BILL ANALYSIS                                                                                                                                                                                                    







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        |Hearing Date:June 17, 2010         |Bill No:AB                         |
        |                                   |630                                |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                              Senator Ted W. Lieu, Chair
                                           

                          Bill No:        AB 630Author:Holden
                          As Amended:June 3, 2010  Fiscal:No

        
        SUBJECT:  Architects.
        
        SUMMARY:  Specifies that no person may use an architect's instruments  
        of service, as specified, without written consent, contract or  
        agreement specifically authorizing that use, and declares that the  
        bill is a clarification of existing law and does not take away any  
        right otherwise granted by law.

        Existing law:
        
       1)Licenses and regulates the practice of architecture under the  
          Architects Practice Act by the California Architects Board (CAB)  
          within the Department of Consumer Affairs (DCA).  (Business and  
          Professions Code (BPC)  5500 et seq.)

       2)Mandates that protection of the public shall be the highest priority  
          for the CAB, and that whenever the protection of the public is  
          inconsistent with other interests sought to be promoted, the  
          protection of the public shall be paramount.  (BPC  5510.15)

       3)Defines the practice of architecture and provides that an architect's  
          professional services may include the following:  (BPC  5500.1 (b))

           a)   Investigation, evaluation, consultation, and advice;

           b)   Planning, schematic, and preliminary studies, designs, work  
             drawings, and specifications;

           c)   Coordination of the work of technical and special consultants;






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           d)   Compliance with generally applicable codes and regulations,  
             and assistance in the governmental review process;

           e)   Technical assistance in the preparation of bid documents and  
             agreements between clients and contractors;

           f)   Contract administration; and,

           g)   Construction observation.


       4)Requires an architect to use a written contract when providing  
          professional services to a client, and requires the contract to  
          include a description of the procedure to be used by either party to  
          terminate the contract.  (BPC  5536.22)

       5)Provides copyright protection under the Federal Copyright Act for  
          original works of authorship, including "architectural work" created  
          in any tangible medium of expression.  (Title 17 United States Code  
          (USC)  102)

       6)Defines "architectural work" to mean the design of a building as  
          embodied in any tangible medium of expression, including a building,  
          architectural plans, or drawings.  The work includes the overall  
          form as well as the arrangement and composition of spaces and  
          elements in the design, but does not include individual standard  
          features.  (17 USC  101) 

        This bill:

       1)Specifies that no person may use an architect's instruments of  
          service, as specified, without written consent, contract or  
          agreement specifically authorizing that use.

       2)Declares that the bill is a clarification of existing law and does  
          not take away any right otherwise granted by law.

        FISCAL EFFECT:  This bill has been keyed "non-fiscal" by Legislative  
        Counsel. 

        COMMENTS:
        
       1.Purpose.  This bill is sponsored by the  American Institute of  
          Architects, California Council  (AIACC) to clarify in plain English  
          that the services provided by an architect, otherwise known as an  
          Instrument of Service, cannot be used without written consent,  





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          contract or agreement of the architect. 

       According to the Author, AB 630 attempts to clarify that a person or  
          entity must have contractual authorization to use the work, or  
          Instruments of Service, prepared by an architect.  By clarifying  
          existing law in plain English, the objective is to establish a clear  
          law that can be used to avoid timely and costly arguments when an  
          unauthorized user attempts to use the Instruments of Services  
          prepared by an architect.

       2.Background.  Like other professionals, architects provide a service  
          to their clients.  Those Instruments of Service, which include  
          planning, schematic and preliminary studies, designs, working  
          drawings, specifications, are used to develop buildings and  
          structures.

          Importantly, architects provide a service and not a product.  The  
          service cannot be bought and sold except by the architect, with the  
          consent of the architect, or by the client if the architect has  
          transferred ownership of the intellectual property to the client.   
          While the law prohibits unauthorized use of architects' Instruments  
          of Service, architects find themselves in situations where a person  
          believes he/she bought the plans, owns them, and has the right to  
          use them.  

          An example of this scenario is when an architect prepares the plans  
          for the client, the plans are reviewed and approved by the local  
          building department and a building permit is issued.  The client  
          sells the property before it is developed, saying the approved  
          architectural plans are a part of the transaction.  The new owner of  
          the property believes he/she owns the plans (the Instruments of  
          Service) and can use them to develop the property as he/she sees  
          fit.  However, unless the contract allows the client to transfer the  
          license to use the Instruments of Service to another person, or the  
          new property owner enters into an agreement with the architect, the  
          new owner is not allowed to use the architect's Instruments of  
          Service.

          The requirement that a user have a license to use an architect's  
          Instrument of Services allows the architect to protect him/herself  
          and the public, e.g., performing construction administration  
          services to ensure the project is constructed according to the  
          plans.  The new property owner described above would not have to  
          honor the construction administration services portion of the  
          contract between the architect and original owner as the new  
          property owner does not have a contractual agreement with the  





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          architect.

       3.Instruments of Service.  The term "Instruments of Service" is  
          commonly used in relation to architectural service and practices and  
          is defined as the "representations, in any medium of expression now  
          known or later developed, of the tangible creative work performed by  
          the architect and the architect's consultants under their respective  
          professional services agreements.  Instruments of Service may  
          include, without limitation, studies, surveys, models, sketches,  
          drawings, specifications, and other similar materials."  The latest  
          amendments narrow the bill's focus to those Instruments of Service  
          involving "planning, schematic and preliminary studies, designs,  
          working drawings and specifications."

