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March 9, 2010, Alert No. 2,057.
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Antitrust Division Requires Divestiture by Election Systems and Software, Inc.

3/8. The Department of Justice's (DOJ) Antitrust Division and nine states filed a civil complaint in the U.S. District Court (DC) against Election Systems and Software, Inc. (ESS) alleging violation of Section 7 of the Clayton Act, which is codified at 15 U.S.C. 18, in connection with ESS's recent acquisition of the Premier subsidiary of Diebold, Inc.

The DOJ, states, and ESS simultaneously filed a proposed Final Judgment that requires ESS to divest all Premier assets.

The complaint alleges that ESS is the "largest provider of voting equipment systems in the United States", and that it recently acquired Premier, a subsidiary of Diebold, Inc., which was the second largest provider.

The complaint defines "voting equipment system" as "the integrated collection of customized hardware, software, firmware and associated services used to electronically record, tabulate, transmit and report votes in an election".

The complaint also alleges these "voting equipment systems" differ from "the mechanical lever and punch card voting devices used in the past in conjunction with manual tabulation methods", and constitute a separate market.

The complaint further alleges that "As a result of this transaction, prices for voting equipment systems likely will increase, while quality and innovation likely will decline, as a consequence of reduced competition in violation" of the Clayton Act.

The one count complaint alleges violation of Section 7 of the Clayton Act, and requests that the Court compel ESS to "divest Premier assets related to the development, manufacture and sale of the relevant products to enable independent and effective competition".

Section 7 provides, in part, in its second paragraph, that "No person shall acquire, directly or indirectly, the whole or any part of the stock or other share capital ... where in any line of commerce or in any activity affecting commerce in any section of the country, the effect of such acquisition, of such stocks or assets, or of the use of such stock by the voting or granting of proxies or otherwise, may be substantially to lessen competition, or to tend to create a monopoly".

The proposed Final Judgment require ESS to divest "all intangible assets related to the use, operation, certification, design, production, modification, enhancement, distribution, sale, repair or service of the Premier Voting Equipment System Products", which is defined as "all versions, past, present, and in development, of Premier hardware, software, and firmware used to record, tabulate, transmit or report votes ...".

It continues that this includes "intellectual property (including, but not limited to, patents, patent applications, licenses, sublicenses, copyrights, databases containing design information and, with respect to the Assure 1.2 suite of products only, trademarks, trade secrets, trade names, service marks, service names, slogans, domain names, logos and trade dress); the unregistered trademark "Premier"; data related to the use, operation, certification testing, internal testing, and beta testing; documentation of pending and current certification efforts with the United States Election Assistance Commission ("EAC") and the election authorities of any state; technical information, software, software source code and related documentation, know-how, drawings, blueprints, designs, design tools and simulation capability, and specifications for materials, parts, and devices;" and other things. (Parentheses in original.)

See also, DOJ release, Competitive Impact Statement, and proposed Asset Preservation Stipulation and Order.

This case is USA, et al. v. Election Systems and Software, Inc., U.S. District Court for the District of Columbia, D.C. No. 1:10-cv-00380, Judge John Bates presiding.

FTC Issues NPRM on Mandatory Energy Consumption Labeling of Consumer Electronics Products

3/4. The Federal Trade Commission (FTC) released a notice [PDF] to be published in the Federal Register that announces an order and a notice of proposed rulemaking (NPRM) regarding mandatory disclosure of energy consumption of consumer electronics products.

This item announces that the FTC amends its appliance labeling rules, which are codified at 16 CFR Part 305, to mandate disclosure and labeling of television sets.

However, the FTC has not yet ordered disclosure or labeling of other consumer electronics products over which the FTC possesses appliance labeling authority, including "personal computers", "cable or satellite set-top boxes", "stand-alone digital video recorder boxes", and "personal computer monitors". 42 U.S.C. 6294(a)(2)(I). Rather, the FTC seeks further comments.

The FTC's new rule defines television as "commercially available electronic product designed primarily for the display and reception of audiovisual signals from terrestrial, cable, satellite, Internet Protocol TV (IPTV), or other transmission of analog and/or digital signals, consisting of a tuner/receiver and a display encased in a single housing".

