Amended in Senate April 8, 2013

Amended in Senate January 15, 2013

Senate BillNo. 6


Introduced by Senator Lieu

December 3, 2012


An act to amend, add, 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 amended, Lieu. Business.

Existing law provides that 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.

This bill would, 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. 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:

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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, ofbegin delete, and also to enhance,end delete
4 existing provisions within Section 9321 of the Commercial Code
5relating to a licensee in ordinary course of business.

6

SEC. 2.  

Section 9321 of the Commercial Code is amended to
7read:

8

9321.  

(a) A lessee in ordinary course of business takes its
9leasehold interest free of a security interest in the goods created
10by the lessor, even if the security interest is perfected and the lessee
11knows of its existence.

12(b) This section shall become operative on January 1, 2015.

13

SEC. 3.  

Section 9321 is added to the Commercial Code, to
14read:

15

9321.  

(a) In this section, “licensee in ordinary course of
16business” means a person that becomes a licensee of a general
17intangible in good faith, without knowledge that the license violates
18the rights of another person in the general intangible, and in the
19ordinary course from a person in the business of licensing general
20intangibles of that kind. A person becomes a licensee in the
21ordinary course if the license to the person comports with the usual
22or customary practices in the kind of business in which the licensor
23is engaged or with the licensor’s own usual or customary practices.

24(b) A licensee in ordinary course of business takes its rights
25under a nonexclusive license free of a security interest in the
26general intangible created by the licensor, even if the security
27interest is perfected and the licensee knows of its existence.

28(c) A lessee in ordinary course of business takes its leasehold
29interest free of a security interest in the goods created by the lessor,
30even if the security interest is perfected and the lessee knows of
31its existence.

32(d) This section shall remain in effect only until January 1, 2015,
33and as of that date is repealed, unless a later enacted statute, that
34is enacted before January 1, 2015, deletes or extends that date.

35

SEC. 4.  

Notwithstanding the operative date set forth in Section
362 of Chapter 315 of the Statutes of 2009, Section 9609 of the
37Government Code, or any other provision of law, Sections 2 and
383 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 ofbegin delete, and to enhance,end delete existing law
6relating to a licensee in ordinary course of business to ensure
7economic stability and continuity for purposes of contract
8interpretation, it is necessary that this act take effect immediately.



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