Senate BillNo. 6


Introduced by Senator Lieu

December 3, 2012


An act to amend and repeal Section 9321 of the Commercial Code, relating to business, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 6, as introduced, Lieu. Business.

Until January 1, 2013, existing law provides that a licensee in ordinary course of business, as defined, takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, as specified.

This bill would indefinitely extend the operation of that provision and further provide that a person does not become a licensee of intellectual property in the ordinary course if the transaction involves meaningful negotiation of material terms of the license. This bill would, notwithstanding any other law, make its provisions operative on January 1, 2013, and state the Legislature’s intent in this regard.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P1    1

SECTION 1.  

To ensure economic stability and continuity for
2purposes of contract interpretation, it is the intent of the Legislature
3to negate the repeal on January 1, 2013, of, and also to enhance,
P2    1existing provisions within Section 9321 of the Commercial Code
2relating to a licensee in ordinary course of business.

3

SEC. 2.  

Section 9321 of the Commercial Code, as amended
4by Section 1 of Chapter 315 of the Statutes of 2009, is amended
5to read:

6

9321.  

(a) In this section, “licensee in ordinary course of
7business” means a person that becomes a licensee of a general
8intangible in good faith, without knowledge that the license violates
9the rights of another person in the general intangible, and in the
10ordinary course from a person in the business of licensing general
11intangibles of that kind. A person becomes a licensee in the
12ordinary course if the license to the person comports with the usual
13or customary practices in the kind of business in which the licensor
14is engaged or with the licensor’s own usual or customary practices.
15begin insert A person does not become a licensee of intellectual property in end insert
16begin insertthe ordinary course if the transaction involves meaningful end insert
17begin insertnegotiation of material terms of the license.end insert

18(b) A licensee in ordinary course of business takes its rights
19under a nonexclusive license free of a security interest in the
20general intangible created by the licensor, even if the security
21interest is perfected and the licensee knows of its existence.

22(c) A lessee in ordinary course of business takes its leasehold
23interest free of a security interest in the goods created by the lessor,
24even if the security interest is perfected and the lessee knows of
25its existence.

begin delete

26(d) This section shall remain in effect only until January 1, 2013,
27and as of that date is repealed, unless a later enacted statute, that
28is enacted before January 1, 2013, deletes or extends that date.

end delete
29

SEC. 3.  

Section 9321 of the Commercial Code, as amended
30by Section 2 of Chapter 315 of the Statutes of 2009, is repealed.

begin delete
31

9321.  

(a) A lessee in ordinary course of business takes its
32leasehold interest free of a security interest in the goods created
33by the lessor, even if the security interest is perfected and the lessee
34knows of its existence.

35(b) This section shall become operative on January 1, 2013.

end delete
36

SEC. 4.  

Notwithstanding the operative date set forth in Section
372 of Chapter 315 of the Statutes of 2009, Section 9609 of the
38Government Code, or any other provision of law, Sections 2 and
393 of this bill are operative commencing on January 1, 2013.

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SEC. 5.  

This act is an urgency statute necessary for the
2immediate preservation of the public peace, health, or safety within
3the meaning of Article IV of the Constitution and shall go into
4immediate effect. The facts constituting the necessity are:

5In order to negate the repeal of, and to enhance, existing law
6relating to a licensee in ordinary course of business that ensure
7economic stability and continuity for purposes of contract
8interpretation, it is necessary that this act take effect immediately.



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