The 110th Congress enacted HR 6, the "Energy Independence and Security Act of 2007". President Bush signed it into law on December 19, 2007. It is now Public Law No. 110-140.

Section 325 of the Act amended 42 U.S.C. 6294 to require this rulemaking proceeding.

The FTC will hold a public meeting at 9:00 AM - 1:00 PM on April 16, 2010. Also, May 14, 2010, is the deadline to submit comments in response to the NPRM.

Douglas Johnson of the Consumer Electronics Association (CEA) stated in a release that "The FTC's latest action in this year-old rulemaking is welcome news and we look forward to working with the Commission on the next steps in this important consumer-focused initiative."

As of the March 9, 2010, issue of the Federal Register, this notice had not yet been published.

District Court Enters Permanent Injunction in RealDVD Case

3/3. The Motion Picture Association of America (MPAA) announced in a release that the member companies of the MPAA and the DVD Copy Control Association (DVD CCA) "have successfully concluded their litigation against RealNetworks concerning that company's DVD-copying product, RealDVD".

They added that this "includes the entry of a permanent injunction by U.S. District Court Judge Marilyn Hall Patel that bars RealNetworks from manufacturing or trafficking in RealDVD or any similar product. RealNetworks will also abandon its claims against the studios and pay $4.5 million to reimburse the studios for legal fees and costs incurred in the litigation."

MPAA member companies filed a complaint [18 pages in PDF] in U.S. District Court (CDCal) against RealNetworks on September 30, 2008, alleging violation of the anti-circumvention provisions of the DMCA, codified at 17 U.S.C. 1201, and breach of contract. RealNetworks filed its own complaint in U.S. District Court (NDCal) against the movie companies seeking declaratory relief.

RealDVD software enables users to make permanent copies of copyrighted and CSS protected content of DVDs, including rental DVDs. See, story titled "Movie Companies Sue RealNetworks for Selling DVD Copying Software" in TLJ Daily E-Mail Alert No. 1,835, September 30, 2008.

The District Court issue a preliminary injunction against Real Networks on August 11, 2009. See, story titled "District Court Enjoins RealDVD" in TLJ Daily E-Mail Alert No. 1,979, August 24, 2009.

The MPAA added in its release that "It is illegal to bypass the copyright protections built into DVDs designed to protect movies against theft. We will continue to vigorously pursue companies that attempt to bring these illegal circumvention products and devices to market."

This case is RealNetworks, Inc. and RealNetworks Home Entertainment, Inc. v. DVD Copy Control Association, Inc., et al., and consolidated cases, U.S. District Court for the Northern District of California, D.C. Nos. C08 04548 MHP and C08 04719 MHP, Judge Marilyn Patel presiding.

Ballmer Addresses Cloud Computing, Privacy and Regulatory Environment

3/4. Steve Ballmer, CEO of Microsoft, gave a speech, and answered questions, at the University of Washington primarily about cloud computing and services, but also touching on open source software, social networking, privacy, security, and advertising.

Steve BallmerBallmer (at right) referenced "In-private browsing". He said that "it's a good absolute standard, it's either on or it's off, and yet there are many cases that are far more nuanced."

He did not cover in his prepared speech issues regarding government surveillance, law enforcement seizure of data stored with third party cloud service providers, or subpoenas from private parties for cloud data. But, he was asked.

He offered a few pertinent comments, and some incoherent ramblings.

He said that "it will be many years before many government organizations will grow comfortable with the notion of their data or citizen data living outside of the jurisdiction".

Ballmer might have talked about the disparate treatment under the 4th Amendment, federal statutes, and law enforcement agency policies, of data stored on a computer owned by the data owner, and the same data stored in the cloud on servers owned by a third party cloud service provider.

He said this: "As technology people we can talk about whether that makes sense or doesn't make sense, and why the protections can be the same, but it turns out the regulatory environment, as you highlight, is imperfect. I mean, the truth of the matter is -- our guys were trying to explain this to me a week or two ago -- the same data held in the same place but under different operating circumstances has different regulatory blah, blah, blah, blah, blah." (Blahs in original.)

