BILL ANALYSIS                                                                                                                                                                                                    Ó






                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                              2013-2014 Regular Session


          AB 609 (Nestande and Gatto)
          As Amended June 11, 2014
          Hearing Date: June 24, 2014
          Fiscal: Yes
          Urgency: No
          TH   
                    

                                        SUBJECT
                                           
              State-funded research: State Department of Public Health

                                      DESCRIPTION  

          This bill would require a grantee who receives funding, in whole  
          or in part, in the form of a research grant from the State  
          Department of Public Health to provide free public access to any  
          publication resulting from that research, as specified.

                                      BACKGROUND  

          Federal law provides for the protection of intellectual property  
          rights through federal patent and copyright law.  Generally  
          speaking, copyright law applies to "original works of  
          authorship," and includes works of art and other intellectual  
          works (such as computer programs, data compilations, and maps).   
          Copyright attaches to a work as soon as it is tangibly created,  
          and may be registered with the U.S. Copyright Office.  Patent  
          law applies to inventions (such as scientific advances, devices,  
          and sometimes business processes).  Generally speaking, a patent  
          must be obtained from the U.S. Patent and Trademark Office  
          before its owner has legal rights over the intellectual  
          property.  Both copyright and patent law give the legal holder  
          of the copyright or patent the ability to control the use and  
          dissemination of the intellectual property.  Additionally,  
          federal and state laws protect the registration of trademarks,  
          providing an owner with the right to exclude others from using a  
          specific mark or using a confusingly similar mark.  California's  
          Trademark Law provides that trademarks may be registered with  
          the Secretary of State, although registration is not required to  
          protect them since trademark rights also arise under common law  
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          as a result of actual use.  

          Considering the numerous types of intellectual property that may  
          be created by the State of California and its agencies, either  
          directly through the work of employees or through financing the  
          research of others, the state has a compelling interest in  
          ensuring that state created or state sponsored intellectual  
          property is adequately protected and appropriately used.  In  
          November 2000, a report by the Bureau of State Audits (now the  
          California State Auditor) on State-Owned Intellectual Property  
          concluded:

               [M]any state agencies are not sufficiently  
               knowledgeable about the intellectual property they  
               own.  Lacking adequate knowledge of their intellectual  
               property ownership and rights, state agencies could  
               fail to act against those who use the State's  
               intellectual property inappropriately.  Inappropriate  
               use includes unauthorized use of state trademarks and  
               improperly profiting on products developed at state  
               expense.  Further . . . state-level direction for  
               administering intellectual property is limited.  The  
               few state laws that address intellectual property do  
               so in a piecemeal fashion . . . [and] state agencies  
               have either no or incomplete written policies for  
               managing their intellectual property.  (State-Owned  
               Intellectual Property (Nov. 2000)  
                (as  
               of June 17, 2014.)

          That report further noted that although more than 113,000 items  
          of state-owned intellectual property were identified, the state  
          likely owns more.  Finally, the report contained several  
          recommendations:

               The Legislature should clarify state law to  
               specifically allow all state agencies to own and, if  
               necessary, formally register intellectual property  
               they create or otherwise acquire when it is deemed to  
               be in the public's best interest.

               The Legislature should designate a single state agency  
               as the lead for developing overall policies and  
               guidance related to state-owned intellectual property.  
               . . .

                                                                      



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               Finally, the Legislature should consider whether the  
               interest of the public is best served when the State  
               uses standard contract language that essentially gives  
               contractors a free license to use and sell  
               intellectual property they develop for the State. 

          Following this report, ACR 252 (Mullin, Res. 190, Stats. 2004)  
          requested the California Council on Science and Technology  
          (CCST) to create a special study group to develop  
          recommendations to the Governor and the Legislature on how the  
          state should treat intellectual property created under state  
          contracts, grants, and agreements.  In 2005, ACR 24 (Mullin,  
          Res. 111, Stats. 2005) requested the CCST to expand the scope of  
          the study group to include contracts, grants, and agreements  
          developed under Proposition 71 and to study how the  
          commercialization of technology developed with taxpayer dollars  
          in the form of contracts, grants, and agreements could generate  
          some public benefit.  The final report in response to those  
          requests was published in January 2006.  In February of 2006, AB  
          2721 (Mullin) was introduced to establish the Office of  
          Intellectual Property and to stipulate various intellectual  
          property policies for the State of California.  That bill failed  
          to pass out of the Senate Governmental Organization Committee.   
          Subsequently, AB 1456 (Mullin) was introduced in March of 2007  
          to similarly establish the Office of Intellectual Property to  
          track intellectual property, develop an outreach campaign, and  
          various advisory materials.  That bill was held in the Senate  
          Appropriations Committee.  Finally, in 2012, the Legislature  
          passed AB 744 (Perez, Ch. 463, Stats. 2012) which gave the  
          Department of General Services various powers and duties to  
          assist state agencies in the management and development of  
          intellectual property developed by state employees or with state  
          funding.  As part of its duties, DGS was authorized to develop a  
          database of state-owned intellectual property. 

