BILL ANALYSIS Ó
AB 2880
Page 1
ASSEMBLY THIRD READING
AB
2880 (Committee on Judiciary)
As Amended March 15, 2016
Majority vote
------------------------------------------------------------------
|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Judiciary |9-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Cristina Garcia, | |
| | |Holden, Maienschein, | |
| | |Ting | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |20-0 |Gonzalez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, McCarty, | |
| | |Holden, Jones, | |
| | |Obernolte, Quirk, | |
| | |Santiago, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
------------------------------------------------------------------
AB 2880
Page 2
SUMMARY: Strengthens the statutory framework on rules,
processes, and procedures relating to state intellectual
property and provides additional guidance to state agencies to
manage and protect the state's intellectual property.
Specifically, this bill:
1)Requires the Department of General Services (DGS) to include
the factors of the state's best interest, maintaining public
access, and the discouragement of unauthorized economic gain
when developing factors for state agencies that decide to sell
or license intellectual property.
2)Requires DGS to develop sample language for an advisory
provision stating that a waiver of the state's intellectual
property rights is subject to the approval of DGS and that the
lack of that approval renders an attempted waiver void as
against public policy.
3)Provides that a public entity may own, license, and if it
deems it appropriate, formally register intellectual property
it creates or otherwise requires. Further provides that 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 (CPRA).
Further provides that a disclosure under the CPRA shall not be
construed as waiving any rights afforded under the federal
Copyright Act.
4)Provides that the maintenance and development of processes,
procedures, or policies in connection with DGS' duties
relating to intellectual property, as provided, shall be
exempt from California's Administrative Procedure Act, similar
to other DGS contracting rules.
AB 2880
Page 3
5)Requires all state agencies to consider the processes,
procedures, or policies developed by DGS relating to
intellectual property, as provided.
6)Provides that for contracts entered into after January 1,
2017, all of the following shall apply:
a) A state agency shall not enter into a contract under
this article that waives the state's intellectual property
rights unless the state agency, prior to execution of the
contract, obtains the consent of the department to the
waiver.
b) An attempted waiver of the state's intellectual property
rights by a state agency that violates 6) a) above, shall
be deemed void as against public policy.
EXISTING LAW:
1)Declares that 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, minimize the
costs of administering policies in this area. (Government
Code Section 13988. All further statutory references are to
the Government Code, unless otherwise indicated.)
2)States that 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 as to promote the benefit of the public. Further
states that it is the intent of the Legislature that DGS have
AB 2880
Page 4
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. (Ibid.)
3)Requires DGS to track intellectual property generated by state
employees or with state funding. (Government Code Section
13988.2.)
4)Requires DGS to develop a database that includes, but is not
limited to, tracking intellectual property, as described. The
database shall be updated every three years after its
commencement in 2015. (Ibid.)
5)Requires DGS to do all of the following:
a) Develop factors that state agencies should consider when
deciding whether to sell their intellectual property or
license it to others.
b) Develop an outreach campaign informing state agencies of
their rights and abilities concerning intellectual property
created by their employees.
c) 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.
d) Develop sample language for licenses or terms-of-use
agreements that state agencies can use to limit the use of
AB 2880
Page 5
their intellectual property by others to only appropriate
purposes. (Ibid.)
6)Authorizes state agencies and departments to share records and
information related to intellectual property generated by
state employees or with state funding with the department.
(Government Code Section 13988.3.)
7)Provides that where the Legislature directs or authorizes DGS
to maintain, develop, or prescribe processes, procedures, or
policies in connection with the administration of its duties,
as provided, the actions by the department shall be exempt
from the Administrative Procedure Act, as described. Further
provides that these provisions shall apply to actions taken by
DGS with respect to the State Administrative Manual and the
State Contracting Manual. (Government Code Section 14615.1.)
8)Establishes specific rules that shall apply to all contracts,
including amendments, entered into by any state agency for
services to be rendered to the state, as provided. (Public
Contract Code Section 10335.)
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)DGS leads the state's Intellectual Property Work Group, which
is developing policies, procedures, and processes to implement
existing law regarding intellectual property. The incremental
workload associated with implementing this bill will therefore
be minor and absorbable.
2)DGS's costs to review proposed agency contract provisions
waiving intellectual property rights would be reimbursed by
AB 2880
Page 6
the contracting agency. These costs should not be significant
for any single agency.
