BILL ANALYSIS SENATE COMMITTEE ON PUBLIC SAFETY Senator Mark Leno, Chair S 2009-2010 Regular Session B 8 3 0 SB 830 (Wright) As Amended August 17, 2010 Hearing date: August 26, 2010 Penal Code JM:mc PURSUANT TO SR 29.10 MUSIC AND AUDIO-VISUAL PIRACY HISTORY Source: Recording Industry Association of America Prior Legislation: AB 2750 (Krekorian) - Ch. 468, Stats. 2008 AB 64 (Cohn) - Ch. 9, Stats. 2006 SB 1506 (Murray) - Ch. 617, Stats. 2005 Support: Universal Music Group; Sony Music Opposition:None known Assembly Floor Vote: Ayes 78 - Noes 0 KEY ISSUE SHOULD STATUTORY ILLUSTRATIONS OF WHAT MEDIA CAN BE INVOLVED OR USED IN A MUSIC OR AUDIO-VISUAL PIRACY CASE INCLUDE CURRENT TECHNOLOGY AND DEVICES, SUCH AS FLASH DRIVES, MEMORY CARDS AND OTHER DATA STORAGE DEVICES? PURPOSE (More) SB 830 (Wright) PageB The purpose of this bill is to state examples of media used in music and movie piracy that reflect current technology. Existing law (Pen. Code 653w) provides that a person is guilty of a crime when he or she knowingly attempts to sell, rent or manufacture, or possess for these purposes, an illicit audio recording or audiovisual work. It is an element of this offense that the defendant failed to disclose the true name and address of the manufacturer and the name of the artist. A violation of Section 653w involving at least 100 copies of an audio recording or an audiovisual work is an alternative felony-misdemeanor, punishable by imprisonment for up to one year in the county jail, or in state prison for 2, 3, or 5 years, or a fine of up to $250,000, or both. First violation involving less than 100 copies of an audio recording or an audiovisual work is a misdemeanor, punishable by up to one year in county jail, or a fine not exceeding $25,000, or both. Subsequent violation involving less than 100 copies of an audio recording or an audiovisual work is an alternative felony-misdemeanor, punishable by up to one year in county jail, 16 months, 2 years, or 3 years in state prison, or a fine not exceeding $100,000, or both. (Penal Code 653w.) Existing law defines a "recording" as "any tangible medium upon which information or sounds are recorded or otherwise stored, including any phonograph record, disc, tape, audio cassette, wire, film, or other medium on which information or sounds are recorded or otherwise stored, but does not include sounds accompanying a motion picture or other audiovisual work." This bill includes any memory card, flash drive, hard drive, data storage device, as specific illustrations or examples of a recoding. (More) SB 830 (Wright) PageC Existing law defines "audiovisual works" as "the physical embodiment of works that consist of related images that are intrinsically intended to be shown using machines or devices, such as projectors, viewers, or electronic equipment, together with accompanying sounds, if any, regardless of the nature of the material objects, such as films, tapes, on which the works are embodied." This bill includes discs, memory cards, flash drives, hard drives, data storage device, or other devices as specific illustrations or example of audio-visual works. RECEIVERSHIP/OVERCROWDING CRISIS AGGRAVATION The severe prison overcrowding problem California has experienced for the last several years has not been solved. In December of 2006 plaintiffs in two federal lawsuits against the Department of Corrections and Rehabilitation sought a court-ordered limit on the prison population pursuant to the federal Prison Litigation Reform Act. On January 12, 2010, a federal three-judge panel issued an order requiring the state to reduce its inmate population to 137.5 percent of design capacity -- a reduction of roughly 40,000 inmates -- within two years. In a prior, related 184-page Opinion and Order dated August 4, 2009, that court stated in part: "California's correctional system is in a tailspin," the state's independent oversight agency has reported. . . . (Jan. 2007 Little Hoover Commission Report, "Solving California's Corrections Crisis: Time Is Running Out"). Tough-on-crime politics have increased the population of California's prisons dramatically while making necessary reforms impossible. . . . As a result, the state's prisons have become places "of extreme peril to the safety of persons" they house . . . (Governor Schwarzenegger's Oct. 4, 2006 Prison Overcrowding State of Emergency Declaration), while (More) SB 830 (Wright) PageD contributing little to the safety of California's residents . . . California "spends more on corrections than most countries in the world," but the state "reaps fewer public safety benefits." . . . . Although California's existing prison system serves neither the public nor the inmates well, the state has for years been unable or unwilling to implement the reforms necessary to reverse its continuing deterioration. (Some citations omitted.) . . . The massive 750% increase in the California prison population since the mid-1970s is the result of political decisions made over three decades, including the shift to inflexible determinate sentencing and the passage of harsh mandatory minimum and three-strikes laws, as well as the state's counterproductive parole system. Unfortunately, as California's prison population has grown, California's political decision-makers