California Intellectual Propert - Wei Zhi

CALIFORNIA
INTELLECTUAL PROPERTY
LAWS
Sheldon Mak & Anderson
Editorial Consultant
2014 EDITION
2
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Sheldon Mak & Anderson
Sheldon Mak & Anderson has provided the consulting editors for this
publication since its inception. Sheldon Mak & Anderson is a leading West
Coast intellectual property law firm with offices in Pasadena, Riverside and
Upland. Sheldon Mak & Anderson specializes in the protection of intellectual
property rights worldwide. The firm includes lawyers who have technical
backgrounds in various scientific areas and are recognized experts in their
fields. Sheldon Mak & Anderson’s highly qualified staff of attorneys has
extensive technical and legal expertise to assist with intellectual property
matters involving virtually every area of technology.
The firm’s litigators are acclaimed by clients, opposing parties and their
counsel, as well as by the courts before which their cases are litigated. The firm
also specializes in antitrust, unfair competition, customs, licensing and
entertainment law, in addition to patents, copyrights, trademarks and trade
secrets.
William J. Brutocao, the Editorial Consultant for this edition of California
Intellectual Property Laws, is a member of Sheldon Mak & Anderson,
specializing in intellectual property litigation. He received a bachelor of arts
degree from Cornell University in 1972, and a juris doctor from Hastings
College of Law in 1977. Mr. Brutocao is admitted to practice in all state and
federal courts in California, as well as the 8th, 9th, and Federal Circuit Courts
of Appeals. Mr. Brutocao is the chief consulting editor for the 2000 and
subsequent editions of California Intellectual Property Laws. Mr. Brutocao is
an adjunct professor of intellectual property law at the University of La Verne
College of Law in Ontario, California.
The 2014 edition represents the twenty-fourth edition of this book. Surjit P.
Singh Soni, formerly a partner with Sheldon Mak & Anderson was the chief
consulting editor for the first nine editions.
6
MATTHEW BENDER’S
INTELLECTUAL PROPERTY LIBRARY:
Nimmer on Copyright
Milgrim on Trade Secrets
Milgrim on Licensing
Intellectual Property Counseling & Litigation
Entertainment Industry Contracts
International Copyright Law and Practice
Trademark Protection and Practice
World Trademark Law and Practice
Attorney’s Dictionary of Patent Claims
Patent Licensing Transactions
Baxter, World Patent Law and Practice
Sinnott, World Patent Law and Practice, Statutes Regulations & Treaties
Patent Litigation: Procedure & Tactics
Court of Appeals for the Federal Circuit; Review of Patent and Trademark
Cases
Albany Law School Annual Conference on Intellectual Property
Patent Office Rules and Practice
Chisum, Patents
Patent Law Perspectives
Patent Law Annual
European Patents Handbook
Computer Contracts
Computer Law
International Computer Law
Prevention and Prosecution of Computer & High Technology Crime
7
The Law of Advertising
Taxation of Intellectual Property: Tax Planning Guide
8
PUBLISHER’S PREFACE
CALIFORNIA INTELLECTUAL PROPERTY LAWS is designed to provide
attorneys with a quick and easy reference source to the California and federal
statutes relevant to intellectual property law. This annual edition contains the
following features:
Introduction
The introduction provides an overview of California intellectual property
statutes. It is designed to acquaint the reader with the general statutory
framework in California. The introduction explains, in very basic terms, for
each statute or group of statutes, the scope or area being regulated, its practical
importance, and the basic manner in which that area is regulated.
Finding Aids
The finding aids consist of topical references to federal and California statutes.
For purposes of the finding aids, the subject matter of intellectual property is
divided into topics and subtopics. Under each topic or subtopic is a list of the
California and federal statutes that are principally relevant to that topic, together
with the section heading of each statute.
Statutes
The largest part of this volume contains the complete text of the principal
California and federal statutes pertaining to intellectual property. The California
statutes appear first, followed by the federal statutes.
California statutes are arranged in alphabetical order by code, and within each
code they are arranged in numerical order by section number. Additions to an
affected statute are indicated in boldface type. A complete legislative history of
each section appears following the text of the section.
Federal statutes are arranged in numerical order by title of the United States
Code, and within each title they are in numerical order by section number. A
complete legislative history of each section appears following the text of the
section.
The text of the statutes included in this edition is current through the following:
California statutes: Current through Chapter 800 of the 2013 Regular Session,
and through Chapter 5 of the First Extraordinary Session of the 2013–2014
Legislature
Federal statutes: P.L. 113-74, with a gap of 113-66 and 113-73, approved
January 16, 2014.
9
Consultant Comments and Annotations
Key California statutes reproduced in this book are accompanied by consultant
comments and annotations, which are located following the text of the statute.
Consultant comments are prepared by the Editorial Consultant and reflect the
observations, opinions, and practical experience of the Editorial Consultant.
Annotations, also prepared by the Editorial Consultant, direct the reader to key
cases and secondary sources. The annotations are not intended to be a
comprehensive listing of sources interpreting the statutes, but rather are intended
to point out cases and sources that are likely to be of particular importance to
readers. In preparing the annotations, special emphasis is given to the inclusion
of recent cases.
Index
A detailed index of the California and federal statutes appears at the end of the
volume.
The Publisher
10
Volume Table of Contents
A COMPLETE SYNOPSIS FOR EACH CHAPTER APPEARS AT
THE BEGINNING OF THE CHAPTER
Cover
Prefatory Material
Title Page
Copyright
MATTHEW BENDER’S INTELLECTUAL PROPERTY LIBRARY:
PUBLISHER’S PREFACE
Volume Table of Contents
1 INTRODUCTION TO CALIFORNIA INTELLECTUAL PROPERTY LAWS

INTRODUCTION TO CALIFORNIA INTELLECTUAL PROPERTY LAWS
INTRODUCTION
§ 1. Basic Property Laws
§ 2. Unfair Competition and False Advertising
[1] Unfair Competition
[2] False Advertising
[3] Plug Molding
§ 3. Patents and Inventions
[1] Ownership
[2] Invention Development Service Contracts
§ 4. Copyrights
[1] Ownership of Copyrights and Works for Hire
[2] Record Piracy
[3] Royalties From Copyrights
§ 5. Goodwill and Its Representations: Trademarks, Tradenames, Business Names,
and Quality Marks
[1] Goodwill
[2] Trademarks
[a] In General
[b] Registration of Trademarks
[c] Infringement and Dilution of Trademarks
[d] Anti-Counterfeiting Provisions
[e] Grey Market Goods
[3] Trade Names
[4] Container Brands, Farm Names, Laundry Supply Designations, and Other
Names
[5] Fictitious Business Names
[6] Corporate and Limited Partnership Names
[7] Precious Metal Quality Marks
11
[8] Domain Names
[9] Wine Labels
§ 6. Trade Secrets
[1] Status as Property
[2] Uniform Trade Secrets Act
[3] Customer Lists
[4] Theft of Trade Secrets
[5] Disclosure of Trade Secrets to Government
[6] Protective Orders
§ 7. Contracts in Restraint of Trade; Employee Restrictions
§ 8. Franchise Laws and Seller Assisted Marketing
[1] In General
[2] Franchise Investment Law
[3] Franchise Relations
[4] Fair Dealership Law
[5] Seller Assisted Marketing Act
§ 9. Artists’ and Authors’ Rights in Their Works (Apart From Patent and Copyright)
[1] Artists’ Rights
[2] Right of Publicity
§ 10. Sale and Consignment of Fine Art
§ 11. Loans to Museums
§ 12. Motion Pictures—Cruelty to People and Animals
§ 13. Computer Crimes and Actions
§ 14. Civil Procedure Involving Intellectual Property
[1] Contents of Complaint for Infringement
[2] Enforcement of Money Judgments by Assignment of Payment From
Intellectual Property
[3] Trade Secret Privileges
[4] Disclosure of Trade Secrets in Litigation
[5] Computer Information as Evidence
[6] Statute of Limitations for Theft of Art Works
[7] Uniform Single Publication Act
[8] Contracts for Artistic Services
[9] Autographed Sports Memorabilia
§ 15. Tax Treatment of Income From Intellectual Property
2 FINDING AIDS
FINDING AIDS
[1] Nature of Property
[2] Ownership
[a] Owners
[b] Interests in Property
[c] Conditions of Ownership
[1] Constitutional Basis for Federal Patent Statutes
12
[2] Patent and Trademark Office
[a] Establishment, Officers, and Functions
[b] Proceedings in the Patent and Trademark Office
[c] Practice Before the Patent and Trademark Office
[d] Patent Fees
[3] Patentability of Inventions
[4] Application for Patent
[5] Examination of Application
[6] Review of Patent and Trademark Office Decisions
[7] Issue of Patent
[8] Plant Patents
[9] Design Patents
[10] Secrecy of Certain Inventions and Filing Applications in Foreign
Countries
[11] Government Interests in Patents and Acquisition/Dissemination of Same
[12] Amendments and Correction of Patents
[13] Ownership and Assignment of Patents
[14] Infringement of Patents
[a] Infringement Defined
[b] Remedies for Infringement of Patent, and Other Actions
[c] Special Procedural Statutes for Patent Infringement Actions
[15] Citation of Prior Art to Patent and Trademark Office and Reexamination
of Patents
[16] Patent Cooperation Treaty
[a] Definitions
[b] International Stage
[c] National Stage
[17] Patent Licenses in Bankruptcy
[18] Tax Treatment of Sale or Exchange of Patents
[19] Patents Involving Atomic Energy, the Space Program, and Drugs
[20] Invention Development Services Contracts
§ 4. Intellectual Property Protection for Agriculture
[1] Plant Variety Protection Act
[a] Plant Variety Protection Office
[i] Organization and Publications
[ii] Practice Before the Plant Variety Protection Office
[iii] Plant Variety Protection Fees
[b] Protectability of Plant Varieties and Certificates of Protection
[i] Protectability of Plant Varieties
[ii] Applications; Form; Who May File; Relating Back;
Confidentiality
[iii] Examinations; Response Time; Initial Appeals
[iv] Appeals to Courts and Other Review of Plant Variety Protection
Office Decisions
[v] Certificates of Plant Variety Protection
[vi] Reexamination After Issue, and Contested Proceedings
[c] Plant Variety Protection and Rights
[i] Ownership and Assignment
[ii] Infringement of Plant Variety Protection
13
[iii] Remedies for Infringement of Plant Variety Protection, and
Other Actions
[iv] Intent and Severability of Plant Variety Protection Act
[2] Plant Patents
[3] Container Brands and Farm Names
§ 5. Copyrights and Record Piracy
[1] Constitutional Basis for Federal Copyright Statutes
[2] Subject Matter and Scope of Exclusive Rights
[3] Ownership and Transfer of Copyrights; Acquisition of Copyright
[4] Duration of Copyright
[5] Notice, Deposit, and Registration of Copyright
[6] Infringement of Copyright
[a] Civil Remedies
[b] Special Procedural Statutes for Copyright Actions
[c] Criminal Penalties
[7] Manufacturing Requirements and Importation
[8] Copyright Office
[9] Copyright Arbitration Royalty Panels
[10] Protection of Semiconductor Chip Products
[11] Employment Statutes Concerning Persons Who Create Works Made for
Hire
[13] Copyright Licenses in Bankruptcy
[14] Record Piracy
§ 6. Goodwill and Its Representations: Trademarks, Trade Names, Business Names,
and Quality Marks
[1] Goodwill
[2] Trademarks
[a] General Provisions Concerning Trademarks
[c] Infringement of Trademarks and Remedies
[d] Counterfeiting and Other Crimes Involving Trademarks
[f] Tax and Bankruptcy Statutes Concerning Trademarks
[3] Trade Names
[4] Container Brands, Farm Names, Laundry Supply, Designations and Other
Names
§ 7. Trade Secrets
[2] Customer Lists as Trade Secrets
§ 8. Contracts in Restraint of Trade and Employee Restrictions
§ 9. Franchises and Seller Assisted Marketing Plans
[a] Definitions
14
[b] Regulation of the Sale of Franchises
[i] Exemptions. Corp. Code § 31000
[ii] Disclosure
[iii] General Provisions
[c] Fraudulent, Prohibited, and Unfair Practices
[i] Fraudulent Practices
[ii] Prohibited Practices
[iii] Unfair Practices
[d] Enforcement
[i] Civil Liability
[ii] Powers of the Commissioner
[iii] Crimes
[iv] Service of Process
[e] Administration
[f] General Provisions
[a] Definitions
[b] Jurisdiction
[c] Termination
[d] Nonrenewal
[e] Transfers
[f] Notices
[g] Offers to Repurchase Inventory
[h] Arbitration
[i] Petroleum Franchises
[4] Taxation of Transfers of Franchises
§ 10. Inventors’, Artists’, and Authors’ Rights in Their Work
[1] Product of Labor of Skill Defined as Property
[3] Inventions Made by Employee
§ 12. Motion Pictures—Cruelty to People or Animals
§ 13. Statutes Specifically Pertaining to Computers and Computer Software
[1] Computer Crimes
[1] Federal Jurisdiction, Venue, Service of Process, and Evidence
[2] Jurisdiction of the Court of Appeals for the Federal Circuit
[4] Enforcement of Money Judgments by Assignment of Payment from
[5] Trade Secrets: Disclosure and Privileges
[6] Statute of Limitations (Theft)
[8] Contracts for Special Services
[9] Loans to Museums
15
[10] Joint Tortfeasors
[11] Miscellaneous Procedural Rules
§ 15. Tax Treatment of Intellectual Property Transfers and Income
3 CALIFORNIA STATUTES
CALIFORNIA STATUTES
CALIFORNIA BUSINESS AND PROFESSIONS CODE
CALIFORNIA CIVIL CODE
CALIFORNIA CODE OF CIVIL PROCEDURE
CALIFORNIA COMMERCIAL CODE
CALIFORNIA CORPORATIONS CODE
CALIFORNIA EDUCATION CODE
CALIFORNIA EVIDENCE CODE
CALIFORNIA GOVERNMENT CODE
CALIFORNIA LABOR CODE
CALIFORNIA PENAL CODE
CALIFORNIA PROBATE CODE
CALIFORNIA REVENUE AND TAXATION CODE
CALIFORNIA UNEMPLOYMENT INSURANCE CODE
DIVISION 6 BUSINESS RIGHTS
GENERAL PROVISIONS
§ 14000. Applicability of Definitions.
§ 14001. Definition of “Person.”
§ 14002. Acts of Agents.
§ 14003. Definition of “Trade Union.”
§ 14004. Trademarks of Unions; Related Provisions of Labor Code.
CHAPTER 1 GOOD WILL
§ 14100. Definition of “Good Will.”
§ 14101. Right to Use Name of Previous Owner Not Part of “Good
Will.”
§ 14102. Good Will Is Property.
§ 14103. Good Will May Be Transferred With Business Name.
CHAPTER 2 MODEL STATE TRADEMARK LAW
ARTICLE 1 General Provisions
§ 14200. Citation of Chapter.
§ 14201. [Section Repealed 2008.]
§ 14202. Definitions.
ARTICLE 2 Application for Registration
§ 14205. Criteria for Registering a Mark.
§ 14207. Application for Registration of Mark.
§ 14209. Examination of Application for Conformity.
16
ARTICLE 3 Certificate of Registration
§ 14215. Certification of Registration.
§ 14217. Effective Term of Registration; Renewal.
ARTICLE 4 Assignments, Changes of Name, and Other Instruments
§ 14220. Assignment of Mark; Name Change; Recording Other
Instruments.
ARTICLE 5 Records
§ 14225. Records of All Registered Marks and Other
Documents.
ARTICLE 6 Cancellation
§ 14230. Cancellation From Register.
ARTICLE 7 Classification
§ 14235. Classification of Goods and Services.
ARTICLE 8 Fraudulent Registration
§ 14240. Liability for Fraudulent Registration.
ARTICLE 9 Violations
§ 14245. Acts Resulting in Civil Action.
§ 14247. Injunctions Against Use of Famous Mark by Others.
§ 14250. Injunctive Relief From Use of Registered Mark by
Others.
§ 14252. Right to Criminal Prosecution.
§ 14254. Actions to Require Cancellation.
§ 14259. Rights of Marks Acquired Within Common Law.
ARTICLE 10 Fees
§ 14260. Non-Refundable Fees.
ARTICLE 11 Severability
§ 14265. Severability of Chapter.
ARTICLE 12 Miscellaneous
§ 14270. Affect on Prior Actions.
§ 14272. Legislative Intent to Provide System of State
Trademark Registration and Protection.
§ 14290.5. [Section Repealed 2008.]
17
ARTICLE 13 Remedies
CHAPTER 3 TRADE NAMES AND DESIGNATIONS
ARTICLE 1 Trade Names
§ 14401. Transfer of Trade Name With Good Will of Business.
§ 14402. Injunction Against Use of Infringing Trade Name.
§ 14403. Fraudulent Use of Container or Label of Another.
§ 14404. Defacement or Obliteration of Trade Name of Another.
§ 14405. Trafficking in or Refilling Container Bearing Trade
Name of Another.
ARTICLE 1.5 Trade Name Registration
§ 14411. Fictitious Business Name Statement; Rebuttable
Presumption of Exclusive Right to Use Name From Filing
of Same; Rebuttable Presumption Defined.
§ 14412. Duration of Rebuttable Presumption Concerning Right
to Use Business Name.
§ 14413. Date of Filing of Fictitious Business Name Statements
Under Previous Laws.
§ 14414. Filing of Fictitious Business Name Statements Not
Required or Prohibited.
§ 14415. Articles of Incorporation; Rebuttable Presumption of
Exclusive Right to Use Name From Filing of Same;
Rebuttable Presumption Defined.
§ 14416. Conflict Between Corporation and Fictitious Name
Registrant; Determination of Priority.
§ 14417. Articles of Incorporation; Filing of Same Does Not
Authorize Use of Name in Violation of Laws.
§ 14418. Fictitious Business Name Statement; Filing of Same
Does Not Authorize Use of Name in Violation of Laws.
ARTICLE 2 Container Brands
§ 14425. Container Brand Definitions.
§ 14426. Registration of Brand by Corporation or Association.
§ 14427. Registration of Description of Brand.
§ 14429. Registration Notice to Be Included in Registered
Brand.
§ 14430. Acts Prohibited With Respect to Containers Bearing
Brands.
§ 14431. Presumption of Unlawful Use From Use by Person
Other Than Registrant.
§ 14432. Acquisition of Vendor’s Rights in Container Brand.
§ 14433. Deposit for Container Not Constituting Sale.
§ 14434. Duty of Persons to Return Containers to Owner.
§ 14435. Search Warrant to Discover Containers; Punishment of
Violations; Return of Containers.
§ 14436. Penalty for Violations of Provisions Concerning
Container Brands.
§ 14437. Brands Registered Under Earlier Statutes.
18
§ 14438. Civil Action by Registrant; Recovery Under Same.
ARTICLE 3 Farm Names
§ 14460. Definition of “Farm.”
§ 14461. Registration of Farm Name; Certificate for Same.
§ 14462. Use of Farm Name as Trademark.
§ 14463. Registration of Farm Name Equivalent to Registration
of Trademark.
§ 14464. Priority of First to Register Farm Name.
§ 14465. Knowing Use or Registration of Another’s Farm Name
—Misdemeanor.
ARTICLE 4 Laundry Supply Designations
§ 14480. Definitions of “Registrant” and “Supplies.”
§ 14481. Registration of Clean Laundry Supply Name.
§ 14482. Procedure for Registration of Clean Laundry Supply
Name.
§ 14483. Fee for Registration.
§ 14484. Prohibited Acts Concerning Clean Laundry Supply
Name.
§ 14485. Acceptance of Deposit Does Not Constitute Sale.
§ 14486. Presumption of Unlawful Use of or Traffic in Marked
Supplies.
§ 14487. Acquisition of Rights of Vendor of Supplies.
§ 14488. Duty to Return Supplies.
§ 14489. Search Warrant to Discover and Obtain Supplies.
§ 14490. Punishment for Violation; Forfeiture of Property Taken
Under Warrant.
§ 14491. Penalties.
ARTICLE 5 Names Other Than Trade Names
§ 14493. Restraint of Unauthorized Use of Organization Name.
§ 14494. Proof of Damages Not Needed for Injunction;
Recovery of Actual Damages.
§ 14495. Presumption of Unlawful Use.
DIVISION 7 GENERAL BUSINESS REGULATIONS
PART 1 Licensing for Revenue and Regulation
CHAPTER 1 LICENSING BY CITIES
§ 16001.7. Veterans; Exemption From Licensing Fees.
PART 2 Preservation and Regulation of Competition
CHAPTER 1 CONTRACT IN RESTRAINT OF TRADE
§ 16600. Restraints in Contracts Void.
§ 16601. Sale of Goodwill or Corporate Shares.
§ 16602. Agreement Not to Compete in Connection with
Dissolution of Partnership Not Void.
§ 16602.5. Agreement by Member Not to Carry on Similar
Business Within Specified Locality.
§ 16606. Customer List of Telephone Answering Service as
Trade Secret.
§ 16607. Customer List of Employment Agency as Trade Secret.
CHAPTER 5 ENFORCEMENT
19
§ 17200. Definition of “Unfair Competition.”
§ 17201.5. Definitions of “Board Within the Department of
Consumer Affairs” and “Local Consumer Affairs Agency.”
§ 17202. Specific or Preventative Relief to Enforce a Penalty,
Forfeiture, or Penal Law.
§ 17203. Injunctive Relief; Court Orders.
§ 17204. Actions for Injunctions by Attorney General, District
Attorney, County Counsel, and City Attorneys.
§ 17204.5. Prosecution of Actions by City Attorney of San Jose.
§ 17205. Remedies Provided by Chapter Are Cumulative.
§ 17206. Civil Penalty for Violation of Chapter.
§ 17206.1. Additional Civil Penalty; Acts Against Senior Citizens
or Disabled Persons.
§ 17207. Civil Penalties for Intentional Violation of Injunction;
Expenses of Prosecution.
§ 17208. Limitation on Commencement of Actions.
§ 17209. Service of Notice.
§ 17210. “Hotel”; “Handbill”; Unfair Competition with Respect
to Distributing Handbills to Individual Guest Rooms.
PART 3 Representations to the Public
CHAPTER 1 ADVERTISING
ARTICLE 1 False Advertising in General
§ 17500. False or Misleading Statements Generally.
§ 17500.1. Prohibition Against Enactment of Rule,
Regulation, or Code of Ethics Restricting or
Prohibiting Advertising Not Violative of Law.
§ 17500.3. Solicitation of Sales at Residence or by
Telephone.
§ 17500.5. Advertisements as to Quantity of Article to Be
Sold to Single Customer.
§ 17501. Value Determinations; Former Price
Advertisements.
§ 17502. Exemption of Broadcasting Stations and
Publishers From Provisions of Article.
§ 17503. [No Section of This Number.]
§ 17504. Advertisement of Price of Goods or Services Sold
in Multiple Units.
§ 17505. Misrepresentation as to Nature of Business.
§ 17505.2. Requirements for Representing Oneself as
Recreation Therapist; Civil Action for Violation.
§ 17506. “Person”.
§ 17506.5. “Board Within the Department of Consumer
Affairs”; “Local Consumer Affairs Agency”.
§ 17507. Disclosure of Price Differentials Respecting
More Than One Article of Merchandise or Type of
Service Within Same Class.
§ 17508. Purportedly Fact-Based or Brand-Comparison
Advertisements.
20
§ 17509. Advertisements Soliciting Purchase of Product
Conditioned on Purchase of Different Product; Price
Disclosure; Good Faith Exemption for Publishers.
ARTICLE 1.6 Cyber Piracy
§ 17525. Domain Names.
§ 17526. Factors in Determining Bad Faith Intent.
§ 17528. Jurisdiction.
§ 17528.5. Transfer of Domain Name as Part of Relief for
Violation of Article.
ARTICLE 1.8 Restrictions on Unsolicited Commercial E-mail
Advertisers
§ 17529. Legislative Findings.
§ 17529.1. Definitions.
§ 17529.2. Unsolicited Commercial E-mail Advertisements
Prohibited; Severability.
§ 17529.3. Effect on Internet Access Service Provider
Policy.
§ 17529.4. Collection and Use of Electronic Mail
Addresses for Certain Purposes Unlawful.
§ 17529.5. Commercial E-mail Advertisements Unlawful
Under Specified Circumstances; Remedies;
Punishment.
§ 17529.8. Action for Actual and Liquidated Damages;
Attorney’s Fees and Costs.
§ 17529.9. Severability.
ARTICLE 2 Particular Offenses
§ 17530. False Statement Concerning Realty.
§ 17530.1. Recommending Insolvent to Act as Trustee.
§ 17530.5. Disclosure of Tax Return Data.
§ 17530.7. Retail Sale of Casket or Other Burial Container,
by Person Other Than Funeral Director, Without
Specified Disclosures.
§ 17531. Advertising Second-Hand, Blemished or Rejected
Merchandise.
§ 17531.1. Labeling Packages of Unassembled Toys.
§ 17531.5. Advertisement of Federal Surplus Materials.
§ 17531.6. Definitions Pertaining to Picture Tubes.
§ 17531.7. Labeling Television Picture Tubes.
§ 17531.8. Prohibition Against Removal or Alteration of
Tube Label.
§ 17531.9. Injunction Against Mislabeling Picture Tubes or
Removal or Alteration of Labels.
§ 17532. Fraudulent Coal Sales.
§ 17533. Misrepresenting Volume of Newspaper or
Periodical Circulation.
§ 17533.5. Sale of Federal Surplus Materials.
§ 17533.6. Use of term, symbol, or content indicating
21
governmental connection; Exception in the case of
endorsement; Solicitation indicating governmental
connection; Violation; Remedies.
§ 17533.7. Use of Words “Made in U.S.A.” or Similar
Words.
§ 17533.8. Offer of Prize or Gift Without Disclosing
Intended Sales Presentation; Exemption for Good Faith
Broadcast or Publication by Media.
§ 17533.9. Advertisement of Tear Gas, Weapons, or
Devices Without Warning of Prohibition of Possession
Without Permit.
§ 17533.10. Advertising of Anabolic Steroids.
§ 17534. Punishment for Violation.
§ 17534.5. Remedies or Penalties Cumulative.
§ 17535. Obtaining Injunctive Relief.
§ 17535.5. Penalty for Violating Injunction; Proceedings;
Disposition of Proceeds.
§ 17536. Penalty for Violations of Chapter; Proceedings;
Disposition of Proceeds.
§ 17536.5. Notice of Issue in Action Before Appellate
Court.
§ 17537. Conditioning Prize-Winning on Purchase or
Rental.
§ 17537.1. Offering Prize or Gift as Inducement to Visit
Location or Attend Sales Presentation; Required
Disclosures.
§ 17537.2. What Constitutes Deceptive and Unfair Trade
Practices With Respect to Inducement to Visit
Location or Attend Sales Presentation.
§ 17537.3. Prohibited Acts Concerning Advertising of
Smokeless Tobacco Products.
§ 17537.4. Civil Action for Making Prohibited Offers.
§ 17537.5. False Statements Relating to Energy
Conservation Products or Services.
§ 17537.6. Untrue or Misleading Statements by Homestead
Filing Service; Disclosure; Fees.
§ 17537.7. Unlawful Use of Specified Terms to Refer to
Dealer’s Cost for Motor Vehicle.
§ 17537.8. Untrue or Misleading Statement by
Homeowners’ Exemption Filing Service.
§ 17537.9. Untrue or Misleading Statement by Assessment
Reduction Filing Service.
§ 17537.10. Untrue or Misleading Statement Relating to
Offering or Performance of Grant Deed Copy Service;
Required Disclosures.
§ 17537.11. Misleading Coupon.
§ 17537.12. Citation of Section; Definitions; Procedures in
Advertising or Conducting a Live Musical Performance
or Production; Violations; Penalties and Remedies.
22
§ 17537.15. Provider or Vendor of Floral or Ornamental
Products or Services; Misrepresenting Geographic
Location of Business.
§ 17538. Seller’s Obligations When Mail Order Delivery Is
Delayed.
§ 17538.3. Exemptions From Restrictions on Mail Order
Sales.
§ 17538.35. Notice Requirements for Electronic Mail
Service Termination.
§ 17538.41. Transmission of Text Message Advertisement
to Cellular Phone or Pager Equipped With Short
Message Capability Prohibited.
§ 17538.43. Transmission of Unsolicited Advertisement to
Telephone Facsimile Machine Prohibited; Definitions;
Remedies; Identification Required; Exceptions.
§ 17538.45. Use of Electronic Mail Service Provider’s
Equipment in Violation of Provider’s Policy on
Unsolicited Electronic Mail Advertisements; Action by
Service Provider; Actual Monetary Loss or Liquidated
Damages; Attorney’s Fees; Election of Remedies.
§ 17538.5. Disclosure of Business Address and Legal
Name.
§ 17538.6. Postdated Checks.
§ 17538.7. Consumer Credit Advertising; Required
Disclosures.
§ 17538.8. Advertisement of Discounted Transportation
With Required Purchase of Accommodations.
§ 17538.9. Standards for Prepaid Calling Cards and
Services.
§ 17539. Legislative Findings Regarding Contests Involving
Solicitations.
§ 17539.1. Unfair Practices in Operation of Contests.
§ 17539.15. Representations by Solicitation Materials
Containing Sweepstakes Entries.
§ 17539.2. Duties of Person Conducting Contest.
§ 17539.3. Applicability and Construction of §§ 17539.1
and 17539.2; “Person” and “Contest” Defined.
§ 17539.35. Contests Conditioned on Minimum Number of
Entries or Participants.
§ 17539.4. Advertisement for Loans Utilizing Real Property
as Collateral.
§ 17539.5. Unlawful Acts Relating to Sale or
Encouragement of Use of Information-Access Service;
Disclosures; Sweepstakes; Application of Section.
§ 17539.55. Use of 900 Number for Sweepstakes;
Registration; Fee.
§ 17539.6. Language of Advertisement Containing 900
Number.
23
CHAPTER 5 FICTITIOUS BUSINESS NAMES
§ 17900. (First of Two; Inoperative January 1, 2014) “Fictitious
Business Name.”
§ 17900. (Second of Two; Operative January 1, 2014) “Fictitious
Business Name.”
§ 17901. Definition of “General Partner.”
§ 17901.5. Definition of “Manager.”
§ 17903. “Registrant.”
§ 17910. Time for Filing Statement.
§ 17910.5. Use of Corporation Designation by Noncorporation
Prohibited.
§ 17911. Nonprofit Corporations.
§ 17912. Real Estate Investment Trusts Not Subject to Chapter.
§ 17913. (First of Two; Repealed January 1, 2014) Fictitious
Business Name Statement; Form.
§ 17913. (Second of Two; Operative January 1, 2014) Fictitious
Business Name Statement; Form.
§ 17914. Signature.
§ 17915. Filing.
§ 17916. (First of Two; Repealed January 1, 2014) What
Constitutes Filing; Certification.
§ 17916. (Second of Two; Operative January 1, 2014) What
§ 17917. Publication; Filing Affidavit of Publication.
§ 17918. No Actions to Be Brought on Contract Until Statement
Filed and Published.
§ 17919. Validity of Filing After Bankruptcy, Death, Sale.
§ 17920. Expiration of Statement.
§ 17921. Notice of Date of Expiration.
§ 17922. (First of Two; Repealed January 1, 2014) Abandonment
of Fictitious Name; Filing Statement.
§ 17922. (Second of Two; Operative January 1, 2014)
Abandonment of Fictitious Name; Filing Statement.
§ 17923. (First of Two; Repealed January 1, 2014) Withdrawal
From Partnership; Filing of Statement.
Withdrawal From Partnership; Filing of Statement.
§ 17924. Forms to Be Furnished by County Clerk.
§ 17925. Indices Concerning Fictitious Business Names
Maintained by County Clerk.
§ 17926. Fees; “Statement.”
§ 17927. (First of Two; Repealed January 1, 2014) File Copy;
Marking and Dating; Period of Retention.
§ 17927. (Second of Two; Operative January 1, 2014) File Copy;
Marking and Dating; Period of Retention.
§ 17928. Summaries or Compilations of Filings; County Clerk to
Provide Same; Fee.
§ 17929. (First of Two; Repealed January 1, 2014) Filing Fees;
24
Cost Covered by Fees.
§ 17929. (Second of Two; Operative January 1, 2014) Filing
Fees; Cost Covered by Fees.
§ 17930. Execution, Filing, or Publishing False Statement a
Misdemeanor; Penalty.
DIVISION 8 SPECIAL BUSINESS REGULATIONS
CHAPTER 5.5 FRANCHISE RELATIONS
ARTICLE 1 Definitions
§ 20000. California Franchise Relations Act; Short Title.
§ 20001. Definition of “Franchise.”
§ 20002. Definition of “Franchisee.”
§ 20003. Definition of “Franchisor.”
§ 20004. Definition of “Area Franchise.”
§ 20005. Definition of “Subfranchisor.”
§ 20006. Definition of “Franchise” Includes “Area Franchise.”
§ 20007. Definition of “Franchise Fee”; Exclusions from
Definition.
§ 20009. Prima Facie Evidence Concerning Whether Agreement
Constitutes a “Franchise”; Burden of Proving an Exemption
or Exception.
§ 20010. Waiver of Compliance with Law Void.
ARTICLE 2 Jurisdiction
§ 20015. Franchises to Which Provisions of Chapter Are
Applicable.
ARTICLE 3 Termination
§ 20020. Termination of Franchise Prior to Expiration of Term;
Good Cause Required; Notice of Noncompliance and Cure.
§ 20021. Termination Without Opportunity to Cure.
ARTICLE 4 Nonrenewal
§ 20025. Requirement of Notice of Intention Not to Renew
Franchise; Other Conditions to Refuse Renewal.
§ 20026. Extension of Current Franchise Term to Satisfy Time
of Notice of Nonrenewal.
ARTICLE 4.4 Transfers
§ 20027. Right of Surviving Spouse, Heirs, or Estate of
Deceased Franchisee to Own Franchise.
ARTICLE 5 Notices
§ 20030. Notices of Termination or Renewal; Method of
Delivery and Contents.
ARTICLE 6 Offers to Repurchase Inventory
§ 20035. Offer to Repurchase Inventory Required When
Franchisor Terminates or Fails to Renew in Violation of
Chapter; Inventory to Be Repurchased; Price of Same.
§ 20036. Offset Against Repurchase of Sums Owed to
Franchisor.
§ 20037. Right of Franchisee to Sue.
ARTICLE 7 Arbitration
§ 20040. Agreement to Binding Arbitration; Requirements.
25
ARTICLE 8 Venue of Disputes
§ 20040.5. Prohibition Against Out-of-State Venue Restriction
in Franchise Agreement.
ARTICLE 9 Miscellaneous Provisions
§ 20041. Franchisees Subject to Chapter.
§ 20042. Motor Vehicle Franchises.
§ 20043. Severability of Invalid Provisions of Chapter.
CHAPTER 7.5 FRANCHISES
§ 20999. Petroleum Franchise Definitions.
§ 20999.1. Termination, Cancellation, or Refusal to Renew Franchise
Without Good Cause Not Permitted.
§ 20999.2. Accompaniment of Dealers by Counsel at Meetings.
§ 20999.25. Leased Marketing Premises; Franchisee’s First Refusal
Rights; Sale to Franchisee of Improvements.
§ 20999.3. Suit for Injunctive Relief for Violation of Chapter;
Damages; Costs; Limitation of Actions.
§ 20999.4. Notification to Governor of Withdrawal from Marketing
in Area.
CHAPTER 12 PRECIOUS METAL MARKING
§ 22100. Construction of Precious Metal Marking Chapter.
§ 22101. Definition of “Article.”
§ 22102. Definition of “Mark.”
§ 22103. Definition of “Apply.”
ARTICLE 2 The Platinum Group
§ 22120. Platinum Group Metals Subject to Article.
§ 22121. Definition of “Quality Mark.”
§ 22122. Application of Quality Marks to Articles; Legibility of
Marks.
§ 22123. Quality Mark Does Not Apply to Mechanisms, Works
or Movements.
§ 22124. Quality Mark Does Not Apply to Springs, Winding
Bars, Etc.
§ 22125. Quality Mark Does Not Apply to Pin Tongues, Joints,
Catches, Etc.
§ 22126. Trademark Required to Be Applied to Article With
Quality Mark; Marking With Identification Numerals.
§ 22127. Parts or Percentages Defined by Weight.
§ 22128. Standards for Application of Quality Mark to Article.
§ 22129. Abbreviations of Platinum Metal Names.
§ 22130. Assay Certificate as Prima Facie Proof Concerning
Assay.
§ 22131. Prima Facie Proof of Time of Manufacture of Article
After Effective Date of Law.
§ 22132. Penalty for Violations; Defense of Exportation.
ARTICLE 3 Gold
§ 22175. Application of Article to Gold and Its Alloys.
26
§ 22177. Quality Marks Must Comply With Provisions of
Article.
§ 22178. Quality Mark to Indicate Gold Content.
§ 22179. Permitted Tolerance for Indicated Fineness.
§ 22180. Requirement to Apply Trademark With Quality Mark.
§ 22181. Penalty for Nonconforming Marks.
CHAPTER 17 INVENTION DEVELOPMENT SERVICES CONTRACTS
§ 22370. Legislative Findings Concerning Invention
Development Services Contracts; Purpose of Chapter.
§ 22371. Definitions Used in Chapter.
ARTICLE 2 General Regulatory Provisions
§ 22372. Requirements for Contract to Be in Writing; Copy to
Be Given to Customer; Subsequent Contracts.
§ 22373. Cancellation of Contract; Notice of Cancellation;
Required Statement of Right of Cancellation.
§ 22374. Required Notices on Cover Sheet of Contract.
§ 22375. Interest of Developer in Title to Invention Prohibited;
Exceptions.
§ 22376. Third Party Rights and Defenses May Not Be Cut Off
by Contract.
§ 22377. Assignee of Developer’s Rights Subject to Equities and
Defenses of Customer.
§ 22378. Quarterly Statement of Services.
ARTICLE 3 Mandatory Contract Terms
§ 22379. Required Contents of Contract; Type Size.
ARTICLE 4 Disclosures Made Prior to Contract
§ 22380. Disclosure of Fee in Advertisements.
§ 22381. Required Disclosures to Potential Customers.
ARTICLE 4.5 Remedies and Enforcement
§ 22382. Chapter Not Exclusive; Other Laws Applicable.
§ 22383. Noncomplying Contracts Void; Exception.
§ 22384. False, Fraudulent, or Misleading Representations
Inducing Reliance: Contract Void.
§ 22385. Waiver by Customer of Provisions of Chapter Void.
§ 22386. Civil Action for Damages Caused to Customer.
§ 22387. Penalty for Willful Violations; Actions to Restrain
Violations; Persons Who Can Bring Actions; Duty to Bring
Same.
§ 22388. Penalty for Failure to Disclose.
ARTICLE 5 Financial Requirements
§ 22389. Bond Filed by Invention Developers; Amount of Bond.
§ 22390. Beneficiary of Bond.
§ 22391. Claim Against Deposit Made in Lieu of Bond;
Requirements; Payment of Claim; Retention of Cash
Deposit for 2 Years; Return of Deposit.
§ 22391.1. Enforcement of Provisions; Filing Fee.
ARTICLE 6 Miscellaneous Provisions
§ 22392. Invention Developers to Maintain Records and
27
Correspondence.
§ 22393. No Reference in Advertisements to Compliance With
Act Permitted.
§ 22394. Severability of Invalid Provisions.
§ 22395. Requirement for Invention Developer to Maintain
Confidentiality of Customer Disclosures; Exceptions to
Same; Waiver by Customer.
DIVISION 9 ALCOHOLIC BEVERAGES
CHAPTER 13 LABELS AND CONTAINERS
ARTICLE 2 Beer
§ 25200. Label; Contents; Refilled containers.
§ 25203. Brand Names; Filing.
ARTICLE 3 Wine
§ 25236. “California Central Coast Counties Dry Wine.”
§ 25237. False Representations of Origin.
§ 25238. Records of Wine Growers or Bottlers.
§ 25239. Counterfeit Wine Labels.
§ 25240. “Napa Valley” wine label; Designation.
§ 25241. “Napa” Label on Wine.
§ 25242. Restrictions on Sale of Wine Using Name of Sonoma
in Labeling, Packaging or Advertising.
§ 25243. Application of Restrictions on Use of a Name of
Viticultural Significance to Multicounty Appellation.
§ 25244. “Paso Robles” Wine Label; Designation; Exception.
§ 25245. “Lodi” Wine Label; Violation; Exception.
§ 25246. “Sonoma County” Wine Label; Violation; Exception.
DIVISION 1 PERSONS
PART 2.9 California Fair Dealership Law
§ 80. Title of Law.
§ 81. Definitions.
§ 82. Purposes.
§ 83. New Dealerships.
§ 84. Existing Dealerships.
§ 85. Transfer of Dealerships.
§ 86. Recovery of Reasonable Attorney’s Fees and Taxable Court
Costs.
DIVISION 2 PROPERTY
PART 1 Property in General
TITLE 1 NATURE OF PROPERTY
§ 654. Ownership Defined.
§ 655. Things Subject to Ownership.
§ 657. Kinds of Property.
§ 663. Personalty.
TITLE 2 OWNERSHIP
CHAPTER 1 OWNERS
§ 669. Seisin or Ownership.
§ 671. Capacity to Own.
CHAPTER 2 MODIFICATIONS OF OWNERSHIP
28
ARTICLE 1 Interests in Property
§ 678. Absolute or Qualified.
§ 679. Absolute Ownership Defined.
§ 680. Qualified or Base Ownership Defined.
§ 681. Sole or Several Ownership.
§ 682. Joint, Common, or Community Ownership.
§ 682.1. Community Property of Husband and Wife.
§ 683. Joint Interest Defined.
§ 683.1. Interest in Contents of Safe-Deposit Box.
§ 683.2. Severance of Joint Tenant’s Interest Without
Consent; Severance by Written Declaration.
§ 684. Partnership Interest Defined.
§ 685. Common Interest Defined.
§ 686. Common Interest Created by Mode of
Acquisition.
§ 687. Community Property Defined.
§ 688. Present or Future, Perpetual or Limited Interest.
§ 689. Present Interest Defined.
§ 690. Future Interest Defined.
§ 691. Perpetual Interest.
§ 692. Limited Interest.
ARTICLE 2 Conditions of Ownership
§ 707. As to Time of Enjoyment.
§ 708. Precedent and Subsequent.
§ 709. Illegal Conditions.
§ 710. Restraining Marriage.
§ 711. Restraining Alienation.
PART 3 Personal or Movable Property
TITLE 2 PARTICULAR KINDS OF PERSONAL PROPERTY
CHAPTER 3 PRODUCTS OF THE MIND
§ 980. Invention, Literature, and Art Protected.
§ 981. Joint Invention or Authorship.
§ 982. Assignment or Transfer—Right of Reproduction.
§ 983. Dedication by Publication.
§ 984. When Not Made Public.
§ 985. Letters and Private Writings—Title—Publication.
§ 986. Residual Rights in Artist for Sale of Work.
§ 987. The California Art Preservation Act.
§ 988. Reservation of Ownership Rights in Reproduced,
Displayed, or Performed Work of Art.
§ 989. Injunctive Relief to Preserve or Restore Integrity of
Fine Art Work.
DIVISION 3 OBLIGATIONS
PART 3 Obligations Imposed By Law
§ 1710. Elements of Actionable Fraud.
§ 1710.1. Sale of Property With Manufacturer’s Nameplate, Serial
Number, Etc., Removed, Defaced, Covered, Altered, or
Destroyed.
§ 1717. Action on Contract—Recovery of Attorney’s Fees.
29
PART 4 Obligations Arising From Particular Transactions
TITLE 1 CONSIGNMENT OF FINE ART
CHAPTER 1 DEFINITIONS
CHAPTER 2 GENERAL PROVISIONS
§ 1738.5. Delivery Constitutes Consignment.
§ 1738.6. Results of Consignment.
§ 1738.7. Payment to Consignor.
§ 1738.8. Waiver Void.
§ 1738.9. Effective Date.
TITLE 1.1A AUTOGRAPHED SPORTS MEMORABILIA
§ 1739.7. Sale of Autographed Sports Memorabilia; Certificate
of Authenticity Required; Civil Penalty.
TITLE 1.2 SALE OF FINE PRINTS
§ 1741. Applicability of Title.
CHAPTER 2 FULL DISCLOSURE IN THE SALE OF FINE
PRINTS
§ 1742. Informational Details Required to Be Published in
Catalogue, Prospectus, or Circular.
§ 1742.6. Charitable Organizations as Exempt From
Disclosure Requirements.
§ 1744. Information Required.
§ 1744.7. Information Disclosed as Part of Basis of Bargain
and as Creating Express Warranty.
§ 1744.9. Liability of Consignors and Agents.
CHAPTER 3 REMEDIES AND PENALTIES
§ 1745. Liability of Offeror or Seller—Amount
Recoverable—Limitation Period for Action.
§ 1745.5. Injunctive Relief; Who May Bring Action; Civil
Penalties.
TITLE 1.7 CONSUMER WARRANTIES
CHAPTER 4 GREY MARKET GOODS
§ 1797.81. Disclosures by Retail Seller.
§ 1797.82. Disclosures in Advertising.
§ 1797.83. Disclosures—Language.
§ 1797.84. Effect on Other Laws.
§ 1797.85. Violation; Refund or Credit.
§ 1797.86. Violation of Chapter—Unfair Competition.
TITLE 2.7 CONTRACTS FOR SELLER ASSISTED MARKETING
PLANS
§ 1812.200. Purpose of Title.
§ 1812.202. When Offer, Sale, or Lease Occurs.
§ 1812.203. Filing of Disclosure Statements With Attorney
General; Stop Orders.
§ 1812.204. Restriction on Representations Allowed in Sale or
30
Lease.
§ 1812.205. Written Disclosure to Be Given to Potential
Purchaser on Initial Contact.
§ 1812.206. Information Sheets.
§ 1812.207. Contract to Be Written—Copies to Purchaser.
§ 1812.208. Purchaser’s Right to Cancel.
§ 1812.209. Contents of Contract—Procedure for Cancellation.
§ 1812.210. Regulation of Payment Under Contract.
§ 1812.211. Rights of Assignee.
§ 1812.212. Reference to Seller’s Compliance With This Title
Prohibited.
§ 1812.213. Record of Sales to Be Kept by Seller.
§ 1812.214. Designated Agent for Service—Procedure for
Service—Procedure for Bond, Trust Account, or Escrow
Account.
§ 1812.215. Voidability of Contract.
§ 1812.216. Waiver by Purchaser Void.
§ 1812.217. Criminal Violations.
§ 1812.218. Action by Purchaser for Damages.
§ 1812.219. Remedies Not Exclusive.
§ 1812.220. Unconstitutional Provisions Severable.
§ 1812.221. Establishment and Payment of Claims Against
Deposit—Deposit Not Subject to Attachment, Garnishment,
or Execution.
TITLE 4 LOAN
CHAPTER 1.5 LOANS TO MUSEUMS FOR INDEFINITE OR
LONG TERMS
§ 1899. Purposes of Chapter.
§ 1899.1. Definition of Terms.
§ 1899.2. When Notice to Lender Deemed Given.
§ 1899.3. Informing Lender of Provisions of Chapter.
§ 1899.4. Owner’s Responsibility to Notify Museum.
§ 1899.5. Notice of Intent to Preserve Interest in Property
—Form.
§ 1899.6. Conditions Under Which Museum May Dispose
of Loaned Property.
§ 1899.7. Injury to or Loss of Property on Loan—Published
Notice.
§ 1899.8. Limitation on Action Against Museum for Loss.
§ 1899.9. Museum’s Notice to Terminate Indefinite Loan.
§ 1899.10. Limitation on Action to Recover Property.
§ 1899.11. Unclaimed Property Law May Be Applied.
TITLE 8 INVOLUNTARY TRUSTS
§ 2223. Creation of Involuntary Trust—Wrongful Detention.
§ 2224. Creation of Involuntary Trust—Mistake or Wrongful
Act.
§ 2225. Proceeds or Profits From Sale of Felon’s Story to Be
Placed in Involuntary Trust—Definitions and Procedures.
TITLE 10 RECORDING ARTIST CONTRACTS
31
§ 2501. Right of Royalty Recipient to Audit Records of Royalty
Reporting Party; Confidential Information.
DIVISION 4 GENERAL PROVISIONS
PART 1 Relief
TITLE 2 COMPENSATORY RELIEF
CHAPTER 1 DAMAGES IN GENERAL
ARTICLE 3 Exemplary Damages
§ 3294. Punitive Damages for Homicide, Oppression,
Fraud, or Malice.
CHAPTER 2 MEASURE OF DAMAGES
ARTICLE 3 Penal Damages
§ 3344. Use of Another’s Name, Voice, Signature,
Photograph, or Likeness in Advertising or
Soliciting Without Prior Consent.
§ 3344.1. Rights of Deceased Personality.
TITLE 3 SPECIFIC AND PREVENTIVE RELIEF
CHAPTER 2 SPECIFIC RELIEF
ARTICLE 3 Specific Performance of Obligations
§ 3390. Contracts Not Subject to Specific
Performance.
CHAPTER 3 PREVENTIVE RELIEF
§ 3423. Proceedings, Which May Not Be Enjoined.
TITLE 4 UNIFORM SINGLE PUBLICATION ACT
§ 3425.1. How Cited.
§ 3425.2. Interpretation.
§ 3425.3. Single Cause of Action for Single Publication.
§ 3425.4. Judgment Bar to Second Action.
§ 3425.5. Not Retroactive.
TITLE 5 UNIFORM TRADE SECRETS ACT
§ 3426. How Cited.
§ 3426.2. Misappropriation—Enjoined.
§ 3426.3. Misappropriation—Recovery of Damages for Loss.
§ 3426.4. Attorney Fees and Costs.
§ 3426.5. Court to Preserve Secrecy in Action.
§ 3426.6. Time Limit for Bringing Action.
§ 3426.7. Applicable Existing Statutes Not Superseded.
§ 3426.8. General Purpose.
§ 3426.9. Provisions of Title Severable.
§ 3426.10. Effective Date of Title.
§ 3426.11. Disclosures of Trade Secrets Not Privileged.
PART 3 Nuisance
TITLE 4 MOTION PICTURES
§ 3505. Exhibition of Motion Picture Showing Intentional
Killing or Cruelty to Animal or Human Is Nuisance.
§ 3506. Action by District Attorney or Attorney General to
32
Enjoin Nuisance—Independent Evidence Required.
§ 3507. Trial on Merits—Only Permanent Injunction May Be
Granted—Appeal.
§ 3507.1. Motion Picture Admissible—Burden of Proof.
§ 3507.2. Precedence of Actions—Speedy Adjudication.
§ 3507.3. Violation of Injunction Punishable by Fine.
§ 3507.4. Distributor and Producer Liable to Exhibitor for
Damages—Duty to Assist in Defense—Contract of
Exhibition Not Enforceable.
§ 3508. Exempt Motion Pictures.
§ 3508.1. Willful Misstatement of Exempt Status of Picture as
Misdemeanor.
§ 3508.2. Invalid Provisions Severable.
PART 2 Of Civil Actions
TITLE 2 OF THE TIME OF COMMENCING CIVIL ACTIONS
CHAPTER 3 THE TIME OF COMMENCING ACTIONS OTHER
THAN FOR THE RECOVERY OF REAL PROPERTY
§ 338. Statutory Liability; Injury to Property; Fraud or Mistake;
Bonds of Public Officials and Notaries; Slander of Title;
False Advertising; Pollution Violations; Challenge to Tax
Levy; Three Years; Specified Recovery of Work of Fine Art
to Be Commenced Within 6 Years.
TITLE 3 Of the Parties to Civil Actions
CHAPTER 5 PERMISSIVE JOINDER
§ 382. Party Who Cannot Be Joined as Plaintiff Being Made
Defendant; Defense by Parties on Behalf of Others Having
Common Interest.
TITLE 6 OF THE PLEADINGS IN CIVIL ACTIONS
CHAPTER 2 PLEADINGS DEMANDING RELIEF
ARTICLE 5 Contents of Documents in Particular Actions or
Proceedings
§ 429.30. Action for Infringement of Rights in Literary,
Artistic, or Intellectual Production.
TITLE 7 OTHER PROVISIONAL REMEDIES IN CIVIL ACTIONS
CHAPTER 3 INJUNCTION
§ 526. Grounds for Issuance.
TITLE 9 ENFORCEMENT OF JUDGMENTS
DIVISION 2 ENFORCEMENT OF MONEY JUDGMENTS
CHAPTER 6 MISCELLANEOUS CREDITORS’ REMEDIES
ARTICLE 6 Assignment Order
§ 708.510. Application for Order for Assignment to
Judgment Creditor of Right to Payment Due or to
Become Due to Judgment Debtor.
TITLE 11 CONTRIBUTION AMONG JOINT JUDGMENT DEBTORS
CHAPTER 1 RELEASES FROM AND CONTRIBUTION AMONG
JOINT TORTFEASORS
§ 875. Right of Contribution.
§ 876. Determination of Pro Rata Share of Tortfeasor.
33
§ 877. Effect of Release, Dismissal, or Covenant Not to Sue or
Enforce Judgment.
§ 877.5. Disclosure of Sliding Scale Recovery Agreement.
§ 877.6. Determination of Good Faith Settlement.
§ 878. Entry of Judgment for Contribution.
CHAPTER 2 CONTRIBUTION AMONG OTHER JUDGMENT
DEBTORS
§ 881. Contribution Among Joint Judgment Debtors.
§ 882. Right to Contribution or Repayment.
§ 883. Motion to Court for Order Determining Liability for
Contribution or Repayment.
PART 4 Miscellaneous Provisions
TITLE 4 CIVIL DISCOVERY ACT
CHAPTER 5 METHODS AND SEQUENCE OF DISCOVERY
ARTICLE 2 Methods and Sequence of Discovery in Specific
Contexts
§ 2019.210. Misappropriation of Trade Secret.
CHAPTER 9 ORAL DEPOSITION INSIDE CALIFORNIA
ARTICLE 4 Objections, Sanctions, Protective Orders, Motions
to Compel, and Suspension of Depositions
§ 2025.420. Motion for Protective Order; What Order May
Include; Discovery of Electronically Stored
Information; Denial of Protective Order; Monetary
Sanction.
CHAPTER 13 WRITTEN INTERROGATORIES
ARTICLE 1 Propounding Interrogatories
§ 2030.090. Motion for Protective Order; What Protective
Order May Provide; Denial of Protective Order;
Monetary Sanction.
CHAPTER 14 INSPECTION, COPYING, TESTING, SAMPLING,
AND PRODUCTION OF DOCUMENTS, ELECTRONICALLY
STORED INFORMATION, TANGIBLE THINGS, LAND, AND
OTHER PROPERTY
ARTICLE 1 Inspection Demand
§ 2031.060. Motion for Protective Order; What Protective
Order May Provide; Denial of Protective Order;
Monetary Sanction.
CHAPTER 16 REQUESTS FOR ADMISSION
ARTICLE 1 Requests For Admission
§ 2033.080. Motion for Protective Order; Grounds; Denial
of Order; Monetary Sanction.
DIVISION 2 SALES
CHAPTER 3 GENERAL OBLIGATION AND CONSTRUCTION OF
CONTRACT
§ 2312. Warranty of Title and Against Infringement; Buyer’s
Obligation Against Infringement.
CHAPTER 6 BREACH, REPUDIATION AND EXCUSE
§ 2607. Effect of Acceptance; Notice of Breach; Burden of
34
Establishing Breach After Acceptance; Notice of Claim or
Litigation to Person Answerable Over.
CHAPTER 7 REMEDIES
§ 2714. Buyer’s Damages for Breach in Regard to Accepted Goods.
§ 2715. Buyer’s Incidental and Consequential Damages.
DIVISION 10 PERSONAL PROPERTY LEASES
CHAPTER 2 FORMATION AND CONSTRUCTION OF LEASE
CONTRACT
§ 10211. Implied Warranty Against Infringement; Supplier’s or
Lessor’s Compliance With Specifications Furnished by Lessee.
§ 10214. Limitation of Express Warranty; Exclusion or Modification
of Implied Warranty.
CHAPTER 5 DEFAULT
ARTICLE 2 Default by Lessor
§ 10516. Lessee Obligations Upon Acceptance; Lessee Sued for
Obligation of Lessor.
TITLE 1 CORPORATIONS
DIVISION 1 GENERAL CORPORATION LAW
CHAPTER 2 ORGANIZATION AND BYLAWS
§ 200. Formation of Corporations—Execution of Articles—
Initiation of Corporate Existence.
§ 200.5. Incorporation of Existing Unincorporated Association.
§ 201. Filing Where “Bank,” “Trust,” or “Trustee” in Name;
Certificate of Approval of Commissioner of Financial
Institutions; Misleading or Deceptive Name; Reservation.
§ 201.5. When Certificate of Insurance Commissioner Is
Required.
§ 201.6. Filing of Certificate of Redomestication.
§ 201.7. Filing of Articles of Incorporation of Domestic Mutual
Insurer, Mutual Holding Company, or Stock Holding
Company.
§ 202. Contents of Articles of Incorporation.
CHAPTER 21 FOREIGN CORPORATIONS
§ 2101. Registration of Corporate Name—Renewal.
§ 2105. Qualification of Foreign Corporation to Transact
Intrastate Business.
§ 2106. Issuance of Certificate—Corporate Names.
§ 2106.5. When Certificate of Insurance Commissioner Is
Required.
§ 2107. Amended Statement and Designation.
DIVISION 2 NONPROFIT CORPORATION LAW
PART 2 Nonprofit Public Benefit Corporations
ARTICLE 2 Formation
§ 5122. Filing Where “Bank,” “Trust,” or “Trustee” in
Name; Certificate of Approval of Commissioner of
Financial Institutions; Misleading or Deceptive
Name; Reservation.
35
PART 3 Nonprofit Mutual Benefit Corporations
ARTICLE 2 Formation
§ 7122. Filing Where “Bank”, “Trust”, or “Trustee” in
Name; Reservation.
PART 4 Nonprofit Religious Corporations
ARTICLE 2 Formation
Name; Reservation.
DIVISION 3 CORPORATIONS FOR SPECIFIC PURPOSES
PART 2 Consumer Cooperative Corporations
CHAPTER 1 GENERAL PROVISIONS, ORGANIZATION AND
BYLAWS
ARTICLE 4 Articles of Incorporation
§ 12311. Corporate Names to Include “Cooperative”;
Use of Word “Cooperative.”
PART 4 Professional Corporations
§ 13409. Name of Professional Corporation.
TITLE 2 PARTNERSHIPS
CHAPTER 2 UNIFORM LIMITED PARTNERSHIP ACT [Repealed]
CHAPTER 3 CALIFORNIA REVISED LIMITED PARTNERSHIP ACT
[Repealed]
ARTICLE 1 General Provisions (Repealed January 1, 2010)
TITLE 2.5 LIMITED LIABILITY COMPANIES [REPEALED JANUARY 1,
2014]
CHAPTER 2 FORMATION [REPEALED JANUARY 1, 2014]
§ 17052. (Repealed January 1, 2014) Company Name; Requirements.
§ 17053. (Repealed January 1, 2014) Certificate of Reservation of
Name.
TITLE 2.6 CALIFORNIA REVISED UNIFORM LIMITED LIABILITY
COMPANY ACT [OPERATIVE JANUARY 1, 2014]
ARTICLE 1 General Provisions [Operative January 1, 2014]
§ 17701.08. (Operative January 1, 2014) Name; Application to Use;
Proscribed Words.
§ 17701.09. (Operative January 1, 2014) Reservation of Name.
TITLE 4 SECURITIES
DIVISION 5 FRANCHISE INVESTMENT LAW
PART 1 Definitions
§ 31000. Division Title.
§ 31001. Legislative Intent.
36
§ 31001.1. Risk-Based Review Process.
§ 31002. Definitions Generally.
§ 31003. “Advertisement” Defined.
§ 31003.5. “Business Days” Defined.
§ 31004. “Commissioner.”
§ 31005. “Franchise” Defined.
§ 31005.5. Terms Defined.
§ 31006. “Franchisee” Defined.
§ 31007. “Franchisor” Defined.
§ 31008. “Area Franchise” Defined.
§ 31008.5. “Subfranchise” Defined.
§ 31009. “Subfranchisor” Defined.
§ 31010. “Franchise” Includes “Area Franchise” and
“Subfranchise.”
§ 31011. “Franchise Fee” Defined.
§ 31012. “Fraud” and “Deceit” Defined.
§ 31013. “In This State” Defined.
§ 31014. “Order” Defined.
§ 31015. “Person” Defined.
§ 31016. “Publish” Defined.
§ 31017. “Rule” Defined.
§ 31018. “Sale,” “Sell,” “Offer,” and “Offer to Sell” Defined.
§ 31019. “State” Defined.
PART 2 Regulation of the Sale of Franchises
CHAPTER 1 EXEMPTIONS
§ 31109.1. Offer and Sale of Franchises Registered Under
Section 31111, 31121, Or 31123 When Terms are
Different from Terms of Offer Registered.
CHAPTER 2 DISCLOSURE
§ 31110. Requirement of Registration of Offers and Sales.
§ 31111. Filing of Application for Registration.
§ 31112. Execution and Verification of Application.
§ 31113. Escrow and Impound of Funds.
§ 31114. Franchise disclosure document.
§ 31115. Stop Order.
§ 31116. Effective Date of Registration.
§ 31117. Hearing on Stop Order.
§ 31118. Removal or Modification of Stop Order.
§ 31119. Provision of franchise disclosure document to
prospective franchisee; Electronic provision allowed.
§ 31120. Period of Registration.
§ 31121. Renewal of Registration.
§ 31122. Form of Renewal Application.
§ 31123. Notification of Change in Application Information.
§ 31124. Effective Date of Amendment to Application.
§ 31125. Registration of Material Modification of Existing
Franchise; Exemption; “California Franchise” Defined;
Restriction.
37
§ 31150. Books and Records.
§ 31151. Opinions, Appraisements, and Reports.
§ 31152. Incorporation by Reference.
§ 31153. Burden of Proof.
§ 31154. Misleading Application and Unlawful
Representations.
§ 31155. Nonresident Applicant’s Irrevocable Appointment
of Commissioner as Attorney to Receive Service of
Process; Procedure for Service of Process.
§ 31156. Filing of Advertisements.
§ 31157. Publication of Advertisements.
PART 3 Fraudulent and Prohibited Practices
CHAPTER 1 FRAUDULENT PRACTICES
§ 31200. Misrepresentation in Application.
§ 31201. Misrepresentation in Offers and Sales.
§ 31202. Misrepresentation in Exempt Offerings by Large
Franchisor.
§ 31203. Violation of Commissioner’s Order.
§ 31204. Tampering With Intent to Impede, Obstruct, or
Influence Administration or Enforcement of Division
Unlawful.
CHAPTER 2 PROHIBITED PRACTICES
§ 31210. Persons authorized to sell franchises.
§ 31211. Desist and Refrain Order.
CHAPTER 3 UNFAIR PRACTICES
§ 31220. Right of Franchisees to Join Trade Association or
Right of Free Association.
PART 4 Enforcement
CHAPTER 1 CIVIL LIABILITY
§ 31300. Rescission or Damages—Failure to Register.
§ 31301. Rescission or Damages—Misrepresentation.
§ 31302. Joint and Several Liability of Principals and
Agents.
§ 31302.5. Cause of Action for Violation of Franchisee’s
Right to Join Trade Association or Right of Free
Association.
§ 31303. Time Limitations—Nonregistration Actions.
§ 31304. Time Limitations—Fraud Actions.
§ 31305. Survival of Actions.
§ 31306. No Liability by Implication—Liability Under Prior
Law.
CHAPTER 2 POWERS OF THE COMMISSIONER
§ 31400. Civil Actions by Commissioner.
§ 31400.1. Persons Ineligible From Acting as an Officer or
Director.
§ 31401. Investigation and Judicial Powers.
§ 31402. Desist and Refrain Order—Unregistered Offers.
§ 31403. Desist and Refrain Order—Misrepresentations.
§ 31404. Reference of Violation to District Attorney.
38
§ 31405. Civil Penalties.
§ 31406. Citations; Sanctions Separate From Other
Remedies; Hearings; Review.
§ 31407. Order Directing Discontinuance of Violation;
Finality After Notice; Hearing.
§ 31408. Inclusions in Administrative Actions; Recovery of
Costs.
CHAPTER 3 CRIMES
§ 31410. Criminal Penalties.
§ 31411. Fraudulent Device, Scheme, or Artifice to Defraud
in Offer or Sale; Penalty.
§ 31412. Punishment of Crimes Under Other Statutes.
CHAPTER 4 SERVICE OF PROCESS
§ 31420. Service of Process on Commissioner Authorized.
PART 5 Administration
§ 31500. Fees.
§ 31501. Judicial Review of Commissioner.
§ 31502. Authority of Commissioner to Make, Amend, and
Rescind Rules.
§ 31503. Procedure for Adopting Rules.
§ 31504. Disclosure of Records by Commissioner.
§ 31505. Photostatic Copies of Documents.
§ 31506. Destruction and Microfilming of Documents.
PART 6 General Provisions
§ 31510. Interpretive Opinions.
§ 31511. No Liability for Reliance on Official Opinion.
§ 31512. Waiver of Law Void.
§ 31513. Hearing Before Division of Corporations.
§ 31514. Invalidity and Severability of Provisions.
§ 31515. Effectiveness of Actions Under Prior Law.
§ 31516. Applicability of Real Estate Law.
TITLE 1 GENERAL EDUCATION CODE PROVISIONS
DIVISION 1 GENERAL EDUCATION CODE PROVISIONS
PART 19 Miscellaneous
CHAPTER 3 MISCELLANEOUS
ARTICLE 7 Copyright Laws
§ 32360. Use of Funds to Secure Copyrights in Works
Developed by District or Board.
§ 32361. Use of Employee Work Time to Secure
Copyrights in Works Developed by District or
Board.
TITLE 2 ELEMENTARY AND SECONDARY EDUCATION
DIVISION 3 LOCAL ADMINISTRATION
PART 21 Local Educational Agencies
CHAPTER 2 GOVERNING BOARDS
ARTICLE 4 Powers and Duties
§ 35170. Royalties From Copyrights Secured in Name
of District.
39
DIVISION 4 INSTRUCTION AND SERVICES
PART 33 Instructional Materials and Testing
CHAPTER 1 INSTRUCTIONAL MATERIALS
ARTICLE 5 Prohibited Acts
§ 60076. Royalties to School Official From
Instructional Material.
TITLE 3 POSTSECONDARY EDUCATION
DIVISION 7 COMMUNITY COLLEGES
PART 45 Districts and Governing Boards
CHAPTER 3 POWERS AND DUTIES
§ 72207. Authority of Community College District to
Secure Copyrights; Royalties From Same.
PART 48 Community Colleges, Education Programs
§ 78900. Improper Influence; Royalties; Punishment;
Samples.
PART 49 Community Colleges, Education Facilities
CHAPTER 2 PROPERTY—SALE, LEASE, USE, AND
EXCHANGE
ARTICLE 9 Sale of Personal Property
§ 81459. Sale, Gift, or Exchange of Published
Materials Prepared by Community College
District; License of Copyrights in Same.
DIVISION 8 PRIVILEGES
CHAPTER 3 GENERAL PROVISIONS RELATING TO PRIVILEGES
§ 915. Disclosure of Information to Determine Claim—Official
Information—Identity of Informer—Trade Secrets.
CHAPTER 4 PARTICULAR PRIVILEGES
ARTICLE 11 Trade Secret
§ 1060. Trade Secret.
§ 1061. Definitions; Protective Orders.
§ 1062. Closed Criminal Proceedings.
§ 1063. Requests to Seal Articles.
DIVISION 11 WRITINGS
CHAPTER 2 SECONDARY EVIDENCE OF WRITINGS
ARTICLE 1 Proof of the Content of a Writing
§ 1520. Original Writing Admissible as Proof of Content.
§ 1521. Secondary Evidence Admissible as Proof of Content.
§ 1522. Exclusion of Secondary Evidence.
§ 1523. Admissibility of Oral Evidence.
TITLE 1 GENERAL
DIVISION 7 MISCELLANEOUS
CHAPTER 3.5 INSPECTION OF PUBLIC RECORDS
§ 6254.2. Public Disclosure of Pesticide Safety and Efficacy
Information; Trade Secret Exception.
40
§ 6254.20. Electronically Collected Personal Information—
Records.
§ 6254.21. Posting Home Address or Phone Number of Official
on Internet Without Permission; Violation; Relief;
Definitions.
§ 6254.24. “Public Safety Official” defined.
§ 6254.26. Disclosure of Specified Records Regarding
Alternative Investments in Which Public Investment
Funds Invest.
§ 6254.27. County Recorder Not to Disclose “Official
Record” If “Public Record” Available.
§ 6254.28. Filing Office Not to Disclose “Official Record”
if “Public Record” Available.
§ 6254.29. Intent of Legislature to Protect Against Risk of
Identity Theft.
§ 6254.7. Public Disclosure of Air Pollution Information,
Notices and Orders to Building Owners; Trade Secret
Exception.
§ 6254.9. Computer Software Developed by State or Local
Agency; Sale, Lease, or License of Same; Public
Record Status of Information Stored in Computer.
TITLE 2 GOVERNMENT OF THE STATE OF CALIFORNIA
DIVISION 3 EXECUTIVE DEPARTMENT
CHAPTER 3 SECRETARY OF STATE
ARTICLE 3 Fees
§ 12193. Trademark and Service Mark Fees.
DIVISION 2 EMPLOYMENT REGULATION AND SUPERVISION
PART 3 Privileges and Immunities
CHAPTER 2 CLASS OF LABOR EMPLOYED; LABOR UNION
INSIGNIA
§ 1015. Forgery of Union Label or Trademark.
§ 1016. Unauthorized Use of Union Label or Trademark.
DIVISION 3 EMPLOYMENT RELATIONS
CHAPTER 2 EMPLOYER AND EMPLOYEE
ARTICLE 1 The Contract of Employment
§ 2750. “Employment Contract.”
§ 2750.5. Rebuttable Presumption That Worker Is Employee;
Proof of Independent Contractor Status.
§ 2855. Enforcement of Contract to Render Personal Service;
Personal Service in Production of Phonorecords.
§ 2860. Employer Owns Things Acquired by Virtue of
Employment.
§ 2870. Limitation on Assignment of Invention Provisions in
Employment Agreement; Unenforceability of Such
Provisions.
§ 2871. Employer May Not Make Unenforceable Assignment
Provision a Condition of Employment; Requirement of
41
Disclosure of Inventions Not Forbidden.
§ 2872. Notice to Employee in Employment Agreement; Burden
of Proof on Employee.
DIVISION 4 WORKERS’ COMPENSATION AND INSURANCE
CHAPTER 2 EMPLOYERS, EMPLOYEES, AND DEPENDENTS
ARTICLE 2 Employees
§ 3350. Division’s Definitions to Govern Construction.
§ 3351. “Employee.”
§ 3351.5. Employees Included.
§ 3352. Persons Excluded From Definition of Employee.
§ 3352.94. Exclusions for Disaster Service Workers as
“Employees.”
§ 3353. “Independent Contractor.”
§ 3355. “Course of Trade, Business, Profession, or Occupation.”
§ 3356. “Trade, Business, Profession, or Occupation.”
§ 3357. Presumption That One Rendering Service Is Employee.
PART I Crimes and Punishments
TITLE IX OF CRIMES AGAINST THE PERSON INVOLVING SEXUAL
ASSAULT, AND CRIMES AGAINST PUBLIC DECENCY AND
GOOD MORALS
CHAPTER 12 OTHER INJURIES TO PERSONS
§ 350. Manufacture or Sale of Counterfeit Mark; Punishment;
Forfeiture and Destruction; Donations; Applicability;
Restitution.
§ 351a. Misrepresenting Name of Maker of Goods Sold.
TITLE XIII CRIMES AGAINST PROPERTY
CHAPTER 5 LARCENY
§ 484j. Publishing Access Card Number, Code to Avoid Payment
or Defraud—Misdemeanor.
§ 485. Lost Property—Effort to Locate Owner.
§ 496. Receiving or Concealing Stolen Property; Duty of Swap
Meet Vendor or Personal Property Dealer or Collector to
Make Reasonable Inquiry; Action for Damages; Attempts.
§ 499c. Trade Secrets; Theft or Unauthorized Copying; Bribery.
§ 502. Computer Crimes.
§ 502.01. Forfeiture of Telecommunications and Computer
Property Used in Committing Specified Crimes; Hearing;
Claim of Interest in Property; Distribution of Proceeds.
§ 502.6. Use of Scanning Device to Obtain Information From
Magnetic Strip of Payment Card.
CHAPTER 8 FALSE PERSONATIONS AND CHEATS
§ 537e. Purchase, Possession or Sale of Item Having Altered or
Obliterated Serial Number or Identification Mark.
§ 538.5 Fraudulently Obtaining Information From Public Utility.
TITLE XV MISCELLANEOUS CRIMES
CHAPTER 2 MISCELLANEOUS CRIMES
§ 653f. Soliciting Commission of Certain Crimes; Punishment;
Proof.
42
§ 653h. Sound Recordings Transferred Without Consent of
Owner; Unauthorized Sale; Persons Exempted.
§ 653s. Transportation of Sounds of Live Performance Recorded
Without Consent of Owner; Applicability; Punishment.
§ 653u. Recording or Causing to Be Recorded Live Performance
Without Consent of Owner; Punishment.
§ 653v. Court Order for Forfeiture and Destruction of Articles.
§ 653w. Failure to Disclose Origin of Recording or Audiovisual
Work; Punishment.
§ 653z. Operation of Recording Device in Theater While Motion
Picture Is Being Exhibited Without Authority; Punishment.
§ 653aa. Unauthorized Electronic Dissemination of Commercial
Recordings or Audiovisual Works as a Crime; Punishment;
Applicability.
PART III Of Imprisonment and Death Penalty
TITLE 1 IMPRISONMENT OF MALE PRISONERS IN STATE PRISONS
CHAPTER 5 EMPLOYMENT OF PRISONERS
ARTICLE 1 Employment of Prisoners Generally
§ 2702. Computer-Related Crimes—No Access to
Department Computer System.
DIVISION 9 TRUST LAW
PART 4 Trust Administration
CHAPTER 3 REVISED UNIFORM PRINCIPAL AND INCOME ACT
§ 16362. Liquidating Asset.
DIVISION 1 PROPERTY TAXATION
PART 2 Assessment
CHAPTER 1 TAXATION BASE
ARTICLE 1 Taxable and Exempt Property
§ 217. Exemption of Artistic Works on Public Display.
CHAPTER 5 SPECIAL TYPES OF PROPERTY
ARTICLE 1 Generally
§ 986. Full Value of Work of Art Neither Sold Nor
Exhibited for Profit.
§ 988. Full Value of Motion Pictures; Exclusion of
Intangible Rights.
PART 3 Equalization
CHAPTER 1 EQUALIZATION BY COUNTY BOARD OF
EQUALIZATION
ARTICLE 1 Generally
§ 1605.4. Open and Public Hearings; Exceptions.
DIVISION 2 OTHER TAXES
PART 1 Sales and Use Taxes
CHAPTER 1 GENERAL PROVISIONS AND DEFINITIONS
§ 6010.4. “Sale” and “Purchase”—Motion Picture Production.
§ 6010.6. “Sale” and “Purchase”—Motion Pictures.
ARTICLE 1 General Exemptions
43
§ 6362.5. Master Tapes or Master Records.
§ 6365. Sale of Original Works of Art to Specified Entities.
§ 6366.3. Museums.
PART 11 Bank and Corporation Tax Law
CHAPTER 13 ACCOUNTING PERIODS AND METHODS OF
ACCOUNTING
ARTICLE 3 Year of Inclusion
§ 24675. Compensatory Damages for Patent Infringement.
CHAPTER 17 ALLOCATION OF INCOME
ARTICLE 2 Uniform Division of Income for Tax Purposes Act
§ 25127. Patent and Copyright Royalties.
CALIFORNIA UNEMPLOYMENT INSURANCE CODE
DIVISION 1 UNEMPLOYMENT AND DISABILITY COMPENSATION
PART 1 Unemployment Compensation
CHAPTER 3 SCOPE OR COVERAGE
ARTICLE 1 Employment
§ 601.5. “Employment” Includes Service in Artistic or
Literary Capacity.
ARTICLE 1.5 Employee
§ 621. “Employee”; Persons Included.
§ 621.5. “Employee” Includes Employees of Licensed
Contractors.
§ 622. “Employee” Does Not Include Director of
Corporation or Association Acting in That Capacity.
§ 623. “Employee”; Additional Persons Excluded.
ARTICLE 3 Subject Employers
§ 686. “Employer” Includes Persons Contracting for Work
Made for Hire.
4 CONSTITUTIONAL PROVISIONS AND FEDERAL STATUTES

