BILL NUMBER: AB 1456 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Mullin
FEBRUARY 23, 2007
An act to add Chapter 12.5 (commencing with Section 14990) to Part
5.5 of Division 3 of Title 2 of the Government Code, relating to
intellectual property.
LEGISLATIVE COUNSEL'S DIGEST
AB 1456, as introduced, Mullin. Office of Intellectual Property.
Existing law permits various state agencies to enter into
contracts and agreements, create liabilities, and develop, own, and
control the use of intellectual property developed by the state.
This bill would establish the Office of Intellectual Property in
the Business, Transportation and Housing Agency. The agency would be
responsible for tracking intellectual property generated by state
employees and by state-funded research, developing a database to
track intellectual property, establishing and updating guidelines for
use by state agencies in administering their intellectual property,
developing an outreach campaign informing state agencies of their
rights and abilities concerning intellectual property, and developing
sample invention assignment agreements and sample language for
licenses or terms-of-use agreements for use by state agencies. The
bill would define terms that apply to the function of the agency, and
would make findings and declarations regarding intellectual
property.
This bill would require that intellectual property policies,
established on and after January 1, 2009, meet certain requirements
regarding rights and uses of the research or invention. It would also
require that state agencies or departments submit an annual report
regarding royalties earned pursuant to the agency's or department's
contracts, grants, or agreements to the office.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 12.5 (commencing with Section 14990) is added
to Part 5.5 of Division 3 of Title 2 of the Government Code, to read:
CHAPTER 12.5. OFFICE OF INTELLECTUAL PROPERTY
14990. The Legislature finds and declares all of the following:
(a) The state is home to many of the world's top research
universities, national laboratories, and leading-edge high technology
companies that generate significant intellectual property.
(b) It is in the interest of the state to ensure that the results
of state-funded research are promptly developed and protected, and
where appropriate, to make the research available in the public
domain.
(c) The commercialization of technology developed with the
investment of taxpayer dollars in the form of contracts, grants, and
agreements could generate public benefit, including, but not limited
to, state revenues, favorable pricing, revenue sharing, and
reinvestment into research.
(d) It is in the interest of the state to facilitate, promote, and
enhance technology transfer programs that will facilitate the
transfer of technology into the marketplace for the public benefit.
(e) The Legislature supports the use of efficient models to
develop and streamline infrastructures, policies, and processes for
the management of intellectual property developed under state funding
in order to stimulate economic development in the state while, at
the same time, minimizing costs of administering policies in this
area.
(f) People of the state should derive a substantial public benefit
from state investment in research, including the development of new
technologies, the commercialization of the product of state-funded
research and the jobs created from these types of research.
(g) It is the intent of the Legislature that the rights of state
agencies to track and manage intellectual property created with any
state funds, including march-in rights, as specified, shall be
interpreted so as to promote the benefit to the public.
14990.1. The Office of Intellectual Property is hereby
established in the Business, Transportation and Housing Agency, and
is authorized to enforce the guidelines specified in this chapter and
any research agreement the office may develop.
14990.2. Unless the context otherwise requires, the definitions
in this section govern the construction of this chapter:
(a) "Agency" means Business, Transportation and Housing Agency.
(b) "Computer programs" means those programs that are
automatically protected by copyright law, and may be made available
to research communities or the public through means that include, but
need not be limited to, open source licensing or dedication to the
public domain. If further investments are needed to refine the
program to make it more useful, proprietary licensing may be
appropriate.
(c) "Databases" means compilations of data, typically generated
from research, sometimes from one source, but often combined from
many sources.
(d) "Intellectual property" means intangible assets that are
subject to statutory protection under applicable patent, copyright,
and trademark law. Intellectual property includes, but is not limited
to, inventions, industrial designs, identifying marks and symbols,
electronic publications, trade secrets, and literary, musical,
artistic, photographic, and film works.
(e) "Net revenue" means gross royalties and license fees.
(f) "Office" means the Office of Intellectual Property.
(g) "Patentable inventions" means discoveries that are, or may be,
patentable and that advance science and enable new useful
applications, notably including therapeutics and diagnostic tools or
products, and discoveries that enable new useful applications. These
discoveries are often patented and licensed in a manner that will
promote the development and availability of products embodying the
invention.
(h) "Research articles" means publishable scientific articles
protected by copyright law.
(i) "Research tools" means inventions that broadly facilitate
subsequent research, including both methods, such as Polymerase Chain
Reaction (PCR), a technique for amplifying DNA to facilitate cloning
and sequencing, and products, such as specific cell lines, such as
embryonic stem cells, DNA clones, or antibodies.
14990.3. The Office of Intellectual Property shall perform, but
is not limited to, all of the following functions:
(a) Track intellectual property generated by state employees and
state-funded research.
(b) Develop a database that includes, but is not limited to,
tracking intellectual property by category of protection, date of
creation, owner of intellectual property, grantee, state agency or
granting entity, sources of funding, and status of licensing,
including invention utilization updates.