COMMENTS: Last year, a well-publicized trademark dispute arose
between the National Park Service (the federal entity that
manages federal parks) and Delaware North Company (the departing
Yosemite concessioner) over attractions and facilities in
Yosemite National Park. The trademark dispute between the
National Park Service and Delaware North put a spotlight on
governmental intellectual property rights, and posed the
following question for the state: does a third-party contractor
who enters into a contract with the state acquire any
intellectual property rights over products and services a
contractor creates and provides to the public that is funded
with public dollars, even after the contract expires? In 2000
and 2011, the State Auditor issued recommendations to the
Legislature to take steps to help state agencies manage and
protect the State's intellectual property. In 2012, the
Legislature enacted AB 744 (Perez), Chapter 463, Statutes of
2012, which requires the Department of General Services (DGS) to
develop guidance to assist state agencies in managing
intellectual property. The guidance is developed by a working
group consisting of attorneys from various state agencies who
have expertise in intellectual property. Under current law,
nothing requires a state agency to review, comply with, or even
consider the guidance of the working group.
Some state agencies, including California State Parks, have
taken steps to develop policies and procedures to protect the
intellectual property rights of the state and the public;
however, most state agencies have not done so. Indeed, the lack
of a robust intellectual property framework has led to confusion
among state agencies, loose and informal practices, and possibly
confusion among state and federal courts. Several recent court
decisions have held that state agencies need legislative
authority to hold intellectual property rights. In light of the
recent Yosemite trademark issue and the recent court decisions,
AB 2880
Page 7
this bill builds on the framework established by AB 744 in order
to assist state agencies manage and protect the state's
intellectual property rights, particularly in state contracts
where state-owned intellectual property is at stake.
Summary of the bill: In summary, this bill does all of the
following: 1) clarifies existing law that public agencies may
own, license, and register intellectual property; 2) provides
policy guidance to the DGS on factors state agencies should
consider when deciding whether to sell or license state-owned
intellectual property; 3) enables DGS to include guidelines in
its State Contracting Manual on how state agencies should manage
its intellectual property; 4) requires state agencies, when
entering into a contract, to consider the guidance, policies,
and procedures developed by DGS on intellectual property; and 5)
prohibits a state contract that waives the state's intellectual
property unless DGS has consented to the waiver.
This bill clarifies existing law to allow public entities to own
and hold intellectual property, while maintaining the public's
protection under the California Public Records Act. Several
recent court cases have held that state agencies cannot own or
hold intellectual property rights unless the Legislature
provides the agency with that explicit authority ("in the
absence of an affirmative grant of authority to obtain and hold
copyrights, a California public entity may not do so" (City of
Inglewood v. Teixeira (C.D.Cal. 2015), relying on County of
Santa Clara v. Superior Court (2009) 170 Cal.App.4th 1301)).
Although it has always been the intent of the Legislature to
ensure that California agencies can own, hold, and acquire
intellectual property, this bill clarifies existing law by
explicitly providing that a California public entity may own,
license, and if deemed appropriate, register intellectual
property. In order to maintain the public's right to
information and to allow for use, this bill also provides that
AB 2880
Page 8
the state's intellectual property rights do not preclude a
public entity from disclosing information otherwise accessible
under the California Public Records Act - consistent with the
State Auditor's recommendation.
This bill provides DGS with additional policy guidance and
factors that state agencies should consider when they decide to
sell or license state-owned intellectual property. In order to
provide the Intellectual Property Working Group with additional
policy guidance in crafting the plan, this bill requires state
agencies to also consider the following factors: the state's
best interest, public access to information, and the
discouragement of unauthorized economic gain. Additionally, to
ensure that the work done by the Intellectual Property Working
Group is not done for naught, this bill requires a state agency
to consider the guidelines developed by DGS when the state
agency enters into a contract.
This bill makes it easier for DGS to adopt rules relating to
intellectual property to be included in the State Contract
Manual. According to the State Auditor, the State Contract
Manual (SCM), a document that provides guidance to state
agencies on rules and procedures for state contracting, does not
provide any guidance on how a state agency should manage its
intellectual property. This bill clarifies the statutory
authority for DGS to adopt rules and procedures in its SCM to
include guidance to state agencies about how to manage
intellectual property.
This bill strengthens California's contracts in order to protect
the State's intellectual property. To ensure that the State is
acting properly to protect its rights, and to allow the State to
have some flexibility and discretion when it is appropriate,
this bill prohibits any contract that waives the state's
intellectual property unless DGS has provided consent to the
contracting state agency. To ensure that parties that contract
AB 2880
Page 9
with the state have notice of these waiver provisions, this bill
also requires DGS to develop sample language advising a party
what happens if a state agency waives its intellectual property
rights.
Analysis Prepared by:
Eric Dang / JUD. / (916) 319-2334 FN: 0002969