BILL ANALYSIS
AB 819
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 819 (Charles Calderon)
As Amended August 12, 2010
2/3 vote. Urgency
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|ASSEMBLY: |77-0 |(June 2, 2009) |SENATE: |34-0 |(August 18, |
| | | | | |2010) |
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Original Committee Reference: PUB. S.
SUMMARY : Doubles the current fines for crimes relating to
intellectual property piracy.
The Senate amendments :
1)Find and declare the following:
a) According to a 2007 study by the Institute for Policy
Innovation, intellectual property piracy, meaning the theft
of movies, music, software, and video games, costs the
United States economy $58 billion each year;
b) The problem of intellectual property piracy continues to
grow worse. A 2005 Gallup study found that 5% of Americans
had purchased, copied, or downloaded counterfeit music in
the preceding year. By 2007, this number had jumped to 9%.
The percentage of respondents that admitted buying a
pirated movie rose from 3% in 2005 to 6% in 2007. At the
same time, once robust DVD sales have decreased over the
past few years, while CD shipments to retailers have
plummeted;
c) The effect of intellectual property piracy on California
and its citizens is particularly dire. Intellectual
property piracy adversely affects the California economy,
eliminates jobs, and damages industry. According to the
Business Software Alliance, in 2003 software piracy alone
cost the California economy more than 13,000 jobs, over
$802 million in wages and salaries, over $1 billion in
retail sales of business software applications, and roughly
$239 million in total tax losses;
d) Intellectual property piracy poses a significant threat
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to consumers who, through no fault of their own, are often
deceived or deliberately misled, or both deceived and
deliberately misled, as to the nature of purchased
products, whereby pirated goods are palmed off, including
in electronic form, as legitimate authorized goods;
e) A growing number of criminal organizations worldwide are
involved in intellectual property piracy;
f) This act will send a strong signal that California is
committed to protecting the intellectual property created
by California's innovation and
entertainment industries; and,
g) Finally, by safeguarding the legitimate sale of
intellectual property, California will increase its tax
base, and stimulate the economy.
2)Change the fine for persons who willfully manufacture,
intentionally sell, or knowingly possess for sale any
counterfeit mark registered with the Secretary of State or
registered on the Principal Register of the United States
Patent and Trademark Office, as follows:
a) When the offense involves less than 1,000 of the
articles described in this subdivision, with a total retail
or fair market value less than that required for grand
theft as defined in Penal Code Section 487, and if the
person is an individual, he or she shall be punished by a
fine of not more than $10,000 instead of $5,000, or by
imprisonment in a county jail for not more than one year,
or by both that fine and imprisonment; or, if the person is
a business entity, by a fine of not more than $200,000
instead of 100,000;
b) When the offense involves 1,000 or more of the articles
described in this subdivision, or has a total retail or
fair market value equal to or greater than that required
for grand theft as defined in Penal Code Section 487, and
if the person is an individual, he or she shall be punished
by imprisonment in a county jail not to exceed one year, or
in the state prison for 16 months, or two or three years,
or by a fine not to exceed $500,000 instead of $250, 000 or
by both that imprisonment and fine; or, if the person is a
business entity, by a fine not to exceed $1 million instead
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of $500,000;
c) Upon a subsequent conviction, if the person is an
individual, he or she shall be punished by a fine of not
more than $100,000 instead of $50,000 or by imprisonment in
a county jail for not more than one year, or in the state
prison for 16 months, or two or three years, or by both
that fine and imprisonment; or, if the person is a business
entity, by a fine of not more than $400,000 instead of
$200,000; and,
d) Any person who has been convicted of a violation of Item
2) a) above and who, by virtue of the conduct that was the
basis of the conviction, has directly and foreseeably
caused death or great bodily injury to another through
reliance on the counterfeited item for its intended purpose
shall, if the person is an individual, be punished by a
fine of not more than $100,000 instead of $50,000 or by
imprisonment in the state prison for two, three, or four
years, or by both that fine and imprisonment; or, if the
person is a business entity, by a fine of not more than
$400,000 instead of $200,000.
