOC Rules of Procedure SOC e-News – Current and previous issues are posted to the SOC’s website at

http://new.abanet.org/sites/portal/SOC_Leadership/Pages/SOCe-News.aspx. VII. NEXT MEETING

The next SOC business meeting will be held: Thursday, September 15, 2011 2011 SOC Fall Leadership Meeting Westin River North Hotel/Chicago

ABA Section Officers Conference Business Meeting

Marriott Atlanta Marquis Friday, February 11, 2011

The Section Officers Conference Business Meeting was convened by Chair Robert A. Zupkus. SOC Director Lametrea M. Gray acted as Secretary. The following attendees acted as representatives of Sections, Divisions, Forums and other entities, as noted: Name Title Entity

Robert A. Zupkus Chair ABA Section Officers Conference Gary A. Munneke SOC Rep. BOG Operations/Planning Committee ABA Section Officers Conference

Allan Van Fleet Chair Antitrust Law

Lynne Barr Chair Business Law Linda Rusch Chair-Elect Business Law Dixie Johnson Secretary Business Law Renie Yoshida Grohl Budget Officer Business Law Barbara Mendal Mayden Delegate Business Law Marsha E. Simms Content Officer Business Law

R. Wayne Thorpe Chair Dispute Resolution John R. Phillips Vice-Chair Dispute Resolution Pamela C. Enslen Delegate Dispute Resolution

Steven G. McKinney Chair Environ., Energy, and Resources Sheila Slocum Hollis Delegate Environ., Energy, and Resources Lee A. DeHihns III Delegate Environ., Energy, and Resources

Joseph A. DeWoskin Chair GPSolo Laura Viviana Farber Chair-Elect GPSolo

Gary Layton Anderson Chair GPSLD Susan A. Low Chair-Elect GPSLD Gregory G. Brooker Treasurer GPSLD

Gregory L. Pemberton Delegate Health Law J. Anthony Patterson, Jr. Delegate Health Law

James R. Silkenat Vice-Chair Individual Rights and

Responsibilities

Name Title Entity Joseph M. Potenza Vice-Chair Intellectual Property Law Salli A. Swartz Chair International Law Michael E. Burke IV Chair-Elect International Law Gabrielle M. Buckley Finance Officer International Law Steven M. Richman Comm. Officer International Law Marilyn J. Kaman Publication Officer International Law Adam Benjamin Farlow Programs Officer International Law Michael H. Byowitz Delegate International Law

Richard N. Bien Delegate Judicial Division

William K. Olivier Chair-Elect JD/Lawyers Conference

Thomas W. Snook Chair JD/NCALJ William C. Carpenter Jr. Vice-Chair JD/NCSTJ

Michael D. Goler SCOTIS Liaison Law Practice Management

Kevin R. Johnson Chair Law Student Division Stephanie McCoy Loquvam Vice-Chair Law Student Division Alan F. Rothschild, Jr. Chair Real Prop., Trust and Estate Law Andrew F. Palmieri Chair-Elect Real Prop., Trust and Estate Law Tina Portuondo Vice-Chair Real Prop., Trust and Estate Law Susan G. Talley Vice-Chair Real Prop., Trust and Estate Law Jo Ann Engelhardt Finance Officer Real Prop., Trust and Estate Law David M. English Delegate Real Prop., Trust and Estate Law David K.Y. Tang Delegate Real Prop., Trust and Estate Law

Julie Fleming Secretary Science and Technology Law Ellen Flannery Delegate Science and Technology Law Bonnie Fought Delegate Science and Technology Law

Bruce Alan Mann Chair-Elect Senior Lawyers Division Edward J. Schoenbaum Vice-Chair Senior Lawyers Division

Dwight H. Merriam Chair State and Local Government Law Mary Kay Klimesh Vice-Chair State and Local Government Law W. Andrew Gowder, Jr. Secretary State and Local Government Law

Jennifer “Ginger” Busby Chair Tort Trial and Insurance Practice Timothy W. Bouch Delegate Tort Trial and Insurance Practice Stephen N. Zack President American Bar Association Wm. T. (Bill) Robinson III President-Elect American Bar Association Linda A. Klein HOD Chair American Bar Association

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Name Title Entity Alice E. Richmond Treasurer American Bar Association Lucian T. Pera Treasurer-Elect American Bar Association Jack L. Rives Executive Director American Bar Association William C. Hubbard Chair ABA Day in Washington

Timothy Bertschy Chair SCOPO David W. Hilgers Chair Center for CLE

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APPROVAL OF THE MINUTES The Minutes from the August 2010 Business Meeting were unanimously approved.

UPDATE ON SOC LEADERSHIP ACTIVITIES

SOC Chair Robert A. Zupkus reported. The Board recommended releasing one of the floors in the ABA headquarters building and serious consideration is being given to selling the Washington, DC Office property. Both initiatives would result in substantial costs savings. The Finance Committee has formed a working group to be headed by Mitch Orpett (Section Representative to the Board from TIPS) to look at reserves with respect to appropriate use of funds from the Dues Warehouse. Chair Zupkus will serve as an ex-officio member. Section reserves are not a subject of this review. It appears that there will be a slight surplus in the budget; however, this is due in part to the transfer of funds from the dues warehouse in an effort to balance the budget to avoid tapping into long-term reserves. Reporting on the Program, Evaluation and Planning (PEP) Committee, it is expected that the Finance Committee will give more deference to entity rankings and therefore seeks to improve the process for developing the rankings, for communicating tentative recommendations for entity rankings (especially if the ranking is negative), and for allowing an entity to respond to the proposed ranking. The committee will increase its communication with an entity who has been recommended to receive a negative ranking; and the process will provide for a review of the tentative recommendation and time for the entity to respond before the rankings are finalized. With respect to non-dues revenue, Chair Zupkus reported that the “whole concept of non-dues revenue is struggling a bit,” as noted by CFO Larry Gill, while Publishing appears to be doing well. Respecting CLE, Chair Zupkus encouraged Section leaders to use the CLE Center and to report back on their experiences. Also, it was suggested that Section leaders consult with CLE Standing Committee Chair David Hilgers, since the CLE Center is responsible for and interested in making sure there is collaboration between the smaller Sections and the Center in an effort to host profitable and useful CLE sessions. The Center can likely suggest ways for Sections to cooperate with each other to host successful joint ventures; and Chair Zupkus asked Section leaders to keep an open mind with respect to suggestions for joint ventures. Chair Zupkus met with ABA President-Elect Bill Robinson to discuss ways to improve communication within the SOC and with other parts of the ABA. One focus of the SOC will be to build stronger communications internally as well as to and from other parts of the ABA. To this end, the SOC will work toward ensuring that SOC representatives are indeed actively involved in the work of the entity to which they liaise, and are communicating vital information back to the Sections. Other communications improvements will be explored and implemented. In a meeting with Section Chairs and Chairs-Elect, President-Elect Robinson reported that he is not undertaking new presidential initiatives; rather, he plans to work with the Sections and will look to them to raise important issues. Therefore, Chair Zupkus invited Section leaders to be forthcoming in raising issues that affect Sections, communicating with him or any of the SOC leadership.

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Report on the Board of Governors Operations and Planning Committee Professor Gary A. Munneke, SOC Representative to the Committee, reported. Professor Munneke asked Section leaders to inform him in advance about any proposals/requests to be submitted for consideration so that he is knowledgeable about and can advocate in support of Section proposals. The committee also discussed Section objection to ad placement on Section websites. Section leaders are to consult with Chris Gloede, Marketing Director, and with Jack Rives, who is the final decision-maker. The recommended increase to the fee structure for CLE programming at the Toronto Annual Meeting was discussed, along with the Task Force’s recommendation to amend fees for solos so that they are commensurate with government lawyers. Professor Munneke commented that the approval of this recommendation was due in part to effective liaison representation for GPSolo, and that Section leaders should contact him regarding matters coming before the Operations Committee. Professor Munneke announced that the Diversity Center has initiated a program called LEAP, designed to recruit more diverse authors. Professor Munneke asked for assistance from Section leaders in identifying these authors. The Center will assist by matching these lawyers with appropriate program topics for Section publications. Also, Section leaders were asked to review their diversity plans and share them since the Center is looking to develop a model diversity plan. Please contact Cie Armstead by the end of February 2011 regarding both diversity initiatives.

ELECTION OF NEW CONFERENCE CHAIR Professor Munneke, Chair of the SOC Nominating Committee, reported on the process undertaken by the Committee to interview candidates for the SOC Chair-Elect position. The Committee nominated Jennifer “Ginger” Busby, Chair of the Tort Trial and Insurance Practice Section, as SOC Chair-Elect, who will assume the Chair position at the conclusion of the 2011 Annual Meeting. Section Chairs voted unanimously to elect Ms. Busby as SOC Chair-Elect.

REPORTS Publishing Update Tim Bertschy, Chair of SCOPO, reported on SCOPO’s efforts to develop new procedures in connection with new projects for the Flagship Program in an effort to ensure that the Sections have an opportunity to weigh in on prospective projects earlier in the process. Additional concerns raised in the past about the Flagship program are: loss of revenue to entity publishing programs; cannibalization of entity book sales; diversion of entity resources to the Flagship program; et al. The new draft policy responds to these concerns, which includes posting all book proposals to the ABA’s website, and an appeals process. SCOPO will review the proposal at this meeting; the policy will then be shared with the publishing entities for their review. Mr. Bertschy noted that SCOPO will explore revenue issues, e.g., what the appropriate division of revenue should be between Section publishing entities and the ABA. Other issues related to Section publishing programs and the legal text market will be explored as well.