(c) Establish and periodically update guidelines for use by state
agencies in administering intellectual property, including, but not
limited to, the following guidelines:
(1) Policies concerning uniform contract terms for management of
state-funded intellectual property.
(2) Policies concerning the criteria for determining which
products should be placed into the public domain.
(3) Factors that state agencies should consider when deciding
whether to sell an intellectual property or license it to others.
(d) Develop an outreach campaign informing state agencies of their
rights and abilities concerning intellectual property.
(e) Develop sample invention assignment agreements that state
agencies can consider if they believe it is necessary to secure the
rights to potentially patentable items created by their employees on
work time using state resources.
(f) Develop sample language for licenses or terms-of-use
agreements that state agencies can use to limit the use of their
intellectual property by others to only appropriate purposes.
14990.4. (a) This section shall apply to intellectual property
policies established on and after January 1, 2009.
(b) Intellectual property contracts, grants, and agreements
entered into by a state agency shall meet the following criteria:
(1) Permit grantees to own intellectual property rights from
state-funded research, except where a state agency determines that,
in appropriate cases, the intellectual property rights shall be
dedicated to the public domain, provided that a state agency can
utilize a process established under paragraph (1) of subdivision (c)
of Section 14990.3 to specify that intellectual property rights shall
be dedicated to the public domain.
(2) Require that grantees, including institutions, individuals, or
both, provide a plan describing how intellectual property will be
managed for the benefit of California and the advancement of science.
(3) Require that grantees, including institutions, individuals, or
both, make research tools developed with any state funds widely
available to other nonprofit research institutions for their own
research purposes, to the extent that resources exist to supply the
research tool and the research tool is being used in accordance with
existing federal laws governing research tools.
(4) Require diligent efforts by grantees to develop state-funded
intellectual property subject to the federal Patent Act into
applications and products that benefit the public, except where a
state agency determines that, in appropriate cases, the intellectual
property rights shall be dedicated to the public domain.
(5) Reserve the right to use the intellectual property by, or on
behalf of, the state for research or noncommercial purposes.
14990.5. (a) This section shall apply to intellectual property
policies established on and after January 1, 2009.
(b) With respect to any subject invention in which a grantee has
acquired title under this chapter, the state agency under whose
funding agreement the subject invention was made shall have the
right, in accordance with procedures specified in regulations adopted
pursuant to this chapter, provided that these regulations shall
promote, and not hinder, the availability of the state's rights under
this subdivision, to require the contractor, an assignee, or
exclusive licensee of a subject invention to grant a nonexclusive,
partially exclusive, or exclusive license in any field of use to a
responsible applicant or applicants, upon terms that are reasonable
under the circumstances.
(c) If the contractor, assignee, or exclusive licensee refuses the
request, the state agency may grant the license itself,
notwithstanding the contract, grant, or agreement, if the state
agency determines that action is necessary based upon one or more of
the following factors:
(1) The contractor or assignee has not taken, or is not expected
to take, within a reasonable time, effective steps to achieve
practical application of the subject invention in that field of use.
(2) To alleviate health or safety needs that are not reasonably
satisfied by the contractor, assignee, or their licensees.
(3) To meet requirements for public use specified by state
regulations, and these requirements are not reasonably satisfied by
the contractor, assignee, or licensees.
(d) The state agency shall give to the grantee or licensee notice
of its determination and the basis on which it was made. The state
agency shall not exercise its rights described in this section if the
grantee or licensee takes diligent action promptly to cure the
deficiency and that deficiency is cured sooner than 60 days from
receipt of notice, except that a longer period may be mutually agreed
upon by the state agency and licensee. A state agency may exercise
its rights at any time in the event of a public health or safety
emergency.
14990.6. (a) This section shall apply to intellectual property
policies established on and after January 1, 2009.
(b) For state-funded patented inventions where state funding is
not minimal, state agencies and state grantees, contractors,
assignees, and licensees shall grant exclusive licenses for therapies
and diagnostics only to organizations with plans to provide access
to resultant therapies and diagnostics for uninsured California
patients. In addition, these licensees will agree to provide to
patients whose therapies and diagnostics will be purchased in
California by public funds the therapies and diagnostics at a cost
not to exceed the federal Medicaid price. The state agency may make
access plans available for review by the Office of Intellectual
Property annually.
14990.7. (a) Every contract, grant, or agreement for research
funded by a grant from a state agency shall require that, if a
revenue stream develops from a state-funded patented invention, the
state agency shall receive a royalty from that revenue, provided that
the royalty is proportional to the state investment and payable on
net revenue.
(b) When royalties are limited by application of the federal
Bayh-Dole Act, all revenue derived from royalties shall be deposited
into a fund within the granting state agency. The revenue shall be
reinvested into the research program funded by the grant, invested
into further research, or invested into education in the area
researched.
(c) State agencies or departments shall submit an annual report
regarding these royalties to the Office of Intellectual Property.
14990.8. This chapter shall not apply to intellectual property
agreements governed by the California Stem Cell Research and Cures
Bond Act (Chapter 3 (commencing with Section 125290.10) of Part 5 of
Division 106 of the Health and Safety Code).