1)Increase the fine for those who knowingly and willfully
transfer or cause to be transferred any sounds that have been
recorded on a phonograph record, disc, wire, tape, film or
other article on which sounds are recorded, with intent to
sell or cause to be sold, or to use or cause to be used for
commercial advantage or private financial gain through public
performance, the article on which the sounds are so
transferred, without the consent of the owner from $250,000 to
$500,000 if the offense involved the transfer or
transportation, or conduct causing that transfer or
transportation, of not less than 1,000 of the articles. A
person who has transported less than 1,000 articles will have
the find increased from $25,000 to $50,000. A second or
subsequent conviction shall receive an increased find from
$100,000 to $200,000.
2)Increase the fine for every person who offers for sale or
resale, or sells or resells, or causes the sale or resale, or
rents, or possesses for these purposes, any sounds that have
been recorded on a phonograph record, disc, wire, tape, film
or other article with knowledge that the sounds thereon have
been so transferred without the consent of the owner from
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$10,000 to $20,000 if the offense involved not less than 100
articles. A second or subsequent conviction shall receive an
increased fine from $25,000 to $50,000.
3)Increase the fine for every person who offers for sale or
resale, or sells or resells, or causes the sale or resale, or
rents, or possesses for these purposes, any sounds that have
been recorded on a phonograph record, disc, wire, tape, film
or other article with knowledge that the sounds thereon have
been so transferred without the consent of the owner from
$5,000 to $10,000 if the offense involved less than 100
articles. A second conviction shall receive an increased fine
from $10,000 to $20,000. A third or subsequent conviction for
the conduct described in this paragraph shall receive an
increased fine from $25,000 to $50,000.
4)Increase the fine for any person who transports or causes to
be transported for monetary or other consideration within this
state, any article containing sounds of a live performance
with the knowledge that the sounds thereon have been recorded
or mastered without the consent of the owner of the sounds of
the live performance from $250,000 to $500,000 if the offense
involved the transportation or causing to be transported of
not less than 1,000 articles.
5)Increase the fine for any person who transports or causes to
be transported for monetary or other consideration within this
state, more than 100 articles containing sounds of a live
performance with the knowledge that the sounds thereon have
been recorded or mastered without the consent of the owner of
the sounds of the live performance from $25,000 to $50,000 if
the offense involved the transportation or causing to be
transported of less than 1,000 articles. A second or
subsequent conviction shall receive an increased fine of
$200,000 instead of $100,000.
6)Increase the fine for any person who offers for sale or
resale, or sells or resells, or causes the sale or resale, or
rents, or possesses for these purposes, more than 100 articles
containing sounds of a live performance with knowledge that
the sounds thereon have been so recorded or mastered without
the consent of the owner of the sounds of a live performance
from $10,000 to $20,000. A second conviction for this offense
shall receive an increased fine from $25,000 to $50,000.
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7)Increase the fine for any person who, offers for sale or
resale, or sells or resells, or causes the sale or resale, or
rents, or possesses for these purposes, less than 100 articles
containing sounds of a live performance with the knowledge
that the sounds thereon have been recorded or mastered without
the consent of the owner of the sounds of the live performance
from $5,000 to $10,000 if the offense involved the
transportation or causing to be transported of less than 1,000
articles. A second or subsequent conviction shall receive an
increased fine of $20,000 instead of $10,000. A third
conviction shall receive an increased fine of $50,000 from
$25,000.
8)Increase the fine for any person who records or masters or
causes to be recorded or mastered on any article with the
intent to sell for commercial advantage or private financial
gain, the sounds of a live performance with the knowledge that
the sounds thereon have been recorded or mastered without the
consent of the owner of the sounds of the live performance
from $250,000 to $500,000 if the offense involves the
recording, mastering, or causing to be recorded or mastered at
least 1,000 articles.