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Steve McKinney, Chair, Environment, Energy, and Resources, asked whether there are any other programs other than Flagship underway to increase publishing revenue. Mr. Bertschy responded “No,” but that there will be an effort to increase subscription sales in the digital area, which seems to be a money-maker for ABA publishing competitors. State of the ABA/Launch of the New ABA Website/Implementation of Related Projects Jack L. Rives, ABA Executive Director, reported on the progress of the launch of the new website. Mr. Rives encouraged Section leaders to complete the comment form on the ABA’s Home page. Mr. Rives recognized and thanked Amy Peebles, Fred Faulkner, and Joe Andrews for their hard work and dedication to the website project, and asked Section leaders to assist with further improvements. Mr. Rives also spoke about the importance he places on transparency with respect to the Financial Services Division, noting the new leadership of this Division. ABA Financial Update/Progress of 2011 Budgeting Process Alice L. Richmond, ABA Treasurer, reported on the success of the monthly conference calls with budget officers in which she, the Incoming Treasurer, and the CFO participate and share current financial information. Ms. Richmond noted that her report will reflect a budget surplus of $6.2M. However, this is not the result of increased revenue; rather it reflects monies left over as a result of a withdrawal from the ABA’s reserves ($11M was taken from the Dues Warehouse), necessary to avoid a budget deficit. Other details about the Treasurer’s Report were provided; and the Treasurer mentioned that Section budget officers would shortly received an electronic copy of the Report. Section and Division Rotation Chart Lee DeHihns, Chair, SOC Operations/Policy Committee, reported on the activities of the Rotation Chart Subcommittee. The charts (for service on the Board of Governors and the Nominating Committee), which expire in 2014, have been updated through 2028, based on current lawyer membership figures, resulting in minimal adjustments to the tier structures. Section leaders will receive the charts shortly and are asked to comment. Update on Email Contact Rules Michael Burke, Chair-Elect Representative to the Email Contact Rules Team (Jon Rusch and Hon. Ed Schoenbaum are the Chair and Vice-Chair Representatives, respectively), reported. A clear issue has emerged: ABA emails are being blocked by service providers (some organizations/firms consider the ABA as a spanner), and the number of members either opting out of email distribution or failing to provide their email addresses to the Association is increasing (including young lawyers and law students in large numbers). The goal of the oversight group is to develop a supply and demand solution (on the demand side, this means establishing a more granular procedure for opting out – providing menu options, which ABA computer systems can currently support without the need for additional software, with a few exceptions). The Team is starting to receive data on this issue. The Team hopes to learn more about what our members want and what we can deliver to them. Information is being circulated within the SOC (a statistical handout was distributed). Mr. Burke encouraged Section leaders to submit comments. It is their aim to develop procedures that work for the Sections. The proliferation of emails from ALI-ABA, which is also a source of considerable complaint, is not included in Olgilvy’s summary report.

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REPORT FROM THE ABA PRESIDENT ABA President Steve Zack commented on the successful selection of Jack Rives as Executive Director, noting his stellar background. President Zack also commented favorably on the staff in general and on Amy Peebles in particular due to her work on getting the new ABA website launched, the “new front door of the ABA.” Respecting ABA membership, the President noted that “value and visibility” are key to gaining and retaining members. To this end, the ABA is stepping up its communications efforts (the ABA has a new Communications Director) so that its members hear about the ABA more frequently in connection with daily legal news items. As of December 2010, the ABA experienced a membership decline of less than one percent – vastly different from what other organizations are experiencing. The President cautioned Section leaders about increasing Section dues at a time when efforts are focused on increasing membership. President Zack reported that there are three commissions at work: Civics Commission (there are several initiatives in place in connection with this commission including brochures, surveys, classes); Commission on Preservation of the Justice System; and the Hispanic Commission. The President asked that Section leaders determine how they can become involved. The President reported that screen actor and director Robert Redford approached the ABA about his new movie “The Conspirators” where the lawyer is cast as the hero. As a result, the ABA is providing movie screenings free of charge for members attending the meeting. Also, the President reported that, outside of the U.S., the ABA is revered; therefore, he encouraged Section leaders to answer the call and to consider going to other countries to assist them to understand the U.S. system of justice.

REPORT FROM THE ABA PRESIDENT-ELECT ABA President-Elect Bill Robinson commented on the hard work of President Zack and that of Executive Director Jack Rives. The President-Elect stated that he is looking forward to working with Section leaders and is eagerly listening to concerns raised. Also, the President and the Executive Director are making him aware of all of the issues in preparation for when he takes over as President.

REPORT FROM THE CHAIR OF THE ABA HOUSE OF DELEGATES Linda A. Klein, Chair of the House, commended Section leaders for bringing unique expertise to the House via the proposed resolutions. Reminding Section leaders that the ABA cannot lobby on any issue unless there is approved policy ratified by the House, Chair Klein asked Section leaders to think about what other ABA policies are needed. Chair Klein reported that five new bar reports have been received along with one late report. Addressing the House will be Congressman John Lewis, a distinguished civil rights leader, who will also be awarded the Presidential Medal of Freedom, and Chief Justice Wallace Jefferson.

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REPORT ON THE 2011 ABA DAY IN WASHINGTON (April 12-14, 2011)

William Hubbard, Chair of ABA Day, invited the full participation and expertise of Section leaders in this activity. Chair Hubbard reported that while participants will be asked to discuss select core issues, there will be some additional options respecting talking points in Congressional meetings. The goal of this meeting is to try to regain some respect for the ABA and assist lawmakers to understand the key role that lawyers play in our society, and the importance of the ABA as the voice of the legal profession in this country. The Grassroots Advocacy Award ceremony will be held on Wednesday evening at the Supreme Court Building, honoring four senators and two Congressmen. Section leaders were encouraged to attend and meet lawyers from all over the country involved in good works. Chair Zupkus thanked David Tang who has served as the SOC Representative to the Board’s Strategic Action Planning Committee and to SOC Director Lametrea M. Gray. There being no further business before the Conference, the Conference was adjourned. The next business meeting of the Conference is scheduled for Friday, August 5, 2011 in Toronto, Ontario, Canada on the occasion of the Association’s Annual Meeting.

Board of Governors Strategic Action Planning Committee Notes from June 8, 2011 Committee Meeting

David K.Y. Tang, SOC Liaison

A. How to engage ABA leadership at all levels of the organization in membership

acquisition Developing membership is not part of the leadership culture at ABA. ABA leaders don’t see membership as a fiduciary responsibility of theirs. How do we achieve the change and how do we create incentives for this? Per Bill Robinson, we need to make it culturally expected that active leaders in ABA must have their members join. It is a matter of driving a cultural change in the ABA that all ABA leaders are responsible to bring in members. Then we offer to help them to do it and provide talking points, agree on officers and leaders who will help go in and do the pitch.

Define the elevator speech for them Membership Department will define follow-up protocol so after all speeches

a specific follow-up is done Develop a “report card” of progress by leaders in recruiting members. List those who are actively recruiting their firms and how their success is

going Membership will be down about 1.8% this year but that is better than projected which was 2.3%. Considered the economic times and the legal market, this is a positive result. B. How to create incentives for ABA leaders to collaborate on full membership

campaign

Consider developing a menu of incentives for members to garner members. SCOM should be the arbiter of the best incentives but ABA has many possibilities, one of which can be reimbursements in various forms from travel to annual meeting to registration fees, etc. Other associations have had success using incentives.

C. How to use every ABA leadership resource this year to maximize acquisition

of large law firms

Execute on current list of large law firm prospects developed and refined with SCOM- This takes multi visits and it must be done by ABA volunteers and this is very time intensive on the volunteers level. Any large account sales take considerably longer than one or two visits.

Protocol should be done by Membership staff as sales people not SPAC - ABA needs a marketing and sales protocol written by a marketing professional

In each case, there must have volunteer and sales partner – not just volunteer visitor alone

Membership Department will have follow-up responsibility.

D. How to revamp and enhance the President’s Council The concept of a President’s Council is in place but not an actual list.

Situated in ABA President’s office Dedicate staff person for the Council Consider a committee in charge of it – William Hubbard chairs the Committee Define role of President’s Council for next year. Who should be on it?

June 7, 2011 To: Section, Division and Forum Officers From: Robert A. Zupkus Subj: 2011 Section Officers Conference Meritorious Service Award Competition Please join me in thanking the SOC Award Committee for selecting this year’s winner of the 2011 SOC Meritorious Service Award competition! Under the able leadership of the Committee’s Chair, Micah Buchdahl, the SOC Award Committee, which includes Russell Frisby, Adrian Bastianelli, Susan Talley and Rudolph Ramelli, has selected three finalist candidates and a winner for this year’s Meritorious Service Award competition. The annual SOC Meritorious Service Award is given to the Section, Division or Forum Committee that has sponsored a program, project or initiative in the past year that is of extraordinary benefit to the profession, the public and/or the Association. Since the Sections, Divisions and Forums abound in good works, ground-breaking projects, and cutting-edge programming, this recognition is only fitting. The three projects selected as finalists are: Criminal Justice: The Racial Justice Improvement Project/Building Community Trust Initiative Real Property, Trust and Community Outreach Program Estate Law: Young Lawyers Division: Serving Our Seniors The winner of the award will be announced at the SOC Business Meeting on Friday, August 5, at 5:00 p.m. during the 2011 ABA Annual Meeting in Toronto. The meeting will be held at the Fairmont Royal York, Ontario, Convention Floor, from 4:00 p.m. – 5:30 p.m. ABA President Stephen N. Zack has been asked to make the presentation. Congratulations to all of the Sections, Divisions and Forums for continuing to offer stellar programs and projects that service the needs of ABA members. Cc: Section, Division and Forum Directors

ROBERT A. ZUPKUS CHAIR

Zupkus & Angell PC McCourt Mansion 555 E. 8th Avenue

Denver, CO 80203-3715 (303) 894-8948

FAX: (303) 894-0104 [email protected]

Jennifer “Ginger” Busby

Chair-Elect & Editor, SOC e-News

SOC

EXECUTIVE COMMITTEE:

Deborah Enix-Ross Immediate Past Chair

Salli A. Swartz

Representing Chairs

Linda J. Rusch Representing Chairs-Elect

Hon. William C. Carpenter, Jr.

