BILL ANALYSIS �
SB 1356
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Date of Hearing: June 10, 2014
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
SB 1356 (Lieu) - As Amended: April 10, 2014
SENATE VOTE : 35-0
SUBJECT : COUNTERFEIT GOODS: ABATEMENT: NONRESIDENTIAL PREMISES
KEY ISSUE : IN ORDER TO ALLOW MORE TIME FOR PROGRAM USAGE DATA
TO BE REPORTED TO THE LEGISLATURE FOR EVALUATION, SHOULD THE
SUNSET DATE BE EXTENDED ONE ADDITIONAL YEAR TO CONTINUE THE
CURRENT PILOT PROGRAM AUTHORIZING NUISANCE ABATEMENT IN
NONRESIDENTIAL PROPERTY USED FOR THE MANUFACTURE OR SALE OF
COUNTERFEIT GOODS?
SYNOPSIS
In 2009, AB 568 (Lieu) was enacted to provide local prosecutors
with an additional tool to address reported problems of piracy
and manufacture of counterfeit goods in California. Under the
AB 568 pilot program, if a person is convicted for willfully
manufacturing, intentionally selling, or knowingly possessing
for sale any counterfeit goods, as specified, then a
nonresidential building or place used by that person for that
purpose shall be deemed a nuisance which may be enjoined,
abated, and prevented, and for which damages may be recovered,
whether it is a public or private nuisance. The program also
requires the prosecuting attorney to send a 30 day notice to the
owner prior to the filing of any such action, and to report
specified information about program usage to the Senate and
Assembly Judiciary Committees. The provisions enacted by AB
568, however, are scheduled to sunset on January 1, 2015. As
recently amended in the Senate, this bill would simply extend
the deadline for reporting until February 1, 2015, and would
extend the sunset date for the overall program by an additional
year, until January 1, 2016. This bill is sponsored by the Los
Angeles City Attorney's Office, has no known opposition, and was
approved by the Senate without receiving any "No" votes.
SUMMARY : Extends, until January 1, 2016, the sunset date for
the current pilot program authorizing local prosecutors to
maintain an action for nuisance abatement in non-residential
property used for the manufacture or sale of counterfeit goods,
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as provided, and makes a corresponding change to the deadline
for program reporting requirements.
EXISTING LAW :
1)Makes it a crime for any person to willfully manufacture,
intentionally sell, or knowingly possess for sale any
counterfeit mark registered with the Secretary of State or
patented by the United States Patent and Trademark Office.
Further provides for certain criminal fines, imprisonment, or
both, where the offense involves 1,000 or more of
counterfeited goods, or has a total retail or fair market
value equal to or greater than that required for grand theft
as defined. (Penal Code Section 350(a)(2).)
2)Makes it a crime for any person to fail to disclose the origin
of a recording or audiovisual work if, for commercial
advantage or financial gain, he or she knowingly advertises or
offers for sale or resale, or sells or resells, or causes the
rental, sale, or resale of, or rents, or manufactures, or
possesses for these purposes, any recording or audiovisual
work, the outside 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 thereof, except as specified. Further prescribes the
punishment for any convictions under this section based upon
the volume of articles involved. (Penal Code Section 653w.)
3)Provides, until January 1, 2015, that if there is a conviction
by any person for a violation of the specified Penal Code
provisions above, then a nonresidential building or place used
by that person for the purpose of willfully manufacturing,
intentionally selling, or knowingly possessing for sale any
counterfeit goods shall be deemed a nuisance which may be
enjoined, abated, and prevented, and for which damages may be
recovered, whether it is a public or private nuisance.
(Business & Professions Code Section 17800(a).)
4)Requires that an owner be provided with 30 days' notice prior
to the filing of an action to abate a nuisance under the
provisions of this section. (Business & Professions Code
Section 17800(b).)
5)Requires a district attorney, county counsel, city attorney,
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or city prosecutor that maintains an action or actions to
enjoin, abate, or prevent a counterfeiting nuisance to submit
a report to the Senate and Assembly Committees on Judiciary,
by October 1, 2013, on their use of the provisions of this
chapter and their effectiveness, including specified
statistics and other information. (Business & Professions
Code Section 17801.)
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
COMMENTS : This non-controversial bill, sponsored by the Los
Angeles City Attorney, seeks to extend, until January 1, 2016,
the sunset date for the current pilot program enacted by SB 568
(Lieu) of 2009. That program currently authorizes local
prosecutors to maintain an action for nuisance abatement in
non-residential property used for the manufacture or sale of
counterfeit goods, as provided, but is set to sunset at the end
of this year.
Author's Statement. According to the author, the bill is needed
to address the problems of illicit trafficking of counterfeit
goods:
The counterfeiting of goods such as pharmaceuticals,
electronics, computer software, DVDs, CDs, clothing and
many other items is a multi-billion dollar problem in
California. Counterfeit goods are a danger to
consumers, undermine legitimate businesses, and deprive
tax-payers of revenues needed for public services.
Counterfeit goods sellers play a major role in the
underground economy and rarely pay taxes or contribute
to workers compensation funds.
According to the Los Angeles County Economic
Development Corporation (LAEDC), counterfeiting and
piracy have cost Los Angeles County at least 70,000
manufacturing jobs and 36,000 retail jobs, resulting in
the loss of $482 million in tax revenues for the city
of Los Angeles and county of Los Angeles. In a time of
critical shortages in public budgets, these massive
losses in tax revenues translate into reductions in
vital services that we can ill afford. As a whole, SB
1356 would continue to help eliminate the growing
problem of piracy and counterfeiting plaguing
California communities.
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Background on existing pilot program established by AB 568
(2009). AB 568 (Lieu, Ch. 453, Stats. 2009) was enacted to
provide local prosecutors with an additional tool to address the
growing problems of piracy and manufacture of counterfeit goods
in California. Under that bill, if a person is convicted for
willfully manufacturing, intentionally selling, or knowingly
possessing for sale any counterfeit mark, as specified, then a
nonresidential building or place used by that person for that
purpose shall be deemed a nuisance which may be enjoined,
abated, and prevented, and for which damages may be recovered,
whether it is a public or private nuisance. The bill also
required a 30 days' notice to be sent to the owner prior to the
filing of any such action, and required that any local
prosecuting attorney who maintains an action to enjoin, abate,
or prevent a nuisance pursuant to these provisions must report
specified information to the Senate and Assembly Judiciary
Committees by October 1, 2013. The provisions enacted by AB
568, however, will sunset on January 1, 2015.
One year extension of pilot authority. This bill would extend
the deadline for mandatory reporting until February 1, 2015, and
would extend the sunset for the overall program for an
additional year, until January 1, 2016. According to the
author, this extension of the sunset date is needed to allow
more time for appropriate usage data and other information to be
reported to the Legislature for evaluation of the overall
program. Because of the dearth of data that has thus far been
reported to the Legislature, it is unknown which jurisdictions
other than Los Angeles have exercised the authority provided by
the SB 568, nor what the impact has been, if any, upon
counterfeiting activity in those areas.
REGISTERED SUPPORT / OPPOSITION :
Support
Los Angeles City Attorney Mike Feuer
Opposition
None on file
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334
SB 1356
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