He also said this: "we can't assume all of the world's important countries are going to even standardize the regulatory framework. That's why when you walk outside and see one of those containers, it would be OK with me if we have to dump one into every country or sell some to some people who want to implement them."

And, he said that "there's a set of issues, but they don't have to be constraints". Also, "We need to permit the private cloud".

People and Appointments

3/8. President Obama nominated Robert Harding to be an Assistant Secretary of Homeland Security, and head of the Transportation Security Administration (TSA). See, White House news office release and release. See also, Department of Homeland Security (DHS) release. Harding is a former career army officer. From 1996 to 2000 he was the Director for Operations at the Defense Intelligence Agency (DIA). If confirmed by the Senate, he will replace Edmund (aka Kip) Hawley.

3/9. The Securities and Exchange Commission (SEC) announced in a release that Chief Economist James Overdahl will leave the SEC to join the Washington DC office of the National Economic Research Associates (NERA).

3/4. The Senate confirmed William Conley to be a Judge of the U.S. District Court (WDWisc). See, Congressional Record, March 4, 2010, at Page S1209.

3/8. President Obama announced his intent to nominate Lawrence Pijeaux to be a member of the National Museum and Library Sciences Board. See, White House news office release.

3/9. Amy Smorodin joined the Technology Policy Institute (TPI) as VP for Communications and External Relations. She was previously VP for Communications at the Progress & Freedom Foundation (PFF). See, TPI release.

More News

3/9. The Federal Communications Commission (FCC) released an agenda [PDF] for its event on March 16, 2010, titled "open meeting". The sole item on the agenda is adoption of an item titled "A National Broadband Plan for Our Future". This is GN Docket No. 09-51. The event is scheduled to start at 10:30 :AM.

3/5. The Government Accountability Office (GAO) released a report [64 pages in PDF] titled "Cybersecurity: Progress Made but Challenges Remain in Defining and Coordinating the Comprehensive National Initiative". It states that "Pervasive and sustained cyber attacks against the United States continue to pose the threat of a potentially devastating impact on federal systems and operations." It adds that "Among other things, roles and responsibilities for participating agencies have not always been clearly defined".

3/5. The Federal Communications Commission (FCC) announced comment deadlines for its Notice of Proposed Rulemaking (NPRM) regarding expanding the FCC's e-rate tax and subsidy program to cover non-educational uses. This NPRM is FCC 10-33 in CC Docket No. 02-6. The FCC adopted it on February 18, 2010, and released the text [26 pages in PDF] on February 19, 2010. See, notice in the Federal Register, March 5, 2010, Vol. 75, No. 43, at Page 10199-10203, and story titled "FCC Expands E-Rate Program to Cover Non-Educational Services" in TLJ Daily E-Mail Alert No. 2,047, February 18, 2010. April 5, 2010 is the deadline for initial comments. April 19, 2010 is the deadline for reply comments.

3/5. The Department of Justice's (DOJ) Antitrust Division, various states, and Microsoft filed with the U.S. District Court (DC) another periodic report titled "Joint Status Report on Microsoft's Compliance with the Final Judgments". These reports were mandated by the Court almost seven years ago. The Court will hold a status conference on March 10, 2010.

3/5. Apple announced in a release that the first models of its iPad will be available in the U.S. on April 3, 2010.

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In This Issue
This issue contains the following items:
  Antitrust Division Requires Divestiture by Election Systems and Software, Inc.
  FTC Issues NPRM on Mandatory Energy Consumption Labeling of Consumer Electronics Products
  District Court Enters Permanent Injunction in RealDVD Case
  Ballmer Addresses Cloud Computing, Privacy and Regulatory Environment
  People and Appointments
  More News
Washington Tech Calendar
New items are highlighted in red.
Tuesday, March 9

The House will meet at 12:30 PM for morning hour, and at 2:00 PM for legislative business. It will consider numerous non-technology related items under suspension of the rules. Votes will be postponed until 6:30 PM. See, Rep. Hoyer's schedule for the week of March  8.

The Senate will meet at 10:00 AM. It will resume consideration of HR 4213 [LOC | WW], the "Tax Extenders Act of 2009". Section 111 of this bill would extend for one year the research and development tax credit. See, story titled "Senate Considers One Year Extension to R&D Tax Credit" in TLJ Daily E-Mail Alert No. 2,054, March 3, 2010.