CONSTITUTIONAL PROVISIONS AND FEDERAL STATUTES
GENERAL SYNOPSIS UNITED STATES CONSTITUTION
TITLE 7 AGRICULTURE
TITLE 10 ARMED FORCES
TITLE 11 BANKRUPTCY
TITLE 15 COMMERCE AND TRADE
TITLE 17 COPYRIGHTS
TITLE 18 CRIMES AND CRIMINAL PROCEDURE
TITLE 19 CUSTOMS DUTIES
TITLE 20 EDUCATION
TITLE 21 FOOD AND DRUGS
TITLE 22 FOREIGN RELATIONS AND INTERCOURSE
TITLE 25 INDIANS
TITLE 26 INTERNAL REVENUE CODE
TITLE 28 JUDICIARY AND JUDICIAL PROCEDURE
TITLE 30 MINERAL LANDS AND MINING
TITLE 35 PATENTS
TITLE 42 THE PUBLIC HEALTH AND WELFARE
UNITED STATES CONSTITUTION
44
ARTICLE I § 8
Clause 3. Regulation of Commerce.
Clause 8. Federal Power to Issue Patents and Copyrights.
AMENDMENTS
Amendment I. Freedom of Religion, Speech, Press, Etc.
UNITED STATES CODE
TITLE 5 GOVERNMENT ORGANIZATION AND EMPLOYEES
PART 1 The Agencies Generally
CHAPTER 5 ADMINISTRATIVE PROCEDURE
SUBCHAPTER I General Provisions
§ 500. Administrative Practice; General Provisions.
§ 501. Advertising Practice; Restrictions.
TITLE 7 AGRICULTURE
CHAPTER 6 INSECTICIDES AND ENVIRONMENTAL PESTICIDE
CONTROL
SUBCHAPTER II Environmental Pesticide Control
§ 136h. Protection of Trade Secrets and Other Information.
CHAPTER 57 PLANT VARIETY PROTECTION
SUBCHAPTER I Plant Variety Protection Office
PART A Organization and Publications
§ 2321. Establishment.
§ 2322. Seal.
§ 2323. Organization.
§ 2324. Restrictions on Employees as to Interest in Plant
Variety Protection.
§ 2326. Regulations.
§ 2327. Plant Variety Protection Board.
§ 2328. Library.
§ 2329. Register of Protected Plant Varieties.
§ 2330. Publications.
§ 2331. Copies for Public Libraries.
PART B Legal Provisions as to the Plant Variety Protection
Office
§ 2351. Day for Taking Action Falling on Saturday, Sunday,
or Holiday.
§ 2352. Form of Papers Filed.
§ 2353. Testimony in Plant Variety Protection Office Cases.
§ 2354. Subpoenas; Witnesses.
§ 2355. Effect of Defective Execution.
§ 2356. Regulations for Practice Before the Office.
§ 2357. Unauthorized Practice.
PART C Plant Variety Protection Fees
§ 2371. Plant Variety Protection Fees.
§ 2372. Payment of Plant Variety Protection Fees; Return
of Excess Amounts.
SUBCHAPTER II Protectability of Plant Varieties and Certificates of
Protection
PART D Protectability of Plant Varieties
§ 2401. Definitions and Rules of Construction.
45
§ 2402. Right to Plant Variety Protection; Plant Varieties
Protectable.
§ 2403. Reciprocity Limits.
§ 2404. Public Interest in Wide Usage.
PART E Applications; Form; Who May File; Relating Back;
Confidentiality
§ 2421. Application for Recognition of Plant Variety Rights.
§ 2422. Content of Application.
§ 2423. Joint Breeders.
§ 2424. Death or Incapacity of Breeder.
§ 2425. Benefit of Earlier Filing Date.
§ 2426. Confidential Status of Application.
§ 2427. Publication.
PART F Examination; Response Time; Initial Appeals
§ 2441. Examination of Application.
§ 2442. Notice of Refusal; Reconsideration.
§ 2443. Initial Appeal.
PART G Appeals to Courts and Other Review
§ 2461. Appeals.
§ 2462. Civil Action Against Secretary.
PART H Certificates of Plant Variety Protection
§ 2481. Plant Variety Protection.
§ 2482. How Issued.
§ 2483. Contents and Term of Plant Variety Protection.
§ 2484. Correction of Plant Variety Protection Office
Mistake.
§ 2485. Correction of Applicant’s Mistake.
§ 2486. Correction of Named Breeder.
PART I Reexamination After Issue, and Contested Proceedings
§ 2501. Reexamination After Issue.
§ 2504. Interfering Plant Variety Protection.
SUBCHAPTER III Plant Variety Protection and Rights
PART J Ownership and Assignment
§ 2531. Ownership and Assignment.
§ 2532. Ownership During Testing.
PART K Infringement of Plant Variety Protection
§ 2541. Infringement of Plant Variety Protection.
§ 2542. Grandfather Clause.
§ 2543. Right to Save Seed; Crop Exemption.
§ 2544. Research Exemption.
§ 2545. Intermediary Exemption.
PART L Remedies for Infringement of Plant Variety Protection,
and Other Actions
§ 2561. Remedy for Infringement of Plant Variety
Protection.
§ 2562. Presumption of Validity; Defenses.
§ 2563. Injunction.
§ 2564. Damages.
§ 2565. Attorney Fees.
46
§ 2566. Time Limitation on Damages.
§ 2567. Limitation of Damages; Marking and Notice.
§ 2568. False Marking; Cease and Desist Orders.
§ 2569. Nonresident Proprietors; Service and Notice.
§ 2570. Liability of States, Instrumentalities of States, and
State Officials for Infringement of Plant Variety
Protection.
PART M Intent and Severability
§ 2581. Intent.
§ 2582. Severability.
TITLE 10 ARMED FORCES
SUBTITLE A General Military Law
PART IV Service, Supply, and Procurement
CHAPTER 141 MISCELLANEOUS PROCUREMENT
PROVISIONS
§ 2386. Copyrights, Patents, Designs, Etc.; Acquisition.
TITLE 11 BANKRUPTCY
CHAPTER 3 CASE ADMINISTRATION
SUBCHAPTER IV Administrative Powers
§ 365. Executory Contracts and Unexpired Leases.
TITLE 15 COMMERCE AND TRADE
CHAPTER 22 TRADEMARKS
SUBCHAPTER I The Principal Register
§ 1051. [Lanham Act § 1] Registration of Trademarks.
§ 1052. [Lanham Act § 2] Trademarks Registrable on the
Principal Register; Concurrent Registration.
§ 1053. [Lanham Act § 3] Service Marks Registrable.
§ 1054. [Lanham Act § 4] Collective Marks and Certification
Marks Registrable.
§ 1055. [Lanham Act § 5] Use by Related Companies Affecting
Validity and Registration.
§ 1056. [Lanham Act § 6] Disclaimer of Unregistrable Matter.
§ 1057. [Lanham Act § 7] Certificates of Registration.
§ 1058. [Lanham Act § 8] Duration, Affidavits and Fees.
§ 1059. [Lanham Act § 9] Renewal of Registration.
§ 1060. [Lanham Act § 10] Assignment.
§ 1061. [Lanham Act § 11] Execution of Acknowledgments and
Verifications.
§ 1062. [Lanham Act § 12] Publication.
§ 1063. [Lanham Act § 13] Opposition to Registration.
§ 1064. [Lanham Act § 14] Cancellation of Registration.
§ 1065. [Lanham Act § 15] Incontestability of Right to Use Mark
Under Certain Conditions.
§ 1066. [Lanham Act § 16] Interference; Declaration by Director.
§ 1067. [Lanham Act § 17] Interference, Opposition, and
Proceedings for Concurrent Use Registration or for
Cancellation; Notice; Trademark Trial and Appeal Board.
§ 1068. [Lanham Act § 18] Action of Director in Interference,
Opposition, and Proceedings for Concurrent Use
47
Registration or for Cancellation.
§ 1069. [Lanham Act § 19] Application of Equitable Principles in
Inter Partes Proceedings.
§ 1070. [Lanham Act § 20] Appeals to Trademark Trial and
Appeal Board From Decisions of Examiners.
§ 1071. [Lanham Act § 21] Appeal to Courts.
§ 1072. [Lanham Act § 22] Registration as Constructive Notice
of Claim of Ownership.
SUBCHAPTER II The Supplemental Register
§ 1091. [Lanham Act § 23] Supplemental Register.
§ 1092. [Lanham Act § 24] Publication; not Subject to
Opposition; Cancellation.
§ 1093. [Lanham Act § 25] Registration Certificates for Marks
on Principal and Supplemental Registers to be Different.
§ 1094. [Lanham Act § 26] Provisions of Chapter Applicable to
Registrations on Supplemental Register.
§ 1095. [Lanham Act § 27] Registration on Principal Register not
Precluded.
§ 1096. [Lanham Act § 28] Registration on Supplemental
Register not Used to Stop Importations.
SUBCHAPTER III General Provisions
§ 1111. [Lanham Act § 29] Notice of Registration; Display With
Mark; Recovery of Profits and Damages in Infringement
Suit.
§ 1112. [Lanham Act § 30] Classification of Goods and Services;
Registration in Plurality of Classes.
§ 1113. [Lanham Act § 31] Fees.
§ 1114. [Lanham Act § 32] Remedies; Infringement; Innocent
Infringement by Printers and Publishers.
§ 1115. [Lanham Act § 33] Registration on Principal Register as
Evidence of Exclusive Right to Use Mark; Defenses.
§ 1116. [Lanham Act § 34] Injunctive Relief.
§ 1117. [Lanham Act § 35] Recovery for Violation of Rights.
§ 1118. [Lanham Act § 36] Destruction of Infringing Articles.
§ 1119. [Lanham Act § 37] Power of Court Over Registration.
§ 1120. [Lanham Act § 38] Civil Liability for False or Fraudulent
Registration.
§ 1121. [Lanham Act § 39] Jurisdiction of Federal Courts; State
and Local Requirements That Registered Trademarks Be
Altered or Displayed Differently; Prohibition.
§ 1122. [Lanham Act § 40] Liability of States, Instrumentalities
of States, and State Officials.
§ 1123. [Lanham Act § 41] Rules and Regulations for Conduct of
Proceedings in Patent and Trademark Office.
§ 1124. [Lanham Act § 42] Importation of Goods Bearing
Infringing Marks or Names Forbidden.
§ 1125. [Lanham Act § 43] False Designations of Origin, False
Descriptions, and Dilution Forbidden.
§ 1126. [Lanham Act § 44] International Conventions.
48
§ 1127. [Lanham Act § 45] Construction and Definitions; Intent
of Chapter.
§ 1128. National Intellectual Property Law Enforcement
Coordination Council [See prospective amendment note
below.]
§ 1129. [Transferred]
SUBCHAPTER IV The Madrid Protocol
§ 1141. [Lanham Act § 60] Definitions.
§ 1141a. [Lanham Act § 61] International Applications Based on
United States Applications or Registrations.
§ 1141b. [Lanham Act § 62] Certification of the International
Application.
§ 1141c. [Lanham Act § 63] Restriction, Abandonment,
Cancellation, or Expiration of a Basic Application or Basic
Registration.
§ 1141d. [Lanham Act § 64] Request for Extension of Protection
Subsequent to International Registration.
§ 1141e. [Lanham Act § 65] Extension of Protection of an
International Registration to the United States Under the
Madrid Protocol.
§ 1141f. [Lanham Act § 66] Effect of Filing a Request for
Extension of Protection of an International Registration to
the United States.
§ 1141g. [Lanham Act § 67] Right of Priority for Request for
Extension of Protection to the United States.
§ 1141h. [Lanham Act § 68] Examination of and Opposition to
Request for Extension of Protection; Notification of
Refusal.
§ 1141i. [Lanham Act § 69] Effect of Extension of Protection.
§ 1141j. [Lanham Act § 70] Dependence of Extension of
Protection to the United States on the Underlying
International Registration.
§ 1141k. [Lanham Act § 71] Duration, Affidavits and Fees.
§ 1141l. [Lanham Act § 72] Assignment of an Extension of
Protection.
§ 1141m. [Lanham Act § 73] Incontestability.
§ 1141n. [Lanham Act § 74] Rights of Extension of Protection.
CHAPTER 23 DISSEMINATION OF TECHNICAL, SCIENTIFIC, AND
ENGINEERING INFORMATION
§ 1155. General Standards and Limitations; Preservation of Security
Classification.
CHAPTER 40 DEPARTMENT OF COMMERCE
§ 1511. Bureaus in Department.
CHAPTER 47 CONSUMER PRODUCT SAFETY
§ 2054. Product Safety Information and Research
CHAPTER 49 FIRE PREVENTION AND CONTROL
§ 2218. Administrative provisions.
CHAPTER 107 PROTECTION OF INTELLECTUAL PROPERTY
RIGHTS— CYBERSQUATTING PROTECTION
49
§ 8131. Cyberpiracy Protections for Individuals.
TITLE 17 COPYRIGHTS
CHAPTER 1 SUBJECT MATTER AND SCOPE OF COPYRIGHT
§ 102. Subject Matter of Copyright: In General.
§ 103. Subject Matter of Copyright: Compilations and Derivative
Works.
§ 104. Subject Matter of Copyright: National Origin.
§ 104A. Copyright in Restored Works.
§ 105. Subject Matter of Copyright: United States Government
Works.
§ 106. Exclusive Rights in Copyrighted Works.
§ 106A. Rights of Certain Authors to Attribution and Integrity.
§ 107. Limitations on Exclusive Rights: Fair Use.
§ 108. Limitations on Exclusive Rights: Reproduction by Libraries
and Archives.
§ 109. Limitations on Exclusive Rights: Effect of Transfer of
Particular Copy or Phonorecord.
§ 110. Limitations on Exclusive Rights: Exemption of Certain
Performances and Displays.
§ 111. Limitations on Exclusive Rights: Secondary Transmissions of
Broadcasting by Cable.
§ 112. Limitations on Exclusive Rights: Ephemeral Recordings.
§ 113. Scope of Exclusive Rights in Pictorial, Graphic, and Sculptural
Works.
§ 114. Scope of Exclusive Rights in Sound Recordings.
§ 115. Scope of Exclusive Rights in Nondramatic Musical Works:
Compulsory License for Making and Distributing Phonorecords.
§ 116. Negotiated Licenses for Public Performances by Means of
Coin-Operated Phonorecord Players.
§ 117. Limitation on Exclusive Rights: Computer Programs.
§ 118. Scope of Exclusive Rights: Use of Certain Works in
Connection With Noncommercial Broadcasting.
Distant Television Programming by Satellite [Caution: See
prospective amendment note below.]
§ 120. Scope of Exclusive Rights in Architectural Works.
§ 121. Limitations on Exclusive Rights: Reproduction for Blind or
Other People With Disabilities.
Local Television Programming by Satellite.
CHAPTER 2 COPYRIGHT OWNERSHIP AND TRANSFER
§ 201. Ownership of Copyright.
§ 202. Ownership of copyright as distinct from ownership of material
object.
§ 203. Termination of Transfers and Licenses Granted by the Author.
§ 204. Execution of Transfers of Copyright Ownership.
§ 205. Recordation of Transfers and Other Documents.
CHAPTER 3 DURATION OF COPYRIGHT
50
§ 301. Preemption with Respect to Other Laws.
§ 302. Duration of Copyright: Works Created on or After January 1,
1978.
§ 303. Duration of Copyright: Works Created But Not Published or
Copyrighted Before January 1, 1978.
§ 304. Duration of Copyright: Subsisting Copyrights.
§ 305. Duration of Copyright: Terminal Date.
CHAPTER 4 COPYRIGHT NOTICE, DEPOSIT, AND REGISTRATION
§ 401. Notice of Copyright: Visually Perceptible Copies.
§ 402. Notice of Copyright: Phonorecords of Sound Recordings.
§ 403. Notice of Copyright: Publications Incorporating United States
Government Works.
§ 404. Notice of Copyright: Contributions to Collective Works.
§ 405. Notice of Copyright: Omission of Notice on Certain Copies
and Phonorecords.
§ 406. Notice of Copyright: Error in Name or Date on Certain Copies
and Phonorecords.
§ 407. Deposit of Copies or Phonorecords for Library of Congress.
§ 408. Copyright Registration in General.
§ 409. Application for Copyright Registration.
§ 410. Registration of Claim and Issuance of Certificate.
§ 411. Registration and Civil Infringement Actions.
§ 412. Registration as Prerequisite to Certain Remedies for
Infringement.
CHAPTER 5 COPYRIGHT INFRINGEMENT AND REMEDIES
§ 501. Infringement of Copyright.
UNITED STATES SUPREME COURT COPYRIGHT PRACTICE RULES
(1909)
Supreme Court Rules.
§ 502. Remedies for Infringement: Injunctions.
§ 503. Remedies for Infringement: Impounding and Disposition of
Infringing Articles.
§ 504. Remedies for Infringement: Damages and Profits.
§ 505. Remedies for Infringement: Costs and Attorney’s Fees.
§ 506. Criminal Offenses.
§ 507. Limitations on Actions.
§ 508. Notification of Filing and Determination of Actions.
§ 509. [Repealed]
§ 510. Remedies for Alteration of Programming by Cable Systems.
§ 511. Liability of States, Instrumentalities of States, and State
Officials for Infringement of Copyright.
§ 512. Limitations on Liability Relating to Material Online.
§ 513. Determination of Reasonable License Fees for Individual
Proprietors.
CHAPTER 6 IMPORTATION AND EXPORTATION
§ 602. Infringing Importation or Exportation of Copies or
Phonorecords.
§ 603. Importation Prohibitions: Enforcement and Disposition of
51
Excluded Articles.
CHAPTER 7 COPYRIGHT OFFICE
§ 701. The Copyright Office: General Responsibilities and
Organization.
§ 702. Copyright Office Regulations.
§ 703. Effective Date of Actions in Copyright Office.
§ 704. Retention and Disposition of Articles Deposited in Copyright
Office.
§ 705. Copyright Office Records: Preparation, Maintenance, Public
Inspection, and Searching.
§ 706. Copies of Copyright Office Records.
§ 707. Copyright Office Forms and Publications.
§ 708. Copyright Office Fees.
§ 709. Delay in Delivery Caused by Disruption of Postal or Other
Services.
CHAPTER 8 PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES
§ 801. Copyright Royalty Judges; Appointment and Functions.
§ 802. Copyright Royalty Judgeships; Staff.
§ 803. Proceedings of Copyright Royalty Judges.
§ 804. Institution of Proceedings.
§ 805. General Rule for Voluntarily Negotiated Agreements.
CHAPTER 9 PROTECTION OF SEMICONDUCTOR CHIP PRODUCTS
§ 902. Subject Matter of Protection.
§ 903. Ownership, Transfer, Licensing, and Recordation.
§ 904. Duration of Protection.
§ 905. Exclusive Rights in Mask Works.
§ 906. Limitation on Exclusive Rights: Reverse Engineering; First
Sale.
§ 907. Limitation on Exclusive Rights: Innocent Infringement.
§ 908. Registration of Claims of Protection.
§ 909. Mask Work Notice.
§ 910. Enforcement of Exclusive Rights.
§ 911. Civil Actions.
§ 912. Relation to Other Laws.
§ 913. Transitional Provisions.
§ 914. International Transitional Provisions.
CHAPTER 10 DIGITAL AUDIO RECORDING DEVICES AND MEDIA
SUBCHAPTER A Definitions
SUBCHAPTER B Copying Controls
§ 1002. Incorporation of Copying Controls.
SUBCHAPTER C Royalty Payments
§ 1003. Obligation to Make Royalty Payments.
§ 1004. Royalty Payments.
§ 1005. Deposit of Royalty Payments and Deduction of
Expenses.
§ 1006. Entitlement to Royalty Payments.
§ 1007. Procedures for Distributing Royalty Payments.
52
SUBCHAPTER D Prohibition on Certain Infringement Actions,
Remedies, and Arbitration
§ 1008. Prohibition on Certain Infringement Actions.
§ 1009. Civil Remedies.
§ 1010. Determination of Certain Disputes.
CHAPTER 11 SOUND RECORDINGS AND MUSIC VIDEOS
§ 1101. Unauthorized Fixation and Trafficking in Sound Recordings
and Music Videos.
CHAPTER 12 COPYRIGHT PROTECTION AND MANAGEMENT
SYSTEMS
§ 1201. Circumvention of Copyright Protection Systems.
§ 1202. Integrity of Copyright Management Information.
§ 1204. Criminal Offenses and Penalties.
§ 1205. Savings Clause.
CHAPTER 13 PROTECTION OF ORIGINAL DESIGNS
§ 1301. Designs Protected.
§ 1302. Designs Not Subject to Protection.
§ 1303. Revisions, Adaptations, and Rearrangements.
§ 1304. Commencement of Protection.
§ 1305. Term of Protection.
§ 1306. Design Notice.
§ 1307. Effect of Omission of Notice.
§ 1308. Exclusive Rights.
§ 1309. Infringement.
§ 1310. Application for Registration.
§ 1311. Benefit of Earlier Filing Date in Foreign Country.
§ 1312. Oaths and Acknowledgments.
§ 1313. Examination of Application and Issue or Refusal of
Registration.
§ 1315. Publication of Announcements and Indexes.
§ 1316. Fees.
§ 1318. Copies of Records.
§ 1319. Correction of Errors in Certificates.
§ 1320. Ownership and Transfer.
§ 1321. Remedy for Infringement.
§ 1322. Injunctions.
§ 1323. Recovery for Infringement.
§ 1324. Power of Court over Registration.
§ 1325. Liability for Action on Registration Fraudulently Obtained.
§ 1326. Penalty for False Marking.
§ 1327. Penalty for False Representation.
§ 1328. Enforcement by Treasury and Postal Service.
§ 1329. Relation to Design Patent Law.
§ 1330. Common Law and Other Rights Unaffected.
§ 1331. Administrator; Office of the Administrator.
§ 1332. No Retroactive Effect.
53
TITLE 18 CRIMES AND CRIMINAL PROCEDURE
PART I Crimes
CHAPTER 53 INDIANS
§ 1158. Counterfeiting Indian Arts and Crafts Board Trade Mark.
§ 1159. Misrepresentation of Indian Produced Goods and
Products.
CHAPTER 113 STOLEN PROPERTY
§ 2314. Transportation of stolen goods, securities, moneys,
fraudulent State tax stamps, or articles used in
counterfeiting.
§ 2318. Trafficking in Counterfeit Labels, Illicit Labels, or
Counterfeit Documentation or Packaging.
§ 2319. Criminal Infringement of a Copyright.
§ 2319A. Unauthorized Fixation of and Trafficking in Sound
Recordings and Music Videos of Live Musical
Performances.
§ 2319B. Unauthorized Recording of Motion Pictures in a
Motion Picture Exhibition Facility.
§ 2320. Trafficking in Counterfeit Goods or Services.
TITLE 19 CUSTOMS DUTIES
CHAPTER 4 TARIFF ACT OF 1930
SUBTITLE II Special Provisions
PART I Miscellaneous
§ 1304. Marking of Imported Articles and Containers.
PART II United States International Trade Commission
§ 1337. Unfair Practices in Import Trade.
SUBTITLE III Administrative Provisions
PART III Ascertainment, Collection, and Recovery of Duties
§ 1526. Merchandise Bearing American Trademark.
CHAPTER 12 TRADE ACT OF 1974
SUBCHAPTER I Negotiating and Other Authority
PART 8 Identification of Market Barriers and Certain Unfair
Trade Actions
§ 2242. Identification of Countries That Deny Adequate
Protection, or Market Access, for Intellectual Property
Rights.
TITLE 20 EDUCATION
CHAPTER 48 DEPARTMENT OF EDUCATION
SUBCHAPTER IV Administrative Provisions
PART B General Administrative Provisions
§ 3480. Copyrights and Patents.
TITLE 21 FOOD AND DRUGS
CHAPTER 9 FEDERAL FOOD, DRUG, AND COSMETIC ACT
SUBCHAPTER V Drugs and Devices
§ 355. New Drugs.
§ 355-1. Risk Evaluation and Mitigation Strategies.
§ 355a. Pediatric Studies of Drugs.
§ 355b. Adverse-Event Reporting.
§ 355c. Research into pediatric uses for drugs and biological
54
products.
§ 355c-1. Report.
§ 355d. Internal Committee for Review of Pediatric Plans,
Assessments, Deferrals, Deferral Extensions, and Waivers.
§ 355e. Pharmaceutical Security.
§ 355f. Extension of Exclusivity Period for New Qualified
Infectious Disease Products.
PART B Drugs for Rare Diseases or Conditions
§ 360aa. Recommendations for Investigations of Drugs for
Rare Diseases or Conditions.
§ 360bb. Designation of Drugs for Rare Diseases or
Conditions.
§ 360cc. Protection for Unpatented Drugs for Rare
Diseases or Conditions.
§ 360dd. Open Protocols for Investigations of Drugs for
§ 360ee. Grants and Contracts for Development of Drugs
for Rare Diseases and Conditions.
§ 360ff. Priority Review to Encourage Treatments for Rare
Pediatric Diseases.
SUBCHAPTER VII General Administrative Provisions
§ 372. Examinations and Investigations.
TITLE 22 FOREIGN RELATIONS AND INTERCOURSE
CHAPTER 10 HEMISPHERAL RELATIONS
SUBCHAPTER II War Materials
§ 526. Protection of Patent Rights.
CHAPTER 35 ARMS CONTROL AND DISARMAMENT
SUBCHAPTER III Functions
§ 2572. Patents; Availability to General Public; Protection of
Background Rights.
TITLE 25 INDIANS
CHAPTER 7A PROMOTION OF SOCIAL AND ECONOMIC WELFARE
§ 305. Indian Arts and Crafts Board; Creation and Composition; Per
Diem Payments.
TITLE 26 INTERNAL REVENUE CODE
SUBTITLE A Income Taxes
CHAPTER 1 NORMAL TAXES AND SURTAXES
SUBCHAPTER A Determination of Tax Liability
PART IV Credits Against Tax
SUBPART D Business Related Credits
§ 45c. Clinical testing expenses for certain drugs
for rare diseases or conditions.
SUBCHAPTER B Computation of Taxable Income
PART VI Itemized Deductions for Individuals and
Corporations
§ 174. Research and Experimental Expenditures.
SUBCHAPTER G Corporations Used to Avoid Income Tax on
Shareholders
PART II Personal Holding Companies
55
§ 543. Personal Holding Company Income.
SUBCHAPTER P Capital Gains and Losses
56
PART IV Special Rules for Determining Capital Gains and
Losses
§ 1235. Sale or Exchange of Patents.
§ 1249. Gain From Certain Sales or Exchanges of
Patents, Etc., to Foreign Corporations.
§ 1253. Transfers of Franchises, Trademarks, and Trade
Names.
TITLE 28 JUDICIARY AND JUDICIAL PROCEDURE
PART IV Jurisdiction and Venue
CHAPTER 83 COURTS OF APPEALS
§ 1292. Interlocutory Decisions.
§ 1295. Jurisdiction of the United States Court of Appeals for
the Federal Circuit.
CHAPTER 85 DISTRICT COURTS; JURISDICTION
§ 1331. Federal Question.
§ 1332. Diversity of Citizenship; Amount in Controversy; Costs.
§ 1338. Patents, Plant Variety Protection, Copyrights, Mask
Works, Designs, Trademarks, and Unfair Competition.
§ 1369. Multiparty, Multiforum Jurisdiction.
CHAPTER 87 DISTRICT COURTS; VENUE
§ 1391. Venue generally.
§ 1400. Patents and Copyrights, Mask Works, and Designs.
CHAPTER 89 DISTRICT COURTS; REMOVAL OF CASES FROM
STATE COURTS
§ 1454. Patent, plant variety protection, and copyright cases.
§ 1455. Procedure for removal of criminal prosecutions.
CHAPTER 91 UNITED STATES COURT OF FEDERAL CLAIMS
§ 1498. Patent and Copyright Cases.
PART V Procedure
CHAPTER 113 PROCESS
§ 1694. Patent Infringement Action.
§ 1697. Service in Multiparty, Multiforum Actions.
CHAPTER 115 EVIDENCE; DOCUMENTARY
§ 1733. Government Records and Papers; Copies.
§ 1741. Foreign Official Documents.
§ 1744. Copies of United States Patent and Trademark Office
Documents, Generally.
§ 1745. Copies of Foreign Patent Documents.
CHAPTER 117 EVIDENCE; DEPOSITIONS
§ 1785. Subpoenas in Multiparty, Multiforum Actions.
CHAPTER 123 FEES AND COSTS
§ 1927. Counsel’s Liability for Excessive Costs.
§ 1928. Patent Infringement Action; Disclaimer Not Filed.
TITLE 30 MINERAL LANDS AND MINING
CHAPTER 22 MINE SAFETY AND HEALTH
SUBCHAPTER IV Black Lung Benefits
PART C Claims for Benefits After December 31, 1973
§ 937. Contracts and Grants.
SUBCHAPTER V Administrative Provisions
57
§ 951. Studies and Research.
CHAPTER 25 SURFACE MINING CONTROL AND RECLAMATION
SUBCHAPTER III State Mining and Mineral Resources Research
Institutes
§ 1226. Research.
SUBCHAPTER IX Energy Resource Graduate Fellowships
§ 1328. Research and Demonstration Projects of Alternative
Coal Mining Technologies.
TITLE 35 PATENTS
PART I United States Patent and Trademark Office
CHAPTER 1 ESTABLISHMENT, OFFICERS AND EMPLOYEES,
FUNCTIONS
§ 2. Powers and Duties.
§ 3. Officers and employees.
§ 4. Restrictions on Officers and Employees as to Interest in
Patents.
§ 5. Patent and Trademark Office Public Advisory Committees.
§ 6. Patent Trial and Appeal Board.
§ 7. Library.
§ 8. Classification of Patents.
§ 9. Certified Copies of Records.
§ 11. Exchange of Copies of Patents and Applications With
Foreign Countries.
§ 12. Copies of Patents and Applications for Public Libraries.
§ 13. Annual Report to Congress.
CHAPTER 2 PROCEEDINGS IN THE PATENT AND TRADEMARK
OFFICE
§ 21. Filing Date and Day for Taking Action.
§ 22. Printing of Papers Filed.
§ 23. Testimony in Patent and Trademark Office Cases.
§ 24. Subpoenas, Witnesses.
§ 25. Declaration in Lieu of Oath.
§ 27. Revival of applications; reinstatement of reexamination
proceedings.
CHAPTER 3 PRACTICE BEFORE PATENT AND TRADEMARK
OFFICE
§ 32. Suspension or Exclusion From Practice.
§ 33. Unauthorized Representation as Practitioner.
CHAPTER 4 PATENT FEES; FUNDING; SEARCH SYSTEMS
§ 41. Patent fees; patent and trademark search systems.
§ 42. Patent and Trademark Office funding.
PART II Patentability of Inventions and Grant of Patents
CHAPTER 10 PATENTABILITY OF INVENTIONS
§ 100. Definitions [Caution: See prospective amendment notes
below.]
§ 101. Inventions Patentable.
58
§ 102. Conditions for patentability; novelty [Caution: See
§ 103. Conditions for patentability; non-obvious subject matter.
§ 104. Repealed.
§ 105. Inventions in Outer Space.
CHAPTER 11 APPLICATION FOR PATENT
§ 111. Application [Caution: See prospective amendment note
below.]
§ 112. Specification
§ 113. Drawings.
§ 114. Models, Specimens.
§ 115. Inventor’s oath or declaration [Caution: See prospective
amendment note below.]
§ 116. Inventors.
§ 117. Death or Incapacity of Inventor.
§ 118. Filing by Other Than Inventor.
§ 119. Benefit of earlier filing date; right of priority.
§ 120. Benefit of earlier filing date in the United States [Caution:
See prospective amendment note below.]
§ 121. Divisional Applications.
§ 122. Confidential status of applications; publication of patent
applications.
§ 123. Micro Entity Defined.
CHAPTER 12 EXAMINATION OF APPLICATION
§ 132. Notice of Rejection; Reexamination.
§ 133. Time for prosecuting application.
§ 134. Appeal to the Patent Trial and Appeal Board.
§ 135. Derivation proceedings.
CHAPTER 13 REVIEW OF PATENT AND TRADEMARK OFFICE
§ 141. Appeal to Court of Appeals for the Federal Circuit.
§ 142. Notice of Appeal.
§ 143. Proceedings on Appeal.
§ 144. Decision on Appeal.
§ 145. Civil action to obtain patent.
§ 146. Civil action in case of derivation proceeding.
CHAPTER 14 ISSUE OF PATENT
§ 151. Issue of patent.
§ 152. Issue of Patent to Assignee.
§ 153. How Issued.
§ 154. Contents and Term of Patent; Provisional Rights [Caution:
See prospective amendment notes below.]
§ 155. Repealed.
§ 155A. Repealed.
§ 156. Extension of Patent Term.
§ 157. Statutory Invention Registration [Caution: See prospective
CHAPTER 15 PLANT PATENTS
§ 161. Patents for Plants.
59
§ 162 Description, Claim.
§ 163. Grant.
§ 164. Assistance of Department of Agriculture.
CHAPTER 16 DESIGNS
§ 171. Patents for designs.
§ 172. Right of priority.
§ 173. Term of design patent [Caution: See prospective
CHAPTER 17 SECRECY OF CERTAIN INVENTIONS AND FILING
APPLICATIONS IN FOREIGN COUNTRY
§ 181. Secrecy of Certain Inventions and Withholding of Patent.
§ 182. Abandonment of Invention for Unauthorized Disclosure.
§ 183. Right to Compensation.
§ 184. Filing of Application in Foreign Country.
§ 185. Patent Barred for Filing Without License.
§ 186. Penalty.
§ 187. Nonapplicability to Certain Persons.
§ 188. Rules and Regulations, Delegation of Power.
CHAPTER 18 PATENT RIGHTS IN INVENTIONS MADE WITH
FEDERAL ASSISTANCE
§ 200. Policy and Objective.
§ 202. Disposition of rights.
§ 203. March-in Rights.
§ 204. Preference for United States Industry.
§ 205. Confidentiality.
§ 206. Uniform Clauses and Regulations.
§ 207. Domestic and Foreign Protection of Federally Owned
Inventions.
§ 208. Regulations Governing Federal Licensing.
§ 209. Licensing Federally Owned Inventions.
§ 210. Precedence of Chapter.
§ 211. Relationship to Antitrust Laws.
§ 212. Disposition of Rights in Educational Awards.
PART III Patents and Protection of Patent Rights
CHAPTER 25 AMENDMENT AND CORRECTION OF PATENTS
§ 251. Reissue of Defective Patents.
§ 252. Effect of Reissue.
§ 253. Disclaimer.
§ 254. Certificate of Correction of Patent and Trademark Office
Mistake.
§ 255. Certificate of Correction of Applicant’s Mistake.
§ 256. Correction of Named Inventor.
§ 257. Supplemental examinations to consider, reconsider, or
correct information.
CHAPTER 26 OWNERSHIP AND ASSIGNMENT
§ 261. Ownership; assignment.
§ 262. Joint Owners.
CHAPTER 27 GOVERNMENT INTERESTS IN PATENTS
60
§ 267. Time for Taking Action in Government Applications.
CHAPTER 28 INFRINGEMENT OF PATENTS
§ 271. Infringement of Patent.
§ 272. Temporary Presence in the United States.
§ 273. Defense to Infringement Based on Prior Commercial Use.
CHAPTER 29 REMEDIES FOR INFRINGEMENT OF PATENT,
AND OTHER ACTIONS
§ 281. Remedy for Infringement of Patent.
§ 283 Injunction.
§ 284 Damages.
§ 287. Limitation on damages and other remedies; marking and
notice.
§ 288. Action for infringement of a patent containing an invalid
claim.
§ 289. Additional Remedy for Infringement of Design Patent.
§ 290. Notice of Patent Suits.
§ 291 Derived Patents [patents]
§ 292 False Marking.
§ 293 Nonresident Patentee; Service and Notice.
§ 294. Voluntary Arbitration.
§ 295. Presumption: Product Made by Patented Process.
§ 296. Liability of States, Instrumentalities of States, and State
Officials for Infringement of Patents.
§ 297. Improper and Deceptive Invention Promotion.
§ 298. Advice of counsel.
§ 299. Joinder of parties.
CHAPTER 30 PRIOR ART CITATIONS TO OFFICE AND EX
PARTE REEXAMINATION OF PATENTS
§ 301. Citation of prior art and written statements.
§ 302. Request for Reexamination.
§ 303. Determination of Issue by Director.
§ 304. Reexamination Order by Director.
§ 305. Conduct of Reexamination Proceedings [Caution: See
§ 306. Appeal.
§ 307. Certificate of Patentability, Unpatentability, and Claim
Cancellation.
CHAPTER 31 INTER PARTES REVIEW
§ 311. Inter partes review.
§ 312. Petitions.
§ 313. Preliminary response to petition.
§ 314. Institution of inter partes review.
§ 315. Relation to other proceedings or actions.
§ 316. Conduct of inter partes review.
§ 317. Settlement.
§ 318. Decision of the Board.
61
§ 319. Appeal.
CHAPTER 32 POST-GRANT REVIEW
§ 321. Post-grant review.
§ 322. Petitions.
§ 323. Preliminary response to petition.
§ 324. Institution of post-grant review.
§ 325. Relation to other proceedings or actions.
§ 326. Conduct of post-grant review.
§ 327. Settlement.
§ 328 Decision of the Board.
§ 329. Appeal.
PART IV Patent Cooperation Treaty
CHAPTER 36 INTERNATIONAL STAGE
§ 361. Receiving Office
§ 362. International Searching Authority and International
Preliminary Examining Authority.
§ 363. International application designating the United States:
Effect.
§ 364. International stage: Procedure.
§ 365. Right of priority; benefit of the filing date of a prior
application [Caution: See prospective amendment note
below.]
§ 366. Withdrawn international application [Caution: See
§ 367. Actions of Other Authorities: Review.
§ 368. Secrecy of Certain Inventions; Filing International
Applications in Foreign Countries.
CHAPTER 37 NATIONAL STAGE
§ 371. National Stage.
§ 372. National Stage: Requirements and Procedure.
§ 373. Repealed.
§ 374. Publication of international application.
§ 375. Patent issued on international application: Effect.
§ 376. Fees.
PART V THE HAGUE AGREEMENT CONCERNING INTERNATIONAL
REGISTRATION OF INDUSTRIAL DESIGNS
CHAPTER 38 INTERNATIONAL DESIGN APPLICATIONS
§ 381. Definitions. [Caution: This section takes effect on the
later of Dec. 18, 2013, or the date of entry into force of the
Geneva Act of the Hague Agreement Concerning the
International Registration of Industrial Designs with respect
to the United States, pursuant to § 103 of Act Dec. 18, 2012,
P.L. 112-211, which appears as 35 USCS § 100 note.]
§ 382. Filing international design applications. [Caution: This
section takes effect on the later of Dec. 18, 2013, or the
date of entry into force of the Geneva Act of the Hague
Agreement Concerning the International Registration of
62
Industrial Designs with respect to the United States, pursuant
to § 103 of Act Dec. 18, 2012, P.L. 112-211, which appears
as 35 USCS § 100 note.]
§ 383. International design application. [Caution: This section
takes effect on the later of Dec. 18, 2013, or the date of
entry into force of the Geneva Act of the Hague Agreement
Concerning the International Registration of Industrial
Designs with respect to the United States, pursuant to § 103
of Act Dec. 18, 2012, P.L. 112-211, which appears as 35
USCS § 100 note.]
§ 384. Filing date. [Caution: This section takes effect on the later
of Dec. 18, 2013, or the date of entry into force of the
§ 385. Effect of international design application. [Caution: This
section takes effect on the later of Dec. 18, 2013, or the
date of entry into force of the Geneva Act of the Hague
§ 386. Right of priority. [Caution: This section takes effect on
the later of Dec. 18, 2013, or the date of entry into force of
the Geneva Act of the Hague Agreement Concerning the
§ 387. Relief from prescribed time limits. [Caution: This section
takes effect on the later of Dec. 18, 2013, or the date of
entry into force of the Geneva Act of the Hague Agreement
Concerning the International Registration of Industrial
Designs with respect to the United States, pursuant to § 103
of Act Dec. 18, 2012, P.L. 112-211, which appears as 35
USCS § 100 note.]
§ 388. Withdrawn or abandoned international design application.
[Caution: This section takes effect on the later of Dec. 18,
2013, or the date of entry into force of the Geneva Act of
the Hague Agreement Concerning the International
Registration of Industrial Designs with respect to the United
States, pursuant to § 103 of Act Dec. 18, 2012, P.L. 112-
211, which appears as 35 USCS § 100 note.]
§ 389. Examination of international design application. [Caution:
This section takes effect on the later of Dec. 18, 2013, or
the date of entry into force of the Geneva Act of the Hague
63
§ 390. Publication of international design application. [Caution:
This section takes effect on the later of Dec. 18, 2013, or
the date of entry into force of the Geneva Act of the Hague
TITLE 42 THE PUBLIC HEALTH AND WELFARE
CHAPTER 6A THE PUBLIC HEALTH SERVICE
SUBCHAPTER I Administration and Miscellaneous Provisions
PART A Administration
§ 236. Orphan Products Board.
CHAPTER 16 NATIONAL SCIENCE FOUNDATION
§ 1871. Disposition of inventions produced under contracts or other
arrangements.
CHAPTER 23 DEVELOPMENT AND CONTROL OF ATOMIC ENERGY
SUBCHAPTER XII Patents and Inventions
§ 2181. Inventions Relating to Atomic Weapons, and Filing of
Reports.
§ 2182. Inventions conceived during Commission contracts;
ownership; waiver; hearings.
§ 2183. Nonmilitary Utilization.
§ 2185. Prior Art.
§ 2186. Commission Patent Licenses.
§ 2187. Compensation, Awards, and Royalties.
§ 2188. Monopolistic Use of Patents.
§ 2189. Federally Financed Research.
§ 2190. Saving Clause.
CHAPTER 26 NATIONAL SPACE PROGRAM
CHAPTER 73 DEVELOPMENT OF ENERGY SOURCES
SUBCHAPTER I Energy Research and Development Administration
§ 5817. Powers of the Administrator.
CHAPTER 74 NONNUCLEAR ENERGY RESEARCH AND
DEVELOPMENT
§ 5908. Patents and Inventions.
CHAPTER 82 SOLID WASTE DISPOSAL
SUBCHAPTER VIII Research, Development, Demonstration, and
Information
§ 6981. Research, Demonstrations, Training, and Other
Activities.
CHAPTER 85 AIR POLLUTION PREVENTION AND CONTROL
SUBCHAPTER I Programs and Activities
PART A Air Quality and Emission Limitations
64
§ 7404. Research Relating to Fuels and Vehicles.
§ 7608. Mandatory Licensing.
5 LEAHY-SMITH AMERICA INVENTS ACT

