Amended in Senate January 15, 2013

Senate Bill No. 6

Introduced by Senator Lieu

December 3, 2012

An act to amend begin delete and repeal end delete begin insert , add, and repeal, end insert 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 amended, Lieu. Business.

begin delete

Until January 1, 2013, existing

end delete

begin insert Existing end insert law provides that a begin delete 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. end delete begin insert lessee in ordinary course of business takes its leasehold interest free of a security interest in the goods created by the lessor, even if the security interest is perfected and the lessee knows of its existence end insert begin insert . end insert

This bill would begin delete 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 end delete begin insert , until January 1, 2015, also provide that a licensee in ordinary course of business takes its rights under a nonexclusive license free of a security interest in the general intangible created by the licensor, even if the security interest is perfected and the licensee knows of its existence end insert . 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: ²⁄₃. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

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

SECTION 1.  

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

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 9321 of the end insert begin insert Commercial Code end insert begin insert is amended to end insert
begin insert read: end insert

9321.  

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

(b) This section shall become operative on January 1, begin delete 2013 end delete
begin insert 2015 end insert .

begin delete

SEC. 2.  

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

9321.  

end delete

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 9321 is added to the end insert begin insert Commercial Code end insert begin insert , to end insert
begin insert read: end insert

begin insert

begin insert 9321. end insert   

end insert

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

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

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

begin insert

(d) This section shall remain in effect only until January 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2015, deletes or extends that date.

end insert

begin delete

SEC. 3.  

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

end delete

SEC. 4.  

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

SEC. 5.  

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

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