9)Increase the fine for any person who records or masters or
causes to be recorded or mastered on any article with the
intent to sell for commercial advantage or private financial
gain, the sounds of a live performance with the knowledge that
the sounds thereon have been recorded or mastered without the
consent of the owner of the sounds of the live performance
from $25,000 to $50,000 if the offense involves the recording,
mastering, or causing to be recorded or mastered at less than
1,000 articles. The fine for a second or subsequent
conviction shall be increased from $100,000 to $200,000.
10)Increase the fine for any person who is guilty of failing to
disclose the origin of a recording or audiovisual work if, for
commercial advantage or private financial gain, he or she
knowingly advertises or offers for sale or resale, or sells or
resells, or causes the rental, sale or resale, or rents, or
manufactures, or possesses for these purposes, any recording
or audiovisual work, the cover, box, jacket, or label of which
does not clearly and conspicuously disclose the actual true
name and address of the manufacturer thereof and the name of
the actual author, artist, performer, producer, programmer, or
group thereon from $250,000 to $500,000 if the offense
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involves the advertisement, offer for sale or resale, sale,
rental, manufacture, or possession for these purposes, of at
least 100 articles of audio recordings or 100 articles of
audiovisual works. If the offense involves less than 100
articles of audio recordings, the fine shall be increased from
$25,000 to $50,000. A second or subsequent conviction shall
see a fine increase from $100,000 to $200,000.
11)Increase the fine every person who operates a recording
device in a motion picture theater while a motion picture is
being exhibited, for the purpose of recording a theatrical
motion picture and without the express written authority of
the owner of the motion picture theater from $2,500 to $5,000.
12)Increase the fine for any person, except a minor, who is
located in California, who, knowing that a particular
recording or audiovisual work is commercial, knowingly
electronically disseminates all or substantially all of that
commercial recording or audiovisual work to more than 10 other
people without disclosing his or her e-mail address, and the
title of the recording or audiovisual work from $2,500 to
$5,000. Any minor who violates the aforementioned shall see a
fine increased from $500 to $1,000. A third or subsequent
conviction of a minor shall receive an increased fine from
$1,000 to $2,000.
13)Make this bill a contingent enactment.
AS PASSED BY THE ASSEMBLY, this bill created the Intellectual
Property Piracy Prevention and Prosecution Program to fund
grants for local law enforcement and district attorneys for the
purposes of preventing and prosecuting intellectual property
piracy.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : According to the author, "California remains the
capital of the motion picture and television industry as well as
a center for the recording and software industries. In terms of
economic activity, television and movies generated a total of
$42.2 billion, split almost equally between payroll expenditures
and payments to vendors. Approximately 266,000 people were
directly employed in the motion picture and television industry
in California, with an average salary of $80,600. When indirect
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employment resulting from the industry is factored in, the
number of people working in California as a result of television
and movies totals over 500,000.
"Although piracy is a global problem, a recent study by the Los
Angeles County Economic Development Corporation (LAEDC) notes
that it affects the Los Angeles region disproportionately due to
the concentration of the entertainment industry there. LAEDC
estimates that in 2005 losses to the motion picture industry
from piracy were $2.7 billion; the sound recording industry $851
million; software publishing $355 million.
"Not only is digital piracy a direct threat to the industry, but
its effects are felt by state and local government in the form
of lost tax revenues.
"According to the same LAEDC study, piracy affecting the
entertainment industry just in Los Angeles cost nearly $134
million in state income taxes; $63.5 million in sales taxes; $2
million in Los Angeles City business taxes.
"This is not just a Los Angeles problem.
"Digital piracy reaches across the state, affecting the Silicon
Valley and its computer industry. According to the Business
Software Alliance, in 2003, software piracy alone cost the
California economy more than 13,000 jobs, $802 million in wages
and salaries, over $1 billion in retail sales of business
software applications, and roughly $239 million in total tax
losses."
Please see the policy committee for a full discussion of this
bill.
Analysis Prepared by : Nicole J. Hanson / PUB. S. / (916)
319-3744
FN: 0006109