LEAHY-SMITH AMERICA INVENTS ACT PUBLIC LAW 112-29 [H.R. 1249]
Sec. 1. Short Title; Table of Contents.
Sec. 2. Definitions.
Sec. 3. First Inventor to File.
Sec. 4. Inventor’s Oath or Declaration.
Sec. 5. Defense to Infringement Based on Prior Commercial Use.
Sec. 6. Post-Grant Review Proceedings.
Sec. 7. Patent Trial and Appeal Board.
Sec. 8. Preissuance Submissions by Third Parties.
Sec. 9. Venue.
Sec. 10. Fee Setting Authority.
Sec. 11. Fees for Patent Services.
Sec. 12. Supplemental Examination.
Sec. 13. Funding Agreements.
Sec. 14. Tax Strategies Deemed within the Prior Art.
Sec. 15. Best Mode Requirement.
Sec. 16. Marking.
Sec. 17. Advice of Counsel.
Sec. 18. Transitional Program for Covered Business Method Patents.
Sec. 19. Jurisdiction and Procedural Matters.
Sec. 20. Technical Amendments.
Sec. 21. Travel Expenses and Payment of Administrative Judges.
Sec. 22. Patent and Trademark Office Funding.
Sec. 23. Satellite Offices.
Sec. 24. Designation of Detroit Satellite Office.
Sec. 25. Priority Examination for Important Technologies.
Sec. 26. Study on Implementation.
Sec. 27. Study on Genetic Testing.
Sec. 28. Patent Ombudsman Program for Small Business Concerns.
Sec. 29. Establishment of Methods for Studying the Diversity of Applicants.
Sec. 30. Sense of Congress.
Sec. 31. USPTO Study on International Patent Protections for Small Businesses.
Sec. 32. Pro Bono Program.
Sec. 33. Limitation on Issuance of Patents.
Sec. 34. Study of Patent Litigation.
Sec. 35. Effective Date.
Sec. 36. Budgetary Effects.
Sec. 37. Calculation of 60-Day Period for Application of Patent Term Extension.
6 INDEX
INDEX
INDEX
65
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
66
INTRODUCTION TO CALIFORNIA
INTELLECTUAL PROPERTY LAWS
This publication represents an amalgamation of statutes, cases, articles,

and commentary related to intellectual property law. It includes both
federal and state law, with an emphasis on California law. The interplay
between state and federal intellectual property law is at times concurrent,
independent, complementary, or contradictory. 1 Naturally, federal law is
supreme and issues of federal preemption arise frequently in this area of
law.2 There are many areas, however, where state law plays a vital and
sometimes the most important role. For example, the law applicable to
trade secrets is almost entirely a matter of state law. Although 17 U.S.C. §
301(a) specifically preempts state laws respecting copyrights, an issue
regarding ownership of copyright based on contract interpretation is
determined under state law.3
In other areas, state law is an important adjunct to federal law. It is
commonplace for intellectual property practitioners to include multiple
counts in any suit for infringement or violation of intellectual property
rights. Thus, for example, a claim for trademark infringement under the
Lanham Act is frequently joined with claims for trademark dilution under
both state and federal statutes, as well as claims for unfair competition
under Business & Professions Code section 17200 or other state law as
well as common law. Claims made under different laws have different
remedies and different statutes of limitation. As a result, claims which
appear to be ancillary to the main claim in dispute, may prove to be
critical to the ultimate resolution. For example, if a trademark infringement
claim involves so-called “grey goods,” i.e., goods which may have been
authorized by the trademark owner for sale outside the United States but
then have been imported without permission for sale within the United
States, then in addition to whatever trademark claims might be available,
California’s “grey market goods” statutes (Civil Code §§ 1797.8–1797.86)
might apply. An independent claim against retailers of so-called “grey
market” goods under these statutes may survive even if a straight trademark
claim fails. Likewise, California Commercial Code section 2312 creates
an important right of indemnification which a defendant accused of
infringement might have against the supplier of the goods which are
claimed to infringe. In any such case, a practitioner ought to consider
whether to assert a claim for indemnification (by way of a cross-claim or
third party claim if in federal court, or a cross-complaint if in state court)
67
based on the implied warranty under this section of the Commercial Code
that goods purchased from a seller are free from any rightful claim of
infringement.
These are but a few illustrations of the significant role that state
statutes play in intellectual property law. A solid understanding of
California laws applicable to intellectual property is crucial for any
practitioner in this state who negotiates intellectual property agreements or
litigates intellectual property issues in either state or federal court. This
publication provides a valuable tool for any practitioner to assist in
mastering the field of California intellectual property law.
SYNOPSIS
INTRODUCTION
[3] Plug Molding
[1] Ownership
§ 4. Copyrights
[2] Record Piracy
§ 5. Goodwill and Its Representations: Trademarks, Tradenames, Business Names, and
Quality Marks
[1] Goodwill
[2] Trademarks
[a] In General
[3] Trade Names
[4] Container Brands, Farm Names, Laundry Supply Designations, and Other Names
[8] Domain Names
[9] Wine Labels
68
§ 6. Trade Secrets
[3] Customer Lists
§ 7. Contracts in Restraint of Trade; Employee Restrictions
[1] In General
§ 9. Artists’ and Authors’ Rights in Their Works (Apart From Patent and Copyright)
[2] Enforcement of Money Judgments by Assignment of Payment From Intellectual
Property
§ 15. Tax Treatment of Income From Intellectual Property
INTRODUCTION
The State of California has many laws recognizing and regulating
intellectual property. A considerable number are not well known to the average
intellectual property or general business practitioner. This introduction provides
a summary of California intellectual property statutes to introduce practitioners
to the statutes and illustrate how they interrelate.
No entirely satisfactory definition of the term “intellectual property” is
69
possible. “Products of the mind” is a common definition of the core of
intellectual property. This term would include intellectual creations and know-
how protected by patent, copyright, and trade secret law. Trademarks, trade
names, and unfair competition issues, however, do not fit neatly into this core
definition because trademark rights are acquired by use in commerce rather than
being created in an individual mind. Nevertheless, unfair competition and
trademark law are customarily subsumed within the generally-recognized scope
of “intellectual property law.” The accepted term in Europe is “industrial
property law,” but even this term is under inclusive. Perhaps the term which
best describes the full scope of rights involved is “intangible property law.”
The principal federal statutes governing intellectual property law are
important and well-known. By and large, patent and copyright law is federal
law and preempts the laws of the individual states. Federal statutes concerning
trademarks, plant varieties, false advertising, mask works, and the like are also
significant. Nevertheless, state law does have an important role in protecting
intellectual property.
Over the years, the California Legislature has enacted a myriad of laws
affecting many aspects of intellectual property law. The subject matters of these
laws include (among others) the inheritance of patents, the ownership of
invention rights, protection of trade secrets, regulation of content of motion
pictures, counterfeiting of trademarks, permissible farm names, quality marks
for precious metals, ownership of copyrighted works created by state agencies,
laws regulating franchise interests, laws regulating the sale of fine prints, and
laws establishing moral rights in works of fine art. The Legislature has therefore
responded abundantly to the concerns expressed at various times by California’s
business people, farmers, artists, inventors, and other users and makers of
intellectual property.
This introduction discusses, for each statute or definable group of statutes,
the scope or area being regulated, its practical importance, and the basic manner
in which it is regulated. Leading cases and references to useful practice guides,
articles, notes, and treatises that might be of value to the practitioner are listed
following the text of the pertinent statutes that comprise the bulk of this volume.
Practical pointers or “consultant’s comments” are also included under the
appropriate statutes.
The rules of practice for patent, trademark, and copyright law have been
promulgated by the Department of Commerce and are codified in Title 37 of the
Code of Federal Regulations (CFR). The contents of the CFR are required to be
judicially noticed.4
Footnotes:
70
4 44 U.S.C. § 1507.

