BILL ANALYSIS                                                                                                                                                                                                    







                      SENATE COMMITTEE ON PUBLIC SAFETY
                             Senator Mark Leno, Chair                S
                             2009-2010 Regular Session               B

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          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




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          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.






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           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  




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               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  








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               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).




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               technology and devices.

          2.  Federal Law Controls Copyright - State Law Generally Involves  
            Other Defined Offenses  








































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          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  




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          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. 
          .

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