have failed to provide the resources and facilities required to meet the additional need for space and for other necessities of prison existence. Likewise, although state-appointed experts have repeatedly provided numerous methods by which the state could safely reduce its prison population, their recommendations have been ignored, underfunded, or postponed indefinitely. The convergence of tough-on-crime policies and an unwillingness to expend the necessary funds to support the population growth has brought California's prisons to the breaking point. The state of emergency declared by Governor Schwarzenegger almost three years ago continues to this day, California's prisons remain severely overcrowded, and inmates in the California prison system continue to languish without constitutionally (More) SB 830 (Wright) PageE adequate medical and mental health care.<1> The court stayed implementation of its January 12, 2010, ruling pending the state's appeal of the decision to the U.S. Supreme Court. That appeal, and the final outcome of this litigation, is not anticipated until later this year or 2011. This bill does not appear to aggravate the prison overcrowding crisis described above. COMMENTS 1. Need for This Bill According to the author: SB 830 is a straightforward bill with no opposition that will clarify existing piracy laws by updating the term "recording" to include all newer forms of storage media. California has a serious problem with intellectual property piracy. Nearly a half billion dollars in revenue were lost by the state and local governments due to counterfeited goods, including music and movies. The state's existing statute to protect against music piracy has not kept pace with latest downloading technologies such as memory cards, flash drives, and data storage devices. SB 830 is intended to simply clarify existing law by listing examples of the latest ---------------------- <1> Three Judge Court Opinion and Order, Coleman v. Schwarzenegger, Plata v. Schwarzenegger, in the United States District Courts for the Eastern District of California and the Northern District of California United States District Court composed of three judges pursuant to Section 2284, Title 28 United States Code (August 4, 2009). (More) SB 830 (Wright) PageF technology and devices. 2. Federal Law Controls Copyright - State Law Generally Involves Other Defined Offenses (More) Federal law preempts state law in the area of copyright. State laws related to copyright are generally called "true name and address" laws, which are intended to protect consumers and prohibit specified forms of unfair competition. Penal Code Section 653w is a form of true name and address law. This bill includes illustrations of relatively recently developed devices, such as flash drives and memory cards, which can be used to violate Section 653w. The United States 9th Circuit Court of Appeals upheld the California true name and address law in Anderson v. Nidorf (9th Cir. 1994 26 F.3d 100). Cletus Anderson was convicted under Penal Code Section 653w for failing to disclose the origin of a sound recording: Anderson's claim that Section 653w is preempted by federal copyright law was rejected by the 9th Circuit. The court in Anderson explained its holding that the California law, in protecting interests beyond and apart from federal copyright law, was not preempted by federal law: . . . [T]he district court stated: [] "[Anderson's] argument ignores [that] 653w was designed to serve: 'assisting consumers in this state by mandating that manufacturers market products for which consumers can go back to the source if there are any problems or complaints.' Preemption would frustrate the State's objective of consumer protection through disclosure." [] Federal copyright laws do not . . . protect consumers. They are designed to protect the property rights of copyright owners. ?Because Section 653w does not prohibit the reproduction of copyrighted works, but rather prohibits selling recordings without disclosing the manufacturer and author of the recording (regardless of its copyright status), the federal copyright laws do not preempt the state statute. (Internal citations omitted, bold type added.) The decision in Anderson did not consider whether the California (More) SB 830 (Wright) PageH true name and address statute would be preempted by federal law if the sole intent of the law were to prevent piracy. However, such an argument can be made from the decision in Anderson, which focused on the consumer protection aspect of the California law. Section 653w very broadly describes the devices and media that can be used in a violation of that statute. The section refers to "any tangible medium" upon which audio works are stored or recorded and states that the statute applies to audio-visual works without regard to the nature of the medium or device on which the works are embodied. This bill simply adds examples or illustrations of media that can be used in a violation of the law. It could be argued that large capacity storage devices, such as hard drives and memory cards, would be used to commit substantial violations of federal copyright law. Such devices would not be used in sales of music of movies to unsuspecting individual consumers. . ***************