Civ. Code §§ 654–655, 657, 663, 669, 671, 678–692 and 707–711 are
basic California property law statutes that are generally applicable to
intellectual property law as well as to other types of property.
By statute, intellectual property is property in California. Civ. Code §§ 654
and 655 state that products of labor or skill, such as a composition by an author,
goodwill of a business, or a trademark, may be owned as property.

Bus. & Prof. Code §§ 17200–17210 govern unfair competition in
California. Unfair competition is often a claim in intellectual property lawsuits.
These statutes are the basis for statutory unfair competition claims and provide
limited remedies. They are commonly referred to as California’s “little FTC
Act.”
Bus. & Prof. Code § 17200 defines unfair competition as any unlawful,
unfair, or fraudulent business act or practice, or any false or misleading
advertising. Bus. & Prof. Code § 17203 provides for an injunction to prevent
any act of unfair competition and for a court order to restore money or property
acquired by unfair competition. The court must impose a penalty for each
violation, up to $2,500 per violation.5 Courts can levy additional penalties of up
to $6,000 per day against anyone violating an injunction,6 with further penalties
against anyone perpetrating an act of unfair competition against a senior citizen
or a disabled person.7
Prior to 2004, standing was very broad. In 2004, proposition 64 was
passed. Now private parties have standing only if they have suffered injury in
fact and lost money or property as a result of the alleged unfair competition. The
California Attorney General and other public prosecutors also can sue
unaffected by the new requirements for a private plaintiff.8 Unlike the “little
FTC Acts” of other states, the California statutes do not provide for recovery of
compensatory and punitive damages or attorneys’ fees. Restitutionary recovery,
however, is permitted. The law is now clear that restitution may be awarded
whether or not the court also grants an injunction.9

Bus. & Prof. Code §§ 17500–17509 and 17531–17539.3 are a subdivision
71
of the unfair competition law and specifically address false advertising. Bus. &
Prof. Code § 17500 prohibits any advertising which is known, or reasonably
should be known, to be untrue or misleading. This applies to real or personal
property and to services. Criminal penalties consist of imprisonment for up to
six months and/or a fine of up to $2,500. Under Bus. & Prof. Code § 17535,
injunctive relief is available; penalties for violating an injunction are included
in Bus. & Prof. Code § 17535.5. Under Bus. & Prof. Code § 17536, the court
must impose a civil penalty for violations, not to exceed $2,500.
Under Bus. & Prof. Code § 17531, used, defective, or second-grade goods
must be clearly marked. The statutes also set forth specific prohibitions, such as
making conditional offers of gifts, inducing visits to locations, or extending
open-end credit plans, and provide for injunctive relief and fines.
Bus. & Prof. Code §§ 17539.5–17539.6 regulate the telephone
information-access service business (“900” numbers).
[3] Plug Molding

California’s “plug molding” law, Bus. & Prof. Code §§ 17300–17301, was
repealed in 1991. This law provided that permission must be obtained from the
original manufacturer before duplicating an item for sale by using the original
item as a plug to make a mold (the “direct molding process”). In Bonito Boats,
Inc. v. Thunder Craft Boats, Inc., 10 the U.S. Supreme Court held a similar
Florida statute unconstitutional on grounds that it was preempted by the federal
patent statute.
The California statute, the nation’s first direct molding legislation,
apparently served as a model for the Florida statute; but the Florida statute is
more narrowly drafted. For this reason the U.S. Supreme Court would have
been even more likely to uphold a challenge to the constitutionality of the
California law, and no purpose was served by leaving California’s plug
molding statute on the books.
Footnotes — § 2:
5 Bus. & Prof. Code § 17206.
6 Bus. & Prof. Code § 17535.5.
7 Bus. & Prof. Code § 17206.1.
8 See Bus. & Prof. Code § 17204.
9 See ABC Intern. Traders Inc. v. MECA, 14 Cal. 4th 1247, 61 Cal. Rptr. 2d 112, 126
(1997).
72
10 Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 S. Ct. 971, 103
L. Ed. 2d 118 (1989).

[1] Ownership
Federal law exclusively governs the granting and enforcement of patents for
inventions, plants, and designs. Federal patent law preempts state statutes
providing patent-like protection under the Sears-Compco doctrine,11 which was
reaffirmed in Bonito Boats.12 Patents, however, are personal property that are
subject to state laws concerning property. California law provides trade-secret
protection for inventions (see § 6).
Civ. Code §§ 980, 981, and 983 provide that an inventor has exclusive
ownership of an invention as long as the invention remains in the inventor’s
possession,13 but that once the inventor makes the invention public, anyone is
entitled to make a copy or reproduction.14 Under federal law, an employer may
have a nonexclusive and nontransferable royalty-free license (a “shop right”) to
use the employee’s patented invention.15
Prob. Code § 16362 governs the allocation in an estate between principal
and income of a “liquidating asset,” including patent, copyright, royalty right,
and the like.
Lab. Code § 2860 states a general rule that, except for compensation,
everything an employee acquires through employment belongs to the employer.
Lab. Code §§ 2870–2872 cover inventions made by an employee and are
relevant principally to employment contracts. Lab. Code § 2870 states that any
provision in an employment agreement requiring an employee to assign rights in
an invention to the employer does not apply to any invention developed by the
employee entirely on his or her own time and without using any of the
employer’s facilities or trade secrets. An exception exists for any invention that
relates to the employer’s business or research and development done by the
employer, or that results from work performed for the employer.
Lab. Code § 2871 provides that no employment agreement provision made
unenforceable under Lab. Code § 2870 can be made a condition of employment
or continued employment. An employer has the right to require disclosure of all
inventions in order to allow the employer a chance to determine the employer’s
rights. Lab. Code § 2872 states that if an employment agreement is entered into
that requires the employee to assign rights in inventions to the employer, the
employer must inform the employee in writing that any inventions that would
qualify under Lab. Code § 2870 are exempt. In any cause of action arising
73
under this statute, the employee claiming the benefit bears the burden of proof.
Code Civ. Proc. § 708.510(a)(5) provides that payments due from patents
may be used to satisfy money judgments.

Bus. & Prof. Code §§ 22370–22395 are designed to protect inventors from
the abuses of invention development service contracts. Every contract for
invention development services must be in writing.16 Any such contract can be
canceled within seven days of execution for any reason, regardless of the terms
of the contract.17 The notice of right to cancel must be conspicuously printed on
a cover sheet to the contract, along with a notice that the inventor’s patent rights
may be adversely affected by signing the contract.18
Remedies include a civil action for the greater of $3,000 or treble actual
damages, along with attorneys’ fees. 19 An invention developer must post a bond
of at least $25,000, or make a deposit, to cover damages awarded to an inventor
for violation of these statutes.20
Footnotes — § 3:
11 Sears, Roebuck & Co. v. Stiffel Company, 376 U.S. 225, 229, 84 S. Ct. 784, 11 L.
Ed. 2d 661 (1964); Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 237, 84 S. Ct.
779, 11 L. Ed. 2d 669 (1964).
12 Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 109 S. Ct. 971, 103
L. Ed. 2d 118 (1989).
13 Civ. Code § 980.
14 Civ. Code § 983.
15 See 5 Chisum, P ATENTS, § 22.03.
16 Bus. & Prof. Code § 22372.
17 Bus. & Prof. Code § 22373.
18 Bus. & Prof. Code § 22374.
19 Bus. & Prof. Code § 22386.
20 Bus. & Prof. Code §§ 22389, 22391.
§ 4. Copyrights
74
Federal law exclusively governs copyright to the extent that Congress has
chosen to legislate under the power granted to it under Article I, § 8, cl. 8 of the
U.S. Constitution to preserve to “authors” the rights to their “writings” for
limited times. California, however, has legislated on the periphery of this field
by protecting authors’ rights not falling within the Federal Copyright Act of
1976.
Civ. Code §§ 654 and 655 collectively define products of labor or skill,
such as the compositions of an author, the goodwill of a business, or a
trademark, as property subject to ownership.
Civ. Code §§ 980–985. Civ. Code § 980, which was formerly known as the
statutory enactment of common-law copyright, was amended in 1982 as a result
of the 1976 copyright act. The statute now grants exclusive ownership of any
original work of authorship only to rights that are not yet “fixed in any tangible
medium of expression,” that is, only for those rights that are not expressly
preempted by the Federal Copyright Act. An example of this is an
improvisational speech that has not been written down or recorded. These rights
are an intangible property interest. Civ. Code § 980 also provides protection
for the authors of original sound recordings fixed prior to February 15, 1972;
these sound recordings are not covered under the Federal Copyright Act.
These Civil Code sections also delineate joint ownership and transfer
provisions of authorship rights, transfers of reproduction rights in fine art, work
for hire issues, and ownership of inventions and designs. Civ. Code § 982
provides that when a work of fine art is transferred, the right of reproduction is
reserved to the artist unless that right is expressly transferred in writing.
Educ. Code §§ 32360, 32361, 35170, 72207, and 81459. These statutes
cover copyrights on material developed by school employees. The school or
community college district may secure copyrights to any works developed by
the district. No school funds may be expended to secure a copyright nor may any
regular work time be used.
and the like.
Lab. Code §§ 2750, 2750.5, and 3350–3357 These statutes define
employee status, which is relevant in determining if an employer is liable to the
person performing services for unemployment, workers’ compensation,
disability, and Social Security benefits. Employers, of course, prefer to have the
authorship of works vested in them from the moment of creation, without the
need to obtain a written assignment. This is possible if the work is a “work
made for hire,” that is, one created by an employee or subject to an agreement
75
between the employer and the creator that a specially commissioned work has
that status. Such an agreement is possible, however, only for contributions to
collective works, parts of a motion picture or other audiovisual work,
translations, supplementary works, instructional texts, tests, answer material for
tests, and atlases.21 However, employers who choose to regard their authors as
“employees” in order to take advantage of this aspect of copyright law may be
required to provide employment benefits under California law.
Lab. Code § 2750.5 provides a rebuttable presumption that a worker
performing services is an employee rather than an independent contractor.
Under Lab. Code § 3351.5, any person creating a specially commissioned work
of authorship under a written contract that the work is to be a work made for
hire is considered an employee, and all rights in the copyright belong to the
employer.
Unemp. Ins. Code §§ 601.5, 621–622, and 686. These statutes govern
whether a person performing services is an “employee” for the purpose of
receiving unemployment compensation. Under Unemp. Ins. Code § 686, any
person contracting to create a specially commissioned work is an employee, and
is therefore entitled to receive unemployment benefits, if the parties agree that
the work is a work made for hire and the commissioning party retains the
copyright.
Code Civ. Proc. § 708.510(a)(5) provides that payments due from
copyrights may be used to satisfy money judgments.
[2] Record Piracy

Federal copyright law exclusively covers the actual recording and sale of
recorded music. However, California has enacted statutes aimed at controlling
other types of record piracy.
Penal Code §§ 653h, 653s, 653u, 653v, and 653w are California’s “record
piracy” statutes that provide criminal penalties for misappropriation (by transfer
to another medium) of recorded music (whether on album, disc, tape, or film) or
sounds of live performances for financial gain. The statutes also cover
unauthorized transport and possession for sale of unauthorized recordings and
nondisclosure on packaging of the origin of recordings. The pirate must have the
intent to sell for commercial advantage and must know that the recording is
unauthorized.
Penalties are substantial and can range up to a $250,000 fine and/or five
years imprisonment for the unauthorized transfer or transport of recorded sound,
the unauthorized recording or mastering of a live performance, or failure to
disclose the origin of a recording, if at least 1,000 articles are involved. Under
76
Penal Code § 653v, any violation of the record piracy statutes will result in
forfeiture and destruction of all unauthorized articles and of the means of making
the articles.
The constitutionality of Penal Code § 653w was upheld in People v.
Anderson,22 which held that the statute was not preempted by federal copyright
law.

Under Educ. Code §§ 60076 and 78900, a school district can claim
royalties from instructional materials prepared by a school or community
college employee during the normal workday; otherwise, the employee may
receive the royalties.
and the like.
Footnotes — § 4:
21 See Community for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S. Ct. 2166,
104 L. Ed. 2d 811 (1989).
22 People v. Anderson, 235 Cal. App. 3d 586, 286 Cal. Rptr. 734 (1991).
§ 5. Goodwill and Its Representations: Trademarks,

Tradenames, Business Names, and Quality Marks
[1] Goodwill
such as the composition of an author, goodwill of a business, or a trademark, as
property and state that the goodwill and the trademarks of a business are
property subject to ownership.
Goodwill is the value of a business as a going concern not attributable to
specific assets and receivables. It is defined by Bus. & Prof. Code § 14100 as
“the expectation of continued public patronage.” It is property defined and
regulated by California law.
Bus. & Prof. Code §§ 14100–14103 define the goodwill of a business as
transferable property. 23 Under Bus. & Prof. Code § 14103, a person
transferring the goodwill of a business may transfer the right to use the name
under which the business is conducted.
77
[2] Trademarks
[a] In General
Effective 2008, California adopted the Model State Trademark Law (Bus.
& Prof. Code § 14200 et seq.), which substantially revamped the state statutory
scheme. In many respects, California law is now similar to the federal scheme.
Among other things: (1) the classification of goods and services now conforms
to the classification under federal law (§ 14235); (2) the applicant must include
a declaration of accuracy that the material facts stated in the application are true
(§ 14207(d)); (3) the duration of the registration is now five years (formerly it
was 10 years), renewable for five-year terms (§ 14217); (4) renewal
applications must be accompanied by a specimen showing actual use of the
mark (§ 14217(d)); (5) the applicant is required to state whether there was a
federal application and if registration was refused, to disclose why it was
refused (§ 14207(b)); and (6) the application is subject to examination (§
14209).
Unlike federal patent and copyright laws, which vest exclusive jurisdiction
in federal courts for most claims, California courts have concurrent jurisdiction
with federal courts over claims under the Lanham Act, and thus a California
court has the power to order cancellation of a federal trademark registration.24

Bus. & Prof. Code § 14200 identifies the Model State Trademark Law and
Bus. & Prof. Code § 14202 provides applicable definitions.
Bus. & Prof. Code §§ 14205–14209 and Gov. Code § 12193 govern
registration of trademarks. In addition to requirements described above, the
application must be accompanied by three specimens showing the mark as
actually used and a $70 application fee.
The Secretary of State issues a certificate of registration.25 This certificate
is admissible in any California court proceeding as proof of registration and is
prima facie evidence of ownership of the trademark.26 Although formal
registration is prima facie evidence of ownership, Bus. & Prof. Code § 14259
explicitly provides that the enforcement of common-law trademarks is not
adversely affected due to lack of registration.
Trademarks and their appurtenant goodwill are assignable. A trademark
cannot exist as an abstract right, independent of the business in which it is used,
and so a trademark cannot be assigned in gross but must be assigned with its
appurtenant goodwill. The assignment may be filed with the Secretary of State.
If it is not filed within three months of assignment, then the assignment is void as
78
against any subsequent purchaser for valuable consideration without notice.27
The Secretary of State can cancel any registration when a court finds the mark
has been abandoned, the registrant is not the owner of the mark, or the mark has
been obtained improperly or fraudulently.28
Bus. & Prof. Code § 14240 provides that any person who fraudulently
procures a registration of a trademark is liable for all damages resulting from
the registration.

Bus. & Prof. Code §§ 14245 and 14247 provide remedies for infringement
and dilution of trademarks. Bus. & Prof. Code § 14245 provides for a civil
action against anyone using any reproduction or copy of a registered mark
without consent when that use is likely to cause confusion or mistake or to
deceive as to the origin of goods or services. Remedies for infringement are
limited to injunctions if the infringers are innocent or are publishers or
distributors of advertising media. An injunction is not available when it would
delay the delivery or transmission of a periodical or electronic communication.
Bus. & Prof. Code § 14247 provides for issuance of an injunction when
any likelihood of injury to business reputation or dilution of the distinctive
quality of plaintiff’s mark may result.
Penal Code § 537e provides criminal penalties for anyone buying, selling,
or in possession of any mechanical or electrical appliance or computer chip
from which the identification mark has been removed.
Lab. Code §§ 1015 and 1016 pertain to labor unions and provide criminal
penalties for anyone who forges a trademark with the intent to falsely represent
that goods were manufactured by members of a trade union and for anyone who
displays the trademark of a labor union in any manner not authorized by the
union.

Bus. & Prof. Code § 14250 state that any owner of a mark registered in
California may enjoin manufacture or sale of any goods bearing counterfeits of
the mark and recover up to three times the counterfeiter’s profits and three times
the owner’s damages. The court may order the destruction of all counterfeit
goods or their transfer to the state, a civil claimant, or other appropriate private
party, such as a charitable institution. The statute also provides for seizures of
counterfeit goods if plaintiff shows good cause, shows a probability of success
on the merits, and posts a bond. Notice to the defendant may be waived on a
showing of good cause. If the seized goods do not bear counterfeit marks,
79
however, the plaintiff will be liable for damages, costs, and possibly expenses,
including attorneys’ fees and punitive damages.
Penal Code § 350 deals specifically with the manufacture or sale of goods
bearing counterfeit marks. This section provides penalties of up to one year
imprisonment and/or a $5,000 fine for an individual, and up to a $100,000 fine
for a corporation. Even more substantial penalties are available for repeat
offenders or counterfeiters whose conduct directly and foreseeably caused death
or great bodily injury to those relying on the counterfeited product. Penal Code
§ 350, like Bus. & Prof. Code § 14340, also provides for destruction or
transfer of the counterfeit items. Penal Code § 351a provides criminal penalties
for anyone who falsely uses the name of a manufacturer to sell goods or
services.

California’s “grey market goods” statutes, Civ. Code §§ 1797.8–1797.86,
are designed to ensure that consumers are informed of disparities between
trademarked goods intended to be sold in the United States under express
warranty and the same goods produced abroad and never intended to be sold in
the United States (“grey market goods”). In the past, “grey market” goods could
be imported if the foreign seller had a certain relationship with the owner of the
U.S. trademark.29 Trademark owners are now on stronger footing to stop the
importation of grey market goods. In Gamut Trading Company v. USITC, 200
F.3d 775 (1999) , the Federal Circuit upheld an order by the International Trade
Commission barring the importation of grey market goods based on material
differences, and approved a low threshold of materiality, making it easier for
U.S. trademark owners to thwart the importation of such goods. U.S. Customs
has adopted regulations which provide for interdiction of such goods if there is
a “material difference” between the imported goods and those available on the
domestic market. See 19 CFR § 133.23. These regulations, however, allow the
foreign seller to import such goods if they bear a conspicuous label designed to
remain on the product or its packaging until the first point of sale to a retail
consumer with specified language clearly showing that the goods are not
authorized by the U.S. trademark owner.
Civ. Code § 1797.81 states that any retailer selling grey market goods must
post a listing of the ways in which the grey market goods are inferior to goods
sold through regular channels, such as lack of warranty and nonavailability of
replacement parts. The buyer’s remedies include the right to a refund.30 Any
violation also constitutes unfair competition under Bus. & Prof. Code § 17200,
as well as a deceptive trade practice under Civ. Code § 1770, thereby entitling
injured consumers to money damages and injunctive relief.
80
[3] Trade Names
Bus. & Prof. Code §§ 14401–14418 cover trade names and their
registration. Registration is accomplished by filing a fictitious business name
statement under Bus. & Prof. Code § 17910, or by filing articles of
incorporation or obtaining a certificate of qualification under Corp. Code §§
202, 2105, and 2106. A trade name can be transferred as property under Bus. &
Prof. Code § 14401. Bus. & Prof. Code § 14402 provides for an injunction to
restrain any infringement of a trade name.
Bus. & Prof. Code §§ 14411 and 14415 establish rebuttable presumptions
that anyone filing a fictitious business name statement or articles of
incorporation has an exclusive right to any trade name contained therein if the
registrant or corporation is the first to file and is actually engaged in a trade or
business using the business or corporate name. The presumptions created by
these statutes affect the burden of proof and do not establish substantive rights.
[4] Container Brands, Farm Names, Laundry Supply Designations, and

Other Names
Container brands, farm names, laundry supply designations, and
organization names are protected by specific statutes.
Bus. & Prof. Code §§ 14425–14438 provide name protection for container
brands. Anyone making, packing, or selling any substance in containers labeled
with a mark, name, or device may file for protection in the same manner as for a
brand.31 Possessing, using, selling, or buying any container bearing a registered
container brand, or concealing or obliterating the brand, is a misdemeanor.
Important remedies and procedural advantages are provided for the benefit of
registered container brand owners, such as attorneys’ fees and a presumption of
unauthorized use of the container bearing the registered brand in the absence of
written consent.
Bus. & Prof. Code §§ 14460–14465 provide that any farm owner or lessee
in California can register the name of his or her farm with the Secretary of State
and then use the name of the farm as a trademark on products of the farm. This
registration has the same effect as registration of a trademark. Knowing use of
the name by another is a misdemeanor.32
Bus. & Prof. Code §§ 14480–14491 provide for registration of a name,
mark, or device by anyone impressing the name, mark, or device on garments
while in the business of supplying laundered garments. Trafficking in or
concealing any registered name or mark can be a misdemeanor or a felony.
Bus. & Prof. Code §§ 14492–14495 state that the registration of the name
of any lodge; order; beneficial society; historical, military, or veterans’
81
organization; or labor union is permitted. Injunctive relief and actual damages
are available as remedies for infringement.

Bus. & Prof. Code §§ 17900–17930 provide for the registration of
fictitious business names. Bus. & Prof. Code § 17910 requires that anyone
regularly conducting a business for profit must file a fictitious business name
statement. The contents of a fictitious business name statement, place of filing,
and filing fees are set forth in Bus. & Prof. Code § 17913. Under Bus. & Prof.
Code § 17918, all actions on account of any contract or transaction
consummated under the fictitious business name are barred until the fictitious
business name statement is filed. Under Bus. & Prof. Code § 17930, executing,
filing, or publishing a fictitious business name statement knowing that it is false
is a misdemeanor.
Under Bus. & Prof. Code § 14411, filing a fictitious business name
statement leads to a rebuttable presumption affecting the burden of proof (but not
substantive rights) that the registrant has the exclusive right to use the name as a
trade name in the county where filed if the registrant is the first to file and is
actually using the name in connection with a trade or business in that county.

Corp. Code §§ 200, 201, 202, 2101, 2102, 2105–2107, 5122, 7122, 9122,
12311, 13409, 15505, and 15612 cover name registration for limited
partnerships and various kinds of corporations. Corp. Code § 17052 applies to
limited liability companies. Corp. Code § 202 sets forth the required
provisions of the articles of incorporation to be filed with the Secretary of State.
Under Bus. & Prof. Code § 14415, the first person to register a name is the
owner of the name and has the right to exclude others from using it in California.

Bus. & Prof. Code §§ 22100–22104, 22120–22132, and 22175–22181.
These statutes cover marking of articles made of precious metal with “quality
marks.” Quality marks, or “hallmarks,” are referred to as “certification marks”
by the federal trademark statutes (the Lanham Act or Trademark Act of 1946). 33
These marks indicate that articles are made of specified percentages and
purities of platinum, metals in the platinum group, or gold. Bus. & Prof. Code §
22126 states that any platinum or platinum group article that bears such a quality
mark must also bear a trademark. Bus. & Prof. Code § 22180 is a similar
statute for gold articles.
82
[8] Domain Names
Disputes over domain names have resulted in legislation at both the state
and federal level, as well as administrative remedies. California statutes
attacking “Cyber Piracy” are Bus. & Prof. Code §§ 17525–17528. Generally,
these statutes make it unlawful for a person acting in bad faith to register, use, or
traffic in a domain name which is identical or confusingly similar to the
personal name of another living person or deceased personality. The factors to
consider in determining whether a person has acted in bad faith are spelled out
in Bus. & Prof. Code § 17526.
[9] Wine Labels

Business & Professions Code §§ 25236–25243 provide special
protections for wine from grapes grown in certain counties and regions. For
example, the appellation “California Central Coast Counties Dry Wine” can
only be used for wine produced entirely from grapes from the counties listed in
section 25236. Similarly, sections 25240–25242 restrict the use of terms such
as “Napa” “Napa Valley” and “Sonoma” to wines produced from grapes from
those regions.
Footnotes — § 5:
23 See specifically Bus. & Prof. Code § 14102.
24 Duggan’s Funeral Service, Inc. v. Duggan’s Serra Mortuary, Inc. , 80 Cal. App. 4th
151, 95 Cal. Rptr. 2d 253 (2000).
25 Bus. & Prof. Code § 14215(a).
26 Bus. & Prof. Code § 14215(b).
27 Bus. & Prof. Code § 14220.
28 Bus. & Prof. Code § 14230.
29 See generally K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 108 S. Ct. 1811, 100 L.
Ed. 2d 313 (1988).
30 Civ. Code § 1797.85.
31 Bus. & Prof. Code § 14427.
32 Bus. & Prof. Code §§ 14430, 14436.
33 See 15 U.S.C. § 1127.
§ 6. Trade Secrets
83
such as the composition of an author, goodwill of a business, or a trademark, as
property.

Civ. Code §§ 3426–3426.10. These statutes are the Uniform Trade Secrets
Act as enacted in California. They provide a statutory scheme for protecting
trade secrets from misappropriation. A “trade secret” is defined broadly as any
information that has economic value as a result of not being known to others and
that the owner has made reasonable efforts to keep secret. By case law this
includes customer lists although they are not specified in the statutes.34
“Misappropriation” is the unauthorized acquisition or disclosure of a trade
secret by a person who knew of the secret nature of the information.35 Legal
persons are included within the scope of the statute, so companies are
discouraged from using or soliciting misappropriated trade secrets from new
employees.
Actual or threatened misappropriation of a trade secret may be enjoined
indefinitely if the trade secret is not disclosed, or for as long as needed to
eliminate a commercial advantage deriving from the misappropriation, even
after public disclosure. The court may also impose affirmative duties to protect
a trade secret, such as a court order to return certain materials.36 The court may
award damages to cover loss or unjust enrichment, or award royalties if
damages are not provable, and can double the damages and award attorneys’
fees if malicious misappropriation is found.37 Attorneys’ fees can also be
awarded against the plaintiff if an action is brought in bad faith.38 Safeguards
are provided to preserve the secrecy of trade secrets in judicial proceedings.39
[3] Customer Lists

Courts have held that customer lists can be trade secrets protected by the
Uniform Trade Secrets Act 40 (see § 6[2], above), even though customer lists are
not mentioned by name in that act.41 Other statutes provide specific trade secret
protection for the customer lists of telephone answering services and
employment agencies.
Bus. & Prof. Code § 16606 states that a customer list of a telephone
answering service is a trade secret belonging to the owner. Similarly, Bus. &
Prof. Code § 16607 states that the customer list of an employment agency is a
trade secret belonging to the agency. As trade secrets, these lists cannot be
appropriated by employees who leave, except that former employees of
employment agencies can use customer lists when starting an employment
84
agency more than one year after termination of employment.

Trade secrets are personal property. As with other forms of property, trade
secrets can be stolen and fenced. These actions are crimes under California law.
Penal Code §§ 496, 499c, 502, 538.5, and 653f. Penal Code § 496
generally prohibits receiving stolen property. Therefore, companies and
individuals who induce the employees of competitors to part with
misappropriated trade secrets may be liable for criminal penalties under this
statute.42
Penal Code § 499c provides that misappropriation of any trade secret is
theft. There must be specific intent to deprive the owner of control of the trade
secret or to appropriate the trade secret. Intent to return the article containing the
trade secret is no defense. If a trade secret is obtained through solicitation or
bribery, penalties can include one year in prison and/or a $5,000 fine. Although
trade secret misappropriation is a form of theft, it has been held that Penal Code
§ 1203.044, which mandates at least a 90-day sentence in county jail as a
condition of probation for a defendant convicted of a felony for theft of an
amount exceeding $50,000, does not apply to a theft of trade secrets.43
Unlike the Uniform Trade Secrets Act 44 (see § 6[2], above), Penal Code §
499(c) covers only “scientific and technical information”; business information
such as customer lists is not covered. Further, the trade secret must be present in
an “article,” in other words, some tangible object.
Penal Code § 502. California’s computer crime law that prohibits taking
any information from a computer, will cover any appropriation of trade secrets
stored in a computer (see § 13).
Penal Code § 538.5 prohibits any fraudulent wire, radio, or television
transmission that has the purpose of obtaining trade secrets. The statute provides
for a penalty of imprisonment for up to one year.

Gov. Code §§ 6254.2 and 6254.7. These statutes specify that trade secrets
are generally exempt from the public disclosure required of pesticide and air
pollution information submitted to the government by manufacturers.

Civil Code § 3426.5 provides that in an action for trade secret
misappropriation the court is required to take appropriate measures to preserve
the secrecy of an alleged trade secret, including the use of protective orders, in
85
camera proceedings, sealing court records, and ordering persons involved in the
action not to disclose an alleged trade secret without court approval. By its
terms, § 3426.5 does not apply in other cases, but there are several other
statutes which provide for the protection of trade secrets in criminal and civil
actions generally.
Evidence Code § 1060 establishes a privilege to refuse to disclose a trade
secret. Evid. Code § 1061 establishes a procedure for obtaining a protective
order in a criminal case to prevent disclosure of a trade secret. In civil cases,
there are a variety of statutes which provide for protective orders to prevent
disclosure of trade secrets. Code of Civil Procedure § 2025.420(b)(13)
provides for a protective order to preserve trade secrets in a deposition; §
2030.090(b)(6) is a similar provision applicable to interrogatories; §
2031.060(b)(5) similarly provides that a protective order may be obtained to
prevent disclosure of trade secrets in document production; and § 2033.080(b)
(4) applies to requests for admission. Courts have approved the use in a civil
case of the procedure for the fashioning of an appropriate protective order
specified in Evid. Code § 1061 for use in a criminal case.45
There may be tradeoffs in obtaining a protective order to prevent disclosure
of trade secrets. In Steiny and Company v. California Electric Supply Co., 79
Cal. App. 4th 285, 93 Cal. Rptr. 2d 920 (2000) , as a result of a protective order
to protect trade secrets, the manner in which a party’s damages was calculated
was protected from disclosure. Other than the broad brush description of the
total damages, no discovery was allowed. As a result the court held that no
damages evidence could be presented to the jury. This result is consistent with
the general rule that if the privileged information goes to the heart of the claim,
the holder of the privilege must choose between disclosing the information or
giving up the claim.
Footnotes — § 6:
34 See American Paper & Packaging Products, Inc. v. Kirgan , 183 Cal. App. 3d 1318,
228 Cal. Rptr. 713 (1986).
35 Civ. Code § 3426.1.
36 Civ. Code § 3426.2.
37 Civ. Code § 3426.3.
38 Civ. Code § 3426.4.
39 Civ. Code § 3426.5.
40 Civ. Code §§ 3426–3426.10.
86
41 See American Paper & Packaging Products, Inc. v. Kirgan , 183 Cal. App. 3d 1318,
228 Cal. Rptr. 713 (1986).
42 See, e.g., People v. Dolbeer, 214 Cal. App. 2d 619, 29 Cal. Rptr. 573 (1963).
43 See People v. Farell, 83 Cal. App. 4th 609, 99 Cal. Rptr. 2d 868 (2000).
44 Civ. Code §§ 3426–3426.10.
45 “We conclude that the procedures called for in section 1061 have a utility in a civil
action in protecting the trade secret privilege provided for in section 1060 and should be
followed.” Stadish v. Superior Court, 71 Cal. App. 4th 1130, 1145, 84 Cal. Rptr. 2d 350,
358 (1999).
§ 7. Contracts in Restraint of Trade; Employee

Restrictions
Bus. & Prof. Code §§ 16600–16607. This group of statutes concern
agreements not to compete and prescribe the situations in which such
agreements are and are not allowed. These statutes are relevant to any employer
seeking to protect trade secrets or the goodwill of the business.
Bus. & Prof. Code § 16600 voids any contract that restrains anyone from
engaging in a lawful profession, trade, or business. The effect of this statute is to
invalidate provisions in employment contracts that either prohibit an employee
from subsequently working for a competitor or impose penalties for such
employment. However, this section does not apply to employment agreements
not to disclose trade secrets or not to solicit confidential customers, nor does it
apply to employment agreements not to “raid” a former employer for its
employees.
Bus. & Prof. Code §§ 16601 and 16602 are exceptions to Bus. & Prof.
Code § 16600. Bus. & Prof. Code § 16601 allows covenants not to compete
when an interest in a corporation is being purchased, the interest is substantial,
and the interest represents the goodwill of the corporation. The geographic area
where the business is “carried on” must be specified, or the agreement is void
as a contract in restraint of trade. The area where business is “carried on” has
been interpreted to mean the entire area in which parties conduct all phases of
business, including sales and promotion. Bus. & Prof. Code § 16602 provides
that upon dissolution of a partnership, a partner may agree not to carry on a
similar business in specified cities or counties as long as any other member of
the partnership is still carrying on that business in those areas. Bus. & Prof.
Code § 16602.5, enacted in 1994, provides a similar exception, allowing
certain covenants not to compete in connection with the dissolution of, or sale of
a member’s ownership interest in, a limited liability company.
87
[1] In General
California statutes regulate the sale of franchises and relations between
franchisor and franchisee. These laws impose many requirements and
restrictions. They are applicable to many transactions involving trademark and
copyright licenses because of the broad definition of “franchise.” No trademark
or copyright licensing scheme should be designed without considering whether
and how the franchise laws apply. The seller assisted marketing laws must also
be considered because they have even broader application than the franchise
investment laws.

Corp. Code §§ 31000–31516, known as the Franchise Investment Law,
govern the sale of franchises in California and set forth detailed disclosure
requirements intended to protect prospective franchisees. All franchise offers
must be registered with the Commissioner of Corporations. The information that
is required for an application for registration is set forth in Corp. Code §
31111. Corp. Code § 31115 sets forth various grounds on which the
Commissioner may issue a stop order denying registration, such as failure to
provide adequate financial arrangements or conviction of a felony. If no stop
order is issued, the registration automatically becomes effective 15 days after
filing.
For violation of these statutes, the franchisee may sue for damages and
rescission.46 The Commissioner may enjoin actions not in compliance with
these statutes and may also issue cease and desist orders if franchise registration
is not complete.47 Any violation is subject to a civil penalty of up to $2,500. 48
The district attorney may bring criminal actions, and criminal penalties include
up to one year imprisonment and/or a $10,000 fine.49

California laws concerning the relations between franchisor and franchisee
are restrictive and are of broad reach due to the expansive definition of
“franchise.”
Bus. & Prof. Code §§ 20000–20043 are known as the California Franchise
Relations Act and provide that a franchise cannot be terminated prior to
termination of its term except for good cause, with notice and an opportunity to
cure. The act also lists a number of situations, such as bankruptcy or
abandonment of the franchise, in which the franchisor may issue an immediate
notice of termination without opportunity to cure. A franchisor may not fail to
88
renew a franchise without providing notice of its intention to not renew and
meeting other conditions. The act also covers transfers of a franchise,
repurchase of inventory, and arbitration of disputes between franchisor and
franchisee. Failure to comply with the act requires the franchisor to repurchase
resalable current inventory of the franchisee.
Bus. & Prof. Code §§ 20999–20999.4 contain special rules governing
petroleum franchises.

Civ. Code §§ 80–86 prohibit discrimination on the basis of race, color,
religion, national origin, ancestry, or sex in transactions involving Dealerships.
“Dealership” is defined as an agreement covering the right to sell or distribute
goods or services or to use a trade name, trademark, or other commercial
symbol when a “community of interest” exists, thus franchises would be
included.

The seller assisted marketing plan statutes present another possible pitfall in
drafting license agreements. Agreements coming within these statutes must
satisfy detailed requirements, and these requirements should not be
inadvertently invoked by uninformed drafting.
Civ. Code §§ 1812.200–1812.221, the Seller Assisted Marketing Act,
require that a prospectus be filed with the Secretary of State, and that detailed
disclosures be made to prospective buyers, for any sale or lease of any products
or services for which the buyer is required to make an initial payment of
between $500 and $50,000, when the buyer is going to use the products or
services to start his or her own business and the seller has made any
presentations concerning expected income, markets for products or services, or
buy-back of products made by the buyer. 50 The act provides nine specific
exceptions. The act is intended to protect inexperienced members of the public
who purchase these plans in hopes that they will be able to use them to become
financially self-sufficient. The act permits purchasers to bring civil actions for
violations of the act or breach of contract on the part of the seller. The court may
award actual damages and attorneys’ fees and costs to the successful purchaser
in such an action.51 Criminal penalties of up to one year of imprisonment and/or
a $10,000 fine for each individual transaction are available.52
Footnotes — § 8:
46 Corp. Code §§ 31300, 31301.
47 See Corp. Code §§ 31400, 31402, 31403.
89
48 Corp. Code § 31405.
49 Corp. Code § 31410.
50 Civ. Code § 1812.201.
51 Civ. Code § 1812.218.
52 Civ. Code § 1812.217.
§ 9. Artists’ and Authors’ Rights in Their Works

(Apart From Patent and Copyright)
Civ. Code §§ 986–989. Civ. Code § 986, the Resale Royalties Act,
provides for continuing royalties on resales of fine art so that an artist receives
a 5-percent royalty any time his or her work is resold at a profit for more than
$1,000. This statute applies only if the seller resides in California or the sale
takes place in California. Resales in which art dealers buy directly from the
artist are exempt. Because the statute imposes no penalties on dealers who
conceal resales from the artist, it may be difficult to enforce.
Civ. Code §§ 987–989 known as the “California Art Preservation
Act”(CAPA) provide “moral rights” to artists. It provides for actual and
punitive damages and attorneys’ fees for intentional disfigurement or destruction
of fine art of “recognized quality,” including paintings, sculptures, drawings,
glass art works, and murals on buildings if they can be removed without harm to
the art work. Property rights of owners of fine art are affected in that they are
not free to intentionally mutilate works of art that they own. The disfigurement
need not be malicious, for example, it might consist of trimming a painting to fit
a frame. The rights exist for the life of the artist plus fifty years. CAPA is
partially preempted by the federal Visual Artists Rights Act (VARA) enacted by
Congress in 1990.53 VARA partially preempts state laws, such as CAPA, to the
extent that state laws provide equivalent rights.54 CAPA is not entirely
preempted by VARA, however, because VARA does not preempt state laws, to
the extent that the rights are not equivalent or for example if the statute provides
post mortem rights, as CAPA does. Other aspects of CAPA, such as the special
enforcement rights accorded to certain non-profit organizations under Civ. Code
§ 989, are probably not preempted by VARA.
Civ. Code §§ 1738–1738.9, discussed in § 10, also protect the artist by
controlling the consignment of fine art.
90
California has two statutes governing the commercialization of a person’s
name, voice, signature, photograph, or likeness. Lawyers dealing with
entertainment, advertising, probate, and family law should be familiar with
these statutes.
Former Civ. Code § 990 (now § 3344.1) prevents unauthorized use of a
deceased personality’s name, voice, signature, photograph, or likeness. The
heirs or assignees of the deceased personality have the right to permit such use.
Potential liability includes actual damages (with a floor of $750), profits,
punitive damages, and attorneys’ fees.
Prior to enactment of Civ. Code § 990 in 1984, California courts were
bound by the California Supreme Court’s 1979 decision in Lugosi v. Universal
Pictures,55 which held that the right to exploit name and likeness is a personal
right that cannot be inherited or assigned; it dies with the artist. Prompted by the
Screen Actors Guild and numerous celebrities, the California Legislature
nullified this decision by enacting Civ. Code § 990 (now § 3344.1). The rights
recognized in Civ. Code § 3344.1 are explicitly defined as property rights; are
descendible to the personality’s spouse, children, and grandchildren; and are
freely transferable, either before or after the death of the personality.56
A successor in interest to the rights of the personality must file a claim with
the Secretary of State to recover damages and may not recover any damages
occurring before such filing. The rights expire fifty years after the death of the
personality. A “deceased personality” is defined as a person whose name,
voice, or likeness has commercial value at the time of death, whether or not that
person ever exploited those rights during life. The deceased must be domiciled
in California at the time of death. No consent is required for use of these rights
in a book, magazine, newspaper, musical composition, film, radio or television
program, work of fine art, political campaign, or a news, public affairs, or
sports broadcast.
Civ. Code § 3344 provides that anyone knowingly using another person’s
name, voice, signature, photograph, or likeness for purposes of advertising,
selling, or soliciting, without first obtaining consent of that person, is liable for
damages, with a floor of $750, plus any profits gained from the use. Punitive
damages and attorneys’ fees are also available. The use must be “directly
connected” with the advertising. The person must be represented as an
individual rather than as a member of a “definable group,” such as a crowd at a
sporting event. No consent is required for use in a news, public affairs, or
sports broadcast or political campaign. Unlike Civ. Code § 3344.1, these rights
are not defined as inheritable or transferable property rights.
An open question is whether a well-known person’s potential right of
publicity under Civ. Code §§ 3344 and 3344.1 can be considered community
91
property at dissolution of marriage. Another open question is whether the term
“persons” as used in these sections includes legal entities as well as
individuals.
Footnotes — § 9:
53 17 U.S.C. § 106A.
54 17 U.S.C. § 301(f).
55 Lugosi v. Universal Pictures , 25 Cal. 3d 813, 821–822, 160 Cal. Rptr. 323, 603
P.2d 425 (1979).
56 See, e.g., Comedy III Productions, Inc. v. Gary Saderup, Inc. , 25 Cal. 4th 387, 106
Cal. Rptr. 2d 126 (2001).