          This bill would address the management of intellectual property  
          generated with state funding in a different fashion.  It would  
          require, as a condition of receiving a research grant from the  
          State Department of Public Health, that a grantee ensure that an  
          electronic version of any peer-reviewed manuscript resulting  
          from the grant is either given to the Department or placed in an  
          approved publicly accessible database not later than 12 months  
          after its date of publication.  For published materials that are  
          not peer-reviewed, the bill would require that the grantee  
          provide the manuscript to the Department not later than 12  
          months after the date of publication.  This bill would require a  
                                                                      



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          grantee to ensure that any publishing or copyright agreements  
          concerning Department-funded research include appropriate terms  
          allowing for the materials to become publicly available 12  
          months after publication, as provided, and would require the  
          Department to track information pertaining to published work  
          resulting from its research grants.

                                CHANGES TO EXISTING LAW
           
           Existing federal regulations  state that the federal government  
          shall obtain, except as provided, the entire right, title and  
          interest in and to any invention made by any government  
          employee: during working hours; with a contribution by the  
          government of facilities, equipment, materials, funds or  
          information, or of time or services of other government  
          employees on official duty; or which bears a direct relation to  
          or is made in consequence of the official duties of the  
          inventor.  (37 Code Fed. Regs. Sec. 501.6.)

           Existing state law  provides that everything which an employee  
          acquires by virtue of his employment, except the compensation  
          which is due to him from his employer, belongs to the employer,  
          whether acquired lawfully or unlawfully, or during or after the  
          expiration of the term of his employment.  (Lab. Code Sec.  
          2860.)

           Existing law  provides that an employment agreement which  
          provides that an employee shall assign, or offer to assign, any  
          of his or her rights in an invention to his or her employer  
          shall not apply to an invention that the employee developed  
          entirely on his or her own time without using the employer's  
          equipment, supplies, facilities, or trade secret information  
          except for those inventions that either:
           relate at the time of conception or reduction to practice of  
            the invention to the employer's business, or actual or  
            demonstrably anticipated research or development of the  
            employer; or
           result from any work performed by the employee for the  
            employer.  (Lab. Code Sec. 2870.)

           Existing law  declares that it is in the interest of the state to  
          ensure that the results of state-funded research are promptly  
          developed and protected and to make the research available in  
          the public domain, where appropriate.  (Gov. Code Sec.  
          13988(b).)

                                                                      



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           This bill  , the California Taxpayer Access to Publicly Funded  
          Research Act, would provide that a grantee that receives  
          funding, in whole or in part, in the form of a research grant  
          from the State Department of Public Health (Department) shall  
          provide for free public access to any publication of a  
          Department-funded invention or Department-funded technology, as  
          provided.

           This bill  would require, when the Department provides funding,  
          in whole or in part, in the form of a research grant, that the  
          grant include the following terms and conditions: 
           that grantees are responsible for ensuring that any publishing  
            or copyright agreements concerning submitted manuscripts fully  
            comply with this bill; and
           that grantees shall report to the Department the final  
            disposition of the research grant, including, but not limited  
            to, if it was published, when it was published, where it was  
            published, when the 12-month time period expires, and where  
            the manuscript will be available for open access.

           This bill  would require the Department to retain information  
          regarding all issued research grants that resulted in published  
          works.

           This bill  would require, for a manuscript that is accepted for  
          publication in a peer-reviewed journal, that the grantee ensure  
          that an electronic version of the peer-reviewed manuscript is  
          available to the Department and on an appropriate publicly  
          accessible database approved by the Department, to be made  
          publicly available not later than 12 months after the official  
          date of publication.  If the grantee is unable to ensure that  
          their manuscript is accessible on an approved publicly  
          accessible database, the grantee may comply by providing the  
          manuscript to the Department not later than 12 months after the  
          official date of publication.

           This bill  would require, for publications other than those  
          accepted for publication in a peer-reviewed journal, including  
          meeting abstracts, the grantee shall provide the manuscript to  
          the Department not later than 12 months after the official date  
          of publication.

           This bill  would state that grantees are responsible for ensuring  
          that publishing or copyright agreements concerning submitted  
          articles fully comply with the above provisions.  This bill  
          would also provide that grantees are authorized to use grant  
                                                                      



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          money for publication costs, including fees charged by a  
          publisher for color and page charges, or fees for digital  
          distribution.

           This bill  would provide that it shall not be construed to  
          authorize use of a peer-reviewed manuscript that would  
          constitute an infringement of copyright under the federal  
          copyright law.  This bill would also provide that it shall not  
          apply to a grantee that receives funding for which there is an  
          existing publication requirement that meets or exceeds the above  
          requirements.

           This bill  would specify that it shall not apply to research  
          grants issued prior to January 1, 2015, and that it shall remain  
          in effect only until January 1, 2020.