Representing Vice-Chairs

Michael Downey Representing Secretaries

William L. Penny

Representing Budget Officers

Gregory L. Pemberton Representing Delegates

Robert L. Rothman

SOC Representative to the Board of Governors

Program, Evaluation and Planning Committee

Gary A. Munneke

SOC Representative to the Board of Governors

Operations and Communications Committee

David K.Y. Tang

SOC Liaison to the Board of Governors Strategic

Planning Committee

TBD Forums Representative

Lee A. DeHihns

Chair SOC Operations/Policy

Committee

Daniel Warren Van Horn Chair

SOC Membership Committee

TBD Chair

SOC Sponsorships Committee

Lametrea M. Gray SOC Director

312/988-5633 [email protected]

Kelley M. James-Gill

Division Assistant 312/988-5645

[email protected]

M E M O R A N D U M

To: Robert A. Zupkus Chair, Section Officers Conference Hon. Barbara Kerr Howe Chair, Center for Professional Responsibility Coordinating Council From: Wayne J. Positan Chair, CPR/SOC Joint Committee on Ethics and Professionalism Date: June 30, 2011 Re: Report of the Joint Committee’s Activities: February 2011 - August 2011 On Saturday, February 12, 2011 the CPR/SOC Joint Committee on Ethics and Professionalism (“the Joint Committee”) conducted a business meeting during the ABA Midyear Meeting in Atlanta. The twenty-two persons in attendance represented ten ABA Sections/Divisions (Sections of Administrative Law and Regulatory Practice, Legal Education and Admissions to the Bar, Intellectual Property Law, Law Practice Management, International Law, Labor and Employment, Real Property, Estate and Trust Law; Young Lawyers, Senior Lawyers and Judicial Divisions); an affiliated legal organization (National Organization of Bar Counsel) and five entities in the Center for Professional Responsibility (“the Center”)(Coordinating Council and the Standing Committees on Client Protection, Professionalism, Specialization and Ethics). The Joint Committee will meet again during the 2011 ABA Annual Meeting in Toronto. The Joint Committee continues to serve as an excellent network for the exchange of information about ongoing projects related to professionalism and ethics. At the business meeting, members discussed opportunities to co-sponsor CLE programs or publications on professional responsibility. The Joint Committee also received reports on Resolutions pending before the ABA House of Delegates at the 2011 Midyear Meeting that impacted professional responsibility law. Additionally, Ellyn Rosen, Counsel to the ABA Commission on Ethics 20/20, provided an update on the Commission’s draft initial proposals related to outsourcing, confidentiality and technology, temporary practice by foreign lawyers, pro hac vice admission, in-house counsel registration, alternative business structures, and the multijurisdictional practice of law. More information can be found at: http://www.americanbar.org/groups/professional_responsibility/aba_commission_on_ethics_20_20.html Since the 2011 ABA Midyear Meeting, the Center has co-sponsored ethics related in-person or live audio webcast CLE programs with eleven different Sections and Divisions. The staff of the Center continues to review ethics-related publications from ABA entities to ensure that accurate rules and policies are cited or discussed. In June 2011, the Center sponsored the 37th National Conference on Professional Responsibility and the 27th National Forum on Client Protection. The Conference and the Forum are the premier educational and informational programs for professionals working in the area of professional responsibility law and client protection. At a luncheon during the Conference, ABA President-elect William T. (Bill) Robinson III presented the 2011 Michael Franck Professional Responsibility Award to Professor Stephen Gillers of the New York University School of Law. Professor Gillers was a member of the ABA Commission on Multijurisdictional Practice and is currently a member of the Commission on Ethics 20/20. Resources on the Center’s Web site continue to be updated daily. ABA Members can receive Ethics Opinions issued during the past year free of charge online, and Center members have access to the entire ethics opinion library free of charge.

MEMORANDUM

TO: SOC Chair Robert Zupkus FROM: Lee A. DeHihns, III, Chair, SOC Operations/Policy Committee DATE: July 11, 2011 RE: SOC Subcommittee on Rotation Charts As represented in the attached documents, the SOC Subcommittee on Rotation Charts has completed its work to establish the composition of the Section and Division members who serve on the ABA Nominating Committee and the ABA Board of Governors pursuant to Sections 1.04 and 1.05 of the SOC Rules of Procedure (the SOC Rules), as amended on July 31, 2009. Service on these two ABA bodies is represented in documents called Rotation Charts. The Charts are displayed in Tiers I – VII under Section 1.04 for the Nominating Committee and Tiers A – F under Section 1.05 for the Board of Governors. The attached documents were submitted to all SDF Chairs in April 2011 with approval of the Subcommittee. Based on feedback, the Rotation Charts are now revised and complete and ready for adoption at the SOC Business Meeting at the 2011 Annual Meeting in Toronto. Therefore, it is the recommendation of the Subcommittee that Section and Division chairs at this meeting approve the recommended methodology of the Committee (as outlined in numbers 2-5 in the memo dated February 7, 2011) regarding development of the new charts, and direct that new charts reflecting representation on the Board of Governors and the Nominating Committee be developed based on August 31, 2011 or September 30, 2011 lawyer membership figures (whichever is more favorable overall), with an implementation date of August 2015. The charts should be developed and circulated to Section and Division leadership no later than November 2011 and appended to the SOC's Rules of Procedure as of the business meeting of the Conference in February 2012. Cc: SOC Rotation Chart Subcommittee

Alston & Bird

MEMORANDUM

TO: Members of the Sub-Committee on Rotation Charts FROM: Lee A. DeHihns, III DATE: February 7, 2011 RE: Committee Update and Report on August 7, 2010 – Meeting in San Francisco

This memorandum summarizes the meeting of the members of the Sub-Committee on Rotation Charts for SOC entity service on the Board of Governors (BOG) and House of Delegates Nominating Committee (NC) held during the Annual Meeting on August 7, 2010. It also provides an update on developments since the Annual Meeting.

1. We ratified prior discussions that in advance of the 10-year governance review, we do not recommend that the SOC seek expanded membership on the Board of Governors or the Nominating Committee beyond the current level to provide for more frequent Section and Division service on these bodies.

2. The tier structure used in the 2009 SOC Rules of Procedure for BOG and NC service will be used for the preparation of the future Rotation Charts.

3. Any realignment on either of the current draft charts should only reflect movement if a Section or Division were to change tiers from the 4/5-tier structure for the BOG and from the 3/4 tier structure for the NC, based again on the August 31, 2009, membership figures. For example, the data supports movement of a Section or Division from a 3 tier to a 4 tier level.

4. It was agreed that we would not move forward with proposing revised charts for SOC adoption until we have an opportunity to evaluate any effects of membership data by comparing membership figures for August 31, 2010 with September 30, 2010. Revised charts were prepared in November 2010 using the August 31, 2010 membership data since these membership numbers were more favorable. They are attached.

5. We will also address inequities that put Sections and Divisions well outside the respective 9-12 year or 12-15 year rotations when the new membership data is evaluated. There do not appear to be any inequities in the revised charts, but we can discuss such if committee members see any.

LAD/ga

ADMIN/20664029v2

Section Officers Conference Rotational Order on ABA Nominating Committee Three, Three, Three, Four, Four, Four, Four Tier Division (7 seats)*

(Based on 8.31.10 Lawyer Membership Figures) April 2011

At the conclusion of the Annual Meeting in: 2011 2012 2013 2014 2015 2016 2017 2018 2019 Tier I (9 yrs.)~ BL Litigation RPTE Tier II (9 yrs.)~ TIPS Tax Labor Tier III (9yrs.)~ LPM IPL ^GPSoloTier IV (12 yrs.)~ IL #EER Family Tier V (12 yrs.)~ Legal Ed Antitrust CJS Tier VI (12 yrs.)~ Ad Law State Science Tier VII (12 yrs.)~ PC Pub. Util. IRR 2020 2021 2022 2023 2024 2025 2026 2027 2028 Tier I (9 yrs.)~ BL Litigation RPTE Tier II (9 yrs.)~ TIPS Tax Labor Tier III (9 yrs.)~ ^IL IPL ^GPSoloTier IV (12 yrs.)~ SLD #LPM #EER Tier V (12 yrs.)~ Health LE Antitrust Tier VI (12 yrs.)~ DR Ad Law State Tier VII (12 yrs.)~ GPSLD Pub. Cont. Pub. Util. ~Denotes the general pattern for rotation within the Tier *Denotes that there are 3 tiers with 3 Sections/Divisions in the rotation and 4 tiers with 4 Sections/Divisions in the rotation. (Note: In addition to these 7 seats, the Judicial Division and Young Lawyers Division each have one permanent seat, for a total of 9 Section and Division seats. These seats are not part of the rotation). ^Moved from Four to Three Tier Division #Moved from Three to Four Tier Division

Section Officers Conference Rotational Order on ABA Board of Governors Four, Four, Four, Four, Four, Five Tier Division (6 seats)*

(Based on 8.31.10 Lawyer Membership Figures) April 2011

At the conclusion of the Annual Meeting in: 2011 2012 2013 2014 2015 2016 2017 2018 2019 Tier A (12 yrs.)~ BL Litigation RP Tier B (12 yrs.)~ Tax Labor LPM Tier C (12 yrs.)~ SLD IPL IL Tier D (12 yrs.)~ Family Antitrust Health Tier E (12 yrs.)~ DR ^GPSLD Ad Law Tier F (15 yrs.)~ Pub. Util. #State IRR 2020 2021 2022 2023 2024 2025 2026 2027 2028 Tier A (12 yrs.)~ TIPS BL Litigation Tier B (12 yrs.)~ EER Tax Labor Tier C (12 yrs.)~ GP ^Science IPL Tier D (12 yrs.)~ CJS Family Antitrust Tier E (12 yrs.)~ LE DR ^GPSLD Tier F (15 yrs.)~ #SLD Publ. Cont. Pub. Util. ~Denotes the general pattern for rotation within the Tier *Denotes that there are 5 tiers with four Sections/Divisions in the rotation and 1 tier with 5 Sections/Divisions in the rotation. (Note: In addition to these 6 seats, the Judicial Division and the Law Student Division each have one permanent seat, and the Young Lawyers Division has two permanent seats, for a total of 10 Section and Division seats. These seats are not part of the rotation). ^Moved from Five Tier to Four Tier Division #Moved from Four Tier to Five Tier Division

M E M O R A N D U M TO: Bob Zupkus From: Bob Stein, Chair, SOC Annual Meeting Task Force Date: June 27, 2011 Re: Report of the 2011 Annual Meeting Task Force In January, I reported to you on the selections made by the SOC Annual Meeting Task Force for the 2011 Annual Meeting. As in previous years the Task Force decided to consider adding one additional CLE presidential showcase program to the showcase lineup in an effort to offer a “late breaking” development, a “hot topic” or an “emerging hot” issue. This is in recognition of the fact that last minute issues often develop as we get closer to the Annual Meeting; and the Task Force seeks, not only to continue to offer attractive CLE programming to our members and prospective members, but to find new ways of enhancing programming at the CLE Center. The Task Force established the following criteria for the “late-breaking” program slot:

Appeal to a broad (membership) base Joint Sponsorship from at least three entities High Profile speakers (with a strong likelihood of securing them) Timeliness Especially attractive to local audiences Newsworthy No re-submission (unless the subject becomes “hot” or compelling)

In addition, the Task Force encourages the inclusion of racial/culturally diverse persons, women and speakers with disabilities, and those of the Lesbian, Gay, Bisexual and Transgender (LGBT) community on the panels. We met by telephone on May 24 and selected a program that we believed fit our criteria. It is:

“The Battle Over Birthright Citizenship: History, International Perspectives, and the Path Ahead,” sponsored by the ABA Commission on Immigration.