8:30 AM - 2:00 PM. Day two of a two day meeting of the National Science Foundation's (NSF) Committee on Equal Opportunities in Science and Engineering (CEOSE). See, notice in the Federal Register, February 5, 2010, Vol. 75, No. 24, at Page 6063. Location: NSF, 4201 Wilson Boulevard, Arlington, VA.

8:30 - 11:30 AM. Day two of a two day event hosted by the Department of Health and Human Services titled "Workshop on the HIPAA Privacy Rule's De-Identification Standard". See, notice in the Federal Register, February 24, 2010, Vol. 75, No. 36, at Pages 8363-8364. Location: Washington Marriott at Metro Center, 775 12th St., NW.

9:00 AM - 12:15 PM. The Federal Communications Commission (FCC) and the Knight Foundation (KF) will host an event titled "Digital Inclusion Summit: Working Together to Expand Opportunity Through Universal Access". The speakers will include FCC Chairman Julius Genachowski, FCC Commissioners Michael Copps, FCC Commissioner Mignon Clyburn and FCC Commissioner Meredith Baker. This event is free and open to the public. See, FCC notice and KF registration page. Location: Newseum, 555 Pennsylvania Ave., NW.

9:30 AM - 5:45 PM. Day two of a two day event hosted by the DC Bar Association titled "2010 Judicial and Bar Conference: Survival Strategies for Modern Legal Times". See, conference web site. At 2:30 - 5:45 PM, there will be a program, in two parts, titled "Emerging E-Communications Issues: Before, During, and After Trial". The price to attend is $55 for each part. Most DC Bar events are not open to the public. See, notice and notice. For more information, contact Verniesa Allen at 202-626-3439. Location: Location: Ronald Reagan Building, 1300 Pennsylvania Ave., NW.

Wednesday, March 10

The House will meet at 10:00 AM for legislative business. It will consider numerous non-technology related items. See, Rep. Hoyer's schedule for the week of March 8.

8:45 AM - 12:30 PM. The University of Colorado's Silicon Flatirons, Information Technology and Innovation Foundation (ITIF), Federal Communications Commission (FCC), American Association of People with Disabilities (AAPD), and the District of Columbia Public Library System will host an event titled "The National Broadband Plan and Accessibility for People with Disabilities Conference". The speakers will include FCC officials, Robert Atkinson (ITIF), Jenifer Simpson (AAPD), Vint Cerf (Google), Link Hoewing (Verizon), Fernando Laguarda (Time Warner Cable), and others. See, notice and registration page. Location: Martin Luther King Library, 901 G St., NW.

10:00 AM. The House Commerce Committee (HCC) will meet to mark up HR 3125 [LOC | WW], the "Radio Spectrum Inventory Act", HR 3019 [LOC | WW], the "Spectrum Relocation Improvement Act Of 2009", and HR 1285 [LOC | WW], the "Truth In Caller ID Act Of 2009". See, notice. See also, story titled "Representatives Introduce Spectrum Inventory Bill" in TLJ Daily E-Mail Alert No. 1,968, June 9, 2009. Location: Room 2123, Rayburn Building.

10:00 AM. The House Foreign Affairs Committee (HFAC) will hold a hearing titled "The Google Predicament: Transforming U.S. Cyberspace Policy to Advance Democracy, Security, and Trade". The witnesses will be Nicole Wong (VP and Deputy General Counsel of Google), Rebecca MacKinnon (Princeton University), Robert Holleyman (P/CEO of the Business Software Alliance), and Larry Wortzel (U.S.-China Economic and Security Review Commission). See, notice. Location: Room 2172, Rayburn Building.

10:00 AM. The House Financial Services Committee's (HFSC) Subcommittee on Financial Institutions and Consumer Credit will hold a hearing titled "Regulation of Money Service Businesses". The HFSC will webcast this event. See, notice. Location: Room 2128, Rayburn Building.

10:00 AM - 12:00 NOON. The House Science Committee's (HSC) Subcommittee on Research and Science Education will hold a hearing titled "The National Science Foundation's FY 2011 Budget Request". The HSC will webcast this event. Location: Room 2318, Rayburn Building.

