Amended in Assembly May 31, 2016

Amended in Assembly March 15, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2880

Introduced by Committee on Judiciary (Assembly Members Mark Stone (Chair), Alejo, Chau, Chiu, Cristina Garcia, begin delete and Holden) end delete begin insert Holden, and Ting) end insert

February 25, 2016

An act to amend Sections begin insert 13988, end insert 13988.2, 13988.3, and 14615.1 begin delete of end delete begin insert of, and to add Sections 6253.11 and 13988.35 to, end insert the Government Code, and to amend Section 10335 of the Public Contract Code, relating to state intellectual property.

LEGISLATIVE COUNSEL’S DIGEST

AB 2880, as amended, Committee on Judiciary. State intellectual property.

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Existing

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(1) The California Public Records Act requires a state or local agency, as defined, to make public records available for inspection, subject to certain exceptions.

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This bill would provide that any work released into the public domain would be a public record. The bill would also prohibit a public agency from denying a request for public records under the California Public Records Act on the grounds that the information requested is protected under the federal Copyright Act of 1976, except as specified.

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begin insert (2) end insert begin insert   end insert begin insert Existing end insert law authorizes the Department of General Services to carry out various powers and duties relating to assisting a state agency in the management and development of intellectual property developed by state employees or with state funding, including, among other duties, developing a database of state-owned intellectual property using specified data and factors that state agencies should consider when deciding whether to sell their intellectual property or license it to others.

This bill would authorize a begin delete public end delete begin insert state end insert entity to own, license, and, if it deems it appropriate, formally register intellectual property it creates or otherwise acquires. The bill would provide that a begin delete public end delete begin insert state end insert entity’s intellectual property rights would not preclude the begin delete public end delete begin insert state end insert entity from disclosing any information otherwise accessible under the California Public Records begin delete Act and that those disclosures would not be construed as waiving any rights afforded under the federal Copyright Act of 1976. end delete begin insert Act. end insert

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Under

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begin insert (3) end insert begin insert   end insert begin insert Under end insert existing law, contracts by state agencies for services rendered to the state are, with certain exceptions, of no effect unless and until approved by the Department of General Services. Existing law imposes various requirements with respect to contracts for services rendered to the state. begin insert Existing law requires the department to develop factors for state agencies to consider in deciding whether to sell or license their intellectual property. end insert

This bill would require begin insert the department to develop factors for end insert state agencies to consider begin delete the processes, procedures, or policies developed by the department regarding the management and development of state intellectual property. For end delete

begin insert The bill would require a state entity that reasonably determines that a work meets the criteria for copyright protection to catalogue the work and submit the information to the department. For end insert contracts entered into on or after January 1, 2017, the bill would prohibit a state agency from entering into a contract that begin delete waives end delete begin insert fails to address end insert the state’s intellectual property rights unless the agency, prior to execution of the contract, obtains the consent of the begin delete department to the waiver and would provide that a waiver of the state’s intellectual property rights by a state agency that violates this requirement would be deemed void as against public policy. end delete begin insert department. end insert The bill would also require the department to develop sample language for an advisory provision begin delete to that effect. end delete begin insert stating, among other things, that an attempted waiver of intellectual property rights without the approval of the department is void. The bill would provide criteria to be considered by a state entity in pursuing an action for copyright infringement. end insert

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Existing

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begin insert (4) end insert begin insert   end insert begin insert Existing end insert law exempts from the Administrative Procedure Act certain actions to maintain, develop, or prescribe processes, procedures, or policies by the Department of General Services that are required or authorized by the Legislature with respect to the general operations of the department or the awarding of state contracts.

This bill would additionally exempt those actions taken with respect to the department’s above-described duties relating to the management and development of state intellectual property, as provided.

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(5) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

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This bill would make legislative findings to that effect.

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

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

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begin insert SECTION 1. end insert   

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begin insert Section 6253.11 is added to the end insert begin insert Government Code end insert begin insert ,
to read: end insert

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begin insert 6253.11. end insert   

(a) Any work released into the public domain shall
be deemed a public record.

(b) A public agency shall not deny a request for a record that
is otherwise public pursuant to this chapter on grounds that the
information requested is protected by the federal Copyright Act
of 1976 (17 U.S.C. Sec. 101 et seq.). A request for such a record
shall be denied only if one of the following applies:

(1) The facts of the particular case demonstrate that the public
interest served by not disclosing the record clearly outweighs the
public interest served by disclosure of the record as provided in
subdivision (a) of Section 6255.

(2) The record in question is exempt under express provisions
of this chapter.

