BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 819|
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THIRD READING
Bill No: AB 819
Author: Charles Calderon (D), et al
Amended: 8/3/10 in Senate
Vote: 27 - Urgency
SENATE PUBLIC SAFETY COMMITTEE : 7-0, 6/29/10
AYES: Leno, Cogdill, Cedillo, Hancock, Huff, Steinberg,
Wright
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 77-0, 6/2/09 - See last page for vote
SUBJECT : Intellectual property piracy
SOURCE : Author
DIGEST : This bill doubles the fines in existing law for
violations related to piracy or counterfeiting of specified
marks registered with the Secretary of State or registered
on the Principal Register of the United States Patent and
Trademark Office.
ANALYSIS : Existing law makes it a crime for a person to
willfully manufacture, intentionally sell, or knowingly
possess for sale any counterfeit mark registered with the
Secretary of State or registered on the Principal Register
of the United States Patent and Trademark Office. Existing
law imposes specified imprisonment and fines based upon the
number of counterfeit marks involved in the offense and if
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the person is an individual or a business entity. Existing
law also specifies certain imprisonment and fines for a
subsequent conviction of this offense and provides other
specified penalties if the conduct that was the basis of
the conviction has directly and foreseeably caused death or
great bodily injury to another through reliance on the
counterfeited item for its intended purpose.
Existing law makes it a crime for a person to knowingly and
willfully transfer or cause to be transferred any sounds
that have been recorded on a phonograph record, disc, wire,
tape, film, or other article on which sounds are recorded,
with intent to sell or cause to be sold, or to use or cause
to be used for commercial advantage or private financial
gain through public performance, the article on which the
sounds are so transferred, without the consent of the
owner. Existing law specifies certain penalties for a
violation of these provisions, and certain other provisions
regarding the transportation of an article with the
knowledge that the sounds thereon have been so transferred
without the consent of the owner, if the offense involves
the transfer or transportation, or conduct causing that
transfer or transportation, of not less than 1,000 of the
articles. Existing law also specifies certain other
penalties for any other violation of these provisions and
for a second or subsequent conviction.
Existing law makes it a crime for any person to transport
or cause to be transported for monetary or other
consideration within the state, any article containing
sounds of a live performance with the knowledge that the
sounds thereon have been recorded or mastered without the
consent of the owner of the sounds of the live performance.
Existing law specifies certain penalties for a violation
of these provisions if the offense involves transporting or
causing to be transported not less than 1,000 articles.
Existing law also specifies certain other penalties for any
other violation of these provisions and for a second or
subsequent conviction.
Existing law makes it a crime for any person to record or
master or cause to be recorded or mastered on any article,
with the intent to sell for commercial advantage or private
financial gain, the sounds of a live performance with the
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knowledge that the sounds thereon have been recorded or
mastered without the consent of the owner of the sounds of
the live performance. Existing law specifies certain
penalties for a violation of these provisions if the
offense involves the recording, mastering, or causing the
recording or mastering of at least 1,000 articles.
Existing law also specifies certain other penalties for any
other violation of these provisions and for a second or
subsequent conviction.
Existing law provides that a person is guilty of failure to
disclose the origin of a recording or audiovisual work if,
for commercial advantage or private financial gain, he/she
knowingly advertises, sells, rents, manufactures, or
possesses for those purposes, a recording or audiovisual
work that does not disclose the name of the manufacturer,
author, artist, performer, or producer, as specified.
Failure to disclose the origin of a recording or
audiovisual work is punishable by imprisonment in a county
jail, imprisonment in the state prison, or a fine, or by
both imprisonment and a fine, as specified, depending on
the number of articles of audio recordings or audiovisual
works involved, and whether the offense is a first offense,
or second or subsequent offense.
Existing law provides that every person who operates a
recording device in a motion picture theater while a motion
picture is being exhibited, for the purpose of recording a
theatrical motion picture and without the express written
authority of the owner of the motion picture theater, is
guilty of a public offense and shall be punished by
imprisonment in a county jail not exceeding one year, by a
fine not exceeding $2,500, or by both that fine and
imprisonment.
This bill doubles the fines that may be imposed for a
violation of any of the above provisions.
Statutory law that became inoperative on January 1, 2010,
provided that it was a crime, punishable by a fine not
exceeding $2,500, imprisonment in a county jail for a
period not exceeding one year, or by both that fine and
imprisonment for a person located in California who knew
that a particular recording or audiovisual work was
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commercial, to knowingly electronically disseminate all or
substantially all of that commercial recording or
audiovisual work to more than 10 other people without
disclosing his/her
e-mail address, and the title of the recording or
audiovisual work. That statutory law also provided that a
minor who violated these provisions was punishable by a
fine not exceeding $250 for a first or second offense and
by a fine not exceeding $1,000, imprisonment in a county
jail, or by both that fine and imprisonment for a third or
subsequent violation.
This bill again makes operative those provisions and would
double the fines that may be imposed for a violation of
those provisions. By creating a new crime, this bill
imposes a state-mandated local program.