10:00 AM - 12:00 NOON. The House Intelligence Committee (HIC) will hold a closed hearing titled "MIP and Service Elements Budget for Fiscal Year 2011". See, notice. Location: Room HVC-304, Capitol Building.

11:00 AM - 3:00 PM. The Department of Defense's (DOD) Department of the Air Force's IS-GPS-200, IS-GPS-705, IS-GPS-800 Interface Control Working Group (ICWG) will meet by teleconference. This event is open to the public. To participate, call 1-800-FON-SAIC (1-800-366-7242); the code is 4511074. See, notice in the Federal Register, February 26, 2010, Vol. 75, No. 38, at Page 8928.

12:00 NOON. The Cato Institute will host a panel discussion of the book [Amazon] titled "The Watchers: The Rise of America's Surveillance State". The speakers will be Shane Harris (author), Jim Harper (Cato), and Julian Sanchez (Cato). This event is free and open to the public. Lunch will be served after the program. The Cato Institute will webcast this event. See, notice and registration page. Location: Cato, 1000 Massachusetts Ave., NW.

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing titled "Advancing American Innovation and Competitiveness". See, notice. The SCC will webcast this event. Location: Room 253, Russell Building.

2:30 PM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Nominations". Sen. Sheldon Whitehouse (D-RI) will preside. The SJC will webcast this event. See, notice. Location: Room 226, Dirksen Building.

3:00 - 5:00 PM. The House Intelligence Committee (HIC) will hold a closed hearing titled "Action Budget for Fiscal Year 2011". See, notice. Location: Room HVC-304, Capitol Building.

Thursday, March 11

The House will meet at 10:00 AM for legislative business. It will consider numerous non-technology related items. See, Rep. Hoyer's schedule for the week of March 8.

9:00 - 11:00 AM. The Federal Communications Commission (FCC) will hold a panel discussion titled "FCC Broadband Strategy National Purpose Team". The speakers will be Kristen Kane (FCC's National Purposes Director), Nick Sinai (FCC's Energy and Environment Director), Eugene Huang (FCC's Government Performance Director), Mohit Kaushal (FCC's Healthcare Director), Steve Midgley (FCC's Education Director), Elana Berkowitz (FCC's Economic Opportunity Director), and Jennifer Manner (FCC's Public Safety and Homeland Security Director). The Information Technology and Innovation Foundation (ITIF) states that this is an ITIF event. Location: ITIF, 1101 K St., NW.

9:30 - 11:30 AM. The House Intelligence Committee (HIC) will hold a closed hearing titled "NIP & MIP Budget Overview for Fiscal Year 2011". See, notice. Location: Room HVC-304, Capitol Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda includes consideration of S 148 [LOC | WW], the "Discount Pricing Consumer Protection Act". This bill would undo the effects of the opinion [55 pages in PDF] of the Supreme Court (SCUS) in Leegin Creative Leather Products v. PSKS, an antitrust case regarding minimum resale price maintenance by manufacturers and intermediate distributors. It impacts the marketing of some consumer IT and electronic products. See also, story titled "SCUS Holds That All Vertical Price Restraints Are Subject to Rule of Reason" in TLJ Daily E-Mail Alert No. 1,603, June 28, 2007. The agenda again lists consideration of the nomination Jane Stinson to be a Judge of the U.S. District Court for the Southern District of Indiana. The SJC rarely follows its published agendas. The SJC will webcast this event. See, notice. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Consumers, Competition, and the Proposed Comcast-NBC Universal Merger". Location: Room 253, Russell Building.

10:00 AM. The House Appropriations Committee's (HAC) Subcommittee on Financial Services will hold a hearing titled "FY 2011 Budget for the Securities and Exchange Commission". Location: Room 2226, Rayburn Building.

10:30 AM. The House Judiciary Committee's (HJC) Subcommittee on Commercial and Administrative Law will hold a hearing titled "State Taxation -- The Role Of Congress In Developing Apportionment Standards". See, notice. The HJC will webcast this event. Location: Room 2141, Rayburn Building.