(c) A public agency that releases a public record that is subject
to copyright protection pursuant to paragraph (1) of subdivision
(b) of Section 13988.3 shall issue the requesting party a license
to use the record in a manner that is consistent with the rights
provided under this chapter and that is considered an act of fair
use under the federal Copyright Act. The license may restrict the
holder from using the record for a commercial use only if such
use would result in economic harm to the public agency or to the
public’s interest.

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begin insert SEC. 2. end insert   

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begin insert Section 13988 of the end insert begin insert Government Code end insert begin insert is amended to
read: end insert

13988.  

The Legislature finds and declares all of the following:

(a) The state is home to many of the world’s top research
universities, national laboratories, and leading-edge
high-technology companies that generate significant intellectual
property.

(b) It is in the interest of the state to ensure that the results of
state-funded research are promptly developed and protected and
to make the research available in the public domain, where
appropriate.

(c) The commercialization of technology developed with the
investment of taxpayer dollars in the form of contracts, grants, and
agreements could generate public benefit, including, but not limited
to, state revenues, favorable pricing, revenue sharing, reinvestment
into research, development of new technologies, the
commercialization of the product of state-funded research, and the
jobs created from these types of research.

(d) It is in the interest of the state to facilitate, promote, and
enhance technology transfer programs that will facilitate the
transfer of technology into the marketplace for the public benefit.

(e) The Legislature supports the use of efficient models to
develop and streamline infrastructures, policies, and processes for
the management of intellectual property developed under state
funding in order to stimulate economic development in the state
while, at the same time, minimizing costs of administering policies
in this area.

(f) It is the intent of the Legislature that the rights of state
agencies and departments to track and manage intellectual property
created with any state funds shall be interpreted so as to promote
the benefit to the begin delete public. end delete begin insert public and be managed in a way that
encourages a release into the public domain whenever it is feasible
and appropriate and does not interfere with the public’s right to
access to public records. end insert

(g) It is the intent of the Legislature that the Department of
General Services have access to information about intellectual
property created by state employees and by state-funded research,
consistent with state and federal laws and regulations governing
access to this information.

(h) The Legislature recognizes that the licensing of or limitations
on the use of intellectual property should accommodate free
expression and, therefore, state agencies and departments should
not develop policies or procedures to license or otherwise limit
the use of the state’s intellectual property in expressive works
created by nonstate employees or without state funding.

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(i) The Legislature recognizes that because state agencies and
departments have different intellectual property needs, a statewide
and uniform approach to managing the state’s intellectual property
should provide state agencies and departments reasonable levels
of discretion that promote releasing information into the public
domain and protect the state from unauthorized economic gain,
but still ensure the public’s right of access to public records.

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begin delete SECTION 1. end delete

begin insert SEC. 3. end insert   

Section 13988.2 of the Government Code is amended
to read:

13988.2.  

(a) The department shall perform all of the following
functions:

(1) Commencing January 1, 2015, and every three years
thereafter, track intellectual property generated by state employees
or with state funding.

(2) Develop a database that includes, but is not limited to,
tracking intellectual property by category of protection, date of
creation, owner of intellectual property, grantee, state agency or
granting entity, sources of funding, and status of licensing,
including invention utilization updates. Failure to include an item
in the database does not create any presumption regarding
ownership. Prior to January 1, 2018, the database shall include the
summary of state-owned intellectual property found in the
California State Auditor’s Report 2011-106 on intellectual property.
After January 1, 2018, and every three years thereafter, the database
shall be updated using information collected by the department
pursuant to this section.

(3) Develop a sample maintenance plan of an inventory of
intellectual property.

(4) Develop factors that state agencies should consider when
deciding whether to sell their intellectual begin delete property or license it end delete
begin insert property, make intellectual property available in the public domain,
or grant the use of their intellectual property end insert to others, including,
but not limited to, the state’s best interest, maintaining public
access, and begin delete the discouragement of unauthorized economic gain. end delete

begin insert preventing improper economic gain through the unauthorized use
of state end insert begin insert -owned intellectual property. end insert

(5) Develop an outreach campaign informing state agencies of
their rights and abilities concerning intellectual property created
by their employees.

(6) Develop sample invention assignment agreements that state
agencies can consider if they believe it is necessary to secure the
rights to potentially patentable items created by their employees
on worktime using state resources.

(7) Develop sample language for licenses or terms-of-use
agreements that state agencies can use to limit the use of their
intellectual property by others to only appropriate purposes.