Several statutes protect the artists and the public in the sale of fine art. Civ.
Code §§ 1740–1745.5, the Farr Act, protect the art-buying public by requiring
art dealers to supply documented certificates with each sale of an art “multiple,”
and Civ. Code §§ 1738–1738.9 protect the artist by controlling the consignment
of fine art.
The Farr Act requires the sellers of fine prints (produced in multiples) to
disclose the number of signed or unsigned prints in a limited edition. For any
fine art multiple selling for at least $100, art dealers must provide “Certificates
of Assignment” for each sale, documenting the dealer’s compliance with
complex duties of due diligence, full disclosure, and certification.57
Penalties include return of the purchase price plus interest upon tender of the
art work to the dealer. The purchaser may recover three times the value of the
art work as damages if the violation is willful.58 Injunctive relief to prevent a
dealer from violating these statutes is also available, as is a $1,000 civil
penalty for each violation and a $1,000 surcharge for costs of enforcement for
each violation.59 An action must be brought within three years.
Civ. Code §§ 1738–1738.9 control the consignment of fine art. These
statutes provide that any art dealer selling art work consigned by the artist must
hold all proceeds of sale in a trust from which the artist is paid. In an
installment sale, the artist must be paid before the dealer takes his or her
commission. An art dealer is also responsible for the loss or intentional damage
of fine art left in the dealer’s care, regardless of the terms of the consignment
contract.
Footnotes — § 10:
92
57 Civ. Code § 1742.
58 Civ. Code § 1745.
59 Civ. Code § 1745.5.

Civ. Code §§ 1899–1899.11 govern indefinite or long-term loans of art
works to museums and state that title of unclaimed loan property passes to the
museum, rather than escheating to the state, under the Unclaimed Property Law.
The statutes list the requirements for the notice to the owner that are needed
before the property can escheat.

A group of statutes deals with intentional killing of or cruelty to humans or
animals in films (“snuff” films). Civ. Code §§ 3504–3508.2 define as a
nuisance any motion picture in which intentional killing of or cruelty to human
beings or animals occurred during its production. Any exhibition of such a
nuisance will be permanently enjoined after a trial on the merits. Trials under
this section take precedence over all actions except criminal proceedings and
election contests.

Penal Code § 502 is intended to penalize tampering, interference, damage,
and unauthorized access to computer data and systems. The intent element of
Penal Code § 502 requires that access be obtained knowingly and that the
prohibited acts be performed without permission. Seven types of computer
crimes are defined: (1) using a computer to defraud or extort, or to steal money
or property; (2) taking, copying, or using any computer data or supporting
documentation; (3) using any computer service without permission; (4) altering,
damaging, or destroying any data, software, or programs; (5) disrupting or
denying computer services to an authorized user; (6) providing a means of
illegally accessing a computer; and (7) accessing any computer without
permission.
Criminal penalties range from a fine of $250 to a fine of $10,000 and
imprisonment for three years. The statute also creates a civil cause of action
against anyone convicted under Penal Code § 502. Moreover, any computer or
program used in committing an offense under this statute is subject to seizure
and forfeiture. Attorneys’ fees may also be awarded. A violator is subject to the
jurisdiction of each jurisdiction in which computer access occurs.
93
Conduct of any unemancipated minor is imputed to the minor’s parent or
legal guardian. An exemption exists for any employee who obtains access to his
or her employer’s computer when acting within the scope of lawful employment,
or when acting outside of the scope of lawful employment provided no injury
results and the value of computer services is less than $100.
In addition to the penalties of fine and imprisonment set out in Penal Code §
502, two other statutes provide penalties for Penal Code § 502 violations.
Penal Code § 502.01 gives the conditions and procedures for forfeiture of
computer equipment under Penal Code § 502. Penal Code § 2702 provides that
no one imprisoned for violation of Penal Code § 502 will be permitted to work
on or have access to any prison computer system.
Penal Code § 484j provides that publication of access codes for computer
systems on a computer network or computer bulletin board, if done with intent
or knowledge or reason to believe that it will be used to avoid payment of a
lawful charge, is a misdemeanor.

Code Civ. Proc. § 429.30 provides that a complaint for infringement of a
literary, artistic, or intellectual work must include a copy of both the work and
the infringement. If copies of the work and the infringement cannot be included
in the complaint, the complaint must so state, and the court by order may view
them.
[2] Enforcement of Money Judgments by Assignment of Payment From

Code Civ. Proc. § 708.510(a)(5) provides that payments due from patents
or copyrights may be used to satisfy money judgments.

Evid. Code § 1060 states that the owner of a trade secret has a privilege to
refuse to disclose it, but only if no fraud or injustice occurs. Evid. Code § 915
provides that the court may require the person claiming a privilege under Evid.
Code § 1060 to disclose the trade secret to the court in camera, in order to
allow the court to make the determination of whether a privilege exists.
Evid. Code §§ 1061–1063 govern protective orders to bar disclosure of
trade secrets that are filed or admitted into evidence during criminal
proceedings. The court will rule on whether the alleged trade secret qualifies
94
for protection. The court has discretion to rule on the moving papers and
opposing affidavits, or after an in camera hearing. Evid. Code § 1062 provides
that the court, upon motion, may close portions of criminal proceedings to the
public if it is likely that a trade secret will be revealed.
In an action for trade secret misappropriation under the Uniform Trade
Secrets Act, Civil Code § 3426 et seq., the court is required to preserve the
secrecy of an alleged trade secret by reasonable means, which may include a
protective order, holding in-camera hearings, sealing court records, and
ordering any person involved in the litigation not to disclose an alleged trade
secret without prior court approval. Civil Code § 3426.5.
During discovery in any civil action, a court may issue a protective order to
protect trade secrets in depositions Code Civ. Proc. § 2025.420(b)(13);
responses to interrogatories Code Civ. Proc. § 2030.090(b)(6); document
production Code Civ. Proc. § 2031.060(b)(5); and requests for admission
Code Civ. Proc. § 2033.080(b)(4).

Code Civ. Proc. § 2019.210 states that in any action alleging
misappropriation of a trade secret under the Uniform Trade Secrets Act, the
plaintiff must identify the trade secret with “reasonable particularity” before
commencing any discovery relating to the trade secret claim.

Evid. Code § 1500.5 states that evidence contained on computer printouts
will not be rendered inadmissible by the best evidence rule. Printouts are
presumed to be accurate representations of the computer information they
represent, unless evidence is introduced that shows otherwise.

Code Civ. Proc. § 338 states that the three-year statute of limitations for
theft of any historical, interpretive, scientific, or artistic article does not begin to
run until the whereabouts of the article are discovered.

Civ. Code §§ 3425.1–3425.5, the Uniform Single Publication Act, provide
that no more than one cause of action can accrue for any single publication of
libel, slander, invasion of privacy, or any other tort occurring in a newspaper,
book, magazine, motion picture, over radio or television, or before an audience,
regardless of how many copies of the newspaper, etc. are circulated. This
95
would also apply to torts arising under the “right of publicity” statutes, Civ.
Code §§ 990 and 3344 (see § 9[2]).

Various statutes deal with contracts for artistic services.
Code Civ. Proc. § 526 permits an injunction for breach of contract in the
case of personal services of a special, unique, unusual, extraordinary, or
intellectual character when the performer receives minimum annual
compensation as specified in the statute. For contracts made on or before
December 31, 1993, the minimum compensation is $6,000 per year. For later
contracts the requisite minimum annual compensation increases according to the
number of years, e.g., $9,000 for the first year, $12,000 for the second year, etc.
The following statutes are of special interest to entertainment lawyers and
others dealing with artists or other performers who contract to provide special
services in the nature of performances.
Lab. Code § 2855 covers enforcement of personal service contracts. Any
valid contract for services of a special, unique, unusual, extraordinary, or
intellectual character can be enforced for a period of up to seven years.
Civ. Code § 3390 states that neither an obligation to render personal
services nor an obligation to employ another in personal service is specifically
enforceable. Civ. Code § 3423 creates an exception to Civ. Code § 3390 and
permits a prohibitory injunction to prevent the breach of a contract for rendition
of personal services of a special, unique, unusual, extraordinary, or intellectual
character when the performer earns specified minimum annual compensation.
The requisite minimum compensation for contracts made on or before December
31, 1993 is $6,000 per year. For later contracts the requisite minimum annual
compensation increases according to the number of years, e.g., $9,000 for the
first year, $12,000 for the second year, etc. The statute contains additional
requirements regarding the compensation which must actually have been paid
under the contract. Also, it has been held that this section only applies to
performers who have achieved distinction in their field. (See Annotations to
Civ. Code § 3423.)

Civ. Code § 1739.7, enacted in 1998, requires dealers who sell collectible
sports memorabilia to provide a certificate of authenticity to accompany any
item which is purportedly signed by a sports personality. There are detailed
requirements for such dealers specified in the statute, including inter alia, a
requirement to have a valid resale certificate from the State Board of
96
Equalization and to provide specified notices in television advertising and trade
shows.
§ 15. Tax Treatment of Income From Intellectual

Property
Various statutes deal with special tax treatment of income from intellectual
property.
Rev. & Tax. Code §§ 217 , 986, 988, 6010.4, 6010.6, 6362, 6362.5, 6365,
6366.3, 24357.9, 24675, and 25127 cover tax exemptions that are available for
donations of art work to museums or public art galleries, for motion pictures,
newspaper, periodicals, photographs, tapes or records, and original works of
art purchased by the government or nonprofit organizations. Rev. & Tax. Code
§§ 986 and 988 state that the full value of a work of art or a motion picture for
tax purposes is the cost of materials. Rev. & Tax. Code §§ 24675 and 25127
deal with the manner in which patent infringement awards and patent and
copyright royalties are to be taxed.
Rev. & Tax. Code § 1605.4 states that an applicant may request that an
equalization hearing be closed if evidence to be presented relates to trade
secrets.
Footnotes:
1 An example of conflict between state and federal law is illustrated in Superbrace Inc.
v. Tidwell, 124 Cal. App. 4th 388, 21 Cal. Rptr. 3d 404 (2004) , where the California court of
appeal held that state law, not conflicting federal law, controls the question whether a patent
license that is silent on the question of assignability can be assigned by the licensee without
the licensor’s consent.
2 For example, Business & Professions Code section 25241, which placed restrictions
on brand names for wine that used the word “Napa” was first held preempted by federal law by
the court of appeal in Bronco Wine Company v. Espinoza , 104 Cal. App. 4th 598 (2002).
But the California Supreme Court reversed that decision in Bronco Wine Co. v. Jolly, 33 Cal.
4th 943, 17 Cal. Rptr. 3d 180 (2004), and the California statute stands as a state law
regulation of wine labels, which arguably is stricter than federal law.
3 Scholastic Entertainment Inc. v. Fox Entertainment Group Inc., 336 F.3d 982 (9th
Cir. 2003).
97
FINDING AIDS
SYNOPSIS

[2] Ownership
[a] Owners
[d] Patent Fees
[7] Issue of Patent
[8] Plant Patents
[9] Design Patents
[10] Secrecy of Certain Inventions and Filing Applications in Foreign Countries
[11] Government Interests in Patents and Acquisition/Dissemination of Same
[15] Citation of Prior Art to Patent and Trademark Office and Reexamination of Patents
[a] Definitions
[c] National Stage
98
[ii] Applications; Form; Who May File; Relating Back; Confidentiality
[iv] Appeals to Courts and Other Review of Plant Variety Protection Office
Decisions
[iii] Remedies for Infringement of Plant Variety Protection, and Other Actions
[2] Plant Patents
[a] Civil Remedies
[11] Employment Statutes Concerning Persons Who Create Works Made for Hire
[14] Record Piracy
§ 6. Goodwill and Its Representations: Trademarks, Trade Names, Business Names, and
Quality Marks
[1] Goodwill
[2] Trademarks
99
[3] Trade Names
[4] Container Brands, Farm Names, Laundry Supply, Designations and Other Names
§ 7. Trade Secrets
§ 8. Contracts in Restraint of Trade and Employee Restrictions
[a] Definitions
[ii] Disclosure
[d] Enforcement
[i] Civil Liability
[iii] Crimes
[e] Administration
[a] Definitions
[b] Jurisdiction
[c] Termination
[d] Nonrenewal
[e] Transfers
[f] Notices
[h] Arbitration
100
§ 10. Inventors’, Artists’, and Authors’ Rights in Their Work
§ 13. Statutes Specifically Pertaining to Computers and Computer Software
[1] Computer Crimes
[4] Enforcement of Money Judgments by Assignment of Payment from Intellectual
Property
§ 15. Tax Treatment of Intellectual Property Transfers and Income

California Statutes
Ownership defined. Civ. Code § 654.
Things subject to ownership. Civ. Code § 655.
Personalty. Civ. Code § 663.
[2] Ownership
[a] Owners
101
California Statutes
Seisin or ownership. Civ. Code § 669.
Capacity to own. Civ. Code § 671.
California Statutes
Absolute or qualified. Civ. Code § 678.
Absolute ownership defined. Civ. Code § 679.
Qualified or base ownership defined. Civ. Code § 680.
Sole or several ownership. Civ. Code § 681.
Joint, common, or community ownership. Civ. Code § 682.
Joint interest defined. Civ. Code § 683.
Partnership interest defined. Civ. Code § 684.
Common interest defined. Civ. Code § 685.
Common interest created by mode of acquisition. Civ. Code § 686.
Community property defined. Civ. Code § 687.
Present or future, perpetual or limited interest. Civ. Code § 688.
Present interest defined. Civ. Code § 689.
Future interest defined. Civ. Code § 690.
Perpetual interest. Civ. Code § 691.
Limited interest. Civ. Code § 692.
Warranties of good title and against infringement. Com. Code § 2312.
Acceptance of goods; notification of breach. Com. Code § 2607.
Damages for nonconforming; goods; breach of warranty. Com. Code § 2714.
Incidental and consequential damages. Com. Code § 2715.
Warranties against interference and infringement. Com. Code § 10211.
Warranties—Reasonable construction; modification. Com. Code § 10214.
Acceptance of goods; breach of warranty; lessee obligations. Com. Code §
102
10516.
California Statutes
As to time of enjoyment. Civ. Code § 707.
Precedent and subsequent. Civ. Code § 708.
Illegal conditions. Civ. Code § 709.
Restraining marriage. Civ. Code § 710.
Restraining alienation. Civ. Code § 711.

California Statutes
Definition of “unfair competition” Bus. & Prof. Code § 17200.
Definition of “person.” Bus. & Prof. Code § 17201.
Definitions of “board within the Department of Consumer Affairs” and “local
consumer affairs agency.” Bus. & Prof. Code § 17201.5.
Specific or preventative relief to enforce a penalty, forfeiture or penal law. Bus.
& Prof. Code § 17202.
Injunction against acts of unfair competition; restoration of money or property
acquired by unfair competition. Bus. & Prof. Code § 17203.
Actions for relief; prosecutors; standing. Bus. & Prof. Code § 17204.
Prosecution of actions by City Attorney of San Jose. Bus. & Prof. Code §
17204.5.
Remedies provided by chapter are cumulative. Bus. & Prof. Code § 17205.
Civil penalties for violations; expenses of prosecution. Bus. & Prof. Code §
17206.
Additional civil penalties for acts of unfair competition perpetrated against
senior citizens or disabled persons. Bus. & Prof. Code § 17206.1.
Civil penalties for intentional violation of injunction; expenses of prosecution.
Bus. & Prof. Code § 17207.
103
Limitation on commencement of actions. Bus. & Prof. Code § 17208.
Service of notice. Bus. & Prof. Code § 17209.
Federal Statutes
Unfair practices in import trade. 19 U.S.C. § 1337.
Identification of countries that deny adequate protection, or market access, for
intellectual property. 19 U.S.C. § 2242.
California Statutes
False or misleading statements. Bus. & Prof. Code § 17500.
Proscription of rules, regulations or codes that restrict or prohibit advertising;
exception for lawyers. Bus. & Prof. Code § 17500.1.
Unlawful residential or telephone solicitations. Bus. & Prof. Code § 17500.3.
Unlawful inducements to buy or limitations on quantities for sale. Bus. & Prof.
Code § 17500.5.
Definition of value or worth of advertised thing; restriction on advertising of
former price. Bus. & Prof. Code § 17501.
Exception for broadcasters and publishers acting in good faith. Bus. & Prof.
Code § 17502.
Advertisement of price of minimum multiple unit; definitions. Bus. & Prof. Code
§ 17504.
Prohibited misrepresentations concerning nature of advertiser. Bus. & Prof.
Code § 17505.
Definition of “Board within the Department of Consumer Affairs” and “local
consumer affairs agency.” Bus. & Prof. Code § 17506.5.
Clear identification of prices in multi-product ads. Bus. & Prof. Code § 17507.
Advertisements claiming factual evidence. Bus. & Prof. Code § 17508.
Purchase or lease of product as condition of sale. Bus. & Prof. Code § 17509.
Required statement in advertising for sale of used, defective, or blemished
merchandise or seconds; violation—Misdemeanor. Bus. & Prof. Code §
17531.
104
Sale of foreign goods as “Made in U.S.A.” unlawful. Bus. & Prof. Code §
17533.7.
Offer of gift without disclosing sales presentation unlawful; persons excepted.
Bus. & Prof. Code § 17533.8.
Violation of chapter—Misdemeanor. Bus. & Prof. Code § 17534.
Remedies for violation of chapter are cumulative. Bus. & Prof. Code § 17534.5.
Injunction against violations; restoration of money or property; prosecutors;
standing. Bus. & Prof. Code § 17535.
Civil penalty for violation of injunction; expenses of prosecution. Bus. & Prof.
Code § 17535.5.
Civil penalties for violation of chapter; expenses of prosecution; exclusivity of
remedy. Bus. & Prof. Code § 17536.
Service of notice. Bus. & Prof. Code § 17536.5.
Use of prizes or gifts in advertising—Unlawful practices. Bus. & Prof. Code §
17537.
Required statement for offer of gift to attend sales presentation; unlawful acts;
misrepresentation. Bus. & Prof. Code § 17537.1.
Civil action for violations; treble damages; attorneys’ fees. Bus. & Prof. Code §
17537.4.
Required statement for purchase under open-end credit plan; unlawful
advertising; definitions. Bus. & Prof. Code § 17538.7.
Findings of Legislature concerning disclosure of rules and operations of
contests. Bus. & Prof. Code § 17539.
Prohibited unfair acts in operation of contest. Bus. & Prof. Code § 17539.1.
Required disclosure for contests. Bus. & Prof. Code § 17539.2.
Construction of sections 17539.1 and 17539.2. Bus. & Prof. Code § 17539.3.
Information-access services—Definitions; unlawful acts; exceptions. Bus. &
Prof. Code § 17539.5.
Operation of sweepstakes through “900” number—Registration requirements;
unlawful reference to Department of Justice. Bus. & Prof. Code § 17539.55.
Advertisements for “900” number—Language requirements. Bus. & Prof. Code
§ 17539.6.
105
Federal Statutes
False designation of origin and false descriptions forbidden. 15 U.S.C. § 1125.

United States Constitution

Federal power to issue patents and copyrights. U.S. Const., Art. I, Sec. 8, cl. 8.
Federal Statutes
Bureau in Commerce Department; Patent and Trademark Office. 15 U.S.C. §
1511.
Establishment. 35 U.S.C. § 1.
Seal. 35 U.S.C. § 2.
Officers and employees. 35 U.S.C. § 3.
Restrictions on officers and employees as to interest in patents. 35 U.S.C. § 4.
Duties of Commissioner. 35 U.S.C. § 6.
Board of Patent Appeals and Interferences. 35 U.S.C. § 7.
Library. 35 U.S.C. § 8.
Classification of patents. 35 U.S.C. § 9.
Certified copies of records. 35 U.S.C. § 10.
Publications. 35 U.S.C. § 11.
Exchange of copies of patents with foreign countries. 35 U.S.C. § 12.
Copies of patents for public libraries. 35 U.S.C. § 13.
Annual report to Congress. 35 U.S.C. § 14.
Federal Statutes
106
Day for taking action falling on Saturday, Sunday, or holiday. 35 U.S.C. § 21.
Printing of papers filed. 35 U.S.C. § 22.
Testimony in Patent and Trademark Office cases. 35 U.S.C. § 23.
Subpoenas, witnesses. 35 U.S.C. § 24.
Declaration in lieu of oath. 35 U.S.C. § 25.
Effect of defective execution. 35 U.S.C. § 26.
Federal Statutes
Administrative practice; general provisions. 5 U.S.C. § 500.
Advertising practice; restrictions. 5 U.S.C. § 501.
Regulations for agents and attorneys. 35 U.S.C. § 31.
Suspension or exclusion from practice. 35 U.S.C. § 32.
Unauthorized representation as practitioner. 35 U.S.C. § 33.
[d] Patent Fees
Federal Statutes
Patent fees; patent and trademark search systems. 35 U.S.C. § 41.
Payment of patent fees; return of excess amounts. 35 U.S.C. § 42.
Federal Statutes
Definitions. 35 U.S.C. § 100.
Inventions patentable. 35 U.S.C. § 101.
Conditions for patentability; novelty and loss of right to patent. 35 U.S.C. § 102.
Conditions for patentability; non-obvious subject matter. 35 U.S.C. § 103.
Invention made abroad. 35 U.S.C. § 104.
Inventions in outer space. 35 U.S.C. § 105.
107
Federal Statutes
Application for patent. 35 U.S.C. § 111.
Specification. 35 U.S.C. § 112.
Drawings. 35 U.S.C. § 113.
Models, specimens. 35 U.S.C. § 114.
Oath of applicant. 35 U.S.C. § 115.
Joint inventors. 35 U.S.C. § 116.
Death or incapacity of inventor. 35 U.S.C. § 117.
Filing by other than inventor. 35 U.S.C. § 118.
Benefit of earlier filing date in foreign country; right of priority. 35 U.S.C. §
119.
Benefit of earlier filing date in the United States. 35 U.S.C. § 120.
Divisional applications. 35 U.S.C. § 121.
Confidential status of applications. 35 U.S.C. § 122.
Federal Statutes
Examinations and investigations. 21 U.S.C. § 372.
Examination of application. 35 U.S.C. § 131.
Notice of rejection; reexamination. 35 U.S.C. § 132.
Time for prosecuting application. 35 U.S.C. § 133.
Appeal to the Board of Patent Appeals and Interferences. 35 U.S.C. § 134.
Interferences. 35 U.S.C. § 135.
Federal Statutes
Appeal to Court of Appeals for the Federal Circuit. 35 U.S.C. § 141.
Notice of appeal. 35 U.S.C. § 142.
Proceedings on appeal. 35 U.S.C. § 143.
108
Decision on appeal. 35 U.S.C. § 144.
Civil action to obtain patent. 35 U.S.C. § 145.
Civil action in case of interference. 35 U.S.C. § 146.
[7] Issue of Patent
Federal Statutes
Time of issue of patent. 35 U.S.C. § 151.
Issue of patent to assignee. 35 U.S.C. § 152.
How issued. 35 U.S.C. § 153.
Contents and term of patent. 35 U.S.C. § 154.
Patent term extension. 35 U.S.C. § 155.
Extension of patent term. 35 U.S.C. § 156.
Statutory invention registration. 35 U.S.C. § 157.
[8] Plant Patents
Federal Statutes
Patents for plants. 35 U.S.C. § 161.
Description, claim. 35 U.S.C. § 162.
Grant. 35 U.S.C. § 163.
Assistance of Department of Agriculture. 35 U.S.C. § 164.
[9] Design Patents
Federal Statutes
Patents for designs. 35 U.S.C. § 171.
Right of priority. 35 U.S.C. § 172.
Term of design patent. 35 U.S.C. § 173.
[10] Secrecy of Certain Inventions and Filing Applications in Foreign

Countries
Federal Statutes
109
General standards and limitations. 15 U.S.C. § 1155.
Secrecy of certain inventions and withholding of patent. 35 U.S.C. § 181.
Abandonment of invention for unauthorized disclosure. 35 U.S.C. § 182.
Right to compensation. 35 U.S.C. § 183.
Filing of application in foreign country. 35 U.S.C. § 184.
Patent barred for filing without license. 35 U.S.C. § 185.
Penalty. 35 U.S.C. § 186.
Nonapplicability to certain persons. 35 U.S.C. § 187.
Rules and regulations; delegation of power. 35 U.S.C. § 188.
[11] Government Interests in Patents and Acquisition/Dissemination of

Same
Federal Statutes
Copyrights, patents, designs, etc.; acquisition. 10 U.S.C. § 2386.
Traffic and vehicle safety research, testing, development, and training;
availability to public of information and patents resulting from same. 15
U.S.C. § 1395.
Product safety information and research. 15 U.S.C. § 2054.
Administrative provisions. 15 U.S.C. § 2218.
Copyrights and patents. 20 U.S.C. § 3480.
Protection of patent rights of U.S. citizens. 22 U.S.C. § 526.
Patents. 22 U.S.C. § 2572.
Information, patents, and developments from coal mining illness research to be
available to public. 30 U.S.C. § 937.
Research. 30 U.S.C. § 951.
Miscellaneous provisions. 30 U.S.C. § 1226.
Research and demonstration projects of alternative coal mining technologies. 30
U.S.C. § 1328.
Policy and objective. 35 U.S.C. § 200.
110
Disposition of rights. 35 U.S.C. § 202.
March-in rights. 35 U.S.C. § 203.
Preference for United States industry. 35 U.S.C. § 204.
Confidentiality. 35 U.S.C. § 205.
Uniform clauses and regulations. 35 U.S.C. § 206.
Domestic and foreign protection of federally owned inventions. 35 U.S.C. §
207.
Regulations governing federal licensing. 35 U.S.C. § 208.
Restrictions on licensing of federally owned inventions. 35 U.S.C. § 209.
Precedence of chapter. 35 U.S.C. § 210.
Relationship to antitrust laws. 35 U.S.C. § 211.
Disposition of rights in educational awards. 35 U.S.C. § 212.
Time for taking action in government applications. 35 U.S.C. § 267.
Patent rights. 42 U.S.C. § 1871.
Powers. 42 U.S.C. § 5817.
Research relating to fuels and vehicles. 42 U.S.C. § 7404.
Mandatory licensing. 42 U.S.C. § 7608.
Federal Statutes
Reissue of defective patents. 35 U.S.C. § 251.
Effect of reissue. 35 U.S.C. § 252.
Disclaimer. 35 U.S.C. § 253.
Certificate of correction of Patent and Trademark Office mistake. 35 U.S.C. §
254.
Certificate of correction of applicant’s mistake. 35 U.S.C. § 255.
Misjoinder of inventor. 35 U.S.C. § 256.
111
California Statutes
Invention, literature, and art protected. Civ. Code § 980.
Joint invention or authorship. Civ. Code § 981.
Assignment or transfer—Right of reproduction. Civ. Code § 982.
Dedication by publication. Civ. Code § 983.
Other property subject to depletion. Prob. Code § 16310.
Federal Statutes
Ownership; assignment. 35 U.S.C. § 261.
Joint owners. 35 U.S.C. § 262.
Federal Statutes
Infringement of patent. 35 U.S.C. § 271.
Temporary presence in the United States. 35 U.S.C. § 272.
Federal Statutes
Remedy for infringement of patent. 35 U.S.C. § 281.
Presumption of validity; defenses. 35 U.S.C. § 282.
Injunction. 35 U.S.C. § 283.
Damages. 35 U.S.C. § 284.
Attorney fees. 35 U.S.C. § 285.
Time limitation on damages. 35 U.S.C. § 286.
Limitation on damages and other remedies; marking and notice. 35 U.S.C. § 287.
Action for infringement of a patent containing an invalid claim. 35 U.S.C. § 288.
Additional remedy for infringement of design patent. 35 U.S.C. § 289.
Notice of patent suits. 35 U.S.C. § 290.
112
Interfering patents. 35 U.S.C. § 291.
False marking. 35 U.S.C. § 292.
Nonresident patentee, service and notice. 35 U.S.C. § 293.
Voluntary arbitration. 35 U.S.C. § 294.
Presumption: Product made by patented process. 35 U.S.C. § 295.
Federal Statutes
Patents, copyrights, trade-marks, and unfair competition. 28 U.S.C. § 1338.
Patents and copyrights. 28 U.S.C. § 1400.
Patent cases. 28 U.S.C. § 1498.
Patent infringement action. 28 U.S.C. § 1694.
Copies of Patent Office documents, generally. 28 U.S.C. § 1744.
Printed copies of patent specifications and drawings. 28 U.S.C. § 1745.
Patent infringement action; disclaimer not filed. 28 U.S.C. § 1928.
[15] Citation of Prior Art to Patent and Trademark Office and

Reexamination of Patents
Federal Statutes
Citation of prior art. 35 U.S.C. § 301.
Request for reexamination. 35 U.S.C. § 302.
Determination of issue by Commissioner. 35 U.S.C. § 303.
Reexamination order by Commissioner. 35 U.S.C. § 304.
Conduct of reexamination proceedings. 35 U.S.C. § 305.
Appeal. 35 U.S.C. § 306.
Certificate of patentability, unpatentability, and claim cancellation. 35 U.S.C. §
307.
[a] Definitions
113
Federal Statutes
Federal Statutes
Receiving Office. 35 U.S.C. § 361.
International Searching Authority. 35 U.S.C. § 362.
International application designating the United States: Effect. 35 U.S.C. § 363.
International stage: Procedure. 35 U.S.C. § 364.
Right of priority; benefit of the filing date of a prior application. 35 U.S.C. §
365.
Withdrawn international application. 35 U.S.C. § 366.
Actions of other authorities: Review. 35 U.S.C. § 367.
Secrecy of certain inventions; filing international applications in foreign
countries. 35 U.S.C. § 368.
[c] National Stage
Federal Statutes
National stage: Commencement. 35 U.S.C. § 371.
National stage: Requirements and procedure. 35 U.S.C. § 372.
Improper applicant. 35 U.S.C. § 373.
Publication of international application: Effect. 35 U.S.C. § 374.
Patent issued on international application: Effect. 35 U.S.C. § 375.
Fees. 35 U.S.C. § 376.
Federal Statutes
Executory contracts and unexpired leases. 11 U.S.C. § 365.
114
Federal Statutes
Sale or exchange of patents. 26 U.S.C. § 1235.
Gain from certain sales or exchanges of patents, etc., to foreign corporations. 26
U.S.C. § 1249.
Federal Statutes
New drugs. 21 U.S.C. § 355.
Recommendations for investigations of drugs for rare diseases or conditions. 21
U.S.C. § 360aa.
Designation of drugs for rare diseases or conditions. 21 U.S.C. § 360bb.
Protection for unpatented drugs for rare diseases or conditions. 21 U.S.C. §
360cc.
Open protocols for investigations of drugs for rare diseases or conditions. 21
U.S.C. § 360dd.
Grants and contracts for development of drugs for rare diseases or conditions.
21 U.S.C. § 360ee.
Clinical testing expenses for certain drugs for rare diseases or conditions. 26
U.S.C. § 28.
Orphan Products Board. 42 U.S.C. § 236.
Patents and inventors—Military utilization. 42 U.S.C. § 2181.
Inventions conceived during Commission contracts. 42 U.S.C. § 2182.
Nonmilitary utilization. 42 U.S.C. § 2183.
Injunctions. 42 U.S.C. § 2184.
Prior art. 42 U.S.C. § 2185.
Commission patent licenses. 42 U.S.C. § 2186.
Patent Compensation Board. 42 U.S.C. § 2187.
Monopolistic use of patents. 42 U.S.C. § 2188.
Federally financed research. 42 U.S.C. § 2189.
Saving clause. 42 U.S.C. § 2190.
115
Property rights in inventions. 42 U.S.C. § 2457.
Patent policy. 42 U.S.C. § 5908.
Research, demonstrations, training, and other activities. 42 U.S.C. § 6981(c)(3).
California Statutes
Legislative findings concerning invention development services contracts;
purpose of chapter. Bus. & Prof. Code § 22370.
Definitions used in chapter. Bus. & Prof. Code § 22371.
Requirements for contracts to be in writing; copy to be given to customer;
subsequent contracts. Bus. & Prof. Code § 22372.
Cancellation of contract; notice of cancellation; required statement of right of
cancellation. Bus. & Prof. Code § 22373.
Required notices on cover sheet of contract. Bus. & Prof. Code § 22374.
Interest of developer in title to invention prohibited; exceptions. Bus. & Prof.
Code § 22375.
Third party rights and defenses may not be cut off by contract. Bus. & Prof.
Code § 22376.
Assignee of developer’s rights subject to equities and defenses of customer.
Quarterly statement of services. Bus. & Prof. Code § 22378.
Required contents of contract; type size. Bus. & Prof. Code § 22379.
Disclosure of fee in advertisements. Bus. & Prof. Code § 22380.
Required disclosures to potential customers. Bus. & Prof. Code § 22381.
Chapter not exclusive; other laws applicable. Bus. & Prof. Code § 22382.
Noncomplying contracts void; exception. Bus. & Prof. Code § 22383.
False, fraudulent, or misleading representations inducing reliance: contract
void. Bus. & Prof. Code § 22384.
Waiver by customer of provisions of chapter void. Bus. & Prof. Code § 22385.
Civil action for damages caused to customer. Bus. & Prof. Code § 22386.
Penalty for willful violations; actions to restrain violations; persons who can
116
bring actions; duty to bring same. Bus. & Prof. Code § 22387.
Penalty for failure to disclose. Bus. & Prof. Code § 22388.
Bond filed by invention developers; amount of bond. Bus. & Prof. Code §
22389.
Beneficiary of bond. Bus. & Prof. Code § 22390.
Claim against deposit made in lieu of bond; requirements; payment of claim.
Invention developers to maintain records and correspondence. Bus. & Prof.
Code § 22392.
No reference in advertisements to compliance with act permitted. Bus. & Prof.
Code § 22393.
Severability of invalid provisions. Bus. & Prof. Code § 22394.
Requirement for invention developer to maintain confidentiality of customer
disclosures; exceptions to same; waiver by customer. Bus. & Prof. Code §
22395.

Federal Statutes
Establishment (of Plant Variety Protection Office). 7 U.S.C. § 2321.
Seal. 7 U.S.C. § 2322.
Organization. 7 U.S.C. § 2323.
Restrictions on employees as to interest in plant variety protection. 7 U.S.C. §
2324.
Regulations. 7 U.S.C. § 2326.
Plant Variety Protection Board. 7 U.S.C. § 2327.
Library. 7 U.S.C. § 2328.
Register of protected plant varieties. 7 U.S.C. § 2329.
117
Publications. 7 U.S.C. § 2330.
Copies for public libraries. 7 U.S.C. § 2331.
Federal Statutes
Administrative practice; general provisions. 5 U.S.C. § 500.
Advertising practice; restrictions. 5 U.S.C. § 501.
Day for taking action falling on Saturday, Sunday, or holiday. 7 U.S.C. § 2351.
Form of papers filed. 7 U.S.C. § 2352.
Testimony in Plant Variety Protection Office cases. 7 U.S.C. § 2353.
Subpoenas; witnesses. 7 U.S.C. § 2354.
Effect of defective execution. 7 U.S.C. § 2355.
Regulations for practice before the office. 7 U.S.C. § 2356.
Unauthorized practice. 7 U.S.C. § 2357.
Federal Statutes
Plant variety protection fees; appropriations. 7 U.S.C. § 2371.
Payment of plant variety protection fees; return of excess amounts. 7 U.S.C. §
2372.
Federal Statutes
Definitions and rules of construction. 7 U.S.C. § 2401.
Right to plant variety protection; plant varieties protectable. 7 U.S.C. § 2402.
Reciprocity limits. 7 U.S.C. § 2403.
Public interest in wide usage. 7 U.S.C. § 2404.
[ii] Applications; Form; Who May File; Relating Back; Confidentiality
118
Federal Statutes
Application for recognition of plant variety rights. 7 U.S.C. § 2421.
Content of application. 7 U.S.C. § 2422.
Joint breeders. 7 U.S.C. § 2423.
Death or incapacity of breeder. 7 U.S.C. § 2424.
Benefit of earlier filing date. 7 U.S.C. § 2425.
Confidential status of application. 7 U.S.C. § 2426.
Publication. 7 U.S.C. § 2427.
Federal Statutes
Examination of application. 7 U.S.C. § 2441.
Notice of refusal; reconsideration. 7 U.S.C. § 2442.
Initial appeal. 7 U.S.C. § 2443.
[iv] Appeals to Courts and Other Review of Plant Variety Protection

Office Decisions
Federal Statutes
Appeals. 7 U.S.C. § 2461.
Civil action against Secretary. 7 U.S.C. § 2462.
Federal Statutes
Plant variety protection. 7 U.S.C. § 2481.
How issued. 7 U.S.C. § 2482.
Contents and term of plant variety protection. 7 U.S.C. § 2483.
Certificate of correction of Plant Variety Protection Office mistake. 7 U.S.C. §
2484.
Certificate of correction of applicant’s mistake. 7 U.S.C. § 2485.
Correction of named breeder. 7 U.S.C. § 2486.
119
Federal Statutes
Reexamination after issue. 7 U.S.C. § 2501.
Interfering plant variety protection. 7 U.S.C. § 2502.
Federal Statutes
Ownership and assignment. 7 U.S.C. § 2531.
Ownership during testing. 7 U.S.C. § 2532.
Federal Statutes
Infringement of plant variety protection. 7 U.S.C. § 2541.
Grandfather clause. 7 U.S.C. § 2542.
Right to save seed; crop exemption. 7 U.S.C. § 2543.
Research exemption. 7 U.S.C. § 2544.
Intermediary exemption. 7 U.S.C. § 2545.
[iii] Remedies for Infringement of Plant Variety Protection, and Other

Actions
Federal Statutes
Remedy for infringement of plant variety protection. 7 U.S.C. § 2561.
Presumption of validity; defenses. 7 U.S.C. § 2562.
Injunction. 7 U.S.C. § 2563.
Damages. 7 U.S.C. § 2564.
Attorney fees. 7 U.S.C. § 2565.
Time limitation on damages. 7 U.S.C. § 2566.
Limitation of damages; marking and notice. 7 U.S.C. § 2567.
120
False marking; cease and desist orders. 7 U.S.C. § 2568.
Nonresident proprietors; service and notice. 7 U.S.C. § 2569.
Federal Statutes
Intent. 7 U.S.C. § 2581.
Severability. 7 U.S.C. § 2582.
[2] Plant Patents
Federal Statutes
Patents for plants. 35 U.S.C. § 161.
Description, claim. 35 U.S.C. § 162.
Grant. 35 U.S.C. § 163.
Assistance of Department of Agriculture. 35 U.S.C. § 164.
California Statutes
Container brand definitions. Bus. & Prof. Code § 14425.
Registration of brand by corporation or association. Bus. & Prof. Code § 14426.
Registration of description of brand. Bus & Prof. Code § 14427.
Registration notice to be included in registered brand. Bus. & Prof. Code §
14429.
Acts prohibited with respect to containers bearing brands. Bus. & Prof. Code §
14430.
Presumption of unlawful use from use by person other than registrant. Bus. &
Prof. Code § 14431.
Acquisition of vendor’s rights in container brand. Bus. & Prof. Code § 14432.
Deposit for container not constituting sale. Bus. & Prof. Code § 14433.
Duty of persons to return containers to owner. Bus. & Prof. Code § 14434.
Search warrant to discover containers; punishment of violations; return of
containers. Bus. & Prof. Code § 14435.
121
Penalty for violations of provisions concerning container brands. Bus. & Prof.
Code § 14436.
Brands registered under earlier statutes. Bus. & Prof. Code § 14437.
Civil action by registrant; recovery under same. Bus. & Prof. Code § 14438.
Definition of “farm.” Bus. & Prof. Code § 14460.
Registration of farm name; certificate for same. Bus. & Prof. Code § 14461.
Use of farm name as trademark. Bus. & Prof. Code § 14462.
Registration of farm name equivalent to registration of trademark. Bus. & Prof.
Code § 14463.
Priority of first to register farm name. Bus. & Prof. Code § 14464.
Knowing use or registration of another’s farm name—Misdemeanor. Bus. &