Existing law provides that, in addition to any other
penalty or fine, a court shall order any person who has
been convicted of any violation of certain provisions of
law relating to the transfer or transportation of
misappropriated recorded music, the transportation of an
article containing unauthorized recordation of sounds of
live performances, the unauthorized recording of sounds of
live performances, or the failure to disclose the origin of
a recording or audiovisual work to make restitution to the
owner or lawful producer, or trade association acting on
behalf of the owner or lawful producer, of the phonograph
record, disc, wire, tape, film, or other device or article
from which the sound or visual images were derived that
suffered economic loss resulting from the violation.
Existing law provides how value is to be determined for the
purpose of calculating restitution.
This bill also requires a court to order restitution when
the person has been convicted of violating certain other
provisions of law relating to the manufacture or sale of a
counterfeit registered mark and the electronic transmission
of all or substantially all of a commercial recording or
audiovisual work.
This bill states the following:
1. According to a 2007 study by the Institute for Policy
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Innovation, intellectual property piracy, meaning the
theft of movies, music, software, and video games, costs
the United States economy $58,000,000,000 each year.
2. The problem of intellectual property piracy continues to
grow worse. A 2005 Gallup study found that five percent
of Americans had purchased, copied, or downloaded
counterfeit music in the preceding year. By 2007, this
number had jumped to nine percent. The percentage of
respondents that admitted buying a pirated movie rose
from three percent in 2005, to six percent in 2007. At
the same time, once robust DVD sales have flattened over
the past few years, while CD shipments to retailers have
plummeted.
3. The effect of intellectual property piracy on California
and its citizens is particularly dire. Intellectual
property piracy adversely affects the California
economy, eliminates jobs, and damages industry.
According to the Business Software Alliance, in 2003,
software piracy alone cost the California economy more
than 13,000 jobs, over $802,000,000 in wages and
salaries, over $1,000,000,000 in retail sales of
business software applications, and roughly $239,000,000
in total tax losses.
4. Intellectual property piracy poses a significant threat
to consumers, who, through no fault of their own, are
often deceived or deliberately misled, or both deceived
and deliberately misled, as to the nature of purchased
products, whereby pirated goods are palmed off,
including in electronic form, as legitimate authorized
goods.
5. A growing number of criminal organizations worldwide are
involved in intellectual property piracy.
6. This act will send a strong signal that California is
committed to protecting the intellectual property
created by California's innovation and entertainment
industries.
7. Finally, by safeguarding the legitimate sale of
intellectual property, California will increase its tax
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base, and stimulate the economy.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/5/10)
California District Attorneys Association
Motion Picture Association of America
ARGUMENTS IN SUPPORT : According to the author:
"California remains the capital of the motion picture and
television industry as well as a center for the recording
and software industries. In terms of economic activity,
television and movies generated a total of $42.2 billion,
split almost equally between payroll expenditures and
payments to vendors. Approximately 266,000 people were
directly employed in the motion picture and television
industry in California, with an average salary of
$80,600. When indirect employment resulting from the
industry is factored in, the number of people working in
California as a result of television and movies totals
over 500,000.
"Although piracy is a global problem, a recent study by
the Los Angeles County Economic Development Corporation
(LAEDC) notes that it affects the L.A. region
disproportionately due to the concentration of the
entertainment industry there. LAEDC estimates that in
2005 losses to the motion picture industry from piracy
were $2.7 billion; the sound recording industry $851
million; and software publishing $355 million.
"Not only is digital piracy a direct threat to the
industry, but its effects are felt by state and local
government in the form of lost tax revenues. According
to the same LAEDC study, piracy affecting the
entertainment industry just in LA cost nearly $134
million in state income taxes; $63.5 million in sales
taxes; $2 million in LA City Business Taxes.
"This is not just an LA problem. Digital piracy reaches
across the state, affecting the Silicon Valley and its
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computer industry. According to the Business Software
Alliance, in 2003, software piracy alone cost the
California economy more than 13,000 jobs, $802 million in
wages and salaries, over $1 billion in retail sales of
business software applications, and roughly $239 million
in total tax losses."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall,
Blakeslee, Blumenfield, Brownley, Buchanan, Caballero,
Charles Calderon, Carter, Chesbro, Conway, Cook, Coto,
Davis, De La Torre, De Leon, DeVore, Duvall, Emmerson,
Eng, Evans, Feuer, Fletcher, Fong, Fuentes, Fuller,
Furutani, Gaines, Galgiani, Garrick, Gilmore, Hagman,
Hall, Harkey, Hayashi, Hernandez, Hill, Huber, Huffman,
Jeffries, Jones, Knight, Krekorian, Lieu, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande,
Niello, Nielsen, John A. Perez, V. Manuel Perez,
Portantino, Price, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, Bass
NO VOTE RECORDED: Bill Berryhill, Tom Berryhill, Block
RJG:mw 8/5/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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