                                        COMMENT
           
          1.  Stated need for the bill  
          
          The author writes:
          
            California taxpayers invest hundreds of millions of dollars  
            annually in research.  State research funding includes  
            research and development by universities and state agencies,  
            as well as efforts such as the California Institute for  
            Regenerative Medicine and specific disease research programs.   
            Upon completion of a project, researchers write an article  
            explaining the results of the study, which is then submitted  
            to an academic journal for publication.  Access to the  
            information contained in these research articles is an  
            essential component of our state's investment in science, and  
            should be widely shared with the public.

            Unfortunately, most taxpayers - including students, medical  
            professionals, scientists, and entrepreneurs - cannot readily  
            gain access to all the research paid for with their taxes.   
            The majority of research funded with public dollars is  
            available only with costly journal subscriptions.  Single  
            articles can cost up to $30 each, and some journals cost up to  
            $40,000 year.  The 10-campus University of California system  
            spends nearly $40 million each year to buy access to academic  
            journals, even though many of the articles are written,  
            reviewed, and edited by UC professors as part of their  
            academic scholarly duties.

                                                                      



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            AB 609 will ensure that the public can access the published  
            results of California taxpayer-funded research for free.  This  
            bill requires each researcher receiving a state-funded  
            research grant to submit an electronic copy of their research  
            publication to an appropriate digital repository no later than  
            twelve months after the work is published.  This policy will  
            apply to peer-reviewed research publications that have been  
            supported, in whole or in part, [by research grants] from [the  
            State Department of Public Health], and not indiscriminately  
            to all public postsecondary faculty members receiving their  
            salary from the state.  The completed research publications  
            will become openly accessible, free of charge, to the public.
          2.  Disposition of publicly financed research  

          Under existing law, employers, including California's public  
          universities, may control the disposition of certain types of  
          intellectual property developed during an employee's work hours  
          or using the employer's resources.  Often, as a condition of  
          receiving a research grant, state, federal, and nonprofit  
          granting agencies will similarly place conditions on the  
          disposition of discoveries and intellectual property that result  
          from a grant.  The federal government, for example, requires  
          businesses and nonprofits to retain ownership of inventions and  
          discoveries made under federally funded research and contract  
          programs, while also giving the government the license to  
          practice the subject invention.  (See 35 U.S.C. Sec. 202.)

          This bill would impose similar disposition requirements on  
          intellectual property - in the form of published research - that  
          results from research grants issued by the State Department of  
          Public Health.  In effect, this bill would mandate that all  
          published research produced in part with Departmental funding  
          shall either be made publicly available through its placement on  
          an approved online repository or via submission to the  
          Department within 12 months of publication.  Staff notes that  
          requiring publication of research partially funded with taxpayer  
          dollars is consistent with the Legislature's declared policy of  
          making the results of state-funded research available in the  
          public domain.  (Gov. Code Sec. 13988(b).)

          Staff also notes that this bill would replicate, in part, a  
          practice employed by the National Institutes of Health (NIH) for  
          research it funds through grants.  Since 2008, NIH has required  
          investigators funded by the agency to submit an electronic  
          version of all peer-reviewed manuscripts to the agency no later  
          than 12 months after publication so that the results of all  
                                                                      



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          NIH-funded research may be made publicly available.  Grant  
          receiving institutions and investigators are tasked with  
          ensuring that any publishing or copyright agreements concerning  
          submitted articles comply with the policy, which mirrors an  
          element of this bill.  Unlike this bill which does not specify a  
          particular online repository for grantees to submit materials  
          to, NIH requires its grantees to accession manuscripts in  
          "PubMed Central," NIH's own digital repository for materials  
          published within the biomedical and life sciences fields.


           Support  :  Advancement Project; Association of College and  
          Research Libraries; Association of Research Libraries;  
          California Academy of Preventative Medicine; California  
          Associates of Susan G. Komen; California Association of  
          Physician Groups; California Association of Psychiatric  
          Technicians; Coalition of Open Access Policy Institutions;  
          Creative Commons; Electronic Frontier Foundation; Greater  
          Western Library Alliance; Howard Hughes Medical Institute;  
          Lieutenant Governor, State of California; National Association  
          of Graduate-Professional Students; Public Knowledge; Public  
          Library of Science; Scholarly Publishing and Academic Resources  
          Coalition; University of California; University of California  
          Student Association; 15 individuals

           Opposition  :  None Known

                                        HISTORY
           
           Source  :  Author

           Related Pending Legislation :  None Known

           Prior Legislation  :

          AB 744 (Perez, Ch. 463, Stats. 2012) See Background.

          AB 1456 (Mullin, 2007) See Background.

          AB 2721 (Mullin, 2006) See Background.

          ACR 24 (Mullin, Ch. 111, Stats. 2005) See Background.

          ACR 252 (Mullin, Ch.190, Stats. 2004) See Background.

           Prior Vote  :
                                                                      



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          Senate Committee on Governmental Organization (Ayes 8, Noes 0)
          Senate Committee on Governmental Organization (Ayes 5, Noes 0)  
          (Failed, Reconsideration Granted)
          Assembly Floor (Ayes 71, Noes 7)
          Assembly Committee on Appropriations (Ayes 17, Noes 0)
          Assembly Committee on Accountability and Administrative Review  
          (Ayes 8, Noes 2)

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