This program is scheduled for Thursday, August 4, 2011, 10:30 AM-12:00 Noon. On behalf of the Task Force, we thank all of the Sections, Divisions, Forums and Committees for their submissions. As Chair I also thank the Task Force members for their hard work both during the selection process and in serving as liaisons to the selected programs to make sure that the various deadlines were met, and the ABA staff with whom we worked, led by Lametrea Gray and André Burke for their efforts in making the process work well.

M E M O R A N D U M To: Bob Zupkus From: Deborah Enix-Ross, Liaison, ABA Diversity Center Date: July 11, 2011 Subj: Report of the SOC Diversity Committee (February 2011-August 2011) The SOC Diversity Committee continued its series of Diversity Committee Leaders conference calls. These regularly scheduled calls for leaders of ABA Diversity Committees provide a forum for sharing information, discussing common interests, and strategizing on best practices for addressing shared concerns. Topics for the calls included: Discussion of the ABA Diversity Plan Implementation Ideas. The Legal Expert Author Pool Project. ABA Commission on Mental and Physical Disability Law -- In-House Expertise & Resource. Diversity Programs at the ABA Annual Meeting. Discussion of a process to nominate diverse candidates for ABA Presidential Appointments:

Sections/Divisions/Forums that want to put forth names of their diverse members for consideration for 2012-13 Presidential appointments.

Presentations on the release of the annual Goal III Report by the Four Goal III Commissions. Below are links to the Goal III Reports for each Commission: Commission on Racial & Ethnic Diversity in the Profession: http://www.americanbar.org/groups/diversity/racial_ethnic_diversity/publications.html Aracely Muñoz Petrich, Esq. (312) 988-5638; [email protected] ----------------------- Sexual Orientation and Gender Identity (SOGI) Commission: http://www.americanbar.org/content/dam/aba/migrated/2011_build/sexual_orientation/sogi_commission_goal_iii_report_2010_2011.authcheckdam.pdf Robin L. Rone 312.988.5137; [email protected] ---------------------- Commission on Women in the Profession: http://www.americanbar.org/groups/women Barbara Leff 312-988-5692; [email protected] ----------------------- ABA Commission on Mental and Physical Disability Law http://www.americanbar.org/content/dam/aba/migrated/2011_build/mental_physical_disability/2011_CMPDL_goal_3_report.pdf

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In addition, the SOC Diversity Committee worked closely with the ABA Center for Racial and Ethnic Diversity. The Diversity Center is the administrative oversight body for ABA activities relating to racial and ethnic diversity in the educational pipeline, legal profession and social justice system. The Center is comprised of three distinct entities: Commission on Racial and Ethnic Diversity in the Profession (Commission) Coalition on Racial and Ethnic Justice (COREJ) Council for Racial and Ethnic Diversity in the Educational Pipeline (Pipeline Council) Recent activities and accomplishments of the Diversity Center and its three entities include:

Center coordinated development of the first association-wide ABA Diversity Plan, which was approved by the Board of Governors in June.

Center presented to National Native American Bar Association Board on diversity activities throughout the ABA diversity and explored potential collaborations. At the NNABA Annual Convention, hosted the ABA joint exhibit that included materials from 30 ABA groups.

Center provided counsel and facilitated session for Grand Rapids Bar Association on launch of its Managing Partners Diversity Collaborative Initiative.

Center, in collaboration with Law Practice Management Section and Office of the President, developed ABA Diversity Training pilot project to train law firms on new mentoring model and held introductory program at Annual Meeting.

Commission published the 2011 Goal III Report, which highlights racial and ethnic diversity data in ABA leadership; posted the Report to the website.

Commission held the Minority Counsel Program (MCP) Spring meeting on May 18-19 in Miami. This MCP expanded its programming to address the development of attorneys in corporate legal departments, in law firms, government and the judiciary.

Commission conducted Annual Meeting Program “Facilitating Diversity: Similar Countries, Different Experiences: How Historical Context Informs How We Address Diversity Today in the U.S. & Canada.

COREJ conducted its program “Foreclosures & Mortgage Crisis in Communities of Color” at the National Bar Association 2011 Annual Meeting in Baltimore, MD.

COREJ collaborated with local organizations to host United for Haiti program in May in Little Haiti (Miami), FL.

Pipeline Council hosted the 11th Annual Judicial Clerkship Program, which is co-sponsored with the Judicial Division. Participation included 101 students from 24 schools.

Pipeline Council submitted letter and comments to the ABA Legal Education Section’s Standards Review Committee (SRC) in support of the ABA Commission on Mental and Physical Disability Law’s comments to the SRC on access and accommodations for law students with disabilities. Submitted comments to the SRC on Standards 211 and 212, which pertain to diversity in law schools, and submitted comments related to Standard 301-6 (related to bar passage).

Pipeline Council coordinated selection of 20 incoming law students to receive the 2011 ABA Legal Opportunity Scholarships, which awards $15,000 total to each of the recipients.

As the new bar year approaches, we look forward to increased participation by the Sections, Divisions and Forums in the bi-monthly conference calls as we work together to promote and enhance all areas of diversity within the Association. If your entity has not appointed a representative, please do so by sending your representative’s contact information to Cie Armstead at [email protected].

AGENDA ABA SECTION OFFICERS CONFERENCE

BUSINESS MEETING Fairmont Royal York

Ontario, Convention Floor Toronto Ontario, Canada Friday, August 5, 2011

4:15 – 5:30 PM

I. SECTION, DIVISION AND FORUM ISSUES 1. Approval of the Minutes from the February 2011 SOC Business Meeting

2. Leadership Activities Update/Board of Governors (BOG) Reports (10 minutes) a. Gary A. Munneke, SOC Representative, BOG Operations Committee 3. Reports/Discussion Items (25 minutes) a. Report on the 2011 SOC Fall Leadership Meeting – Salli Swartz, Chair

Representative to the SOC Executive Committee b. New Board/House Section and Division Rotation Charts (Vote by Section and

Division Chairs) – Lee DeHihns, Chair, SOC Operations/Policy Committee c. Update on the work of the ABA Annual Meeting Task Force – Deborah Enix-

Ross, Chair, ABA Annual Meeting Task Force d. ABA Financial/Budget Update – Alice Richmond, ABA Treasurer II. GENERAL ABA ISSUES 4. State of the ABA (10 minutes)

Jack L. Rives, ABA Executive Director 5. Publishing Growth Initiative Update (4 minutes) Timothy Bertschy, Chair, Standing Committee on Publishing Oversight 6. Increasing Section Diversity Efforts (3 minutes) Robert Carlson, Member, Commission on Racial and Ethnic Diversity 7. 2012 ABA Day in Washington (3 minutes) William Hubbard, Chair, ABA Day in Washington III. PRESENTATIONS 8. Special Order at 5:00 PM (25 minutes):

Presentation of the SOC Meritorious Service Award – Brief remarks from Michael Buchdahl, Award Committee Chair; presentation of the award to the winner by ABA President Stephen N. Zack

Report from ABA President Stephen N. Zack Report from ABA President-Elect Wm. Robinson III Report from ABA President-Elect Nominee Laurel G. Bellows

Report from Linda A. Klein, Chair, ABA House of Delegates

9. Passing of the Gavel (1 minute)

10. Presentation of Outgoing Chair’s Gift (2 minutes) Salli Swartz, Chair Representative to the SOC Executive Committee, will make the presentation to Robert A. Zupkus (in absentia). IV. NEW BUSINESS V. SOC INFORMATIONAL REPORTS/MATERIALS

Available as part of the electronic agenda book posted to the SOC’s Website at http://new.abanet.org/sites/portal/SOC_Leadership/default.aspx: SOC Business Meeting Minutes – February 2011 Board of Governors Strategic Action Planning Committee – David K.Y. Tang,

SOC Representative Award Committee – Micah Buchdahl, Chair CPR/SOC Joint Committee on Professionalism and Ethics – Wayne Positan, Chair Operations/Policy Committee – Lee DeHihns, Chair Annual Meeting Task Force – Robert E. Stein, Chair ABA Diversity Center – Deborah Enix-Ross, SOC Liaison

VI. ADMINISTRATIVE MATERIALS

Also available at http://new.abanet.org/sites/portal/SOC_Leadership/default.aspx): SOC “Frequently Asked Questions” for Section Leaders SOC Calendar of Events 2010-11 Committees and Liaisons SOC Rules of Procedure SOC e-News – Current and previous issues are posted to the SOC’s website at

http://new.abanet.org/sites/portal/SOC_Leadership/Pages/SOCe-News.aspx. VII. NEXT MEETING

The next SOC business meeting will be held: Thursday, September 15, 2011 2011 SOC Fall Leadership Meeting Westin River North Hotel/Chicago

AMERICAN BAR ASSOCIATION

SECTION OF INTELLECTUAL PROPERTY LAW

REPORT TO THE HOUSE OF DELEGATES

RECOMMENDATION

RESOLVED, that the American Bar Association supports the right of a patent applicant who has brought a civil action in a United States district court to obtain a patent pursuant to 35 U.S.C. 145 to introduce new evidence, including evidence that could have been presented to the U.S. Patent and Trademark Office (USPTO), subject only to limitations in the Federal Rules of Evidence and the Federal Rules of Civil Procedure;

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FURTHER RESOLVED, that the American Bar Association supports the principle that, in a § 145 action in which new evidence has been admitted, the district court make de novo fact findings to which the new evidence relates and applies the substantial evidence standard of the Administrative Procedure Act to USPTO fact findings for which no new evidence was admitted.

REPORT On June 27, the U.S. Supreme Court granted certiorari in Kappos v. Hyatt (No. 10-1219), a case in which David J. Kappos, Under Secretary of Commerce for Intellectual Property and Director, U.S. Patent and Trademark Office (“USPTO”), sought review of the decision of the U.S. Court of Appeals for the Federal Circuit ( “Federal Circuit”) in Hyatt v. Kappos, 625 F.3d 1320 (Fed. Cir. 2010). The case before the Supreme Court presents significant issues regarding the ability of a patent applicant to obtain judicial relief after being denied a patent by the USPTO. Congress has established a dual track whereby such an applicant may seek judicial relief. One track is to file an appeal to the Federal Circuit. The other track is to bring a civil action against the USPTO Director in the U.S. District Court for the District of Columbia. Congress has made clear in the legislation authorizing these actions that an applicant dissatisfied with an adverse decision of the USPTO Board of Patent Appeals and Interferences (“BPAI”) can choose one and only one of these two alternative routes of judicial review. Section 141 of title 35, United States Code (titled “Appeal to the Court of Appeals for the Federal Circuit”), authorizes a direct appeal to the Federal Circuit and provides, inter alia, as follows:

“An applicant dissatisfied with the decision in an appeal to the Board of Patent Appeals and Interferences under section 134 of this title may appeal the decision to the United States Court of Appeals for the Federal Circuit. By filing such an appeal the applicant waives his or her right to proceed under section 145 of this title.”