Federal power to issue patents and copyrights. U.S. Const., Art. I, Sec. 8, cl. 8.
Federal Statutes
Subject matter of copyright; in general. 17 U.S.C. § 102.
Subject matter of copyright; compilations and derivative works. 17 U.S.C. §
103.
Subject matter of copyright; national origin. 17 U.S.C. § 104.
Subject matter of copyright; United States Government works. 17 U.S.C. § 105.
Exclusive rights in copyrighted works. 17 U.S.C. § 106.
Rights of certain authors to attribution and integrity. 17 U.S.C. § 106A.
Limitations on exclusive rights: Fair use. 17 U.S.C. § 107.
Limitations on exclusive rights: Reproduction by libraries and archives. 17
122
U.S.C. § 108.
Limitations on exclusive rights: Effect of transfer of particular copy or
phonorecord. 17 U.S.C. § 109.
Limitations on exclusive rights: Exemption of certain performances and
displays. 17 U.S.C. § 110.
Limitations on exclusive rights: Secondary transmissions. 17 U.S.C. § 111.
Limitations on exclusive rights: Ephemeral recordings. 17 U.S.C. § 112.
Scope of exclusive rights in pictorial, graphic, and sculptural works. 17 U.S.C.
§ 113.
Scope of exclusive rights in sound recordings. 17 U.S.C. § 114.
Scope of exclusive rights in nondramatic musical works: Compulsory license
for making and distributing phonorecords. 17 U.S.C. § 115.
Negotiated licenses for public performances by means of coin-operated
phonorecord players. 17 U.S.C. § 116.
Limitations on exclusive rights: Computer programs. 17 U.S.C. § 117.
Scope of exclusive rights: Use of certain works in connection with
noncommercial broadcasting. 17 U.S.C. § 118.
Limitations on exclusive rights: Secondary transmissions of superstations and
network stations for private home viewing. 17 U.S.C. § 119.
Scope of exclusive rights in architectural works. 17 U.S.C. § 120.
California Statutes
When not made public. Civ. Code § 984.
Letters and private writings—Title—Publication. Civ. Code § 985.
Use of funds to secure copyrights in works developed by district or board.
Educ. Code § 32360.
123
Use of employee work time to secure copyrights in works developed by district
or board. Educ. Code § 32361.
Royalties from copyrights secured in name of district. Educ. Code § 35170.
Royalties to school official from instructional material. Educ. Code § 60076.
Authority of community college district to secure copyrights; royalties from
same. Educ. Code § 72207.
Sale, gift, or exchange of published materials prepared by community college
district; license of copyrights in same. Educ. Code § 81459.
Other property subject to depletion. Prob. Code § 16310.
Federal Statutes
Copyrights, patents, designs, etc.; acquisition. 10 U.S.C. § 2386.
Ownership of copyright. 17 U.S.C. § 201.
Ownership of copyright as distinct from ownership of material object. 17 U.S.C.
§ 202.
Termination of transfers and licenses granted by the author. 17 U.S.C. § 203.
Execution of transfers of copyright ownership. 17 U.S.C. § 204.
Recordation of transfers and other documents. 17 U.S.C. § 205.
Copyrights and patents. 20 U.S.C. § 3480.
Federal Statutes
Preemption with respect to other laws. 17 U.S.C. § 301.
Duration of copyright: Works created on or after January 1, 1978. 17 U.S.C. §
302.
Duration of copyright: Works created but not published or copyrighted before
January 1, 1978. 17 U.S.C. § 303.
Duration of copyright: Subsisting copyrights. 17 U.S.C. § 304.
Duration of copyright: Terminal date. 17 U.S.C. § 305.
Federal Statutes
124
Notice of copyright: Restoration of copyright for motion pictures first fixed or
published without copyright notice in North American Free Trade
Agreement country after January 1, 1978, and before March 1, 1989. 17
U.S.C. § 104A.
Notice of copyright: Visually perceptible copies. 17 U.S.C. § 401.
Notice of copyright: Phonorecords of sound recordings. 17 U.S.C. § 402.
Notice of copyright: Publications incorporating United States government
works. 17 U.S.C. § 403.
Notice of copyright: Contributions to collective works. 17 U.S.C. § 404.
Notice of copyright: Omission of notice on certain copies and phonorecords. 17
U.S.C. § 405.
Notice of copyright: Error in name or date on certain copies and phonorecords.
17 U.S.C. § 406.
Deposit of copies or phonorecords for Library of Congress. 17 U.S.C. § 407.
Copyright registration in general. 17 U.S.C. § 408.
Application for copyright registration. 17 U.S.C. § 409.
Registration of claim and issuance of certificate. 17 U.S.C. § 410.
Registration and infringement actions. 17 U.S.C. § 411.
Registration as prerequisite to certain remedies for infringement. 17 U.S.C. §
412.
[a] Civil Remedies
Federal Statutes
See, generally, United States Supreme Court Rules For Copyright Infringement
Remedies, reproduced in this volume following 17 U.S.C. § 501.
Infringement of copyright. 17 U.S.C. § 501.
Remedies for infringement: Injunctions. 17 U.S.C. § 502.
Remedies for infringement: Impounding and disposition of infringing articles. 17
U.S.C. § 503.
Remedies for infringement: Damages and profits. 17 U.S.C. § 504.
125
Remedies for infringement: Costs and attorney’s fees. 17 U.S.C. § 505.
Criminal offenses. 17 U.S.C. § 506.
Limitations on actions. 17 U.S.C. § 507.
Notification of filing and determination of actions. 17 U.S.C. § 508.
Seizure and forfeiture. 17 U.S.C. § 509.
Remedies for alteration of programming by cable systems. 17 U.S.C. § 510.
Liability of States, instrumentalities of States, and State officials for
infringement of copyright. 17 U.S.C. § 511.
Federal Statutes
Federal Statutes
Transportation or receipt of phonograph records bearing forged or counterfeit
labels. 18 U.S.C. § 2318.
Criminal infringement of a copyright. 18 U.S.C. § 2319.
Federal Statutes
Manufacture, importation, and public distribution of certain copies. 17 U.S.C. §
601.
Infringing importation of copies or phonorecords. 17 U.S.C. § 602.
Importation prohibitions: enforcement and disposition of excluded articles. 17
U.S.C. § 603.
Federal Statutes
The Copyright Office: General responsibilities and organization. 17 U.S.C. §
126
701.
Copyright Office regulations. 17 U.S.C. § 702.
Effective date of actions in Copyright Office. 17 U.S.C. § 703.
Retention and disposition of articles deposited in Copyright Office. 17 U.S.C. §
704.
Copyright Office records: Preparation, maintenance, public inspection, and
searching. 17 U.S.C. § 705.
Copies of Copyright Office records. 17 U.S.C. § 706.
Copyright Office forms and publications. 17 U.S.C. § 707.
Copyright Office fees. 17 U.S.C. § 708.
Delay in delivery caused by disruption of postal or other services. 17 U.S.C. §
709.
Reproductions for use of the blind and physically handicapped: Voluntary
licensing forms and procedures. 17 U.S.C. § 710.
Federal Statutes
Copyright arbitration royalty panels: Establishment and purpose. 17 U.S.C. §
801.
Membership of the arbitration panels. 17 U.S.C. § 802.
Institution and conclusion of proceedings. 17 U.S.C. § 803.
Federal Statutes
Subject matter of protection. 17 U.S.C. § 902.
Ownership, transfer, licensing, and recordation. 17 U.S.C. § 903.
Duration of protection. 17 U.S.C. § 904.
Exclusive rights in mask works. 17 U.S.C. § 905.
Limitation on exclusive rights; reverse engineering; first sale. 17 U.S.C. § 906.
Limitation on exclusive rights; innocent infringement. 17 U.S.C. § 907.
127
Registration of claims of protection. 17 U.S.C. § 908.
Mask work notice. 17 U.S.C. § 909.
Enforcement of exclusive rights. 17 U.S.C. § 910.
Civil actions. 17 U.S.C. § 911.
Relation to other laws. 17 U.S.C. § 912.
Transitional provisions. 17 U.S.C. § 913.
International transitional provisions. 17 U.S.C. § 914.
[11] Employment Statutes Concerning Persons Who Create Works Made

for Hire
California Statutes
“Employment contract.” Lab. Code § 2750.
Rebuttable presumption that worker is employee; proof of independent
contractor status. Lab. Code § 2750.5.
“Employment” includes service in artistic or literary capacity. Unemp. Ins.
Code § 601.5.
Definition of “employee.” Unemp. Ins. Code § 621.
“Employee” includes employees of licensed contractors. Unemp. Ins. Code §
621.5.
“Employee” does not include director of corporation or association acting in
that capacity. Unemp. Ins. Code § 622.
“Employer” includes persons contracting for work made for hire. Unemp. Ins.
Code § 686.
California Statutes
Proceeds from sale of felon’s story to be placed in involuntary trust—
Definitions and procedures. Civ. Code § 2225.
Federal Statutes
Personal holding company income. 26 U.S.C. § 543.
128
Federal Statutes
[14] Record Piracy
California Statutes
Sound recordings. Penal Code § 653h.
Transportation or sale of live performance recorded without consent. Penal
Code § 653s.
Recording of article with intent to sell without owner’s consent. Penal Code §
653u.
Court order for forfeiture and destruction of articles. Penal Code § 653v.
Failure to disclose origin of recording or audiovisual work. Penal Code §
653w.
§ 6. Goodwill and Its Representations: Trademarks,

Trade Names, Business Names, and Quality Marks
[1] Goodwill
California Statutes
Definition of “good will.” Bus. & Prof. Code § 14100.
Right to use name of previous owner not part of “good will.” Bus. & Prof. Code
§ 14101.
Good will is property. Bus. & Prof. Code § 14102.
Good will may be transferred with business name. Bus. & Prof. Code § 14103.
[2] Trademarks

Regulation of commerce. U.S. Const., Art. I, Sec. 8, cl. 3.
129
California Statutes
Applicability of definitions. Bus. & Prof. Code § 14000.
Acts of agents. Bus. & Prof. Code § 14002.
Definition of “trade union.” Bus. & Prof. Code § 14003.
Trademarks of unions; related provisions of Labor Code. Bus. & Prof. Code §
14004.
California Statutes
Title of trademark law chapter. Bus. & Prof. Code § 14200.
Construction of trademark law chapter. Bus. & Prof. Code § 14201.
Definition of “mark.” Bus. & Prof. Code § 14203.
Definition of “registrant.” Bus. & Prof. Code § 14205.
Definition of “service mark.” Bus. & Prof. Code § 14206.
Definition of “trademark.” Bus. & Prof. Code § 14207.
Definition of “trade name.” Bus. & Prof. Code § 14208.
Definition of “use” of trademark. Bus. & Prof. Code § 14209.
Common law trademarks not adversely affected by chapter. Bus. & Prof. Code §
14210.
Severability of invalid provisions. Bus. & Prof. Code § 14211.
Pending suits, proceedings, or appeals not affected by chapter. Bus. & Prof.
Code § 14212.
Marks that may not be registered. Bus. & Prof. Code § 14220.
Application for registration; required information. Bus. & Prof. Code § 14230.
Application to be signed and verified. Bus. & Prof. Code § 14231.
Specimen or facsimile of mark. Bus. & Prof. Code § 14232.
Application filing fee. Bus. & Prof. Code § 14233.
130
Translation of mark not in English language. Bus. & Prof. Code § 14234.
Certificate of registration; issuance and contents. Bus. & Prof. Code § 14240.
Admissibility of registration as proof of registration and prima facie evidence
of ownership of mark. Bus. & Prof. Code § 14241.
Registration as constructive notice of claim of ownership of mark. Bus. & Prof.
Code § 14242.
Term of registration; renewal; renewal fee. Bus. & Prof. Code § 14250.
Term of registration in force on effective date of chapter. Bus. & Prof. Code §
14252.
Statement of continued use in state for renewal application. Bus. & Prof. Code §
14253.
Notice concerning expiration of registrations under previous law. Bus. & Prof.
Code § 14254.
Assignment of mark and registration; requirement of writing; recordation of
assignment. Bus. & Prof. Code § 14260.
Record of registered marks. Bus. & Prof. Code § 14270.
Cancellation of unrenewed registrations; voluntary cancellation. Bus. & Prof.
Code § 14280.
Cancellation of registrations based on court finding. Bus. & Prof. Code § 14281.
Cancellation ordered by court. Bus. & Prof. Code § 14282.
Classes of goods and services; single application limited to one class. Bus. &
Articles and materials classified as “goods.” Bus. & Prof. Code § 14291.
Services classified. Bus. & Prof. Code § 14292.
Fraudulently obtained registration; liability to party injured by same. Bus. &
Fee or filing claim to trademark. Gov. Code § 12192.
Federal Statutes
Registration of trademarks on Principal Register; requirements of application
for same; intent-to-use applications; designation of United States resident by
foreign applicant. 15 U.S.C. § 1051.
Marks registrable on the Principal Register. 15 U.S.C. § 1052.
131
Service marks registrable. 15 U.S.C. § 1053.
Collective and certification marks registrable. 15 U.S.C. § 1054.
Use by related companies. 15 U.S.C. § 1055.
Disclaimers. 15 U.S.C. § 1056.
Certificates. 15 U.S.C. § 1057.
Duration. 15 U.S.C. § 1058.
Renewal. 15 U.S.C. § 1059.
Assignment. 15 U.S.C. § 1060.
Acknowledgments and verifications. 15 U.S.C. § 1061.
Publication. 15 U.S.C. § 1062.
Opposition. 15 U.S.C. § 1063.
Cancellation. 15 U.S.C. § 1064.
Requirements for right to use of mark to become incontestable. 15 U.S.C. §
1065.
Interference. 15 U.S.C. § 1066.
Trademark Trial and Appeal Board; interference, opposition, cancellation, and
concurrent use proceedings. 15 U.S.C. § 1067.
Decision in such proceedings. 15 U.S.C. § 1068.
Laches, estoppel and acquiescence in inter partes proceedings. 15 U.S.C. §
1069.
Appeal from final decision of examiner. 15 U.S.C. § 1070.
Appeals to Federal Circuit from decisions of Commissioner or Trademark Trial
and Appeal Board. 15 U.S.C. § 1071.
Registration is notice. 15 U.S.C. § 1072.
The supplemental register. 15 U.S.C. § 1091.
Cancellation. 15 U.S.C. § 1092.
Certificates of Registration for marks on supplemental register. 15 U.S.C. §
1093.
General provisions. 15 U.S.C. § 1094.
Registration on supplemental register not preclusive of registration on Principal
132
Register. 15 U.S.C. § 1095.
Registration on supplemental register not to be used to stop importations. 15
U.S.C. § 1096.
International conventions. 15 U.S.C. § 1126.
Construction and definitions. 15 U.S.C. § 1127.
Effective date of Lanham Act; repeal of prior acts. Lanham Act, Uncodified. §
46(a).
Registrations existing under prior acts; renewal of same. Lanham Act,
Uncodified. § 46(b).
Applications pending on effective date of Lanham Act. Lanham Act, Uncodified.
§ 47(a).
Appeals pending on effective date of Lanham Act. Lanham Act, Uncodified. §
47(b).
Acts not repealed or affected by Lanham Act. Lanham Act, Uncodified. § 48.
Existing rights not adversely affected by Lanham Act. Lanham Act, Uncodified.
§ 49.
Severability of invalid provision. Lanham Act, Uncodified. § 50.
Terms of certificates based upon applications pending on effective date of 1988
Act. Lanham Act, Uncodified. § 51.
California Statutes
Civil action for infringement. Bus. & Prof. Code § 14320.
Injury to business reputation; trademark dilution—Injunctive relief. Bus. & Prof.
Code § 14330.
Infringement of registered trademark—Injunctive relief; exception for
comparative advertising. Bus. & Prof. Code § 14335.
Counterfeit goods; injunction; damages and profits awards; destruction of goods;
seizure of goods; wrongful seizure. Bus. & Prof. Code § 14340.
Prosecution under penal law not affected. Bus. & Prof. Code § 14341.
No enforcement against same or confusingly similar marks adopted by another
prior to registration. Bus. & Prof. Code § 14342.
133
Federal Statutes
Notice of registration. 15 U.S.C. § 1111.
Classification. 15 U.S.C. § 1112.
Fees and charges. 15 U.S.C. § 1113.
Remedies. 15 U.S.C. § 1114.
Registration on principal register as evidence of validity and exclusive right to
use mark; defenses to incontestable registration. 15 U.S.C. § 1115.
Injunctions to prevent infringement; enforcement of same; seizure of goods in
counterfeiting cases. 15 U.S.C. § 1116.
Monetary recovery for infringement; attorney’s fees; costs; prejudgment interest.
15 U.S.C. § 1117.
Destruction of materials bearing infringing mark. 15 U.S.C. § 1118.
Cancellation or restoration of registrations by court. 15 U.S.C. § 1119.
Liability for procurement of registration by false or fraudulent statement. 15
U.S.C. § 1120.
Original and appellate jurisdiction of federal courts for actions arising under
Lanham Act. 15 U.S.C. § 1121.
Patent and Trademark Office rules and regulations for proceedings under
Lanham Act. 15 U.S.C. § 1123.
Importation forbidden of goods bearing infringing marks or names. 15 U.S.C. §
1124.
False designation of origin and false descriptions forbidden. 15 U.S.C. § 1125.
Merchandise bearing American trademark. 19 U.S.C. § 1526.
California Statutes
Elements of actionable fraud. Civ. Code § 1710.
Sale of property with manufacturer’s nameplate, serial number, etc., removed,
defaced, covered, altered, or destroyed. Civ. Code § 1710.1.
Forgery of union label or trademark. Lab. Code § 1015.
Unauthorized use of union label or trademark. Lab. Code § 1016.
134
Manufacture or sale of counterfeit mark. Penal Code § 350.
Misrepresenting name of maker of goods sold. Penal Code § 351a.
Transfer or possession of articles from which serial number altered. Penal Code
§ 537e.
Federal Statutes
Counterfeiting Indian Arts and Crafts Board trademark. 18 U.S.C. § 1158.
Misrepresentation in sale of products. 18 U.S.C. § 1159.
Transportation of stolen goods, securities, monies, or articles used in
counterfeiting. 18 U.S.C. § 2314.
Trafficking in counterfeit goods or services. 18 U.S.C. § 2320.
Indian Arts and Crafts Board; per diem payments. 21 U.S.C. § 305.
California Statutes
Definitions. Civ. Code § 1797.8.
Disclosures by retail seller. Civ. Code § 1797.81.
Disclosures in advertising. Civ. Code § 1797.82.
Disclosures—Language. Civ. Code § 1797.83.
Effect on other laws. Civ. Code § 1797.84.
Violation; refund or credit. Civ. Code § 1797.85.
Violation of chapter—Unfair competition. Civ. Code § 1797.86.
Federal Statutes
Transfers of franchises, trademarks, and tradenames. 26 U.S.C. § 1253.
[3] Trade Names
California Statutes
Transfer of trade name with good will of business. Bus. & Prof. Code § 14401.
135
Transfer of trade name with good will of business. Bus. & Prof. Code § 14401.
Injunction against use of infringing trade name. Bus. & Prof. Code § 14402.
Fraudulent use of container or label of another. Bus. & Prof. Code § 14403.
Defacement or obliteration of trade name of another. Bus. & Prof. Code §
14404.
Trafficking in or refilling container bearing trade name of another. Bus. & Prof.
Code § 14405.
Fictitious business name statement; rebuttable presumption of exclusive right to
use name from filing of same; rebuttable presumption defined. Bus. & Prof.
Code § 14411.
Duration of rebuttable presumption concerning right to use business name. Bus.
& Prof. Code § 14412.
Date of filing of fictitious business name statements under previous laws. Bus.
& Prof. Code § 14413.
Filing of fictitious business name statements not required or prohibited. Bus. &
Articles of incorporation; rebuttable presumption of exclusive right to use name
from filing of same; rebuttable presumption defined. Bus. & Prof. Code §
14415.
Conflict between corporation and fictitious name registrant; determination of
priority. Bus. & Prof. Code § 14416.
Articles of incorporation; filing of same does not authorize use of name in
violation of laws. Bus. & Prof. Code § 14417.
Fictitious business name statement; filing of same does not authorize use of
name in violation of laws. Bus. & Prof. Code § 14418.
[4] Container Brands, Farm Names, Laundry Supply, Designations and

Other Names
California Statutes
Container brand definitions. Bus. & Prof. Code § 14425.
Registration of brand by corporation or association. Bus. & Prof. Code § 14426.
Registration of description of brand. Bus. & Prof. Code § 14427.
Registration notice to be included in registered brand. Bus. & Prof. Code §
14429.
136
Acts prohibited with respect to containers bearing brands. Bus. & Prof. Code §
14430.
Presumption of unlawful use from use by person other than registrant. Bus. &
Acquisition of vendor’s rights in container brand. Bus. & Prof. Code § 14432.
Deposit for container not constituting sale. Bus. & Prof. Code § 14433.
Duty of persons to return containers to owner. Bus. & Prof. Code § 14434.
Search warrant to discover containers; punishment of violations; return of
containers. Bus. & Prof. Code § 14435.
Penalty for violations of provisions concerning container brands. Bus. & Prof.
Code § 14436.
Brands registered under earlier statutes. Bus. & Prof. Code § 14437.
Civil action by registrant; recovery under same. Bus. & Prof. Code § 14438.
Definition of “farm.” Bus. & Prof. Code § 14460.
Registration of farm name; certificate for same. Bus. & Prof. Code § 14461.
Use of farm name as trademark. Bus. & Prof. Code § 14462.
Registration of farm name equivalent to registration of trademark. Bus. & Prof.
Code § 14463.
Priority of first to register farm name. Bus. & Prof. Code § 14464.
Knowing use or registration of another’s farm name—Misdemeanor. Bus. &
Definitions of a “registrant” and “supplies.” Bus. & Prof. Code § 14480.
Registration of clean laundry supply name. Bus. & Prof. Code § 14481.
Procedure for registration of clean laundry supply name. Bus. & Prof. Code §
14482.
Fee for registration. Bus. & Prof. Code § 14483.
Prohibited acts concerning clean laundry supply name. Bus. & Prof. Code §
14484.
Acceptance of deposit does not constitute sale. Bus. & Prof. Code § 14485.
Presumption of unlawful use of or traffic in marked supplies. Bus. & Prof. Code
§ 14486.
137
Acquisition of rights of vendor of supplies. Bus. & Prof. Code § 14487.
Duty to return supplies. Bus. & Prof. Code § 14488.
Search warrant to discover and obtain supplies. Bus. & Prof. Code § 14489.
Punishment for violation; forfeiture of property taken under warrant. Bus. &
Violation of article—Misdemeanor or felony. Bus. & Prof. Code § 14491.
Definitions of “organization” and “name and ownership.” Bus. & Prof. Code §
14492.
Registration of name of organization. Bus. & Prof. Code § 14492.5.
Restraint of unauthorized use of organization name. Bus. & Prof. Code § 14493.
Proof of damages not needed for injunction; recovery of actual damages. Bus. &
Presumption of unlawful use. Bus. & Prof. Code § 14495.
California Statutes
Definition of “fictitious business name.” Bus. & Prof. Code § 17900.
Definition of “general partner.” Bus. & Prof. Code § 17901.
Definition of “registrant.” Bus. & Prof. Code § 17903.
Persons required to file fictitious business name statement; time limits. Bus. &
Prohibited fictitious business names. Bus. & Prof. Code § 17910.5.
Nonprofit corporation and organizations not subject to chapter. Bus. & Prof.
Code § 17911.
Real estate investment trusts not subject to chapter. Bus. & Prof. Code § 17912.
Form of fictitious business name statement. Bus. & Prof. Code § 17913.
Persons who may sign statement. Bus. & Prof. Code § 17914.
Location of filing of statement. Bus. & Prof. Code § 17915.
Method of filing statement. Bus. & Prof. Code § 17916.
138
Publication of statement; affidavit of publication. Bus. & Prof. Code § 17917.
No actions to be brought on contract until statement filed and published. Bus. &
Execution, filing, and publication of statement by trustee, executor, or assignee;
form of statement. Bus. & Prof. Code § 17919.
Expiration of statement. Bus. & Prof. Code § 17920.
Notice of date of expiration. Bus. & Prof. Code § 17921.
Statement of abandonment of use of fictitious business name; requirements. Bus.
& Prof. Code § 17922.
Statement of withdrawal from partnership. Bus. & Prof. Code § 17923.
Forms for statements to be furnished without charge; required notices. Bus. &
Indices concerning fictitious business names maintained by county clerk. Bus. &
Definition of “statement”; fee for certified copy; presumptions created by
certified copy. Bus. & Prof. Code § 17926.
Marking of statements with file number and date of filing. Bus. & Prof. Code §
17927.
Summaries or compilations of filings; county clerk to provide same; fee. Bus. &
Fees for filing statements. Bus. & Prof. Code § 17929.
Execution, filing, or publishing false statement a misdemeanor; penalty. Bus. &
California Statutes
Prohibited names—Reservation of name. Corp. Code § 201.
Articles of incorporation—Required provisions. Corp. Code § 202.
Registration of corporate name—Renewal. Corp. Code § 2101.
Issuance of certificate—Corporate names. Corp. Code § 2106.
When certificate of insurance commissioner is required. Corp. Code § 2106.5.
Amended statement and designation. Corp. Code § 2107.
139
Prohibited names—Reservation of names. Corp. Code § 5122.
Use of “cooperative” in name. Corp. Code § 12311.
Name of professional corporation. Corp. Code § 13409.
Partnership name. Corp. Code § 15505.
Limited partnership name. Corp. Code § 15612.
California Statutes
Construction of precious metal marking chapter. Bus. & Prof. Code § 22100.
Definition of “article.” Bus. & Prof. Code § 22101.
Definition of “mark.” Bus. & Prof. Code § 22102.
Definition of “apply.” Bus. & Prof. Code § 22103.
Platinum group metals subject to article. Bus. & Prof. Code § 22120.
Definition of “quality mark.” Bus. & Prof. Code § 22121.
Application of quality marks to articles; legibility of marks. Bus. & Prof. Code
§ 22122.
Quality mark does not apply to mechanisms, works or movements. Bus. & Prof.
Code § 22123.
Quality mark does not apply to springs, winding bars, etc. Bus. & Prof. Code §
22124.
Quality mark does not apply to pin tongues, joints, catches, etc. Bus. & Prof.
Code § 22125.
Trademark required to be applied to article with quality mark; marking with
identification numerals. Bus. & Prof. Code § 22126.
Parts or percentages defined by weight. Bus. & Prof. Code § 22127.
Standards for application of quality mark to article. Bus. & Prof. Code § 22128.
Abbreviations of platinum metal names. Bus. & Prof. Code § 22129.
140
Assay certificate as prima facie proof concerning assay. Bus. & Prof. Code §
22130.
Prima facie proof of time of manufacture of article after effective date of law.
Penalty for violations; defense of exportation. Bus. & Prof. Code § 22132.
Application of article to gold and its alloys. Bus. & Prof. Code § 22175.
Definition of “quality mark.” Bus. & Prof. Code § 22176.
Quality marks must comply with provisions of article. Bus. & Prof. Code §
22177.
Quality mark to indicate gold content. Bus. & Prof. Code § 22178.
Permitted tolerance for indicated fineness. Bus. & Prof. Code § 22179.
Requirement to apply trademark with quality mark. Bus. & Prof. Code § 22180.
Penalty for nonconforming marks. Bus. & Prof. Code § 22181.
§ 7. Trade Secrets
California Statutes
How cited. Civ. Code § 3426.
Misappropriation—Enjoined. Civ. Code § 3426.2.
Misappropriation—Recovery of damages for loss. Civ. Code § 3426.3.
Misappropriation—Attorney’s fees for claim made in bad faith. Civ. Code §
3426.4.
Court to preserve secrecy in an action. Civ. Code § 3426.5.
Time limit for bringing action. Civ. Code § 3426.6.
Applicable existing statutes not superseded. Civ. Code § 3426.7.
General purpose. Civ. Code § 3426.8.
Provisions of title severable. Civ. Code § 3426.9.
Effective date of title. Civ. Code § 3426.10.
141
Disclosures of trade secrets not privileged. Civ. Code § 3426.11.
California Statutes
Customer list of telephone answering service as trade secret. Bus. & Prof. Code
§ 16606.
California Statutes
Lost property—Effort to locate owner. Penal Code § 485.
Stolen property, buying—Presumption. Penal Code § 496.
Trade secrets. Penal Code § 499c.
Computer-related crimes. Penal Code § 502.
Fraudulent use of wire, radio, or television transmissions. Penal Code § 538.5.
Solicitation to commit felony. Penal Code § 653f.
California Statutes
Trade secret. Evid. Code § 1060.
Definitions; protective orders. Evid. Code § 1061.
Closed criminal proceedings. Evid. Code § 1062.
Requests to seal articles. Evid. Code § 1063.
Public disclosure of pesticide safety and efficacy information; trade secret
exception. Gov. Code § 6254.2.
Public disclosure of air pollution information, notices and orders to building
owners; trade secret exception. Gov. Code § 6254.7.
Computer software developed by state or local agency; sale, lease, or license of
same; public record status of information stored in computer. Gov. Code §
6254.9.
Federal Statutes
Protection of trade secrets and other information. 7 U.S.C. § 136h.
142
§ 8. Contracts in Restraint of Trade and Employee
Restrictions
California Statutes
Restraints of trade in contracts void. Bus. & Prof. Code § 16600.
Agreement not to compete in connection with sale of business not void. Bus. &
Agreement not to compete in connection with dissolution of partnership not
void. Bus. & Prof. Code § 16602.
Agreement not to compete in connection with dissolution of, or sale of interest
in, limited liability company not void. Bus & Prof. Code § 16602.5.
Customer list of telephone answering service as trade secret. Bus. & Prof. Code
§ 16606.
Customer list of employment agency as trade secret. Bus. & Prof. Code § 16607.
Contracts not subject to specific performance. Civ. Code § 3390.
Time limitation on enforcement of contracts to render personal service;
exceptions. Lab. Code § 2855.
Limitation on assignment of invention provisions in employment agreement;
unenforceability of such provisions. Lab. Code § 2870.
Employer may not make unenforceable assignment provision a condition of
employment; requirement of disclosure of inventions not forbidden. Lab.
Code § 2871.
Notice to employee in employment agreement; burden of proof on employee.
Lab. Code § 2872.

[a] Definitions
California Statutes
Division title. Corp. Code § 31000.
Legislative intent. Corp. Code § 31001.
143
Definitions generally. Corp. Code § 31002.
“Advertisement” defined. Corp. Code § 31003.
“Business days” defined. Corp. Code § 31003.5.
“Commissioner” defined. Corp. Code § 31004.
“Franchise” defined. Corp. Code § 31005.
Terms defined. Corp. Code § 31005.5.
“Franchisee” defined. Corp. Code § 31006.
“Franchisor” defined. Corp. Code § 31007.
“Area Franchise” defined. Corp. Code § 31008.
“Subfranchise” defined. Corp. Code § 31008.5.
“Subfranchisor” defined. Corp. Code § 31009.
“Franchise” includes “area franchise” and “subfranchise.” Corp. Code § 31010.
“Franchise fee” defined. Corp. Code § 31011.
“Fraud” and “deceit” defined. Corp. Code § 31012.
“In this state” defined. Corp. Code § 31013.
“Order” defined. Corp. Code § 31014.
“Person” defined. Corp. Code § 31015.
“Publish” defined. Corp. Code § 31016.
“Rule” defined. Corp. Code § 31017.
“Sale,” “sell,” “offer,” and “offer to sell” defined. Corp. Code § 31018.
“State” defined. Corp. Code § 31019.

Exemption by Commissioner’s rule. Corp. Code § 31100.
Exemption for large franchisors; requirements. Corp. Code § 31101.
Exempt sale by franchisee or subfranchisee. Corp. Code § 31102.
Bank credit card exemption. Corp. Code § 31103.
144
Offer and sale of franchise exemption. Corp. Code § 31000.
[ii] Disclosure
California Statutes
Exemption for resident of another state, territory, or foreign country. Corp. Code
§ 31105.
Exemption for prospective franchisee with financial and operational experience
in similar business. Corp. Code § 31106.
Exemption for franchisor during pendency of application for renewal or
amendment. Corp. Code § 31107.
Requirement of registration of offers and sales. Corp. Code § 31110.
Filing of application for registration. Corp. Code § 31111.
Execution and verification of application. Corp. Code § 31112.
Escrow and impound of funds. Corp. Code § 31113.
Offering circular. Corp. Code § 31114.
Stop order. Corp. Code § 31115.
Effective date of registration. Corp. Code § 31116.
Hearing on stop order. Corp. Code § 31117.
Removal or modification of stop order. Corp. Code § 31118.
Prior delivery of agreement or offering circular. Corp. Code § 31119.
Period of registration. Corp. Code § 31120.
Renewal of registration. Corp. Code § 31121.
Form of renewal application. Corp. Code § 31122.
Notification of change in application information. Corp. Code § 31123.
Effective date of amendment to application. Corp. Code § 31124.
Registration of material modification of existing franchise. Corp. Code § 31125.
California Statutes
Books and records. Corp. Code § 31150.
145
Opinions, appraisements, and reports. Corp. Code § 31151.
Incorporation by reference. Corp. Code § 31152.
Burden of proof. Corp. Code § 31153.
Misleading application and unlawful representations. Corp. Code § 31154.
Consent for service of process on commissioner. Corp. Code § 31155.
Filing of advertisements. Corp. Code § 31156.
Publication of advertisements. Corp. Code § 31157.
California Statutes
Misrepresentation in application. Corp. Code § 31200.
Misrepresentation in offers and sales. Corp. Code § 31201.
Misrepresentation in exempt offerings by large franchisor. Corp. Code § 31202.
Violation of commissioner’s order. Corp. Code § 31203.
California Statutes
Qualification of person effecting offering. Corp. Code § 31210.
Desist and refrain order. Corp. Code § 31211.
California Statutes
Right of franchisees to join trade association or right of free association. Corp.
Code § 31220.
[d] Enforcement
[i] Civil Liability
California Statutes
Rescission or damages—Failure to register. Corp. Code § 31300.
146
Rescission or damages—Failure to register. Corp. Code § 31300.
Rescission or damages—Misrepresentation. Corp. Code § 31301.
Joint and several liability of principals and agents. Corp. Code § 31302.
Cause of action for violation of franchisee’s right to join trade association or
right of free association. Corp. Code § 31302.5.
Time limitations—Nonregistration actions. Corp. Code § 31303.
Time limitations—Fraud actions. Corp. Code § 311304.
Survival of actions. Corp. Code § 31305.
No liability by implication—Liability under prior law. Corp. Code § 31306.
California Statutes
Civil actions by Commissioner. Corp. Code § 31400.
Investigation and judicial powers. Corp. Code § 31401.
Desist and refrain order—Unregistered offers. Corp. Code § 31402.
Desist and refrain order—Misrepresentations. Corp. Code § 31403.
Reference of violation to district attorney. Corp. Code § 31404.
Civil penalties. Corp. Code § 31405.
[iii] Crimes
California Statutes
Penalty for violation of law or rule. Corp. Code § 31410.
Penalty for fraud or deceit. Corp. Code § 31411.
Punishment of crimes under other statutes. Corp. Code § 31412.
California Statutes
Service of process on commissioner authorized. Corp. Code § 31420.
[e] Administration
147
California Statutes
Fees. Corp. Code § 31500.
Judicial review of Commissioner. Corp. Code § 31501.
Authority of Commissioner to make, amend, and rescind rules. Corp. Code §
31502.
Procedure for adopting rules. Corp. Code. § 31503.
Disclosure of records by Commissioner. Corp. Code § 31504.
Photostatic copies of documents. Corp. Code § 31505.
Destruction and microfilming of documents. Corp. Code § 31506.
California Statutes
Interpretive opinions. Corp. Code § 31510.
No liability for reliance on official opinion. Corp. Code § 31511.
Waiver of law void. Corp. Code § 31512.
Hearing before division of corporations. Corp. Code § 31513.
Invalidity and severability of provisions. Corp. Code § 31514.
Effectiveness of actions under prior law. Corp. Code § 31515.
Applicability of real estate law. Corp. Code § 31516.
Federal Statutes
[a] Definitions
California Statutes
California Franchise Relations Act; short title. Bus. & Prof. Code § 20000.
Definition of “franchise.” Bus. & Prof. Code § 20001.
Definition of “franchisee.” Bus. & Prof. Code § 20002.
148
Definition of “franchisor.” Bus. & Prof. Code § 20003.
Definition of “area franchise.” Bus. & Prof. Code § 20004.
Definition of “subfranchisor.” Bus. & Prof. Code § 20005.
Definition of “franchise” includes “area franchise.” Bus. & Prof. Code § 20006.
Definition of “franchise fee”; exclusions from definition. Bus. & Prof. Code §
20007.
Prima facie evidence concerning whether agreement constitutes a “franchise”;
burden of proving an exemption or exception. Bus & Prof. Code § 20009.
Waiver of compliance with law void. Bus. & Prof. Code § 20010.
[b] Jurisdiction
California Statutes
Franchises to which provisions of chapter are applicable. Bus. & Prof. Code §
20015.
[c] Termination
California Statutes
Termination of franchise prior to expiration of term; good cause required; notice
of noncompliance and cure. Bus. & Prof. Code § 20020.
Events which make reasonable immediate notice of termination without
opportunity to cure. Bus. & Prof. Code § 20021.
[d] Nonrenewal
California Statutes
Requirement of notice of intention not to renew franchise; other conditions to
refuse renewal. Bus. & Prof. Code § 20025.
Extension of current franchise term to satisfy time of notice of nonrenewal. Bus.
& Prof. Code § 20026.
[e] Transfers
California Statutes
149
Right of surviving spouse, heirs, or estate of deceased franchisee to own
franchise. Bus. & Prof. Code § 20027.
[f] Notices
California Statutes
Notices of termination or renewal; method of delivery and contents. Bus. &
California Statutes
Offer to repurchase inventory required when franchisor terminates or fails to
renew in violation of chapter; inventory to be repurchased; price of same.
Offset against repurchase of sums owed to franchisor. Bus. & Prof. Code §
20036.
Right of franchisee to sue. Bus. & Prof. Code § 20037.
[h] Arbitration
California Statutes
Agreement to binding arbitration; requirements. Bus. & Prof. Code § 20040.
Franchisees subject to chapter. Bus. & Prof. Code § 20041.
Motor vehicle franchises. Bus. & Prof. Code § 20042.
Severability of invalid provisions of chapter. Bus. & Prof. Code § 20043.
California Statutes
Petroleum franchise definitions. Bus. & Prof. Code § 20999.
Termination, cancellation, or refusal to renew franchise without good cause not
permitted. Bus. & Prof. Code § 20999.1.
Accompaniment of dealers by counsel at meetings. Bus. & Prof. Code §
20999.2.
Suit for injunctive relief for violation of chapter; damages; costs; limitation of
150
actions. Bus. & Prof. Code § 20999.3.
Notification to Governor of withdrawal from marketing in area. Bus. & Prof.
Code § 20999.4.
California Statutes
Title of law. Civ. Code. § 80.
Definitions. Civ. Code § 81.
Purposes and policies. Civ. Code § 82.
Discrimination prohibited when granting dealership. Civ. Code § 83.
Discrimination prohibited when terminating, canceling, or renewing dealership
agreement. Civ. Code § 84.
Discrimination prohibited when assigning, reselling, transferring, bequeathing,
or to the intestate succession to, dealership. Civ. Code § 85.
Recovery of reasonable attorney’s fees and taxable court costs. Civ. Code § 86.
Federal Statutes
California Statutes
Purpose of title. Civ. Code § 1812.200.
When offer, sale, or lease occurs. Civ. Code. § 1812.202.
Filing of disclosure statements with Attorney General; stop orders. Civ. Code. §
1812.203.
Restriction on representations allowed in sale or lease. Civ. Code § 1812.204.
Written disclosure to be given to potential purchaser on initial contact. Civ.
Code § 1812.205.
Written information to be given to potential purchaser 48 hours before sale or
151
lease. Civ. Code § 1812.206.
Contract to be written—Copies to purchaser. Civ. Code § 1812.207.
Purchaser’s right to cancel. Civ. Code § 1812.208.
Contents of contract—Procedure for cancellation. Civ. Code § 1812.209.
Regulation of payment under contract. Civ. Code § 1812.210.
Rights of assignee. Civ. Code § 1812.211.
Reference to seller’s compliance with this title prohibited. Civ. Code §
1812.212.
Record to sales to be kept by seller. Civ. Code § 1812.213.
Designated agent for service—Procedure for service—Procedure for bond, trust
account, or escrow account. Civ. Code § 1812.214.
Voidability of contract. Civ. Code § 1812.215.
Waiver by purchaser void. Civ. Code § 1812.216.
Criminal penalties. Civ. Code § 1812.217.
Action by purchaser for damages. Civ. Code § 1812.218.
Remedies not exclusive. Civ. Code § 1812.219.
Unconstitutional provisions severable. Civ. Code § 1812.220.
Establishment and payment of claims against deposit—Deposit not subject to
attachment, garnishment, or execution. Civ. Code § 1812.221.
§ 10. Inventors’, Artists’, and Authors’ Rights in Their

Work
California Statutes
California Statutes
152
When not made public. Civ. Code § 984.
Letters and private writings—Title—Publication. Civ. Code § 985.
Residual rights in artist for sale of work. Civ. Code § 986.
The California Art Preservation Act. Civ. Code § 987.
Reservation of ownership rights in reproduced, displayed, or performed work
of art. Civ. Code § 988.
Injunctive relief to preserve or restore integrity of fine art work. Civ. Code §
989.
Deceased personality’s name, voice, signature, photograph, or likeness in
advertising or soliciting. Civ. Code § 990.
Creation of involuntary trust—Wrongful detention. Civ. Code § 2223.
Creation of involuntary trust—Mistake or wrongful act. Civ. Code § 2224.
Federal Statutes
Rights of certain authors to attribution and integrity. 17 U.S.C. § 106A.
California Statutes
Employer owns things acquired by virtue of employment. Lab. Code § 2860.
Limitation on assignment of invention provisions in employment agreement;
unenforceability of such provisions. Lab. Code § 2870.
Employer may not make unenforceable assignment provision a condition of
employment; requirement of disclosure of inventions not forbidden. Lab.
Code § 2871.
Notice to employee in employment agreement; burden of proof on employee.
Lab. Code § 2872.
Division’s definitions to govern construction. Lab. Code § 3350.
“Employee.” Lab. Code § 3351.
153
Employees included. Lab. Code § 3351.5.
Employees excluded. Lab. Code § 3352.
Exclusions for disaster service workers as “employees.” Lab. Code § 3352.94.
“Independent contractor.” Lab. Code § 3353.
“Course of trade, business, profession, or occupation.” Lab. Code § 3355.
“Trade, business, profession, or occupation.” Lab. Code § 3356.
Presumption that one rendering service is employee. Lab. Code § 3357.
California Statutes
Deceased personality’s name, voice, signature, photograph, or likeness in
advertising or soliciting. Civ. Code § 990.
Use of another’s name, voice, signature, photograph, or likeness in advertising
or soliciting without prior consent. Civ. Code § 3344.