(8) Develop sample language for an advisory provision stating
that a waiver of the state’s intellectual property rights is subject
to the approval of the department and that the lack of that approval
renders an attempted waiver begin delete void as against public policy. end delete begin insert void. end insert

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(c)

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begin insert (b) end insert  This section shall not apply to the use of expressive works
created by nonstate employees or without state funding.

begin delete SEC. 2. end delete

begin insert SEC. 4. end insert   

Section 13988.3 of the Government Code is amended
to read:

13988.3.  

(a)  begin delete A public end delete begin insert To the extent not inconsistent with the
rights of the public to obtain, inspect, copy, publish, and otherwise
communicate information under the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1), under subdivision (a) of Section 2 and subdivision (b)
of Section 3 of Article I of the California Constitution, and under
the First Amendment to the United States Constitution, a state end insert
entity may own, license, and, if it deems it appropriate, formally
register intellectual property it creates or otherwise acquires. begin delete A
public entity’s intellectual property right shall not preclude the
public entity from disclosing any information otherwise accessible
under the California Public Records Act (Chapter 3.5 (commencing
with Section 6250) of Division 7 of Title 1). A disclosure under
the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1) shall not be construed as
waiving any rights afforded under the federal Copyright Act of
1976 (17 U.S.C. Sec. 101 et seq.). end delete

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(b) (1) When a state entity creates a work that is otherwise
subject to copyright protection, the work shall be released into the
public domain unless the state entity reasonably determines any
of the following:

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(A) The work has commercial value, and the release would
jeopardize the integrity of the work.

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(B) The release would infringe upon the property interests of a
third party.

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(C) The release would detrimentally affect the state’s interests
in its trademarks, service marks, patents, or trade secrets.

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(2) If a state entity reasonably determines that a work meets the
criteria described in paragraph (1), the entity shall catalog those
works and submit the information to the department for the purpose
of tracking intellectual property generated by state employees or
with state funding as provided in Section 13998.2.

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(b)

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begin insert (c) end insert  Notwithstanding any other law, state agencies and
departments may, upon request, share records and information
related to intellectual property generated by state employees or
with state funding with the department.

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(c)

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begin insert (d) end insert  Any employee or former employee of the department who
has access to or knowledge of the records and information
described in subdivision (b), shall not divulge or make known to
any person not employed by the department in any manner not
expressly permitted by law any particulars of these records or
information that is restricted by law from public disclosure, or
represents a first publication of research results, or information
pertaining to patent rights that would not otherwise be publicly
available.

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(e) Nothing in this section requires a state entity to own, license,
or formally register intellectual property that it creates or
otherwise acquires.

end insert begin insert

(f) This section shall not apply to the use of expressive works
created by nonstate employees or without state funding.

end insert

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begin insert SEC. 5. end insert   

end insert

begin insert Section 13988.35 is added to the end insert begin insert Government Code end insert begin insert , end insert
immediately following Section 13988.3 begin insert , to read: end insert

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begin insert 13988.35. end insert   

In the event that a state entity pursues an action for
copyright infringement, all of the following shall apply:

(a) Prior to sending a takedown notification, a state entity shall
reasonably consider in good faith whether the allegedly infringing
material constituted fair use.

(b) No state entity shall elect to receive statutory damages as
provided under the federal Copyright Act of 1976 (17 U.S.C. Sec.
504(c)) except in cases of willful infringement where there is no
evidence of fair use.

(c) Upon a court’s finding that the party defending the
infringement action engaged in fair use, the state shall waive
statutory damages.

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begin delete SEC. 3. end delete

begin insert SEC. 6. end insert   

Section 14615.1 of the Government Code is amended
to read:

14615.1.  

(a) Where the Legislature directs or authorizes the
department to maintain, develop, or prescribe processes,
procedures, or policies in connection with the administration of
its duties under this chapter and Chapter 2 (commencing with
Section 14650) of this part, Chapter 2 (commencing with Section
13988) of Part 4.5, or Section 6611 of the Public Contract Code
or Part 2 (commencing with Section 10100) of Division 2 of the
Public Contract Code, the action by the department shall be exempt
from the Administrative Procedure Act (Chapter 3.5 (commencing
with Section 11340), Chapter 4 (commencing with Section 11370),
Chapter 4.5 (commencing with Section 11400), and Chapter 5
(commencing with Section 11500)). This section shall apply to
actions taken by the department with respect to the State
Administrative Manual and the State Contracting Manual.

(b) To the extent permitted by the United States and California
Constitutions, subdivision (a) also applies to actions taken by the
department prior to January 1, 1999, with respect to competitive
procurement in the State Administrative Manual and the State
Contracting Manual.

begin delete SEC. 4. end delete

begin insert SEC. 7. end insert   

Section 10335 of the Public Contract Code is amended
to read:

10335.  