       4.Written Contracts and Copyrights.  Current law already provides  
          protections for an architectural work under Federal Copyright law  
          and state contract law.  If a person improperly uses or transfers  
          architectural work, an architect can pursue legal action in a  
          federal court and seek injunctive relief or compensation ranging  
          from $200 to $150,000 for each infringement.  In addition, if a  
          contract prohibits the transfer of architectural work, then an  
          architect can sue for a breach of contract in state civil court.

       If an architect's written contract does not state whether the right of  
          the original client to use the architectural work can be transferred  
          to another person, it is implied that the only person who is  
          authorized to use the architectural work is the client who signs the  
          contract.  The Sponsor believes this bill will remove any ambiguity  
          as to who is authorized to use an architectural work.  

       In addition, if a written contract is silent on the transfer rights of  
          an architectural work, this bill would prohibit the use of an  
          architect's work without permission, even if that was not the  
          intent.  Generally, this would pose no problem, since anyone other  
          than the original client should seek permission from the architect  
          to use his or her work.  However, since copyright protection for a  
          work can last anywhere from 70 years following the life of the  
          author to 120 years after the date of publication, a situation may  
          arise in which the architect will not be available to grant  
          permission, even if it is sought.

       5.CAB Concerns.  Although the CAB supports the bill, in its support  
          letter CAB raises two concerns.  First, the CAB points out, "?these  
          proposed provisions may be more appropriate in the Civil Code or the  
          general provisions of the Business and Professions Code, rather than  
          the Architects Practice Act.  This is because the CAB has no  





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          regulatory authority over consumers/clients . . ."


       Second, the CAB is concerned that, "?these well-intended provisions  
          could be abused by an architect simply terminating a contract even  
          though the payment for services is current.  This would leave the  
          consumer/client in the untenable position of having to negotiate  
          with the architect to continue the project and ultimately use the  
          Instruments of Service."

       Staff notes that the ability for an architect to abuse the contracting  
          process by terminating the contract and leaving the client in the  
          position of having to again negotiate with the architect already  
          appears to be a possibility under current law.  It is unclear how  
          this bill would change those dynamics. 

       6.Arguments in Support.  The  American Institute of Architects  
          California Council  (AIACC) writes in support of the bill:  "AB 630  
          seeks to add to state law language that clarifies in plain and  
          simple English that a person must have permission to use the work,  
          or Instruments of Service, prepared by an architect.  [AIACC's] hope  
          is AB 630 will give architects a tool to educate a person who is  
          trying to illegally use the Instruments of Services prepared by the  
          architect, and hopefully avoid timely and costly arguments . . .  
          Importantly, architects provide a service and not a product.  The  
          service cannot be bought and sold except by the architect or, if by  
          third parties, with the consent of the architect."

       AIACC further states, "While the federal Copyright Act does prohibit  
          the unauthorized use of architects' Instruments of Service,  
          architects find themselves in situations where a person believes  
          he/she bought the plans, owns them, and has the right to use them .  
          . . A survey the AIACC conducted early last year of architectural  
          firms in California showed that a sizeable percentage (nearly 50%)  
          of the firms that responded have encountered a person attempting to  
          use their Instruments of Service without permission."

       According to the  CAB  , "AB 630 solves the problem of architects'  
          Instruments of Service being used without their consent in the event  
          a party other than the original client takes over a project.  In  
          some cases, the architect has not been paid for their professional  
          services, the original client enters bankruptcy, and a bank  
          subsequently takes over the project believing they  own  the  
          Instruments of Service.  In this situation, the architect's  
          Instruments of Service are subsequently used to construct the  
          project without the architect being compensated for the professional  





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          services, and potentially without the services and construction  
          documents being complete and compliant with codes and standards."
       
        7.Policy Consideration  :  Should these provisions be in the Architects  
          Practice Act?  The CAB has questioned whether the provisions  
          contained in this bill should be placed within the Act or even  
          within the Business and Professions Code.  The CAB has pointed out  
          that the law mandates that the protection of the public shall be the  
          highest priority of the CAB (BPC  BPC  5510.15), and that this  
          bill is aimed at benefiting licensees rather than the public.  More  
          importantly, CAB states that the Board cannot enforce the provisions  
          of the bill, since the CAB has jurisdiction over licensees and this  
          bill is aimed at clients, who are not accountable to the CAB.  CAB  
          suggests the amendments should be better placed in the Civil Code  
          rather than in the Act.

       In response, the Sponsor points out that there are other provisions in  
          the Act that are not enforced by the CAB.  BPC  5536.25 provides  
          that if after the architect has signed and stamped plans and the  
          plans are subsequently changed, then the architect shall not be held  
          liable for those changes.  BPC  5536.27 grants an architect  
          immunity for services provided without compensation in response to a  
          declared emergency.  The Sponsor indicates that although each of  
          these provisions is within the Architects Practice Act, they are not  
          administered or enforced by the CAB.
        

        SUPPORT AND OPPOSITION:
        
         Support:  

        American Institute of Architects, California Council (Sponsor)
        California Architects Board

         Opposition:  

        None on file as of June 12, 2013.



        Consultant:G. V. Ayers