In nearly identical introductory language, section 145 (titled “Civil action to obtain patent”) provides, inter alia, as follows:

“An applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a) of this title may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty days, as the Director appoints.

As provided in section 144, the Federal Circuit “shall review the decision from which an appeal is taken on the record before the” USPTO. Under section 145, however, district court review has no corresponding restriction as to the evidence that may be introduced, but the district court will determine whether the applicant is entitled to receive a patent “as the facts in the case may appear.”

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More specifically, Kappos v. Hyatt is a case in which Hyatt, an unsuccessful applicant for a patent, chose to challenge the denial of his patent by exercising his right under section 145 to file a civil action against the USPTO Director. The case presents important questions concerning the ability of an unsuccessful patent application to obtain effective judicial review as authorized by Congress. For these reasons, the Section of Intellectual Property Law requests that the House of Delegates adopt policy that would support an ABA brief amicus curiae in support of neither party. Patent applicant Gilbert P. Hyatt filed a patent application that, after amendments, included 117 claims. The patent examiner rejected all claims, some on multiple grounds. Hyatt appealed to the BPAI, which overturned some of the rejections and upheld the examiner’s rejection of 79 claims for lack of an adequate written description under 35 U.S.C. § 112, ¶1. Hyatt then filed a civil action under section 145 and presented a declaration that contained evidence that allegedly responded to and rebutted the grounds for rejecting his claims. The Director did not take the position in the District Court that a plaintiff in a section 145 action has no right to submit new evidence, and the existence of such a right is not in issue in the case pending in the Supreme Court. The issue on admissibility of new evidence goes to one alleged circumstance under which the new evidence was refused. In the District Court, Director Kappos urged the exclusion of the new evidence on grounds that Hyatt failed, without reasonable excuse, to submit the evidence during prosecution of the application in the USPTO. The District Court judge agreed, excluded Hyatt’s offered new evidence, and granted summary judgment in favor of Director Kappos. On appeal of the District Court’s decision to the Federal Circuit, a panel of the court affirmed the decision to exclude the new evidence. The panel also ruled that in a section 145 civil action, the USPTO agency record must be reviewed under the standard of review (substantial evidence) called for by the Administrative Procedure Act (“APA”) when a court reviews an agency action, except that, for issues as to which new evidence is introduced, de novo review is appropriate. On rehearing en banc, the Federal Circuit reversed the District Court’s grant of summary judgment, holding that in a section 145 proceeding, the introduction of new evidence is not contingent on whether the applicant could reasonably have presented the evidence to the USPTO but limited only by the rules applicable to all civil actions, i.e., the Federal Rules of Evidence and the Federal Rules of Civil Procedure. The court also ruled en banc (a) that, generally, the agency’s fact finding should be reviewed under the more deferential APA court/agency standard but (b) that, if new evidence is introduced, the factual issues to which the new evidence relates must be reviewed under a de novo standard. The government’s petition for certiorari states the Questions Presented to be:

1. Whether the plaintiff in a Section 145 action may introduce new evidence that could have been presented to the agency in the first instance.

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2. Whether, when new evidence is introduced under Section 145, the district court may

decide de novo the factual questions to which the evidence pertains, without giving deference to the prior decision of the PTO.

We believe that the questions presented should be answered with a unified and balanced approach. In keeping with the purpose, language, and history of section 145, the admissibility of new evidence beyond that in the record of the agency proceedings should be considered under the rules generally applicable to civil proceedings. The agency’s fact findings should be reviewed with the deference called for in the Administrative Procedure Act, except to the extent that new evidence relates to factual determinations made by the USPTO, in which event those factual determinations should be reviewed under a de novo standard. Section 145 Civil Action to Obtain Patent. Proper interpretation and application of a statute begins with its language:

145 Civil action to obtain patent. An applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a) of this title may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty days, as the Director appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Board of Patent Appeals and Interferences, as the facts in the case may appear and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid by the applicant.

Although the language of the statute is not directly dispositive of the issues of the admission of evidence and the review standards to be applied, the language does point in the right direction. Providing a right to an unsuccessful patent applicant to “have remedy by civil action against the Director . . . in the United States District Court for the District of Columbia . . .” indicates that something other than an appeal is authorized, particularly in view of the provisions for direct appeal in the neighboring provisions of section 141 of the Patent Act. Moreover, as noted earlier, section 145 is not restricted to “the record before the” USPTO, as is a direct appeal to the Federal Circuit, but provides for district court review “as the facts in the case may appear.” The origins of section 145 go back 175 years, to the Act of July 4, 1836, ch. 357, 5 Stat. 117 which provided that, if the Patent Office Board rejected a patent application, the applicant “may have remedy by bill in equity.” Id., § 16, 5 Stat. 123-24. A bill in equity was a mechanism that commenced an original suit in a court of equity. The 1836 Act limited an applicant’s right to a bill in equity to challenge denial of a patent to denials based on priority of

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invention, i.e. interference grounds. Courts with jurisdiction over an applicant’s bill in equity could “adjudge that such applicant is entitled . . . to have and receive a patent for his invention . . . as the fact of priority of right or invention shall in any such case be made to appear.” Id., § 16, 5 Stat. 124. In 1839, an unsuccessful applicant’s right to file a bill in equity was extended to all grounds for denial of a patent. Act of March 3, 1839, ch.88, § 10, 5 Stat. 353. The Act of July 8, 1870, ch. 230, 16 Stat. 198 used similar language regarding an applicant’s bill in equity:

[W] henever a patent on application is refused . . . , the applicant may have remedy by bill in equity; and the court . . . may adjudge that such applicant is entitled, according to law, to receive a patent for his invention . . . as the facts in the case may appear. Id., at § 52, 16 Stat. 205.

The bill in equity was available to a patent applicant only after exhausting appeals first to the Commissioner of Patents and then to the Supreme Court of the District of Columbia. Congress later codified this section as Revised Statute 4915 (“R.S. 4915”) of the Revised Statutes of 1870:

Whenever a patent on application is refused either by the Commissioner of Patents or by the Supreme Court of the District of Columbia upon appeal from the commissioner, the applicant may have remedy by bill in equity, and the court having cognizance thereof, on notice to adverse parties and other due proceedings had, may adjudge that such applicant is entitled, according to law, to receive a patent for his invention, as specified in his claim, or for any part thereof, as the facts in the case may appear. And such adjudication, if it be in favor of the right of the applicant, shall authorize the commissioner to issue such patent on the applicant filing in the Patent Office a copy of the adjudication, and otherwise complying with the requirements of law. In all cases where there is no opposing party, a copy of the bill shall be served on the Commissioner, and all the expenses of the proceeding shall be paid by the applicant, whether the final decision is in his favor or not.

Legislative History of the 1927 Act

The continued validity of R.S. 4915 was a particularly disputed issue when Congress modified the patent application process in the Act of March 2, 1927, ch. 273, 44 Stat. 1335. Members of Congress recognized that R.S. 4915 allowed an applicant to introduce new evidence in the district court. See Hyatt, 625 F.3d at 1328-30. Those in favor of continuing R.S. 4915 claimed that it granted the applicant the right to have the case “start de novo after the decision of the board” and “build up a new record” in the district court. That is, the applicant could get before the court “everything that courts in the country have before them in infringement cases.” Opponents cautioned that R.S. 4915 permitted applicants to “bring in evidence that they could have brought before [the Patent Office] but did not.” Opponents wanted R.S. 4915 cut back—to force the applicant to introduce “all the testimony pertinent to his case” in the Patent Office proceedings. Neither of these extremes prevailed: R.S. 4915 was not amended to call for ignoring the administrative record in favor of totally de novo proceedings, nor was it amended to

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exclude any new evidence in the district court proceedings. The major change was to give patent applicants an option to choose an appeal or a remedy by bill in equity. Despite recommendations that ranged from total repeal of remedy by a bill in equity to total de novo review in such proceedings, in the revision of provisions in R.S. 4915, no changes were made regarding admission of evidence or standard of review. The Patent Act of 1952 In the 1952 Patent Act, Congress bifurcated R.S. 4915 into sections 145 (Civil action to obtain patent) and 146 (Civil action in case of interference) of title 35 of the U.S. Code. Both sections provided a “remedy by civil action,” and section 146 provided that “the record in the Patent and Trademark Office shall be admitted . . . without prejudice to the right of the parties to take further testimony.” Id. §§ 145-46. The Federal Circuit has aptly characterized the two statutes as “parallel provisions” to be treated similarly. Winner Int’l Royalty Corp. v. Wang, 202 F.3d 1340, 1345 (Fed. Cir. 2000). Early Precedent In the decision below, the Federal Circuit recognized Butterworth v. Hoe, 112 U.S. 50 (1884), as speaking to the admissibility of new evidence in R.S. 4915 proceedings. The Butterworth court recognized that such a proceeding is “not a technical appeal from the patent-office, [which is] confined to the case as made in the record of that office, but is prepared and heard upon all competent evidence adduced and upon the whole merits.” Id. at 61 (emphasis added). The Butterworth court also identified three cases as exemplifying correct practice in R.S. 4915 cases. Butler v. Shaw, 21 F. 321 (C.C. D. Mass. 1884); Whipple v. Miner, 15 F. 117 (C.C.D. Mass. 1883); In re Squire, 22 F. Cas. 1015 (C.C.E.D. Mo. 1877) (No. 13,269). In each of these cases, the court explicitly recognized that a R.S. 4915 case was to be heard upon all competent evidence, regardless of whether the evidence was or could have been provided to the Patent Office. The Supreme Court’s decision ten years later in Morgan v. Daniels, 153 U.S. 120 (1894), a case that is frequently cited by both sides of the argument on proper standard of judicial review of USPTO agency action, tends to support the review standards that we believe to be appropriate. Morgan involved a factual dispute over which of two claimants was the first inventor. Deciding the case without additional evidence, the Circuit Court for the District of Massachusetts reversed the decision of the Patent Office. The Supreme Court reversed that decision, reasoning that the stricter court/court standard applied below was erroneous, and that a more deferential court/agency standard should apply. The case did not involve a mixture of new evidence with old agency findings, and thus presented no need for a partial de novo court review. Accord with the Supreme Court’s APA Decision in Zurko Under proper application of section 145, a plaintiff is able to introduce new evidence to the extent permitted by the Federal Rules of Evidence and the Federal Rules of Civil Procedure. The agency record is reviewed under the court/agency deferential standards, with de novo review of