California Statutes
Delivery constitutes consignment. Civ. Code § 1738.5.
Results of consignment. Civ. Code § 1738.6.
Payment to consignor. Civ. Code § 1738.7.
Waiver void. Civ. Code § 1738.8.
Effective date. Civ. Code § 1738.9.
Applicability of title. Civ. Code § 1741.
Informational details required to be published in catalogue, prospectus, or
circular. Civ. Code § 1742.
Charitable organizations as exempt from disclosure requirements. Civ. Code §
1742.6.
Information required. Civ. Code § 1744.
154
Information disclosed as part of basis of bargain and as creating express
warranty. Civ. Code § 1744.7.
Liability of consignors and agents. Civ. Code § 1744.9.
Liability of offeror or seller—Amount recoverable—Limitation period for
action. Civ. Code § 1745.
Injunctive relief; who may bring action; civil penalties. Civ. Code § 1745.5.

California Statutes
Exhibition of motion picture showing intentional killing or cruelty to animal or
human is nuisance. Civ. Code § 3505.
Action by district attorney or Attorney General to enjoin nuisance—Independent
evidence required. Civ. Code § 3506.
Trial on merits—Only permanent injunction may be granted—Appeal. Civ.
Code § 3507.
Motion picture admissible—Burden of proof. Civ. Code § 3507.1.
Precedence of actions—Speedy adjudication. Civ. Code § 3507.2.
Violation of injunction punishable by fine. Civ. Code § 3507.3.
Distributor and producer liable to exhibitor for damages—Duty to assist in
defense—Contract of exhibition not enforceable. Civ. Code § 3507.4.
Exempt motion pictures. Civ. Code § 3508.
Willful misstatement of exempt status of picture as misdemeanor. Civ. Code §
3508.1.
Invalid provisions severable. Civ. Code § 3508.2.
§ 13. Statutes Specifically Pertaining to Computers and

Computer Software
[1] Computer Crimes
California Statutes
155
Publishing access card number, code to avoid payment or defraud—
Misdemeanor. Penal Code § 484j.
Computer-related crimes. Penal Code § 502.
Computer-related crimes—No access to department computer system. Penal
Code § 2702.
Federal Statutes
Subject matter of protection. 17 U.S.C. § 902.
Ownership, transfer, licensing, and recordation. 17 U.S.C. § 903.
Duration of protection. 17 U.S.C. § 904.
Exclusive rights in mask works. 17 U.S.C. § 905.
Limitation on exclusive rights; reverse engineering; first sale. 17 U.S.C. § 906.
Limitation on exclusive rights; innocent infringement. 17 U.S.C. § 907.
Registration of claims of protection. 17 U.S.C. § 908.
Mask work notice. 17 U.S.C. § 909.
Enforcement of exclusive rights. 17 U.S.C. § 910.
Civil actions. 17 U.S.C. § 911.
Relation to other laws. 17 U.S.C. § 912.
Transitional provisions. 17 U.S.C. § 913.
International transitional provisions. 17 U.S.C. § 914.

Federal Statutes
Liability of States, instrumentalities of States, and State officials for
infringement of copyright. 17 U.S.C. § 511.
Diversity of citizenship; amount in controversy; costs. 28 U.S.C. § 1332.
156
Patent cases. 28 U.S.C. § 1498.
Patent infringement action. 28 U.S.C. § 1694.
Copies of Patent Office documents, generally. 28 U.S.C. § 1744.
Printed copies of patent specifications and drawings. 28 U.S.C. § 1745.
Patent infringement action; disclaimer not filed. 28 U.S.C. § 1928.
Federal Statutes
Appeals. 7 U.S.C. § 2461.
Interlocutory decisions. 28 U.S.C. § 1292.
Jurisdiction of United States Court of Appeals for the Federal Circuit. 28 U.S.C.
§ 1295.
Appeal to Court of Appeals for the Federal Circuit. 35 U.S.C. § 141.
Notice of appeal. 35 U.S.C. § 142.
Proceedings on appeal. 35 U.S.C. § 143.
Decision on appeal. 35 U.S.C. § 144.
California Statutes
Action for infringement of rights in literary, artistic, or intellectual production.
Code Civ. Proc. § 429.30.
[4] Enforcement of Money Judgments by Assignment of Payment from

California Statutes
Application for order for assignment to judgment creditor of right to payment
due or to become due to judgment debtor. Code Civ. Proc. § 708.510.
157
California Statutes
Methods of discovery. Code Civ. Proc. § 2019.210.
Disclosure of information to determine claim—Official information—Identity of
informer—Trade secrets. Evid. Code § 915.
Trade secret. Evid. Code § 1060.
Definitions; protective orders. Evid. Code § 1061.
Closed criminal proceedings. Evid. Code § 1062.
Requests to seal articles. Evid. Code § 1063.
California Statutes
Three years—Statutory liability; injury to property; fraud or mistake; official
bonds; slander of title; false advertising; pollution and wildlife violations;
challenge to tax levy; civil rights. Code Civ. Proc. § 338.
California Statutes
How cited. Civ. Code § 3425.1.
Interpretation. Civ. Code § 3425.2.
Single cause of action for single publication. Civ. Code § 3425.3.
Judgment bar to second action. Civ. Code § 3425.4.
Not retroactive. Civ. Code § 3425.5.
California Statutes
Grounds for Issuance. Code Civ. Proc. § 526.
California Statutes
Purposes of chapter. Civ. Code § 1899.
158
Definition of terms. Civ. Code § 1899.1.
When notice to lender deemed given. Civ. Code § 1899.2.
Informing lender of provisions of chapter. Civ. Code § 1899.2.
Owner’s responsibility to notify museum. Civ. Code § 1899.4.
Notice of intent to preserve interest in property—From. Civ. Code § 1899.5.
Conditions under which museum may dispose of loaned property. Civ. Code §
1899.6.
Injury to or loss of property on loan—Published notice. Civ. Code § 1899.7.
Limitation on action against museum for loss. Civ. Code § 1899.8.
Museum’s notice to terminate indefinite loan. Civ. Code § 1899.9.
Limitation on action to recover property. Civ. Code § 1899.10.
Unclaimed property law may be applied. Civ. Code § 1899.11.
California Statutes
Right of contribution. Code Civ. Proc. § 875.
Determination of pro rata share of tortfeasor. Code Civ. Proc. § 876.
Effect of release, dismissal, or covenant not to sue. Code Civ. Proc. § 877.
Disclosure of sliding scale recovery agreement. Code Civ. Proc. § 877.5
Determination of good faith settlement. Code Civ. Proc. § 877.6.
Entry of judgment for contribution. Code Civ. Proc. § 878.
Contribution among joint judgment debtors. Code Civ. Proc. § 881.
Right to contribution or repayment. Code Civ. Proc. § 882.
Motion to court for order determining liability for contribution or repayment.
Code Civ. Proc. § 883.
Federal Statutes
Counsel’s liability for excessive costs. 28 U.S.C. § 1927.
159
§ 15. Tax Treatment of Intellectual Property Transfers
and Income
California Statutes
Personal property displayed in art gallery or museum; procedure for filing claim
for exemption. Rev. & Tax. Code § 217.
Full value of work of art neither sold nor exhibited for profit. Rev. & Tax. Code
§ 986.
Full value of motion pictures; exclusion of intangible rights. Rev. & Tax. Code §
988.
“Sale” and “purchase”—Motion pictures production. Rev. & Tax. Code §
6010.4.
“Sale” and “purchase”—Motion pictures. Rev & Tax. Code § 6010.6.
Master tapes or master records. Rev. & Tax. Code § 6362.5.
Art works. Rev. & Tax. Code § 6365.
Museums. Rev. & Tax. Code § 6366.3.
Compensatory damages for patent infringement. Rev. & Tax. Code § 24675.
Patent and copyright royalties. Rev. & Tax. Code § 25127.
Federal Statutes
Research and experimental expenditures. 26 U.S.C. § 174.
Personal holding company income. 26 U.S.C. § 543.
Sale or exchange of patents. 26 U.S.C. § 1235.
Gain from certain sales or exchanges of patents, etc., to foreign corporations. 26
U.S.C. § 1249.
160
CALIFORNIA STATUTES
SYNOPSIS
SYNOPSIS
CALIFORNIA UNEMPLOYMENT INSURANCE
CODE
CALIFORNIA BUSINESS AND PROFESSIONS
CODE
CALIFORNIA STATUTES
161
TABLE OF 2013 AMENDMENTS
Section Effect Chapter
Business and Professions Code
17533.6 Amended 695
17914 Amended 319
25200 Amended 686
Corporations Code
31004 Amended 353*
31109.1 Amended 334
31114 Amended 334
31119 Amended 334
31210 Amended 352
DIVISION 6
BUSINESS RIGHTS
GENERAL PROVISIONS
§ 14000. Applicability of Definitions.

Definitions in this division shall not affect the construction of the same terms
in any other division of this code.
Leg.H. 1941 ch. 56.

As used in this division, “person” means any person, association,
organization, partnership, business trust, limited liability company, or
corporation.
Leg.H. 1941 ch. 56, 1994 ch. 1010.
§ 14002. Acts of Agents.

Every act which, according to this division, may be done by or to any
person, may be done by or to the agent of such person for that purpose, unless a
contrary intention clearly appears.
Leg.H. 1941 ch. 56.
162
§ 14003. Definition of “Trade Union.”
As used in this division, “trade union” means any trade union, labor
organization, or labor association, organized and existing in this State, whether
incorporated or not.
Leg.H. 1941 ch. 56.
§ 14004. Trademarks of Unions; Related Provisions of

Labor Code.
The provisions of this code for the registration and use of trade-marks by
trade unions are cumulative to, and are not a limitation upon, the provisions of
the Labor Code relating to the same subject.
Leg.H. 1941 ch. 56.
CHAPTER 1
GOOD WILL
§ 14100. Definition of “Good Will.”

The “good will” of a business is the expectation of continued public
patronage.
Leg.H. 1941 ch. 57.
§ 14101. Right to Use Name of Previous Owner Not Part

of “Good Will.”
The good will of a business does not include a right to use the name of any
person from whom the business was acquired.
Leg.H. 1941 ch. 57.
§ 14102. Good Will Is Property.

The good will of a business is property and is transferable.
Leg.H. 1941 ch. 57.
§ 14103. Good Will May Be Transferred With Business

Name.
163
The person transferring the good will of a business may transfer with it the
right of using the name under which the business is conducted.
Leg.H. 1941 ch. 57.
CHAPTER 2
MODEL STATE TRADEMARK LAW

ARTICLE 1
General Provisions
§ 14200. Citation of Chapter.

This chapter shall be known and may be cited as the Model State Trademark
Law.
Added Stats 2007 ch 411 § 2 (AB 1484).

Added Stats 1967 ch 1556 § 2; Repealed Stats 2007 ch 711 § 1 (AB 1484). The repealed
section related to applicability of definitions.
For the purposes of this chapter, the following terms have the following
meanings:
( a ) “Trademark” means any word, name, symbol, or device, or any
combination thereof, used by a person to identify and distinguish the goods
of that person, including a unique product, from those manufactured or sold
by others, and to indicate the source of the goods, even if that source is
unknown.
(b) “Service mark” means any word, name, symbol, or device, or any
combination thereof, used by a person to identify and distinguish the
services of that person, including a unique service, from the services of
others, and to indicate the source of the services, even if that source is
unknown. Titles, character names used by a person, and other distinctive
features of radio or television programs may be registered as service marks
notwithstanding that they, or the programs, may advertise the goods of the
164
sponsor.
( c ) “Mark” includes any trademark or service mark entitled to
registration under this chapter, whether registered or not.
( d ) “Trade name” means any name used by a person to identify a
business or vocation of that person.
(e) The term “person” and any other word or term used to designate the
applicant or other party entitled to a benefit or privilege or rendered liable
under the provisions of this chapter includes a juristic person as well as a
natural person. The term “juristic person” includes a firm, partnership,
corporation, union, association, or other organization capable of suing and
being sued in a court of law.
(f) “Applicant” means the person filing an application for registration of
a mark under this chapter, and the legal representatives, successors, or
assigns of the person.
(g) “Registrant” means the person to whom the registration of a mark
under this chapter is issued, and the legal representatives, successors, or
assigns of the person.
(h) “Use” means the bona fide use of a mark in the ordinary course of
trade, and not made merely to reserve a right in a mark. For the purposes of
this chapter, a mark shall be deemed to be in use if it is used on either of the
following:
(1) On goods when it is placed in any manner on the goods or other
containers or the displays associated therewith or on the tags or labels
affixed thereto, or if the nature of the goods makes that placement
impracticable, then on documents associated with the goods or their
sale, and the goods are sold or transported in commerce in this state.
( 2 ) On services when it is used or displayed in the sale or
advertising of services and the services are rendered in this state.
(i) “Abandoned” means either of the following has occurred:
(1) A mark’s use has been discontinued with intent not to resume that
use. Intent not to resume the use may be inferred from circumstances.
Nonuse for two consecutive years shall constitute prima facie evidence
of abandonment.
( 2) When any course of conduct of the owner, including acts of
omission as well as commission, causes the mark to lose its significance
as a mark.
165
( j ) “Secretary” means the Secretary of State or the designee of the
Secretary of State charged with the administration of this chapter.
( k) “Dilution” means dilution by blurring or dilution by tarnishment,
regardless of the presence or absence of any of the following:
(1) Competition between the owner of the famous mark and other
parties.
(2) Actual or likely confusion, mistake, or deception.
(3) Actual economic injury.
(l) “Dilution by blurring” means association arising from the similarity
between a mark or a trade name and a famous mark that impairs the
distinctiveness of the famous mark.
( m) “Dilution by tarnishment” means association arising from the
similarity between a mark or a trade name and a famous mark that harms the
reputation of the famous mark.
(n) “Counterfeit” means a spurious trademark, service mark, collective
mark, or certification mark that is identical to, or substantially
indistinguishable from, a registered mark that is used on or in connection
with goods or services or any labels or packaging or components.
( o ) “Comparative commercial advertising” means the use of a
competitor’s trademark in advertising to compare the relative qualities of
the competitive goods.
Added Stats 2007 ch 411 § 2 (AB 1484).

Added Stats 1967 ch 1556 § 2. Repealed Stats 2007 ch 711 § 1 (AB 1484). The repealed
section related to definition of “mark”.

Added Stats 1967 ch 1556 § 2. Amended Stats 1988 ch 393 § 1; Stats 1994 ch 1010 §
20 (SB 2053); Repealed Stats 2007 ch 711 § 1 (AB 1484). The repealed section related to
definition of “Person”.
ARTICLE 2
Application for Registration
166
§ 14205. Criteria for Registering a Mark.
A mark by which the goods or services of any applicant for registration may
be distinguished from the goods or services of others shall not be registered if it
meets any of the following criteria:
(a) It consists of or comprises immoral, deceptive, or scandalous matter.
( b) It consists of or comprises matter that may disparage or falsely
suggest a connection with persons living or dead, institutions, beliefs, or
national symbols, or bring them into contempt or disrepute.
(c) It consists of or comprises the flag or coat of arms or other insignia
of the United States of America, of any state or municipality, or of any
foreign nation, or any simulation thereof.
( d ) It consists of or comprises the name, signature, or a portrait
identifying a particular living individual, except by the individual’s written
consent.
(e) It consists of a mark that is any of the following:
(1) When used on or in connection with the goods or services of the
applicant, is merely descriptive or deceptively misdescriptive of them.
(2) When used on or in connection with the goods or services of the
applicant, is primarily geographically descriptive or deceptively
misdescriptive of them.
(3) Is primarily merely a surname, provided, however, that nothing
in this paragraph shall prevent the registration of a mark used by the
applicant that has become distinctive of the applicant’s goods or
services. The secretary may accept as evidence that the mark has
become distinctive, as used on or in connection with the applicant’s
goods or services, proof of continuous use thereof as a mark by the
applicant in this state for the five years before the date on which the
claim of distinctiveness is made.
( f ) It consists of or comprises a mark that so resembles a mark
registered in this state or a mark or trade name previously used by another
and not abandoned, as to be likely, when used on or in connection with the
goods or services of the applicant, to cause confusion or mistake, or to
deceive. Added Stats 2007 ch 411 § 2 (AB 1484).

section related to definition of “service mark”.
167
§ 14207. Application for Registration of Mark.
(a) Subject to the limitations set forth in this chapter, a person who uses a
mark may file with the secretary, on a form prescribed by the secretary, an
application for registration of that mark setting forth, but not limited to, the
following information:
( 1 ) The name and business address of the person applying for the
registration and, if that person is a corporation or partnership, the state of
incorporation or the state in which the partnership is organized and the
names of the general partners, as specified by the secretary.
(2) The goods or services on or in connection with which the mark is
used, the mode or manner in which the mark is used on or in connection with
the goods or services, and the class in which the goods or services fall.
(3) The date on which the mark was first used anywhere and the date
when it was first used in this state by the applicant or a predecessor in
interest.
(4) A statement that the applicant is the owner of the mark, that the mark
is in use, and that, to the knowledge of the person verifying the application,
no other person has registered in this state or has the right to use the mark,
either in the identical form or in such near resemblance as to be likely, when
applied to the goods or services of the other person, to cause confusion, to
cause mistake, or to deceive.
(b) The secretary may also require a statement as to whether an application
to register the mark, or portions or a composite thereof, has been filed by the
applicant or a predecessor in interest with the United States Patent and
Trademark Office and, if so, the applicant shall provide full particulars with
respect thereto, including the filing date and serial number of each application,
the status thereof, and, if any application was finally refused registration or has
otherwise not resulted in a registration, the reasons for the refusal or result.
(c) The secretary may also require that a drawing of the mark, complying
with requirements specified by the secretary, accompany the application.
(d) The application shall include a declaration of accuracy signed by the
applicant, by a member of the firm or an officer of the corporation or
association making application, or by a general partner of the partnership
making application. If the person signing the declaration willfully states as true
in the declaration a material fact that he or she knows to be false, he or she shall
be subject to a civil penalty of not more than ten thousand dollars ($10,000). An
action for that penalty may be brought by a public prosecutor. The person
signing the declaration shall be informed of this penalty in writing.
168
(e) The application shall be accompanied by three specimens showing the
mark as actually used.
(f) The application shall be accompanied by the application fee payable to
the secretary as set forth in subdivision (a) of Section 12193 of the Government
Code.
(g) If the mark or any part of the mark is in any language other than English,
the application shall be accompanied by a certified translation in English.
Added Stats 2007 ch 711 § 2 (AB 1484). Amended Stats 2008 ch 179 § 20 (SB 1498),
effective January 1, 2009.

Added Stats 1967 ch 1556 § 2; Repealed Stats 2007 ch. 711 § 1 (AB 1484). The
Repealed section related to definition of “trade name”.
§ 14209. Examination of Application for Conformity.

(a) Upon the filing of an application for registration and payment of the
application fee, the secretary may cause the application to be examined for
conformity with this chapter.
( b ) The applicant shall provide any additional pertinent information
requested by the secretary, including a description of a design mark, and may
make, or authorize the secretary to make, amendments to the application as may
be reasonably requested by the secretary or deemed by the applicant to be
advisable in order to respond to any rejection or objection.
(c) The secretary may require the applicant to disclaim an unregisterable
component of an otherwise registerable mark, and an applicant may voluntarily
disclaim a component of a mark sought to be registered. No disclaimer shall
prejudice or affect the applicant’s or registrant’s rights, then existing or
thereafter arising, in the disclaimed matter, or the applicant’s or registrant’s
rights of registration on another application if the disclaimed matter is or has
become distinctive of the applicant’s or registrant’s goods or services.
(d) The secretary may make amendments to the application submitted by the
applicant upon the applicant’s agreement, or may require the submission of a
new application.
(e) If an applicant is found not to be entitled to registration, the secretary
shall so advise the applicant and shall advise the applicant of the reasons. The
applicant shall have a reasonable period of time specified by the secretary in
which to reply or to amend the application, in which event the application shall
be reexamined. This procedure may be repeated until the secretary finally
169
refuses registration of the mark or the applicant fails to reply or amend within
the specified period, whereupon the application shall be deemed to have been
abandoned.
(f) If the secretary finally refuses registration of the mark, the applicant may
seek a writ of mandamus to compel registration. A writ may be granted, but
without costs to the secretary, on proof that all statements in the application are
true and that the mark is otherwise entitled to registration.
( g) In the instance of applications concurrently being processed by the
secretary seeking registration of the same or confusingly similar marks for the
same or related goods or services, the secretary shall grant priority to the
applications in the order of filing. If a prior-filed application is granted a
registration, the other application or applications shall then be rejected. Any
rejected applicant may bring an action for cancellation of the registration upon
grounds of prior or superior rights to the mark, in accordance with the
provisions of Section 14230.
Added Stats 2007 ch 411 § 2 (AB 1484).

Added Stats 1967 ch 1556 § 2; Repealed Stats 2007 ch 711 § 1 (AB 1484). The
Repealed section related to common law rights.

section related to severability of provisions of chapter.

section related to status of pending litigation.
ARTICLE 3
Certificate of Registration

(a) Upon compliance by the applicant with the requirements of this chapter,
the secretary shall cause a certificate of registration to be issued and delivered
to the applicant. The certificate of registration shall be issued under the
signature of the secretary and the seal of the state, and shall show the following
170
information:
(1) The name and business address and, if a corporation, the state of
incorporation, or if a partnership, the state in which the partnership is
organized and the names of the general partners, as specified by the
secretary, of the person claiming ownership of the mark.
(2) The date claimed for the first use of the mark anywhere and the date
claimed for the first use of the mark in this state.
(3) The class of goods or services and a description of the goods or
services on or in connection with which the mark is used.
(4) A reproduction of the mark.
(5) The registration date and the term of the registration of the mark.
( b ) Any certificate of registration issued by the secretary under the
provisions of this chapter or a copy thereof duly certified by the secretary shall
be admissible in evidence as competent and sufficient proof of the registration
of the mark in any action or judicial proceeding in any court of this state.
Added Stats 2007 ch 411 § 2 (AB 1484).
§ 14217. Effective Term of Registration; Renewal.

(a) A registration of mark pursuant to this chapter shall be effective for a
term of five years from the date of registration and, upon application filed
within six months prior to the expiration of the term, in a manner complying with
the requirements of the secretary, the registration may be renewed for a like
term from the end of the expiring term. A renewal fee, payable to the secretary,
shall accompany the application for renewal of the registration as set forth in
subdivision (c) of Section 12193 of the Government Code.
(b) A registration may be renewed for successive periods of five years in
like manner.
(c) Any registration in force on January 1, 2008, shall continue in full force
and effect for the unexpired term thereof, and may be renewed by filing an
application for renewal with the secretary that complies with the requirements
of the secretary and payment of the renewal fee within the six months prior to
the expiration of the registration.
(d) All applications for renewal under this chapter, whether of registrations
made under this chapter or of registrations effected under any prior act, shall
include a verified statement that the mark has been and is still in use and shall
include a specimen showing actual use of the mark on, or in connection with, the
goods or services with which the mark is associated.
171
Added Stats 2007 ch 411 § 2 (AB 1484).
ARTICLE 4
Assignments, Changes of Name, and Other

Instruments
§ 14220. Assignment of Mark; Name Change;

Recording Other Instruments.
(a) Any mark and its registration hereunder shall be assignable with the
good will of the business in which the mark is used, or with that part of the good
will of the business connected with the use of and symbolized by the mark.
Assignment shall be by instrument in writing duly executed and may be recorded
with the secretary upon the payment of the recording fee payable to the secretary
as set forth in subdivision (b) of Section 12193 of the Government Code, who,
upon recording of the assignment, shall issue in the name of the assignee a new
certificate for the remainder of the term of the registration or of the last renewal
thereof. An assignment of any registration under this chapter shall be void as
against any subsequent purchaser for valuable consideration without notice,
unless it is recorded with the secretary within three months after the date thereof
or prior to the subsequent purchase.
(b) Any registrant or applicant effecting a change of the name of the person
to whom the mark was issued or for whom an application was filed may, on a
form prescribed by the secretary, record a certificate of change of name of the
registrant or applicant with the secretary upon the payment of the recording fee.
The secretary may issue in the name of the assignee a certificate of registration
of an assigned application or a new certificate or registration for the remainder
of the term of the registration or last renewal thereof.
(c) Other instruments that relate to a mark registered or application pending
pursuant to this chapter, including, but not limited to, licenses, may be recorded
at the discretion of the secretary, provided that the instrument is in writing and is
duly executed.
(d) Acknowledgment shall be prima facie evidence of the execution of an
assignment or other instrument and, when recorded by the secretary, the record
shall be prima facie evidence of the execution of an assignment.
(e) A photocopy of any instrument referred to in subdivision (a), (b), or (c)
shall be accepted for recording if it is certified by any of the parties thereto, or
172
their successors, to be a true and correct copy of the original.
(f) Neither this chapter nor the recordal of any instrument received by the
secretary pursuant to this chapter shall have any effect, including, but not limited
to, any effect relating to attachment, perfection, priority, or enforcement, on any
security interest governed by Division 9 (commencing with Section 9101) of the
Uniform Commercial Code.
Added Stats 2007 ch 411 § 2 (AB 1484).
ARTICLE 5
Records
§ 14225. Records of All Registered Marks and Other

Documents.
The secretary shall keep for public examination a record of all marks
registered or renewed under this chapter, as well as a record of all documents
recorded pursuant to Section 14220.
Added Stats 2007 ch 411 § 2 (AB 1484).
ARTICLE 6
Cancellation
§ 14230. Cancellation From Register.

The secretary shall cancel from the register, in whole or in part, any of the
following:
(a) Any registration concerning which the secretary receives a voluntary
request for cancellation from the registrant or the assignee of record.
( b ) All registrations granted under this chapter and not renewed in
accordance with the provisions of this chapter.
(c) Any registration concerning a mark with regard to which a court of
competent jurisdiction finds any of the following:
(1) The registered mark has been abandoned.
(2) The registrant is not the owner of the mark.
173
(3) The registration was granted improperly.
(4) The registration was obtained fraudulently.
(5) The mark is or has become the generic name for the goods or
services, or a portion thereof, for which it has been registered.
(6) The registered mark is so similar to a mark registered by another
person in the United States Patent and Trademark Office prior to the date
of the filing of the application for registration by the registrant
hereunder, and not abandoned, as to be likely to cause confusion or
mistake, or to deceive. However, should the registrant prove that the
registrant is the owner of a concurrent registration of a mark in the
United States Patent and Trademark Office covering an area including
this state, the registration hereunder shall not be canceled for that area of
the state.
(d) Cancellation of a registration ordered on any ground by a court of
competent jurisdiction.
(e) Any registration or renewal if a check or other remittance accepted
in payment of the filing fee is not paid upon presentation. The secretary shall
give written notice of the applicability of this subdivision to the registrant.
Thereafter, 30 days shall be allowed from the date of the notification letter
for payment by cashier’s check or the equivalent.
(f) Within six months of the date of registration, any registration issued
in error by the secretary that violates the requirements of subdivision (f) of
Section 14205.
Added Stats 2007 ch 411 § 2 (AB 1484).

section related to signature of verification.

Added Stats 1967 ch 1556 § 2. Amended Stats 1988 ch 393 § 2; Repealed Stats 2007 ch
711 § 1 (AB 1484). The repealed section related to copies of mark.

1 (SB 1434); Stats 1995 ch 656 § 1 (SB 888); Stats 1999 ch 1000 § 2 (SB 284); Repealed
Stats 2007 ch 711 § 1 (AB 1484). The repealed section related to fees.
174
section related to translations.
ARTICLE 7
Classification
§ 14235. Classification of Goods and Services.

The classification of goods and services shall conform to the classifications
adopted by the United States Patent and Trademark Office. A single application
for registration of a mark may include any or all goods upon which, or services
with which, the mark is actually being used indicating the appropriate class or
classes of goods or services. When a single application includes goods or
services that fall within multiple classes, the secretary may require payment of a
fee for each class.
Added Stats 2007 ch 411 § 2 (AB 1484).
ARTICLE 8
Fraudulent Registration
§ 14240. Liability for Fraudulent Registration.

Any person who, either for himself or herself or on behalf of another-
person, procures the filing or registration of any mark pursuant to this chapter by
knowingly making any false or fraudulent representation or declaration, either
orally or in writing, or by any other fraudulent means shall be liable to pay all
damages sustained as a consequence of the filing or registration, to be recovered
by or on behalf of the party injured thereby in any court of competent
jurisdiction.
Added Stats 2007 ch 411 § 2 (AB 1484).

section related to admissibility of registration as evidence of mark.
175
section related to registration of mark as constructive notice of ownership.
ARTICLE 9
Violations
§ 14245. Acts Resulting in Civil Action.

(a) A person who does any of the following shall be subject to a civil action
by the owner of the registered mark, and the remedies provided in Section
14250:
( 1 ) Uses, without the consent of the registrant, any reproduction,
counterfeit, copy, or colorable imitation of a mark registered under this
chapter in connection with the sale, distribution, offering for sale, or
advertising of goods or services on or in connection with which the use is
likely to cause confusion or mistake, or to deceive as to the source of origin
of the goods or services.
(2) Reproduces, counterfeits, copies, or colorably imitates the mark and
applies the reproduction, counterfeit, copy, or colorable imitation to labels,
signs, prints, packages, wrappers, receptacles, or advertisements intended
to be used upon or in connection with the sale or other distribution in this
state of goods or services. The registrant shall not be entitled under this
paragraph to recover profits or damages unless the acts have been
committed with knowledge that the mark is intended to be used to cause
confusion or mistake, or to deceive.
( 3 ) Knowingly facilitate, enable, or otherwise assist a person to
manufacture, use, distribute, display, or sell goods or services bearing a
reproduction, counterfeit, copy, or colorable imitation of a mark registered
under this chapter, without the consent of the registrant. An action by a
person is presumed to have been taken knowingly following delivery to that
person by personal delivery, courier, or certified mail return receipt
requested, of a written demand to cease and desist that is accompanied by
all of the following:
( A ) A copy of the certificate of registration and of a claimed
reproduction, counterfeit, copy, or colorable imitation of the registered
mark.
176
(B) A statement, made under penalty of perjury, by the owner of the
registered mark, by an officer of the corporation that owns the registered
mark, or by legal counsel for the owner of the registered mark, that
includes all of the following:
(i) The name or description of the infringer.
(ii) The product or service and mark being or to be infringed.
(iii) The dates of the infringement.
( i v ) Other reasonable information to assist the recipient to
identify the infringer.
( 4 ) The presumption created by paragraph (3) does not affect the
owner’s burden of showing that there was a violation of this chapter.
(5) Paragraph (3) is applicable to a landlord or property owner who
provides, rents, leases, or licenses the use of real property where goods or
services bearing a reproduction, counterfeit, copy, or colorable imitation of
a mark registered pursuant to this chapter are sold, offered for sale, or
advertised, where the landlord or property owner had control of the
property and knew, or had reason to know, of the infringing activity.
(b) Notwithstanding any other provision of this chapter, the remedies given
to the owner of the right infringed pursuant to this section are limited as follows:
( 1 ) If an infringer or violator is engaged solely in the business of
printing the mark or violating matter for others and establishes that he or she
was an innocent infringer or innocent violator, the owner of the right
infringed is entitled only to an injunction against future printing of the mark
by the innocent infringer or innocent violator.
(2) If the infringement complained of is contained in, or is part of, paid
advertising matter in a newspaper, magazine, or other similar periodical, or
in an electronic communication as defined in subsection (12) of Section
2510 of Title 18 of the United States Code, the remedies of the owner of the
right infringed against the publisher or distributor of the newspaper,
magazine, or other similar periodical or electronic communication shall be
confined to an injunction against the presentation of the advertising matter in
future issues of the newspapers, magazines, or other similar periodicals or
in further transmissions of the electronic communication. The limitation of
this subdivision shall apply only to innocent infringers and innocent
violators.
(3) Injunctive relief is not available to the owner of the right infringed
with respect to an issue of a newspaper, magazine, or other similar
periodical or electronic communication containing infringing matter if
177
restraining the dissemination of the infringing matter in a particular issue of
the periodical or in an electronic communication would delay the delivery
of the issue or transmission of the electronic communication after the regular
time for delivery and the delay would be due to the method by which
publication and distribution of the periodical or transmission of the
electronic communication is customarily conducted in accordance with
sound business practice, and not to a method or device adopted for the
evasion of this section or to prevent or delay the issuance of an injunction or
restraining order with respect to the infringing matter.
(c) An innocent infringer or innocent violator is a person whose acts were
committed without knowledge that the mark was intended to be used to cause
confusion, mistake, or to deceive.
Added Stats 2007 ch 711 § 2 (AB 1484). Amended Stats 2008 ch 179 § 21 (SB 1498),
Cases
E.S.S. Entm’t 2000, Inc. v. Rock Star Videos, Inc. , 547 F.3d 1095 (9th Cir. 2008) . The
owners of a strip club in Los Angeles known as the “Play Pen” sued the developers of the
Grand Theft Auto series of video games for federal trademark infringement under § 43(a) of
the Lanham Act, state trademark infringement under Bus. & Prof. Code § 14320 (see now
Bus. & Prof. Code § 14245), statutory unfair competition under Bus. & Prof. Code § 17200,
and common law unfair competition. The video games include a fictional city called Los
Santos which was designed to resemble Los Angeles and contained a virtual strip club called
the “Pig Pen” which was modeled after plaintiff’s club. Rock Star Videos asserted two
defenses, nominative fair use and the First Amendment. The nominative fair use defense
failed because that only applies when the names used are identical. The First Amendment
defense succeeded to bar all four claims. The creator of an artistic work is entitled to the
First Amendment defense unless the interest in avoiding confusion “outweighs the public
interest in free expression” [emphasis in original]. The threshold for artistic expression is a
low one. As long as there is any artistic transformation involved the First Amendment
defense applies.
§ 14247. Injunctions Against Use of Famous Mark by

Others.
(a) Subject to the principles of equity, an owner of a mark that is famous and
distinctive, whether inherently or through acquired distinctiveness, shall be
entitled to an injunction against another person’s commercial use of a mark or
trade name, if such use begins after the mark has become famous and is likely to
cause dilution of the famous mark, and to obtain such other relief as is provided
in this section. For purposes of this subdivision, a mark is famous if it is widely
recognized by the general consuming public of this state, or by a geographic
area of this state, as a designation of source of the goods or services of the
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mark’s owner. In determining whether a mark is famous, a court may consider
factors including, but not limited to, all of the following:
( 1 ) The duration, extent, and geographic reach of advertising and
publicity of the mark in this state, whether advertised or publicized by the
owner or third parties.
(2) The amount, volume, and geographic extent of sales in this state of
goods or services offered under the mark.
(3) The extent of actual recognition of the mark in this state.
(4) Whether the mark is the subject of a state registration in this state, or
a federal registration under the Act of March 3, 1881, or under the Act of
February 20, 1905, or on the principal register under the Trademark Act of
1946 (15 U.S.C. Sec. 1051 et seq.), as amended.
(b) In an action brought under this section, the owner of a famous mark shall
be entitled to injunctive relief throughout the geographic area in which the mark
is found to have become famous prior to commencement of the junior use, but
not beyond the borders of this state. If the person against whom injunctive relief
is sought willfully intended to cause dilution of the famous mark, the owner
shall also be entitled to the remedies set forth in Section 14250, subject to the
discretion of the court and the principles of equity. The following shall not be
actionable under this section:
( 1) Any fair use, including a nominative or descriptive fair use, or
facilitation of such fair use, of a famous mark by another person other than
as a designation of source for the person’s own goods or services, including
use in connection with either of the following:
(A) Advertising or promotion that permits consumers to compare
goods or services.
(B) Identifying and parodying, criticizing, or commenting upon the
famous mark owner or the goods or services of the famous mark owner.
(2) Noncommercial use of the mark.
(3) All forms of news reporting and news commentary.
Added Stats 2007 ch 411 § 2 (AB 1484).
§ 14250. Injunctive Relief From Use of Registered

Mark by Others.
(a) Any owner of a mark registered under this chapter may proceed by suit
to enjoin the manufacture, use, display, or sale of any counterfeits thereof and
179
any court of competent jurisdiction may grant injunctions to restrain the
manufacture, use, display, or sale as may be deemed just and reasonable, and
shall require the defendants to pay to the owner up to three times their profits
from, and up to three times all damages suffered by reason of, the wrongful
manufacture, use, display, or sale. If, in any action brought under this section,
the court determines that any goods in the possession of or services offered by a
defendant bear or consist of a counterfeit mark, the court shall order the
destruction of any goods, labels, packaging or any components bearing the
counterfeit mark and all instrumentalities used in the production of the
counterfeit goods, including, but not limited to, any items, objects, tools,
machines or equipment or, after obliteration of the counterfeit mark, the court
may dispose of those materials by ordering their transfer to the state, a civil
claimant, an eleemosynary institution, or any appropriate private person other
than the person from whom the materials were obtained.
(b) The court, upon motion or ex parte application by a plaintiff in a suit to
enjoin the manufacture, use, display, or sale of counterfeits, may order seizure
of any goods, labels, packaging or any components bearing the counterfeit mark
and all instrumentalities used in the production of the counterfeit goods,
including, but not limited to, any items, objects, tools, machines or equipment
from persons manufacturing, displaying for sale, or selling the goods, upon a
showing of good cause and a probability of success on the merits and upon the
posting of an undertaking pursuant to subdivision (e). If it appears from the ex
parte application that there is good reason for proceeding without notification to
the defendant, the court may, for good cause shown, waive the requirement of
notice for the ex parte proceeding. The order of seizure shall specifically set
forth all of the following:
(1) The date or dates on which the seizure is ordered to take place.
(2) A description of the counterfeit goods to be seized.
(3) The identity of the persons or class of persons to effect seizure.
(4) A description of the location or locations at which seizure is to
occur.
(5) A hearing date not more than 10 court days after the last date on
which seizure is ordered at which any person from whom goods are seized
may appear and seek release of the seized goods. Any person from whom
seizure is effected shall be served with the order at the time of seizure.
(c) Any person who causes seizure of goods that are not counterfeit shall be
liable in an amount equal to the following:
(1) Any damages proximately caused to any person having a financial
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interest in the seized goods by the seizure of goods that are not counterfeit.
(2) Costs incurred in defending against seizure of noncounterfeit goods.
(3) Upon a showing that the person causing the seizure to occur acted in
bad faith, expenses, including reasonable attorneys’ fees expended in
defending against the seizure of any noncounterfeit or noninfringing goods.
(4) Punitive damages, if warranted.
(d) A person entitled to recover pursuant to subdivision (c) may seek a
recovery by cross-claim or motion made in the trial court and served pursuant to
Section 1011 of the Code of Civil Procedure. A person seeking a recovery
pursuant to this section may join any surety on an undertaking posted pursuant to
subdivision (b), and any judgment of liability shall bind the person liable
pursuant to subdivision (c) and the surety jointly and severally, but the liability
of the surety shall be limited to the amount of the undertaking.
(e) The court shall set the amount of the undertaking required by subdivision
(b) in accordance with the probable recovery of damages, costs, and expenses
under subdivision (c) if it were ultimately determined that the goods seized
were not counterfeit.
(f) Any person entitled to recover under subdivision (c) may, within 30 days
after the date of seizure, object to the undertaking on the grounds that the surety
or the amount of undertaking is insufficient.
(g) The motion or application filed pursuant to subdivision (b) shall include
a statement advising the person from whom the goods are seized that the
undertaking has been filed, informing him or her of his or her right to object to
the undertaking on the grounds that the surety or the amount of the undertaking is
insufficient, and advising the person from whom the goods are seized that an
objection to the undertaking must be made within 30 days after the date of
seizure.
Added Stats 2007 ch 411 § 2 (AB 1484).
§ 14252. Right to Criminal Prosecution.

The enumeration of any right or remedy herein shall not affect a registrant’s
right to prosecute under any penal law of this state, including, but not limited to,
Section 350, of the Penal Code.
Added Stats 2007 ch 411 § 2 (AB 1484).

Added Stats 1967 ch 1556 § 2; Repealed Stats 2007 ch 711 § 1 (AB 1484).
181
§ 14254. Actions to Require Cancellation.
( a ) Actions to require cancellation of a mark registered pursuant to this
chapter or in mandamus to compel registration of a mark pursuant to this chapter
shall be brought in the superior court.
(b) In an action in mandamus, the proceeding shall be based solely upon the
record before the secretary. In an action for cancellation, the secretary shall not
be made a party to the proceeding, but shall be notified of the filing of the
complaint by the clerk of the court in which it is filed and shall be given the
right to intervene in the action.
(c) In any action brought against a nonresident registrant, service may be
effected upon the secretary as agent for service of the registrant in accordance
with the procedures established for service upon nonresident corporations and
business entities under Sections 416.10 to 416.40, inclusive, of the Code of
Civil Procedure, and Sections 2110, 2111, and 2114 of the Corporations Code.
Added Stats 2007 ch 411 § 2 (AB 1484).
§ 14259. Rights of Marks Acquired Within Common

Law.
Nothing herein shall adversely affect the rights or the enforcement of rights
in marks acquired in good faith at any time within common law.
Added Stats 2007 ch 411 § 2 (AB 1484).
ARTICLE 10
Fees
§ 14260. Non-Refundable Fees.

Unless specified by the secretary, the fees payable herein are not
refundable.
Added Stats 2007 ch 411 § 2 (AB 1484).
ARTICLE 11
Severability
182
§ 14265. Severability of Chapter.
If any provision of this chapter, or the application of such provision to any
person or circumstance is held invalid, the remainder of this chapter shall not be
affected thereby.
Added Stats 2007 ch 411 § 2 (AB 1484).
ARTICLE 12
Miscellaneous
§ 14270. Affect on Prior Actions.

