BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 744 (J Perez) - Office of Intellectual Property.
Amended: June 18, 2012 Policy Vote: GO 9-2 Judiciary
3-1
Urgency: No Mandate: No
Hearing Date: August 6, 2012 Consultant:
Bob Franzoia
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 744 would establish the Office of Intellectual
Property in the Department of General Services (department).
This bill would authorize the office to carry out various powers
and duties relating to assisting a state agency in the
management and development of intellectual property developed by
state employees or with state funding.
Fiscal Impact: Up to $350,000 in 2012-13 and 2013-14 to develop
legally supported policies for identifying, and procedures for
protecting, intellectual property.
Up to $700,000 annually for 1.5 staff counsels, three
associate governmental program analysts, one staff services
manager, one executive assistant and one office technician
with potentially offsetting state agency workload savings.
Cost split approximately 80 percent General Fund and 20
percent special funds.
Unknown increase in General Fund and special fund revenue
to the extent the processes formalized by this bill relating
to intellectual property result in royalties to the state.
Background: In its November 2011 report Intellectual Property:
An Effective Policy Would Educate State Agencies and Take Into
Account How Their Functions and Property Differ, the Bureau of
State Audits noted the following:
- The state has not enacted a statutory framework nor
implemented the recommendations made in a 2000 audit report.
- Fifty-three percent of the state agencies that responded to
the bureau survey think the state should establish statewide
guidance for managing and protecting intellectual property.
- Four state control agencies do not think they are responsible
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for providing policies or guidance to other state agencies for
managing and protecting intellectual property.
- The four state agencies the bureau visited had only limited
written policies, and the way in which they addressed their
rights varied.
- The Department of Health Care Services generally retains the
rights to intellectual property created by a contractor.
- Certain contracts the California Energy Commission has with
its researchers gives the researchers the rights, but it can and
has earned royalties. Between 2008-09 and 2010-11, it received
$2.6 million in royalties.
- The California Department of Transportation sold licenses to
its employee-developed intellectual property and generated
$51,500 in revenue.
- To move forward, the state will need to clearly articulate the
goals of any policy related to intellectual property.
Proposed Law: This bill defines "intellectual property" to mean
intangible assets subject to statutory protections 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.
Staff Comments: The report suggested the Legislature and
Governor should consider whether establishing a mechanism to
track the State's intellectual property
would be beneficial. This bill requires the department develop
a database for the tracking of 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.
This bill exempts from the definition of state funding, the
California Film and Television Tax Credit Program, likely
denying the state an opportunity to at least obtain a share of
intellectual property from musical, artistic, photographic or
film works, all of which are specified in the definition of
intellectual property proposed by the bill.
The provisions of the bill do not apply to intellectual property
agreements governed by the California Stem Cell Research and
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Cures Bond Act.
Proposed Author Amendments: Proposed author amendments would
require the office to track intellectual property commencing
2015 and every three years thereafter and clarify the
application of existing University of California and California
State University contract provisions.