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only those USPTO factual findings as to which new evidence has been introduced. This approach is also consistent with the decision and reasoning of the Supreme Court in Dickinson v. Zurko, 527 U.S. 150 (1999). There, the Court reversed a Federal Circuit decision that had found the more deferential APA standard of review of final agency actions inapplicable in direct appeals to the Federal Circuit. Supporters of the more rigorous standard of review applied by the Federal Circuit had strongly argued that the APA standard would create an anomaly because a Federal Circuit review of a PTO action by direct appeal would be under the more deferential court/agency standard, whereas the same action would be reviewed in the Federal Circuit under the stricter court/court standard if the case arrived through the intermediate route of a section 145 proceeding. The Federal Circuit was concerned that applicants might choose the section 145 route in order to obtain stricter judicial review of PTO fact-finding. The Court noted that new evidence can be offered in a section 145 proceedings, and conceded that “an anomaly might exist insofar as the district judge does no more than review PTO factfinding, . . .” However, the Court refused to exempt the PTO from the government wide system of review of agency action called for by the APA in order to avoid this possible anomaly. Significantly, the Court noted that “nothing in this opinion prevents the Federal Circuit from adjusting review standards where necessary.” A section 145 action in which new evidence is introduced that relates to factual findings in the agency record appears to present circumstances in which such “adjusting review standards” is called for. If so, the proper adjustment may be found in the disposition by the Federal Circuit in the en banc case below: apply the APA standards except where new evidence calls for a de novo review of the effected agency fact-finding(s). Arguments that in section 145 proceedings no new evidence should be permitted, or that it should be permitted only on a very restrictive basis, ignore one basic fact: Congress has provided and maintained for 175 years a separate “remedy by civil action” for a patent applicant who has been unsuccessful after exhausting all administrative options. While the law calls for a section 145 process which is more robust than a mere paper review, so too do considerations of fairness and efficiency. Severe restrictions on the admissibility of new evidence and the weight of such evidence also present problems of fairness to the inventor and to the effectiveness of the patent system. The Period for Introducing Evidence in the USPTO is Limited

As a practical matter, applicants generally face a relatively narrow window for introducing evidence in the USPTO. After a final rejection (which, in most cases, follows immediately after a first rejection), entry of evidence in the USPTO is a matter of the USPTO’s discretion. Under UPSTO Rule 116(e), the applicant must make “a showing of good and sufficient reasons why the affidavit or other evidence is necessary and was not earlier presented.” 37 C.F.R. § 1.116(e) (2010). Thus, applicants have only a limited right or opportunity to introduce evidence when they are before the examiner.

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Moreover, it may not be immediately apparent early in the prosecution that one should prepare and introduce the evidence ultimately needed to support the applicant’s position, as the factual and legal positions of the examiner and the BPAI evolve over the course of the prosecution. Before a final rejection and often before the BPAI rules, the issue to which the proffered evidence applies may not be ripe, and the introduction of such evidence may be premature and likely not properly focused.

Costs of Section 145 Proceedings Section 145 dictates “All the expenses of the proceedings shall be paid by the applicant.” This cost bearing system—user pays, not loser pays—weighs against the argument that the conventional rules of evidence and review standards will invite protracted filings and dilatory litigation strategies by section 145 plaintiffs.

Continued Prosecution Before the Agency The government’s argument (Petition at 14-15) that applicants have a mechanism for introducing new evidence by way of a request for continued examination (“RCE”) or a continuation application does not acknowledge the loss of effective enforceable patent term that results from such additional prosecution. Until 1995, a patent remained effective for 17 years from the date of issue. An issued patent now generally expires 20 years from the earliest effective filing date of the underlying application. This change means that, except for delays caused by the USPTO, the longer an application remains in prosecution, the shorter the period available for effective enforcement of the issued patent. By contrast, a successful § 145 plaintiff is not penalized for the time spent pursuing the remedy that is available in the district court. The rules provide that “the term of an original patent shall be adjusted if the issuance of the patent was delayed due to review ... by a Federal court under 35 U.S.C. 141 or 145, if the patent was issued under a decision in the review reversing an adverse determination of patentability.” 37 C.F.R. § 1.702(e) (2010); see also M.P.E.P. § 2730. Thus, while an RCE or a continuation application might allow an applicant to introduce new evidence, the procedure could add considerable time to the prosecution and shorten the effective life of any patent that might issue. Unduly restrictive rules on the admissibility and the weight of new evidence in a section 145 suit would greatly diminish the value of the proceeding to an applicant whose application has been erroneously rejected by the USPTO, possibly forcing the applicant to a choice to extend or revive efforts in the USPTO instead of pursuing the remedy in district court that Congress has provided. Neither the law nor the equities involved support that result. Respectfully submitted, Marylee Jenkins, Chair Section of Intellectual Property Law August 2011

GENERAL INFORMATION FORM Submitting Entity: Section of Intellectual Property Law Submitted by: Marylee Jenkins, Section Chair 1. Summary of Resolution

The resolution calls for the Association to adopt policy relating to the rights of an applicant for a patent who has been denied a patent by the U.S. Patent Office and who has exercised the right provided by federal statute to bring a civil action in the U.S. District Court for the District of Columbia to obtain the patent. The resolution supports the right of such applicant to introduce new evidence in the district court subject only to limitations generally applicable in federal civil litigation. It also expresses ABA support for district court de novo fact-finding on issues concerning which new evidence has been introduced, and application of the substantial evidence standard of the Administrative Procedure Act for fact-finding for which no new evidence was admitted.

2. Approval by Submitting Entity The Section Council approved the resolution on July 18, 2011. 3. Has This or a Similar Recommendation Been Submitted to the House of Delegates or

Board of Governors Previously? No. 4. What Existing Association Policies are Relevant to This Recommendation and Would

They be Affected by its Adoption? None. 5. What Urgency Exists Which Requires Action at This Meeting of the House?

On June 27, the U.S. Supreme Court granted a writ of certiorari to review a decision of the U.S. Court of Appeals for the Federal Circuit in a case that addresses the issues that are the subject of this resolution. The resolution would support the filing of an ABA brief amicus curiae. The report cannot be considered by the House of Delegates at a time later than the 2011 Annual Meeting since the deadline for filing the amicus brief in the Supreme Court will be reached before the next meeting of the House of Delegates.

6. Status of Matter The status of the issue is discussed in the preceding paragraph.

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7. Cost to the Association (both direct and indirect costs). Adoption of the recommendations would not result in additional direct or indirect costs to

the Association. Disclosure of Interest There are no known conflicts of interest with regard to this recommendation. 9. Referrals This recommendation is being distributed to each of the Sections and Divisions and

Standing Committees of the Association. 10. Contact Person (prior to meeting) Donald R. Dunner Section Delegate to the House of Delegates Finnegan, Henderson, Farabow, Garrett & Dunner LLP 901 New York Avenue, N.W. Washington, DC 20001-4413 Ph: 202 408-4062 Fax: 202 408-4400 [email protected] cell: 202-251-1893 11. Contact Persons (who will present the report to the House) Donald R. Dunner (See item 10 above)

EXECUTIVE SUMMARY

1. Summary of the Resolution

The resolution calls for the Association to adopt policy relating to the right of a patent applicant to obtain judicial relief after being denied a patent by the U.S. Patent and Trademark Office.

2. Summary of the Issue that the Resolution Addresses

Federal law (35 U.S.C. 145) provide a right of an unsuccessful applicant for a patent to bring a civil action the U.S. District Court for the District of Columbia to obtain the patent. The U.S. Supreme Court has granted certiorari in a case (Kappos v. Hyatt, No. 10-1219) that will address two important issues in the application of the statute in question: 1. Whether the plaintiff in such an action may introduce evidence that could

have been introduced in the agency proceedings. 2. If new evidence is introduced, whether the court may decide de novo the

factual questions to which the evidence pertains, without giving deference to the prior decision of the USPTO.

3. Please Explain How the Proposed Policy Position will Address the Issue The policy would support receipt of new evidence beyond that in record of the agency proceedings under the rules generally applicable to civil proceedings. The agency record should be reviewed with the deference called for in the Administrative Procedure Act, except to the extent that new evidence relates to factual determinations made by the USPTO, in which event those factual determinations should be reviewed under a de novo standard.

4. Summary of Minority Views None known at this time.

11

AMERICAN BAR ASSOCIATIONMONEY MARKET REPORTAS OF JUNE 30, 2011

ENTITYNAME BALANCE

ADMINISTRATIVE LAW 351,741ANTITRUST LAW 1,704,754BUSINESS LAW 2,167,107CRIMINAL JUSTICE 2,266,253DISPUTE RESOLUTION 547,837LAW PRACTICE MGMT 330,866FAMILY LAW 757,868GENERAL PRACTICE 466,646INDIVIDUAL RIGHTS 35,360TORT TRIAL AND INSURANCE 571,040INTERNATIONAL LAW 938,459JUDICIAL ADMINISTRATION 131,432LABOR & EMPLOYMENT 33,300LAW STUDENT DIVISION 1,625,862LEGAL EDUCATION 775,927LITIGATION 464,154STATE & LOCAL GVMT 196,886ENVIR.ENERGY & RESOURCES 380,370INTELLECTUAL PROPERTY 724,190PUBLIC CONTRACT LAW 229,063GVMT & PUBLIC SECTOR 352,760PUBLIC UTILITY LAW 174,339REAL PROPERTY 390,302SCIENCE AND TECHNOLOGY 212,290SENIOR LAWYERS DIVISION 166,856TAXATION 1,505,666JOINT COMMITTEE - EMPL. BEN. 344,840HEALTH LAW 322,885

Section Funds 18,169,053

AFFORDABLE HOUSING 388,324AIR AND SPACE LAW 190,653COMMUNICATIONS LAW 27,951CONSTRUCTION INDUSTRY 86,572ENTERTAINMENT & SPORTS 90,816FRANCHISING 325,049

