BILL NUMBER: SB 650	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JANUARY 21, 2014
	AMENDED IN SENATE  JANUARY 6, 2014
	AMENDED IN SENATE  APRIL 15, 2013

INTRODUCED BY   Senator Lieu

                        FEBRUARY 22, 2013

   An act to add Section 9321.1 to, and to repeal and amend Section
9321 of, the Commercial Code, relating to business.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 650, as amended, Lieu. Motion pictures.
   Existing law provides, until January 1, 2015, 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 remove the repeal of this provision on January 1,
2015, thus making this provision in effect indefinitely.
   This bill would also provide that a licensee of nonexclusive
rights in a motion picture that is produced pursuant to one or more
collective bargaining agreements, as specified, takes its
nonexclusive license in the motion picture subject to any perfected
security interest securing the obligation to pay residuals as set
forth in the applicable collective bargaining agreement and arising
from exploitation under the license.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 9321 of the Commercial Code, as amended by
Section 2 of Chapter 54 of the Statutes of 2013, is repealed.
  SEC. 2.  Section 9321 of the Commercial Code, as added by Section 3
of Chapter 54 of the Statutes of 2013, is amended to read:
   9321.  (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.
   (b)  A   Except   as otherwise
provided in Section 9321.1, 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.
  SEC. 3.  Section 9321.1 is added to the Commercial Code, to read:
   9321.1.   Notwithstanding the foregoing, a  
A  licensee of nonexclusive rights in a motion picture that is
produced pursuant to one or more collective bargaining agreements
governed by the laws of the United States takes its nonexclusive
license in such motion picture subject to any perfected security
interest securing the obligation to pay residuals as set forth in the
applicable collective bargaining agreement and arising from
exploitation under such license. The terms "motion picture" and
"residuals" have the meaning ascribed to such terms under the
applicable collective bargaining agreements.