(a) This article shall apply to all contracts, including
amendments, entered into by any state agency for services to be
rendered to the state, whether or not the services involve the
furnishing or use of equipment, materials, or supplies or are
performed by an independent contractor. Except as provided in
Sections 10295.6 and 10351, and paragraphs (8) and (9) of
subdivision (b) of Section 10340, all contracts subject to this article
are of no effect unless and until approved by the department. Each
contract shall be transmitted with all papers, estimates, and
recommendations concerning it to the department and, if approved
by the department, shall be effective from the date of approval.
This article shall apply to any state agency that by general or
specific statute is expressly or impliedly authorized to enter into
the transactions referred to in this section. This article shall not
apply to contracts for the construction, alteration, improvement,
repair, or maintenance of real or personal property, contracts for
services subject to Chapter 10 (commencing with Section 4525)
of Division 5 of Title 1 of the Government Code, to contracts that
are listed as exceptions in Section 10295, contracts of less than
five thousand dollars ($5,000) in amount, contracts of less than
five thousand dollars ($5,000) where only per diem or travel
expenses, or a combination thereof, are to be paid, contracts
between state agencies, or contracts between a state agency and
local agency or federal agency.

(b) In exercising its authority under this article with respect to
contracts for the services of legal counsel, other than the Attorney
General, entered into by any state agency that is subject to Section
11042 or Section 11043 of the Government Code, the department,
as a condition of approval of the contract, shall require the state
agency to demonstrate that the consent of the Attorney General to
the employment of the other counsel has been granted pursuant to
Section 11040 of the Government Code. This consent shall not be
construed in a manner that would authorize the Attorney General
to establish a separate program for reviewing and approving
contracts in the place of, or in addition to, the program administered
by the department pursuant to this article.

(c) Until January 1, 2001, the department shall maintain a list
of contracts approved pursuant to subdivision (b). This list shall
be filed quarterly with the Senate Committee on Budget and Fiscal
Review and the Assembly Committee on Budget. The list shall be
limited to contracts with a consideration in excess of twenty
thousand dollars ($20,000) during the life of the contract and shall
include sufficient information to identify the provider of legal
services, the length of each contract, applicable hourly rates, and
the need for the services. The department shall add a contract that
meets these conditions to the list within 10 days after approval. A
copy of the list shall be made available to any requester. The
department may charge a fee to cover the cost of supplying the list
as provided in Section 6253 of the Government Code.

(d) (1) In exercising its authority under this article, a state
agency shall consider the processes, procedures, or policies
developed by the department pursuant to Chapter 2 (commencing
with Section 13988) of Part 4.5 of Division 3 of Title 2 of the
Government Code.

(2) For contracts entered into on or after January 1, 2017, begin delete both
of the following shall apply: end delete

begin delete (A) end delete begin delete   end delete begin delete A end delete begin insert a end insert state agency shall not enter into a contract under this
article that begin delete waives the state’s end delete begin insert fails to address the issue of end insert
intellectual property rights unless the state agency, prior to
execution of the contract, obtains the consent of the begin delete department
to the waiver. end delete begin insert department. end insert

begin delete

(B) An attempted waiver of the state’s intellectual property
rights by a state agency that violates subparagraph (A) shall be
deemed void as against public policy.

end delete

(e) Contracts subject to the approval of the department shall
also have the department’s approval for a modification or
amendment thereto, with the following exceptions:

(1) An amendment to a contract that only extends the original
time for completion of performance for a period of one year or
less is exempt. If the original contract was subject to approval by
the department, one fully executed copy including transmittal
document, explaining the reason for the extension, shall be sent
to the legal office of the department. A contract may only be
amended once under this exemption.

(2) Contracts let or awarded on the basis of a law requiring
competitive bidding may be modified or amended only if the
contract so provides or if authorized by the law requiring
competitive bidding.

(3) If an amendment to a contract has the effect of giving the
contract as amended an increase in monetary amount, or an
agreement by the state to indemnify or save harmless any person,
the amendment shall be approved by the department.

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begin insert SEC. 8. end insert   

end insert

begin insert The Legislature finds and declares that Section 1 of
this act, which adds Section 6253.11 to the Government Code,
imposes a limitation on the public’s right of access to the meetings
of public bodies and the writings of public officials and agencies
within the meaning of Section 3 of Article I of the California
Constitution. Pursuant to that constitutional provision, the
Legislature makes the following findings to demonstrate the interest
to be protected and the need for protecting that interest: end insert

begin insert

In order to protect intellectual property developed by state
entities from copyright infringement, it is necessary to provide a
limited exemption for these records from the provision of the
California Public Records Act.

end insert