Forums 1,109,365

Total Section & Forum Funds 19,278,418

AMERICAN BAR ASSOCIATION

CASH & INVESTED BALANCES ANALYSISAS OF 6/30/11

PIMCO TOTAL RETURN METWEST TOTAL RETURN WELLS FARGO VANGUARD VANGUARD VANGUARD VANGUARD FIXED INCOME FUND FIXED INCOME FUND FIXED INCOME FUND MEGACAP 300 INDEX FD INST MIDCAP INDEX FD INST SMALL CAP INDEX FD INST DEVELOPED MARKETS

ENTITY COST MARKET COST MARKET COST MARKET COST MARKET COST MARKET COST MARKET COST MARKETNAME VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE

General Fund 4,752,822 5,350,836 6,428,075 6,364,219 6,648,217 6,654,494 17,887,878 18,241,234 3,929,196 4,894,075 1,953,614 2,531,416 8,274,182 7,852,180Permanent Reserves 5,306,574 5,521,227 6,471,885 6,411,220 6,223,909 6,238,071 18,197,944 18,583,652 3,612,111 4,232,533 2,601,260 3,167,271 7,955,277 7,317,250

ADMINISTRATIVE LAW 17,354 21,811 22,871 22,587 40,142 40,142 86,733 89,968 17,225 20,443 12,405 15,257 37,985 35,694ANTITRUST LAW 1,051,183 1,208,627 1,259,839 1,244,850 1,184,215 1,184,211 2,535,789 2,654,454 547,204 650,739 447,921 550,596 831,419 792,196BUSINESS LAW 1,213,673 1,275,615 0 0 250,893 250,892 2,446,459 2,641,570 1,347,815 1,599,544 1,754,660 2,118,142 1,763,550 1,681,673CRIMINAL JUSTICE 391,883 476,682 656,769 651,848 644,293 644,290 1,595,282 1,663,055 0 0 520,295 639,897 1,018,000 1,071,327DISPUTE RESOLUTION 71,816 79,907 80,646 79,685 77,275 77,274 243,325 252,404 48,321 57,345 34,803 42,804 106,559 100,134LAW PRACTICE MGMT 123,263 141,616 145,769 144,126 0 0 293,630 304,584 58,311 69,202 41,998 51,651 128,590 120,836FAMILY LAW 85,567 103,534 107,393 106,124 87,310 87,309 295,779 306,815 55,345 65,682 34,602 42,555 57,211 53,761GENERAL PRACTICE 41,975 48,177 50,300 49,733 0 0 203,507 211,100 117,181 139,066 77,405 95,198 84,774 79,662INDIVIDUAL RIGHTS 17,633 20,845 21,558 21,315 0 0 45,603 47,306 11,937 14,167 8,597 10,573 11,098 10,429TORT TRIAL AND INSURANCE 438,433 488,076 504,035 498,351 501,786 501,784 933,008 1,094,361 878,370 1,208,461 893,300 1,264,095 556,415 606,448INTERNATIONAL LAW 91,152 110,534 114,973 113,677 0 0 320,428 332,383 314,355 373,068 316,652 389,443 325,826 306,182JUDICIAL ADMINISTRATION 287,897 291,569 0 0 0 0 185,730 194,519 89,013 96,094 89,008 95,712 125,000 131,549LABOR & EMPLOYMENT 447,756 516,349 532,779 526,772 0 0 776,811 841,161 146,240 193,327 83,086 110,776 324,929 324,921LAW STUDENT DIVISION 195,913 219,643 225,840 223,295 0 0 455,567 472,564 90,470 107,367 65,162 80,142 199,509 187,480LEGAL EDUCATION 64,695 59,056 60,565 59,882 0 0 0 0 70,961 85,853 0 0 0 0LITIGATION 1,250,990 1,325,092 193,786 194,930 0 0 2,943,760 3,053,590 746,442 885,855 465,284 572,242 1,315,434 1,236,124STATE & LOCAL GVMT 45,984 56,400 57,486 56,837 0 0 116,327 120,666 23,101 27,415 16,639 20,463 50,943 47,870ENVIR.ENERGY & RESOURCES 265,003 322,174 332,601 328,850 0 0 973,953 1,010,291 179,393 212,898 179,457 220,710 432,694 406,606INTELLECTUAL PROPERTY 266,670 319,240 329,522 325,805 0 0 662,734 687,461 131,610 156,190 94,793 116,583 290,235 272,735PUBLIC CONTRACT LAW 213,720 230,757 239,597 236,763 200,714 200,714 307,960 319,449 60,506 71,808 60,526 74,440 187,636 176,323GVMT & PUBLIC SECTOR 12,704 14,158 14,372 14,212 0 0 0 0 0 0 0 0 0 0PUBLIC UTILITY LAW 36,875 43,382 44,142 43,643 0 0 165,744 174,310 69,168 85,645 35,955 44,219 92,529 92,243REAL PROPERTY 158,866 183,160 193,166 190,782 310,104 310,103 839,216 892,965 305,130 375,369 420,587 471,703 373,284 357,383SCIENCE AND TECHNOLOGY 67,675 79,651 80,646 79,685 77,275 77,274 242,945 252,008 48,247 57,257 34,749 42,739 106,395 99,981SENIOR LAWYERS DIVISION 23,884 26,280 26,690 26,387 0 0 0 0 11,689 13,874 36,010 44,288 62,409 58,646TAXATION 449,930 344,132 361,366 357,062 337,200 337,198 2,472,320 2,655,553 1,881,493 2,280,363 1,465,251 1,766,767 904,954 906,307JOINT COMMITTEE - EMPL. BEN. 88,751 98,441 99,406 98,338 97,346 97,346 129,131 144,637 22,007 28,877 18,318 23,045 68,776 73,280HEALTH LAW 108,887 125,088 125,116 123,623 121,432 121,432 380,248 394,436 75,512 89,615 54,388 66,889 166,525 156,485

Section Funds 7,530,131 8,229,996 5,881,231 5,819,162 3,929,985 3,929,969 19,651,989 20,811,610 7,347,047 8,965,524 7,261,850 8,970,929 9,622,680 9,386,275

AFFORDABLE HOUSING 11,762 13,357 14,372 14,212 0 0 28,295 29,350 5,620 6,669 4,047 4,976 12,391 11,643AIR AND SPACE LAW 12,760 14,478 14,993 14,814 85,303 85,303 45,516 47,214 9,038 10,726 6,511 8,009 19,933 18,731COMMUNICATIONS LAW 14,463 17,139 18,479 18,271 0 0 36,298 37,652 7,208 8,554 5,193 6,388 15,895 14,937CONSTRUCTION INDUSTRY 223,148 240,681 250,149 247,170 240,857 240,856 588,379 660,856 360,960 453,596 121,688 156,638 299,692 306,373ENTERTAINMENT & SPORTS 15,075 17,781 18,479 18,271 0 0 36,964 38,343 7,339 8,709 5,288 6,504 16,188 15,211FRANCHISING 347,002 386,028 359,291 355,240 0 0 190,786 198,914 57,802 68,599 42,831 77,472 136,975 131,532

Forums 624,210 689,464 675,762 667,978 326,160 326,159 926,238 1,012,329 447,967 556,853 185,558 259,987 501,074 498,427

Total Section & Forum Funds 8,154,341 8,919,460 6,556,993 6,487,140 4,256,145 4,256,128 20,578,227 21,823,939 7,795,014 9,522,377 7,447,408 9,230,916 10,123,754 9,884,702

ABA Investments 18,213,737 19,791,523 19,456,953 19,262,579 17,128,271 17,148,693 56,664,050 58,648,825 15,336,321 18,648,985 12,002,282 14,929,603 26,353,213 25,054,132

Judicial Improvement Fund 331,132 350,859 0 0 0 0 335,729 348,253 67,150 79,691 48,392 59,516 146,185 137,372FJE Endowment Funds 2,363,721 2,407,829 468,611 464,219 401,543 402,457 2,804,009 2,899,339 529,561 612,311 371,898 441,672 1,208,096 1,121,889

FJE Investments 2,694,853 2,758,688 468,611 464,219 401,543 402,457 3,139,738 3,247,592 596,711 692,002 420,290 501,188 1,354,281 1,259,261

Total ABA & FJE Investments 20,908,589 22,550,211 19,925,564 19,726,798 17,529,814 17,551,150 59,803,788 61,896,417 15,933,032 19,340,987 12,422,571 15,430,791 27,707,494 26,313,393Investments held for OthersNational Judicial College 210,943 223,219 0 0 0 0 0 0 0 0 0 0 0 0

Total Investments 21,119,532 22,773,430 19,925,564 19,726,798 17,529,814 17,551,150 59,803,788 61,896,417 15,933,032 19,340,987 12,422,571 15,430,791 27,707,494 26,313,393

AMERICAN BAR ASSOCIATION

CASH & INVESTED BALANCES ANALYSAS OF 6/30/11

ENTITYNAME

General FundPermanent Reserves

ADMINISTRATIVE LAWANTITRUST LAWBUSINESS LAW CRIMINAL JUSTICEDISPUTE RESOLUTIONLAW PRACTICE MGMTFAMILY LAWGENERAL PRACTICEINDIVIDUAL RIGHTSTORT TRIAL AND INSURANCEINTERNATIONAL LAWJUDICIAL ADMINISTRATIONLABOR & EMPLOYMENT LAW STUDENT DIVISIONLEGAL EDUCATIONLITIGATION STATE & LOCAL GVMTENVIR.ENERGY & RESOURCESINTELLECTUAL PROPERTYPUBLIC CONTRACT LAWGVMT & PUBLIC SECTORPUBLIC UTILITY LAWREAL PROPERTYSCIENCE AND TECHNOLOGYSENIOR LAWYERS DIVISIONTAXATIONJOINT COMMITTEE - EMPL. BEN.HEALTH LAW

Section Funds

AFFORDABLE HOUSINGAIR AND SPACE LAWCOMMUNICATIONS LAWCONSTRUCTION INDUSTRYENTERTAINMENT & SPORTS FRANCHISING

Forums

Total Section & Forum Funds

ABA Investments

Judicial Improvement FundFJE Endowment Funds

FJE Investments

Total ABA & FJE InvestmentsInvestments held for OthersNational Judicial College

Total Investments

TOTAL FUNDS

VANGUARD TOTAL LONG TERM VANGUARD % ALLOCATION OFEMERGING MARKETS INVESTMENTS PRIME MONEY MKTS TOTAL FUNDS MARKET VALUECOST MARKET COST MARKET COST MARKET COST MARKET FIXED