12:00 NOON - 2:00 PM. The DC Bar Association will host a closed lunch titled "Informal Discussion with USTR General Counsel Timothy Reif". The price to attend ranges from $15 to $35. Most DC Bar events are not open to the public. This event is closed to reporters. See, notice. For more information, call 202-626-3463. Location: McKenna Long & Aldridge, 1900 K St., NW.

2:00 - 6:00 PM. The Federal Communications Bar Association (FCBA) will host an event titled "Privacy and Data Security for Communications and Media Companies". The price to attend ranges from $50 to $350. This event qualifies for continuing legal education credits. Registrations and cancellations are due by 5:00 PM on March 8. Location: Arnold & Porter, 555 12th St., NW.

2:30 PM. The Federal Trade Commission's (FTC) Bureau of Economics (BOE) will host a seminar presented by Aviv Nevo (Northwestern University Department of Economics). For more information, contact Loren Smith at lsmith2 at ftc dot gov or Tammy John at tjohn at ftc dot gov. Location: FTC, Conference Center, 601 New Jersey Ave., NW.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft FIPS-140 -3 titled "Security Requirements for Cryptographic Modules". See, CSD notice with hyperlinks to numerous ZIP documents and comments template.

Friday, March 12

The House will meet at 9:00 AM for legislative business. See, Rep. Hoyer's schedule for the week of March 8.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Recording Industry Association of America v. Librarian of Congress, App. Ct. No. 09-5094. Judges Garland, Kavanaugh and Randolph will preside.

10:00 AM - 12:00 NOON and 2:00 - 3:00 PM. The President's Council of Advisors on Science and Technology (PCAST) will hold a partially closed meeting. See, notice in the Federal Register, February 26, 2010, Vol. 75, No. 38., at Pages 9006-9007. Location: National Academy of Sciences, 2100 C St., NW.

5:00 PM. Deadline to submit comments to the Executive Office of the President's (EOP) Office of Science and Technology Policy (OSTP) in response to its Request for Information (RFI) regarding the consumer interface with the Smart Grid. See, notice in the Federal Register, February 19, 2010, Vol. 75, No. 33, at Pages 7526-7528.

Sunday, March 14

Daylight savings time begins.

Monday, March 15

12:00 NOON. The Federal Communications Commission (FCC) and Federal Communications Bar Association (FCBA) International Telecommunications Committee will hold an event titled "EU Electronic Communications Regulatory Developments". The speakers will be Mindel De La Torre (Chief of the FCC's International Bureau), Gerry Oberst (Hogan & Hartson), and Winston Maxwell (Hogan & Hartson) . This event is not open to the public. Lunch will be provided. Location: Hogan & Hartson, 13th Floor West, 555 13th St., NW.

TIME? The Department of Commerce's (DOC) National Institute of Standards and Technology (NIST) will host an event titled "kick-off informational meeting" via the web regarding its creation of a "700 MHz Public Safety Broadband Demonstration Network". See, notice in the Federal Register, March 3, 2010, Vol. 75, No. 41, at Pages 9586-9587, and story titled "NIST Announces Creation of 700 MHz Public Safety Broadband Demonstration Network" in TLJ Daily E-Mail Alert No. 2,055, March 4, 2055. The deadline to register is 3:00 PM on March 12, 2010.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its draft SP 800-131 [22 pages in PDF] titled "Recommendation for the Transitioning of Cryptographic Algorithms and Key Sizes".

Tuesday, March 16

2:00 - 3:30 PM. The Department of Justice's (DOJ) Antitrust Division will host a seminar presented by Tim Brennan (UMD Baltimore County) titled "Exclusion vs. Predation: Drawing Lines Between Easy and Hard Abuse Cases". For more information, contact Patrick Greenlee at 202-307-3745 or atr dot eag at usdoj dot gov. Location: DOJ, Liberty Square Building, 450 5th St., NW.

6:00 - 8:15 PM. The Federal Communications Bar Association's (FCBA) Mass Media Committee will host an event titled "Political Broadcasting Rule Update". The price to attend ranges from $50 to $150. This event qualifies for continuing legal education credits. Registrations and cancellations are due by 5:00 PM on March 12. Location: Wiley Rein, 1776 K St., NW.