California Legislature—2013–14 Regular Session

Assembly Bill No. 2158

Introduced by Assembly Member Buchanan

February 20, 2014

An act to amend Section 22370 of the Business and Professions Code, relating to business.

LEGISLATIVE COUNSEL’S DIGEST

AB 2158, as introduced, Buchanan. Invention development services contracts.

Existing law provides for the regulation of invention development services contracts and, among other things, requires that those contracts be in writing. Existing law declares the purpose of those provisions and states various findings regarding inventors.

This bill would make technical, nonsubstantive changes to that declaration and statement of findings.

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 22370 of the Business and Professions
Code is amended to read:

22370.  

(a) The Legislature finds that begin insert , in the State of California, end insert
there are begin delete in the State of California end delete members of the general public
who have ideas or inventions that they believe have substantial
commercial value begin insert , end insert but begin delete which end delete begin insert these end insert members of the general public
do not have the resources or expertise necessary to develop,
manufacture begin insert , end insert or market these ideas or inventions; that these
members of the general public are commonly referred to as
“inventors”; that these inventors are generally not people who earn
their livelihood from developing, manufacturing, promoting begin insert , end insert or
marketing ideas or inventions, from manufacturing or marketing
products, from publishing literary works or from owning, operating begin insert , end insert
or controlling commercial enterprises; that begin delete their is end delete a significant
number of persons begin delete who end delete have realized that inventors are willing to
expend substantial sums for services represented to result in the
development, manufacture, promotion, sale begin insert , end insert or general exploitation
of the commercial value of their ideas or inventions; that these
persons are frequently known as invention developers; that the
invention developers’ services are generally offered for sums
ranging from $500 to $5,000 plus either a percentage of the income
that may be derived from the sale or marketing of the idea or
invention or a partial ownership interest in the idea or invention;
that the inventors generally have a very passive role in the
development, promotion, manufacture begin insert , end insert or sale of their ideas or
inventions after the contract with the invention developer is
executed, usually doing little more than receiving periodic reports
from the invention developer; that an extremely small number of
inventors to whom these invention developers offer their services
ever have their products sold or marketed; that there exists begin insert , end insert in
connection with invention development services, sales practices
and business methods which have worked a fraud, deceit,
imposition, and financial hardship begin delete upon end delete begin insert on end insert many people of this
state; that existing legal protection to consumers is inadequate to
prevent these abuses; that the invention development industry has
a significant impact begin delete upon end delete begin insert on end insert the economy and well-being of this
state and its local communities; and that the provisions of this
chapter relating to begin delete such end delete begin insert those end insert services are necessary for the public
welfare.

(b) The Legislature declares that the purpose of this chapter is
to safeguard the public against fraud, deceit, imposition, and
financial hardship, and to foster and encourage competition, fair
dealing, and prosperity in the field of invention development
services by prohibiting or restricting false or misleading
advertising, onerous contract terms, harmful financial practices,
and other unfair, dishonest, deceptive, destructive, unscrupulous,
fraudulent, and discriminatory practices by which the public has
been injured in connection with invention development services
but not to interfere with, or further regulate by this chapter, those
persons who provide researching, marketing, surveying, or other
kinds of consulting services to professional manufacturers,
marketers, publishers or others purchasing begin delete such end delete begin insert those end insert services as
an adjunct to the traditional commercial enterprises in which they
engage as a livelihood.