VALUE VALUE VALUE VALUE VALUE VALUE VALUE VALUE INCOME EQUITY CASH

2,274,425 3,500,336 52,148,410 55,388,790 4,875,621 4,875,621 57,024,031 60,264,411 30.5% 61.4% 8.1%1,956,678 2,154,038 52,325,638 53,625,262 0 0 52,325,638 53,625,262 33.9% 66.1% 0.0%

9,349 10,435 244,064 256,337 0 244,064 256,337 33.0% 67.0% 0.0%425,051 464,265 8,282,622 8,749,938 404,182 404,182 8,686,804 9,154,120 39.7% 55.8% 4.4%

1,057,550 1,121,264 9,834,600 10,688,700 0 9,834,600 10,688,700 14.3% 85.7% 0.0%263,909 294,549 5,090,430 5,441,648 0 5,090,430 5,441,648 32.6% 67.4% 0.0%26,229 29,275 688,974 718,828 0 688,974 718,828 33.0% 67.0% 0.0%31,652 35,329 823,213 867,344 0 823,213 867,344 32.9% 67.1% 0.0%14,083 15,720 737,290 781,500 0 737,290 781,500 38.0% 62.0% 0.0%1,442 1,609 576,584 624,545 0 576,584 624,545 15.7% 84.3% 0.0%6,480 7,232 122,906 131,867 0 122,906 131,867 32.0% 68.0% 0.0%

356,168 464,401 5,061,515 6,125,977 0 5,061,515 6,125,977 24.3% 75.7% 0.0%322,901 360,390 1,806,287 1,985,677 0 1,806,287 1,985,677 11.3% 88.7% 0.0%35,000 35,305 811,648 844,748 0 811,648 844,748 34.5% 65.5% 0.0%52,466 69,441 2,364,067 2,582,747 0 2,364,067 2,582,747 40.4% 59.6% 0.0%49,106 54,806 1,281,567 1,345,297 0 1,281,567 1,345,297 32.9% 67.1% 0.0%71,288 75,927 267,509 280,718 0 267,509 280,718 42.4% 57.6% 0.0%

326,539 364,448 7,242,235 7,632,281 0 7,242,235 7,632,281 19.9% 80.1% 0.0%12,539 13,995 323,019 343,646 0 323,019 343,646 33.0% 67.0% 0.0%

182,575 203,772 2,545,676 2,705,301 0 2,545,676 2,705,301 24.1% 75.9% 0.0%71,438 79,732 1,847,001 1,957,746 0 1,847,001 1,957,746 32.9% 67.1% 0.0%61,579 68,729 1,332,237 1,378,983 0 1,332,237 1,378,983 48.5% 51.5% 0.0%

0 0 27,076 28,370 0 27,076 28,370 100.0% 0.0% 0.0%20,931 26,232 465,343 509,674 0 465,343 509,674 17.1% 82.9% 0.0%

305,908 346,176 2,906,261 3,127,641 0 2,906,261 3,127,641 21.9% 78.1% 0.0%26,188 29,228 684,120 717,823 0 684,120 717,823 33.0% 67.0% 0.0%61,444 68,577 222,126 238,052 0 222,126 238,052 22.1% 77.9% 0.0%

678,411 738,081 8,550,925 9,385,463 0 8,550,925 9,385,463 11.1% 88.9% 0.0%18,423 21,696 542,158 585,660 0 542,158 585,660 50.2% 49.8% 0.0%40,988 45,747 1,073,096 1,123,315 0 1,073,096 1,123,315 33.0% 67.0% 0.0%

4,529,637 5,046,361 65,754,550 71,159,826 404,182 404,182 66,158,732 71,564,008 25.1% 74.3% 0.6%

3,051 3,405 79,538 83,612 0 79,538 83,612 33.0% 67.0% 0.0%4,907 5,478 198,961 204,753 0 198,961 204,753 56.0% 44.0% 0.0%3,912 4,366 101,448 107,307 0 101,448 107,307 33.0% 67.0% 0.0%

103,857 120,207 2,188,730 2,426,377 0 2,188,730 2,426,377 30.0% 70.0% 0.0%3,984 4,446 103,317 109,265 0 103,317 109,265 33.0% 67.0% 0.0%

58,892 65,729 1,193,578 1,283,514 0 1,193,578 1,283,514 57.8% 42.2% 0.0%

178,603 203,631 3,865,572 4,214,828 0 0 3,865,572 4,214,828 39.9% 60.1% 0.0%

4,708,240 5,249,992 69,620,121 75,374,654 404,182 404,182 70,024,303 75,778,836 25.9% 73.5% 0.5%

8,939,343 10,904,366 174,094,169 184,388,706 5,279,803 5,279,803 179,373,972 189,668,509 29.6% 67.6% 2.8%

42,884 47,863 971,472 1,023,554 0 971,472 1,023,554 34.3% 65.7% 0.0%271,005 280,980 8,418,444 8,630,696 0 0 8,418,444 8,630,696 37.9% 62.1% 0.0%

313,889 328,843 9,389,916 9,654,250 0 0 9,389,916 9,654,250 37.6% 62.4% 0.0%

9,253,232 11,233,209 183,484,085 194,042,956 5,279,803 5,279,803 188,763,888 199,322,759 30.0% 67.3% 2.6%

0 0 210,943 223,219 0 0 210,943 223,219 100.0% 0.0% 0.0%

9,253,232 11,233,209 183,695,028 194,266,175 5,279,803 5,279,803 188,974,831 199,545,978 30.1% 67.3% 2.6%

August __, 2011 DRAFT: 8/02/11

Re: Concerns Regarding H.R. 1161

The Honorable Lamar Smith Chairman Committee on the Judiciary U.S. House of Representatives Washington, DC 20515

The Honorable John Conyers, Jr. Ranking Member Committee on the Judiciary U.S. House of Representatives Washington, DC 20515

Gentlemen: On behalf of the American Bar Association, which has nearly 400,000 members, I write to express our concerns regarding H.R. 1161, the Community Alcohol RegulaEffectiveness Act of 2011. Section 2 of the bill states that its purpose is “to recognize and reaffirm that alcohol is different from other consumer products and that it should continue to be regulated by the States.” We do not dispute the general proposition that states have broad authority under the Twenty-First Amendment to regulate alcohol beverages. See, e.g., Healy v. Beer Institute, Inc., 491 U.S. 324, 331 (1989). Our concern stems from the provisions of Subsection 3(b), which states that “[s]ilence on the part of Congress shall not be construed to impose any barrier under clause 3 of section 8 of article I of the Constitution (commonly referred to as the ‘Commerce Clause’) to the regulation by a State or territory of alcoholic beverages.”

tory

to

The apparent purpose of this provision is not merely to reaffirm state regulation of alcohol beverages, but to provide a broader base for states to impose discriminatory restrictions on other states that allow interstate sales of alcohol beverages that are produced within those other states (e.g., wines). Such restrictions would likely have significant adverse effects on interstate commerce and consumers in many states. It is well-settled law that the Commerce Clause’s affirmative grant of authority to Congress encompasses an implicit or “dormant” limitation on the authority of the States to enact legislation affecting interstate commerce. Healy, 491 U.S. at 326 n.1, citing Hughes v. Oklahoma, 441 U.S. 322, 326 & n. 2 (1979); H.P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 534-535 (1949). For example, in Granholm v. Heald, 544U.S. 460 (2005), the United States Supreme Court held that laws in Michigan and New York which allowed in-state wineries in each of those states to sell wine directlyconsumers in that same state but prohibited out-of-state wineries from doing so (or, at the least, made direct sales impractical from an economic standpoint) discriminated against interstate commerce in violation of the Commerce Clause, and that the discrimination was neither authorized nor permitted by the Twenty-first Amendment. The Court found that it was “evident that the object and design of the Michigan and

August __, 2011 Page 2 New York statutes [was] to grant in-state wineries a competitive advantage over wineries located beyond the States’ borders.” Id.at 466. It also held that such laws “deprive citizens of their right to have access to the markets of other States on equal terms. . . . Allowing States to discriminate against out-of-state wine ‘invite[s] a multiplication of preferential trade areas destructive of the very purpose of the Commerce Clause’." Id. at 473, quoting Dean Milk Co. v. Madison, 340 U.S. 349, 356 (1951).

Granholm addressed only situations in which states facially discriminate against producers in other states in violation of the Commerce Clause. H.R. 1161 does not contradict the specific holding of Granholm, but it is flatly at odds with its underlying principles. By stating what appears to be a rule of construction for state legislatures and for courts, subsection 3(b) of the bill purports to immunize states from the restrictions of the dormant Commerce Clause in the regulation of alcoholic beverages and to authorize States to selectively discriminate against producers in other states, as well as consumers in those and other states. The only exception to this blanket immunity is found in the next sentence of the subsection, which is only applicable to alcoholic beverage producers:

However, State or territorial regulations may not intentionally or facially discriminate against out-of-State or out-of-territory producers of alcoholic beverages in favor of in-State or in-territory producers unless the State or territory can demonstrate that the challenged law advances a legitimate local purpose that cannot be adequately served by reasonable nondiscriminatory alternatives.

For producers alone, subsection 3(b) would encourage states to adopt certain types of nonfacial or “unintentional” discrimination (e.g., granting direct shipment privileges only to wineries of a certain size). For consumers, retailers, and others, subsection 3(b) purports to remove all dormant Commerce Clause protections, encouraging states to pass protectionist measures that favor their own in-state producers at the expense of out-of-state producers. In short, while H.R. 1161’s title suggests that its purpose is to make regulation of alcohol beverages more effective, the probable effect of this bill would be to foster discriminatory regulation against interstate commerce, and to adversely affect alcohol beverage producers in numerous states with no compensating benefits for consumers. For these reasons, we respectfully oppose H.R. 1161 and urge your Committee not to report the bill out without careful scrutiny of the effects of its provisions on interstate commerce.

Thank you for considering the ABA’s views on these important issues. If you have any questions regarding our concerns, please contact me at (202) 662-1765 or our senior legislative counsel, Larson Frisby, at (202) 662-1098. Sincerely, Thomas M. Susman Attachments

Comment [meh1]: If it only “apparently” is doing it, then it’s not “explicit.”

August __, 2011 Page 3 cc: Members of the House Judiciary Committee