This chapter shall not affect any suit, proceeding, or appeal pending on January
1, 2008.
Added Stats 2007 ch 411 § 2 (AB 1484).
§ 14272. Legislative Intent to Provide System of State

Trademark Registration and Protection.
The intent of this chapter is to provide a system of state trademark
registration and protection substantially consistent with the federal system of
trademark registration and protection under the Trademark Act of 1946 ( 15
U.S.C. Sec. 1051 et seq.), as amended. To that end, the construction given the
federal act should be examined as nonbinding authority for interpreting and
construing this chapter.
Added Stats 2007 ch 411 § 2 (AB 1484).

Added Stats 1967 ch 1556 § 2. Amended Stats 1988 ch 393 § 6. Repealed Stats 2007 ch
711 § 1 (AB 1484). The repealed section related to cancellation by Secretary of State.

section related to cancellation upon court finding.

section related to effect of court orders.
183
section related to classification system.

Added Stats 1995 ch 407 § 1 (SB 526). Repealed Stats 2007 ch 711 § 1 (AB 1484). The
repealed section related to application of trademark and service mark registrations.

Added Stats 1967 ch 1556 § 2. Amended Stats 1995 ch 407 § 2 (SB 526). Repealed
Stats 2007 ch 711 § 1 (AB 1484). The repealed section related to list of “goods”.

Added Stats 1967 ch 1556 § 2. Amended Stats 1995 ch 407 § 2 (SB 526). Repealed
Stats 2007 ch 711 § 1 (AB 1484). The repealed section related to services for which a
certificate of registration is issues or renewed.

section related to liability for damages.

Added Stats 1967 ch 1556 § 2. Amended Stats 1989 ch 780 § 2; Stats 2000 ch 673 § 1
(AB 1348). Repealed Stats 2007 ch 711 § 1 (AB 1484). The repealed section related to
actionable conduct.

(SB 879). Repealed Stats 2007 ch 711 § 1 (AB 1484). The repealed section related to
grounds for relief.

Added Stats 1991 ch 647 § 3 (SB 879). Repealed Stats 2007 ch 711 § 1 (AB 1484). The
repealed section related to injunction against use of trademark.
ARTICLE 13
Remedies
184
Added Stats 1967 ch 1556 § 2. Amended Stats 1983 ch 569 § 1. Repealed Stats 2007 ch
711 § 1 (AB 1484). The repealed section related to injunctive relief and recovery of profits
and damages.

Added Stats 1967 ch 1556 § 2. Amended Stats 1984 ch 1016 § 1. Repealed Stats 2007
ch 711 § 1 (AB 1484). The repealed section related to criminal penalties.

Added Stats 1967 ch 1556 § 2. Amended Stats 1984 ch 1016 § 2. Repealed Stats 2007
ch 711 § 1 (AB 1484). The repealed section related to previously used marks.
CHAPTER 3
TRADE NAMES AND DESIGNATIONS

ARTICLE 1
Trade Names
§ 14401. Transfer of Trade Name With Good Will of

Business.
Any trade name may be transferred in the same manner as personal property
in connection with the good will of the business in which it is used or the part
thereof to which it is appurtenant, and the owner is entitled to the same
protection by suits at law or in equity.
Leg.H. 1941 ch. 59.
Cases
Balesteri v. Holler, 87 Cal. App. 3d 717, 151 Cal. Rptr. 229 (1978) . A bill of sale
transferring a fishing business included a transfer of the name of the business for ten years or
until the purchase price was paid. Thus, when the purchase price was fully paid the seller
could use the name. The transfer of the name does not necessarily go along with the transfer
of the business.
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§ 14402. Injunction Against Use of Infringing Trade
Name.
Any court of competent jurisdiction may restrain, by injunction, any use of
trade names in violation of the rights defined in this chapter.
Leg.H. 1941 ch. 59.
§ 14403. Fraudulent Use of Container or Label of

Another.
Every person who has in his possession, or who uses any cask, bottle,
vessel, case, cover, label, brand, or other thing bearing, or having in any way
connected with it, the trade name of another, for the purpose of disposing of any
article other than that which such cask, bottle, vessel, case, cover, label, brand
or other thing, originally contained, or is connected with by the owner of the
trade name, with intent to deceive or defraud, is guilty of a misdemeanor.
Leg.H. 1941 ch. 59.
§ 14404. Defacement or Obliteration of Trade Name of

Another.
Every person who wilfully defaces, obliterates, or otherwise removes,
destroys, or conceals the trade name of another, printed, branded, stamped,
engraved, etched, blown, impressed, or otherwise attached to, or produced upon
any cask, keg, bottle, vessel, siphon, can, case, or other package, for the purpose
of selling or trafficking in such cask, keg, bottle, vessel, siphon, can, case, or
other package, or refilling such cask, keg, bottle, vessel, siphon, can, case, or
other package, with intent to defraud the owner thereof, without the consent of
the owner, or unless the same has been purchased from the owner, is guilty of a
misdemeanor.
Leg.H. 1941 ch. 59.
§ 14405. Trafficking in or Refilling Container Bearing

Trade Name of Another.
Every person who wilfully sells, or traffics in any cask, keg, bottle, vessel,
siphon, can, case or other package bearing the trade name of another, printed,
branded, stamped, engraved, etched, blown, or otherwise attached or produced
thereon, or refills any such cask, keg, bottle, vessel, siphon, can, case, or other
package with intent to defraud the owner thereof, without the consent of the
owner, or unless it has been purchased from the owner, is guilty of a
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misdemeanor.
Leg.H. 1941 ch. 59.
ARTICLE 1.5
Trade Name Registration
§ 14411. Fictitious Business Name Statement;

Rebuttable Presumption of Exclusive Right to Use
Name From Filing of Same; Rebuttable Presumption
Defined.
The filing of any fictitious business name statement by a person required to
file such statement pursuant to Section 17910 shall establish a rebuttable
presumption that the registrant has the exclusive right to use as a trade name the
fictitious business name, as well as any confusingly similar trade name, in the
county in which the statement is filed, if the registrant is the first to file such a
statement containing the fictitious business name in that county, and is actually
engaged in a trade or business utilizing such fictitious business name or a
confusingly similar name in that county. The rebuttable presumption created by
this section shall be one affecting the burden of producing evidence.
Leg.H. 1972 ch. 438.
Consultant’s Comments
Bus. & Prof. Code §§ 14411, 14415 may be overbroad as literally written. In the case of
identical names, they arguably do away with the “likelihood of confusion” requirement.
§ 14412. Duration of Rebuttable Presumption

Concerning Right to Use Business Name.
The rebuttable presumption created by Section 14411 shall be applicable
until the fictitious business name statement is abandoned pursuant to Section
17922, or otherwise expires pursuant to Section 17920, and no new fictitious
business name statement has been filed by the registrant, or in the case of any
assignment or transfer no original fictitious business name statement has been
filed by the assignee or transferee.
Leg.H. 1972 ch. 438.
187
§ 14413. Date of Filing of Fictitious Business Name
Statements Under Previous Laws.
For purposes of Section 14411 a fictitious business name statement filed
after January 1, 1971, and deemed filed on July 1, 1971, under Section 8 of
Chapter 618 of the 1970 Statutes shall be considered filed at the time a
certificate was first filed under Chapter 2 (commencing with Section 2466) of
Title 10 of Part 4 of Division 3 of the Civil Code, as it existed on the effective
date of the filing, provided that the certificate had not expired prior to the filing
under Chapter 5 (commencing with Section 17900) of Part 3 of Division 7 of the
Business and Professions Code.
Leg.H. 1972 ch. 438.
§ 14414. Filing of Fictitious Business Name Statements

Not Required or Prohibited.
Nothing in this chapter shall be construed to require or prohibit the filing in
any county of any fictitious business name statement if such filing is not required
or prohibited by Section 17910.
Leg.H. 1972 ch. 438.
§ 14415. Articles of Incorporation; Rebuttable

Presumption of Exclusive Right to Use Name From
Filing of Same; Rebuttable Presumption Defined.
The filing of articles of incorporation pursuant to Section 200 of the
Corporations Code, in the case of a domestic corporation, or the obtaining of a
certificate of qualification pursuant to Sections 2105 and 2106 of the
Corporations Code, in the case of a foreign corporation, shall establish a
rebuttable presumption that the corporation has the exclusive right to use as a
trade name, in the state the corporate name set forth in the articles or certificate,
as well as any confusingly similar trade name, if the corporation is the first to
have filed the articles or obtained the certificate containing the corporate name,
and is actually engaged in a trade or business utilizing that corporate name or a
confusingly similar name. If a foreign corporation continues to have authority to
transact intrastate business pursuant to Section 2102 of the Corporations Code,
the foreign corporation shall be considered to have obtained its certificate of
qualification pursuant to law for the purposes of this section on the date it first
qualified to transact intrastate business in this state. The rebuttable presumption
created by this section affects the burden of producing evidence.
Leg.H. 1972 ch. 438, 1978 ch. 370, 1981 ch. 714.
188
Bus. & Prof. Code §§ 14411, 14415 may be overbroad as literally written. In the case of
identical names, they arguably do away with the “likelihood of confusion” requirement.
§ 14416. Conflict Between Corporation and Fictitious

Name Registrant; Determination of Priority.
If, as to the same or a confusingly similar trade name, in a county, there are
both a corporation entitled to the rebuttable presumption created by Section
14415 and a registrant entitled to the benefit of the presumption created by
Section 14411, whichever has filed the fictitious business name statement, filed
the articles of incorporation, or obtained the certificate of qualification first in
time, and is actually engaged in a trade or business utilizing such fictitious
business name, such corporate name, or a confusingly similar name, shall be
entitled to the presumption as against the other, that he has the exclusive right to
use such fictitious business name, or such corporate name, or a confusingly
similar name, as a trade name in the county where the registrant has filed his
fictitious business name statement.
Leg.H. 1972 ch. 438.
§ 14417. Articles of Incorporation; Filing of Same Does

Not Authorize Use of Name in Violation of Laws.
The filing of articles of incorporation pursuant to Section 200 of the
Corporations Code shall not of itself authorize the use in this state of a
corporate name in violation of the rights of another under the federal Trademark
Act (15 U.S.C. Sec. 1051 et seq.), the Trademark Act (Chapter 2 (commencing
with Section 14200) of Division 6), the Fictitious Business Name Act (Chapter
5 (commencing with Section 17900) of Division 7), or the common law,
including rights in a trade name. The Secretary of State shall deliver a notice to
this effect to each newly organized corporation.
Leg.H. 1983 ch. 1317.
§ 14418. Fictitious Business Name Statement; Filing of

Same Does Not Authorize Use of Name in Violation
of Laws.
The filing of any fictitious business name statement pursuant to Section
17910 does not, of itself, authorize the use in this state of a fictitious business
name in violation of the rights of another as established under this chapter, the
federal law relating to trademarks (15 U.S.C. Sec. 1051 et seq.), or the common
189
law, including rights in a trade name.
Leg.H. 1987 ch. 437.
ARTICLE 2
Container Brands
§ 14425. Container Brand Definitions.

As used in this article:
( a ) “Containers,” “equipment” and “supplies” means containers,
equipment or supplies bearing a brand.
(b) “Brand” means any mark, name or device filed as a brand under this
article.
(c) “Registrant” means a person who files a brand under this article.
Leg.H. 1941 ch. 59, 1982 ch. 194.
§ 14426. Registration of Brand by Corporation or

Association.
Any corporation or association whose members might register a brand under
this article, may itself register a brand under this article. As used in this article,
“member of a registrant” means a member who would be entitled to register the
same brand under this article.
Leg.H. 1941 ch. 59.
§ 14427. Registration of Description of Brand.

Any person, who is engaged in the manufacture, packing, canning, bottling,
or selling of any substance in containers with his or her name, or other mark or
device impressed or produced thereon, or whose equipment or supplies, owned
by and used in his or her business, bears a name or other mark or device
impressed or produced thereon, may file in the office of the Secretary of State
after payment of the fee set forth in subdivision (d) of Section 12193 of the
Government Code, a description of the name, mark, or device so used, as a
brand.
Leg.H. 1941 ch. 59, 1943 ch. 757, 1982 ch. 194, 1987 ch. 1348, 1995 ch. 656, 1999
ch. 1000.
190
§ 14429. Registration Notice to Be Included in
Registered Brand.
There shall be included as a part of each brand the words, “Registered in
California,” or the abbreviation, “Reg.Cal.”
Leg.H. 1941 ch. 59.
§ 14430. Acts Prohibited With Respect to Containers

Bearing Brands.
It is unlawful for any person except a person named in subdivision (a) to do
any of the acts named in subdivision (b).
(a) Persons excepted:
(1) The owner of the brand which has been filed in accordance with
this article.
(2) The registrant.
( 3 ) Members of any corporation or association which is the
registrant.
(4) A person who has the written consent of the registrant describing
the containers, equipment or supplies to which it applies.
( 5 ) A person who has purchased the container, equipment or
supplies from the owner of the brand appearing thereon.
(b) Prohibited acts:
(1) Possessing, using, or filling with any substance any container.
(2) Obliterating or concealing the brand on any container, supplies
or equipment.
( 3) Selling, buying, giving, taking or otherwise trafficking in any
container, equipment, or supplies.
Leg.H. 1941 ch. 59, 1982 ch. 194.
Bus. & Prof. Code §§ 14430–14438 provide extraordinary remedies for actions
involving containers bearing a brand that has been registered with the state. Prohibited acts
include possessing or using a container bearing a brand, or filling the container with any
substance; obliteration or concealment of the brand on any container, supplies or equipment;
and selling, buying, giving, taking, or otherwise trafficking in any container, equipment, or
supplies by any person who is not the registrant of the brand, or by persons not having the
191
consent of the registrant. Unauthorized use is presumed in the absence of written consent.
Possession by any junk dealer or dealer in second hand articles, by virtue of that person being
a junk dealer or dealer in second hand articles, is presumptive evidence of unlawful use or
trafficking in containers, supplies, or equipment.
These statutes impose upon every person an affirmative duty to return to the owner any
equipment or containers bearing a registered brand. The statutes also provide for imposition
of punitive sanctions. A magistrate may issue a search warrant against persons possessing
containers, supplies or equipment in violation of the statutes, based on the unsupported
“reasonable belief” of the registrant. Civil penalties include reasonable attorneys’ fees as
well as three times the replacement cost of the new containers, equipment, or supplies
involved.
The statutes appear to have developed no case law, despite the severe remedies for
violation of the rights of owners of registered brands.
§ 14431. Presumption of Unlawful Use From Use by

Person Other Than Registrant.
The use by any person other than the registrant, or owner of the brand and
other than the members of the registrant of any container, supplies or equipment,
without the written consent provided for in this article, or the possession by any
junk dealer, or dealer in secondhand articles, of any containers, supplies or
equipment, is presumptive evidence of unlawful use of or traffic in such
containers, supplies, or equipment.
Leg.H. 1941 ch. 59.
See Consultant’s Comments to Bus. & Prof. Code § 14430.
§ 14432. Acquisition of Vendor’s Rights in Container

Brand.
Any person acquiring containers, supplies or equipment, by purchase or
other lawful means, and having the written consent provided for in this article is
not required again to file the description, but acquires as a part of his or her
purchase all benefit that the vendor has.
Leg.H. 1941 ch. 59, 1982 ch. 194.
§ 14433. Deposit for Container Not Constituting Sale.

192
The acceptance by the owner, or any person lawfully entitled to their use, of
any money as a deposit to secure the safekeeping and return of containers,
equipment or supplies does not constitute a sale of the containers, supplies or
equipment, either optional or otherwise, in any proceeding under this article.
Leg.H. 1941 ch. 59.
§ 14434. Duty of Persons to Return Containers to

Owner.
It is the duty of every person who finds or receives in the regular course of
business or in any other manner, any containers, supplies or equipment to make
diligent effort to find the owner and return the containers, supplies or equipment
to him.
Leg.H. 1941 ch. 59.
§ 14435. Search Warrant to Discover Containers;

Punishment of Violations; Return of Containers.
(a) Whenever any registrant or any member of the registrant takes an oath
before any magistrate that he has reason to believe, and does believe, that any of
the containers, supplies or equipment mentioned in this article, are being
unlawfully sold, filled or used, or are secreted in any place, the magistrate shall
issue a search warrant to discover and obtain them;
(b) The magistrate may cause to be brought before him, the person in whose
possession the containers, equipment or supplies are found, and if he finds that
the person has been guilty of a violation of this article, he shall impose the
punishment prescribed in this article, and also award the possession of the
containers, equipment or supplies taken upon the search warrant to the owner, or
to the corporation or association of which the owner is a member.
Leg.H. 1941 ch. 59.
193
§ 14436. Penalty for Violations of Provisions
Concerning Container Brands.
The violation of any of the provisions of this article is a misdemeanor,
punishable:
(a) For the first offense by imprisonment for not less than 10 days nor
more than six months or by a fine of fifty dollars ($50) for each and every
container, or article of supply or equipment so filled, sold, used, disposed
of, held, bought or trafficked in, or by both such fine and imprisonment.
(b) For each subsequent offense by imprisonment for not less than 20
days nor more than one year, or by a fine of not less than fifty dollars ($50)
nor more than one hundred dollars ($100) for each and every container, or
article of supply or equipment so filled, sold, used, disposed of, held,
bought or trafficked in, or by both such fine and imprisonment.
Leg.H. 1941 ch. 59, 1982 ch. 194.
§ 14437. Brands Registered Under Earlier Statutes.

Every brand registered and published under Chapter 431 of the Statutes of
1921, as amended, prior to the effective date of Chapter 1162 of the Statutes of
1931, and all containers, equipment and supplies bearing such a brand shall be
entitled to all the protection and benefits of this chapter, and it is not necessary
for any such brand to be changed or reregistered on account of the provisions of
Chapter 1162 of the Statutes of 1931 and the provisions of this article which
constitute a restatement and continuation thereof.
Leg.H. 1941 ch. 59, 1982 ch. 194.
§ 14438. Civil Action by Registrant; Recovery Under

Same.
Any registrant whose containers, equipment or supplies are involved in any
violation of the provisions of this article may sue the person or persons who
violated said provisions and, upon proof of such violation, shall recover
threefold the replacement cost new of the containers, equipment or supplies so
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involved and costs of suit including a reasonable attorney’s fee. No action shall
be brought under this section or Section 14436 against a person who obtained
possession of the containers, equipment or supplies pursuant to a contract with
the registrant for the delivery of agricultural commodities, unless such person
has failed to return to the registrant such containers, equipment and supplies to
the point of delivery within 10 days after receipt of a demand for such return
sent by registered mail to such person by the registrant.
Leg.H. 1949 ch. 550, 1982 ch. 194.
ARTICLE 3
Farm Names
§ 14460. Definition of “Farm.”

“Farm,” as used in this article, includes ranch, estate and villa.
Leg.H. 1941 ch. 59.
§ 14461. Registration of Farm Name; Certificate for

Same.
Any farm owner or lessee in this state may register the name of his or her
farm with the Secretary of State, and the Secretary of State shall issue a
certificate setting forth the name and location of the farm and the name of the
owner upon payment of the fee as set forth in subdivision (g) of Section 12193
of the Government Code.
Leg.H. 1941 ch. 59, 1987 ch. 1348, 1999 ch. 1000.
§ 14462. Use of Farm Name as Trademark.

Any person selling or marketing the products grown on a farm may use the
name of the farm as a trade-mark on the products of the farm, in the same manner
as provided for other trade-marks, and subject to the same rights and duties, as
provided in this code.
Leg.H. 1941 ch. 59.
195
§ 14463. Registration of Farm Name Equivalent to
Registration of Trademark.
Registration under this article shall have the same effect as the registration
of a trade-mark.
Leg.H. 1941 ch. 59.
§ 14464. Priority of First to Register Farm Name.

When any name has been registered as the name of any farm, that name shall
not be registered as the name of any other farm in this State, unless designating
words have been prefixed or added thereto. The Secretary of State shall register
such name only for the person entitled thereto.
Leg.H. 1941 ch. 59.
§ 14465. Knowing Use or Registration of Another’s

Farm Name—Misdemeanor.
Any person who registers as his own, any name already in use in this State,
knowing that the name is already adopted as the name of a farm, or makes use of
the name when regularly registered and in use by any other person entitled
thereto under this article is guilty of a misdemeanor.
Leg.H. 1941 ch. 59.
ARTICLE 4
Laundry Supply Designations
§ 14480. Definitions of “Registrant” and “Supplies.”

(a) “Registrant” means any person who files and publishes a name, mark
or device under this article.
(b) “Supplies” means supplies bearing a name, mark or device filed and
published under this article.
Leg.H. 1941 ch. 59.
§ 14481. Registration of Clean Laundry Supply Name.
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Any person engaged in the business of supplying clean laundered garments,
towels, table linen or other articles, the property of the supplier, in a regular
service, periodically exchanging clean articles for soiled for a fixed
compensation, may adopt and use a name or other mark or device woven,
impressed or produced thereon as an indicium of ownership, and may register
the name, mark or device by filing and publishing it under this article.
Leg.H. 1941 ch. 59.
§ 14482. Procedure for Registration of Clean Laundry

Supply Name.
In order to register a name, mark or device under this article, the supplier
shall do all of the following:
(a) File in the office of the Secretary of State a description of the names,
marks, or devices so used.
(b) Cause the description of the name, mark or device to be printed once
a week for three successive weeks in a newspaper published in the county
in which the principal place of business of the supplier is located.
Leg.H. 1941 ch. 59, 2000 ch. 506.
§ 14483. Fee for Registration.

The registrant shall pay to the Secretary of State for filing each laundry
supply designation described and for issuing a certificate of filing a fee as set
forth in subdivision (e) of Section 12193 of the Government Code.
Leg.H. 1941 ch. 59, 1943 ch. 758, 1987 ch. 1348, 1999 ch. 1000, 2000 ch. 506.
§ 14484. Prohibited Acts Concerning Clean Laundry

Supply Name.
It is unlawful for any persons except a person named in subdivision (a) to
do any of the acts named in subdivision (b):
(a) Persons excepted:
(1) The registrant.
(2) A person who has the written consent of the registrant.
(3) A person who has purchased the supplies from the registrant.
(b) Prohibited acts:
(1) Selling, buying, renting, giving, taking or otherwise trafficking in
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any supplies bearing a name, mark or device filed and published under
this article.
(2) Obliterating or otherwise covering up, concealing or removing a
name, mark or device filed and published under this article, from such
supplies.
Leg.H. 1941 ch. 59.
§ 14485. Acceptance of Deposit Does Not Constitute

Sale.
The acceptance by the registrant of any sum of money as a deposit to secure
the safekeeping and return of the supplies does not constitute a sale of the
supplies either optional or otherwise, in any proceeding under this article.
Leg.H. 1941 ch. 59.
§ 14486. Presumption of Unlawful Use of or Traffic in

Marked Supplies.
The use by any person, other than the registrant of any supplies without the
written consent provided in this article or the possession of supplies so marked
by any junk dealer or dealer of secondhand articles is presumptive evidence of
unlawful use of or traffic in such supplies.
Leg.H. 1941 ch. 59.
§ 14487. Acquisition of Rights of Vendor of Supplies.

Any person or any member of any firm, corporation or association acquiring
supplies by purchase or other lawful means and having the written consent
provided for in this article, is not required again to file and publish the
description but shall, as to supplies described in the written consent, acquire as
part of the purchase all such rights and benefits as the vendor has under this
article.
Leg.H. 1941 ch. 59.
§ 14488. Duty to Return Supplies.

It is the duty of every person who finds or receives in the regular course of
business or in any other manner, any supplies to make diligent effort to find the
owner and restore or return the supplies.
Leg.H. 1941 ch. 59.
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§ 14489. Search Warrant to Discover and Obtain
Supplies.
Whenever the registrant or any member of any corporation or association
which is the registrant takes an oath before any magistrate that he has reason to
believe and does believe that any supplies are being unlawfully used, sold or
secreted in any place, the magistrate shall issue a search warrant to discover
and obtain the supplies and may also bring before him the person in whose
possession the articles are found.
Leg.H. 1941 ch. 59.
§ 14490. Punishment for Violation; Forfeiture of

Property Taken Under Warrant.
If the magistrate finds that any person brought before him has been guilty of
a violation of this article he shall impose the punishment prescribed in this
article and also award the possession of the property taken upon the search
warrant to the owner.
Leg.H. 1941 ch. 59.
§ 14491. Penalties.
The violation of any of the provisions of this article is a misdemeanor, except
that if the violation consists of unlawfully using, selling, or secreting in any
place supplies of a value exceeding nine hundred fifty dollars ($950), the
violation is a felony.
Added Stats 1941 ch. 59 § 1. Amended Stats 1968 ch. 1280 § 17; Stats 1983 ch. 1092 §
48, effective September 27, 1983, operative January 1, 1984; Stats 2009-2010 3d Ex. Sess.
ch. 28 § 1 (SB 18XXX), effective January 25, 2010.
ARTICLE 5
Names Other Than Trade Names
As used in this article, the following terms have the meanings set forth in
this section unless the context otherwise requires:
( a ) “Organization” includes any lodge, order, beneficial association,
fraternal or beneficial society or association, historical, military, or
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veterans organization, labor union, or any other similar society,
organization, or association or degree, branch, subordinate lodge, or
auxiliary thereof.
( b ) “Name and Ownership.” Name is that name that has first been
adopted and used by an organization within or beyond the limits of this state,
which name has been registered in the Office of the Secretary of State, and
the name of any organization that has complied with Chapter 5 (commencing
with Section 17900) of Part 3 of Division 7, unless the name conflicts with
a name duly registered in the Office of the Secretary of State prior to the
compliance with those provisions, and any organization that has so first
adopted and used the name is its original owner.
Added Stats 1955 ch 1931 § 1. Amended Stats 2006 ch 538 § 21 (SB 1852), effective
January 1, 2007.
§ 14493. Restraint of Unauthorized Use of Organization

Name.
Any court of competent jurisdiction may restrain by injunction: the use of the
name of any organization in a commercial venture, trade or business, or in the
solicitation of subscriptions for or sale of any newspaper, book, or other
publication, or in the solicitation of advertising in any newspaper, book, or
other publication or in the solicitation of, donations, aid, or other benefits by
any other person, firm, or corporation representing directly or indirectly that
such commercial venture, trade or business, newspaper or book or other
publication or donation or solicitation for donation, is sponsored, endorsed or
being offered by the organization owning such name, unless the person, firm, or
corporation so using the name is entitled to use the name under the constitution,
by-laws or rules of the organization owning such name, or by the written consent
of such organization so owning the name to such use.
Leg.H. 1955 ch. 1931.
§ 14494. Proof of Damages Not Needed for Injunction;

Recovery of Actual Damages.
In any action under Section 14493 it is not necessary to allege or prove
actual damages or the threat thereof or actual injury or the threat thereof, to the
plaintiff, but in addition to injunctive relief, any plaintiff in any such action is
entitled to recover the amount of the actual damages, if any, sustained by such
plaintiff.
Leg.H. 1955 ch. 1931.
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§ 14495. Presumption of Unlawful Use.
The use of the name of any organization by any person, firm, or corporation
not entitled to use the same under the constitution, by-laws, rules or regulations
of the organization which owns the name or by the written consent of such
organization, is presumptive evidence of the unlawful use or traffic in such
name.
Leg.H. 1955 ch. 1931.
DIVISION 7
GENERAL BUSINESS REGULATIONS

PART 1
Licensing for Revenue and Regulation

CHAPTER 1
LICENSING BY CITIES
§ 16001.7. Veterans; Exemption From Licensing Fees.

Every person who is honorably discharged or honorably relieved from the
military, naval, or air service of the United States and who is a resident of this
state, may distribute circulars, and hawk, peddle and vend any goods, wares, or
merchandise owned by him or her, except spiritous, malt, or vinous, or other
intoxicating liquor, without payment of any business license fee, whether
municipal, county, or state, and the legislative body shall issue to that person,
without cost, a license therefor.
Added Stats 2008 ch 435 § 1 (AB 1952), effective January 1, 2009.
PART 2
Preservation and Regulation of Competition
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CHAPTER 1
CONTRACT IN RESTRAINT OF TRADE
§ 16600. Restraints in Contracts Void.

Except as provided in this chapter, every contract by which anyone is
restrained from engaging in a lawful profession, trade, or business of any kind is
to that extent void.
Leg.H. 1941 ch. 526.
Sometimes parties craft standard agreements containing arguably illegal or invalid
provisions with the expectation that any invalid portion of the agreement can be severed and
the balance of the agreement remain enforceable. An example is an employer with operations
in numerous states. Post-employment noncompetition clauses are enforceable in many
states, but generally invalid in California. Employers argue that they should be able to use a
standard form agreement for all their employees regardless of the particular state where the
employee lives or works, and that the enforceability of specific provisions should be
determined on a case-by-case basis. This approach can lead to problems, however, when an
employer presents its employees with a broad agreement containing a noncompete provision.
Even if the agreement contains a severability clause, and even if the agreement contains other
valid and enforceable provisions, such as prohibitions on disclosure of confidential
information or trade secrets, if a California employee refuses to sign the agreement, and the
employer then terminates the employee, the employer can have liability for wrongful
termination. Two cases reaching that conclusion are D’Sa v. Playhut Inc., 85 Cal. App. 4th
927, 102 Cal. Rptr. 2d 495 (2000) and Walia v. Aetna, Inc. , 93 Cal. App. 4th 1213, 113 Cal.
Rptr. 2d 737 (2001). (See Annotations below.)
Annotations
Cases
Angelica Textile Services Inc. v. Park , 220 Cal. App. 4th 495, 163 Cal. Rptr. 3d 192
(2013). This case involved claims for trade secret misappropriation and other torts against an
employee who set up a competing business while still employed by the plaintiff. (See
annotation under Civil Code section 3426.7) The former employee relied in part on Business
& Professions Code section 16600, but the court explained that section 16600 only applies
to restrictive covenants against an employee’s competitive activities after termination of
employment. The section has no application to restrictive covenants during employment.
Wanke, Industrial, Commercial, Residential Inc. v. Superior Court (Keck), 209 Cal.
App. 4th 1151, 147 Cal. Rptr. 3d 651 (2012). Wanke sued former employees for trade secret
misappropriation and several other counts based on allegedly misusing confidential customer
202
information. A settlement included a stipulated permanent injunction that the former
employees would not solicit Wanke’s customers on an attached list. Wanke applied for
contempt based on alleged violation of the injunction and also for civil enforcement as to
two specific customers. The trial court held that the injunction was invalid insofar as it
prohibited contacting a customer on the list unless the employees misused trade secret
information. Accordingly, Wanke lost with respect to the first customer, and prevailed with
respect to the second customer. On appeal the court reversed the determination regarding the
first customer. The injunction was facially valid and there was no showing that the customer
list was not a valid trade secret. Even if the injunction had been issued in error, it is still
enforceable.
Fillpoint LLC v. Maas, 208 Cal. App. 4th 1170, 146 Cal. Rptr. 3d 194 (2012) . Maas
sold his stock in a company to Fillpoint’s predecessor. He entered two agreements, a stock
purchase agreement and a separate employment agreement. The stock purchase agreement
contained a three-year covenant not to compete. The employment agreement contained a
separate broader covenant not to compete for one year after termination of his employment.
Maas quit his employment three years later. The court held that the purchase agreement non-
compete clause had been satisfied and the separate one-year non-compete clause was invalid.
NewLife Sciences v. Weinstock , 197 Cal. App. 4th 676, 128 Cal. Rptr. 3d 538 (2011) .
As an issue sanction resulting from failure to comply with discovery the court held that a
non-compete clause, which arguably was unenforceable under section 16600 was
enforceable and thereafter issued a preliminary injunction. A divided appellate court
affirmed. The dissent argued that the court should determine in the first instance whether the
non-compete clause was valid under section 16601, but should not enforce it as a sanction.
Dowell v. Biosense Webster, Inc. , 179 Cal. App. 4th 564, 102 Cal. Rptr. 3d 1 (2009) . A
broad noncompetition clause purporting to prevent competition from a former employee for
18 months after termination of employment is invalid. Even assuming that there is a trade
secret exception, which the court did not decide, the clause in this case was not narrowly
tailored to protect trade secrets and therefore was invalid.
Comedy Club, Inc. v. Improv West Associates , 553 F.3d 1277 (9th Cir. 2009) . The
Ninth Circuit’s 2007 opinion was vacated by the Supreme Court with directions to reconsider
the decision in light of Hall Street Associated v. Mattel , 552 U.S. 576, 128 S. Ct. 1396, 170
L. Ed. 2d 254 (2008). The Ninth Circuit reached the same result in this opinion. The gist of
the opinion is the same as in the prior 2007 opinion. (See annotation below.)
Retirement Group v. Galante , 176 Cal. App. 4th 1226, 98 Cal. Rptr. 3d 585 (2009) . A
preliminary injunction restraining a former employee from soliciting customers is invalid
under section 16600, provided that a former employee can be enjoined from using his
former employer’s trade secrets.
Edwards v. Arthur Andersen LLP, 44 Cal. 4th 937, 189 P.3d 285, 81 Cal. Rptr. 3d 282
(2008). The California Supreme Court clarified that a noncompetition agreement whereby an
employee is prohibited from pursuing his chosen profession or trade is invalid under Bus. &
Prof. Code § 16600. The Court rejected the narrow restraint exception espoused by the Ninth
Circuit in cases such as Campbell v. Board of Trustees , 817 F.2d 499 (9th Cir. 1987) and
General Commer. Packaging v. TPS Package Eng’g, 126 F.3d 1131 (9th Cir. 1997).
Comedy Club, Inc. v. Improv W. Assocs. , 502 F.3d 1100 (9th Cir. 2007) . Comedy Club
Inc. (CCI) had contracted with Improv West to open numerous comedy clubs across the
203
country under the “Improv” name which was licensed to CCI by Improv West. The contract’s
term extended through 2019. The contract specified that CCI could not open any other
comedy clubs (“non-Improv clubs”) anywhere in the country during the contract term. The
contract also required disputes to be settled by arbitration. CCI opened several Improv clubs,
but failed to meet the contract schedule. The arbitrator ruled that CCI had breached the
contract. The arbitrator’s ruling included a permanent injunction prohibiting CCI from
opening non-Improv clubs anywhere in the country through the end of the contract, i.e., the
year 2019. The appellate court reversed this part of the ruling on the ground that it violates
section 16600. It would be permissible to enjoin CCI from opening non-Improv clubs near
the 18 Improv clubs that were operating in 2002, but the injunction prohibiting such clubs
elsewhere in the country is too broad.
VL Systems, Inc. v. Unisen, Inc., 152 Cal. App. 4th 708, 61 Cal. Rptr. 3d 818 (2007) .
Plaintiff provided computer consulting services to defendant. The contract included a clause
that defendant would not hire any of plaintiff’s employees for a period up to 12 months after
the consulting services were performed. Defendant posted a job listing on the Internet and
one of plaintiff’s employees applied for the job and was hired by defendant during the 12-
month window. The defendant did not solicit the employee; the employee had not worked on
the defendant’s computer systems when plaintiff provided services to defendant; and he had
not even been employed by the plaintiff at the time those services were rendered. Under
these circumstances, the contractual prohibition on hiring one of plaintiff’s employees is
unenforceable.
Biosense Webster, Inc. v. Superior Court , 135 Cal. App. 4th 827, 37 Cal. Rptr. 3d 759
(2006). Biosense is a California corporation doing business in California. Its employment
agreement contained a non-competition clause which, among other things, prohibited a
defendant employee from working for a competitor for 18 months after employment
termination. The agreement also had a forum selection clause and a consent to personal
jurisdiction and venue in a state or federal court in New Jersey. Three employees, all
California residents who had worked several years for Biosense in California, left to work
for a competitor in California. Biosense sent a cease-and-desist letter to the competitor. Two
weeks later, the employees sued in Los Angeles Superior Court and obtained a TRO without
notice enjoining Biosense from litigating in any court outside of Los Angeles. The non-
competition clause appears facially invalid under Bus. & Prof. Code § 16600. The forum
selection clause also appears to overreach and the employees argued this was a transparent
attempt to circumvent California public policy expressed in Bus. & Prof. Code § 16600.
Nonetheless, the Court of Appeals ordered the TRO to be dissolved because principles of
comity do not permit the California court to enjoin out-of-state litigation under these
circumstances.
Kelton v. Stravinski, 138 Cal. App. 4th 941, 41 Cal. Rptr. 3d 877 (2006) . Two
individuals formed a partnership to develop industrial warehouses. Their partnership
agreement contained a provision that the individuals were free to undertake other projects of
similar nature. The parties also executed a covenant not to compete, in which they agreed not
to develop competing warehouses. The covenant was invalid under section 16600. The
exceptions in sections 16601 and 16602 do not apply. It appears that the provision allowing
the parties to develop similar projects was inconsistent with the non-compete agreement.
Ordinarily, partners have a fiduciary duty not to engage in a business competing with the
partnership business, but the partnership agreement expressly disclaimed such a duty, and the
court would not find an implied duty when the agreement expressly allowed the individuals to
204
undertake such projects.
Thompson v. Impaxx Inc., 113 Cal. App. 4th 1425, 7 Cal. Rptr. 3d 427 (2003) . An
employee for a company that was purchased by Impaxx refused to sign a covenant in favor of
Impaxx stating that for one year following termination of employment he would not “call on,
solicit, or take away any [existing] customers or potential customers with whom I have had
any dealings as a result of my employment.” He was fired. He sued for wrongful termination.
The trial court granted judgment on the pleadings in favor of the employer. The appellate
court reversed. Although Impaxx argued that this was a narrow non-solicitation clause and not
a non-competition clause, the appellate court decided otherwise. Although less restrictive
than other non-compete clauses it was still “anti-competitive.” Moreover, the court followed
the rule from the 1986 Moss, Adams v. Shilling case (see annotation below) that
“Antisolicitation covenants are void as unlawful business restraints except where their
enforcement is necessary to protect trade secrets.” If the employer’s customer list qualifies
as a trade secret, then an agreement not to contact the customers might be valid and
enforceable (in which case the wrongful termination in violation of public policy case would
fail). Although the employer might be correct that the customers qualified as a trade secret,
since the case was decided on the pleadings, the court had to accept as correct the allegation
in the complaint that the customers were not confidential. Hence, it was error for the trial
court to grant judgment on the pleadings.
Bennett v. Medtronic Inc., 285 F.3d 801 (9th Cir. 2002) . This case concerns a conflict
between a state court action in Tennessee where Medtronic was seeking to enforce a post-
termination noncompetition agreement against former employees, and an action in federal
district court in San Diego where the former employees sought a declaration that the
noncompetition provisions were unlawful under § 16600. The district court issued an order
temporarily enjoining Medtronic from pursuing the action in Tennessee, thereby requiring it
to litigate the enforceability of the noncompete agreements in California. The appellate court
reversed the injunction as a violation of the anti-injunction act, 28 U.S.C. § 1292.
Walia v. Aetna, Inc. , 93 Cal. App. 4th 1213, 113 Cal. Rptr. 2d 737 (2001) . A merger
between two companies resulted in a company named Aetna U.S. Healthcare. The former U.S.
Healthcare company primarily operated on the east coast and had written agreements with its
employees containing both nondisclosure and noncompete provisions (generally valid in
eastern states). The noncompete clause obligated an employee not to compete for 6 months
after termination of employment. After the merger, the new company sought to use these
agreements with all its employees, including those in California. A California employee
refused to sign the agreement and was fired. Aetna was held liable for wrongful termination
and a jury awarded about $54,000 in compensatory damages, $125,000 in emotional distress
damages and about $1 million in punitive damages. The entire award was affirmed on appeal.
The court held that California public policy against the enforcement of post-employment
noncompetition covenants as expressed in § 16600 has been in existence for over 100 years
with a substantial history of court enforcement. This sufficiently supported a claim for
wrongful termination in violation of public policy, commonly referred to as a “Tameny”
claim (from Tameny v. Atlantic Richfield Co. (1980) 27 Cal. 3d 167).
Advanced Bionics Corp. v. Medtronic Inc. , 87 Cal. App. 4th 1235, 105 Cal. Rptr. 2d
265 (2001), (rev. granted 108 Cal. Rptr. 2d 595, June 13, 2001). This case involves conflict
of law and jurisdiction issues. Since the Supreme Court has granted a hearing, the appellate
decision will become moot. The case is nevertheless significant because it upholds
jurisdiction in California to contest the validity of a noncompete covenant signed in
205
Minnesota by a Minnesota resident who thereafter moved to California.
Hill Medical Corporation v. Wycoff , 86 Cal. App. 4th 895, 103 Cal. Rptr. 2d 779
(2001). This case involves the interplay between §§ 16600 and 16601. A noncompete clause
purporting to prevent an employee from competing following termination is void under §
16600. On the other hand, a noncompete clause contained in an agreement whereby a seller
sells a business or all of his shares in a corporation plus the goodwill attendant thereto is
enforceable under § 16601. Hill Medical Group was a corporation. Dr. Wycoff was one of
14 doctors who owned stock in the corporation and were also employees. The combined
effect of the employment agreement and stock repurchase agreement required Wycoff to
sell his stock upon resignation and agree not to compete for 3 years. There may be cases
where the corporation could succeed in enforcing such a noncompete clause, but this was not
one of them. The trial court refused to grant an injunction against Wycoff’s competition
following resignation, holding that § 16601 did not apply. In affirming, the appellate court
observed that the mandatory repurchase provision required Wycoff to sell his stock for a
book value formula which did not include a component for goodwill. Further, since Wycoff
was one of 14 shareholders, his stake amounted to about 7 percent, and this did not support
any suggestion that any transfer of goodwill was considered as part of the transaction.
Therefore, the noncompete clause was unenforceable.
D’Sa v. Playhut Inc., 85 Cal. App. 4th 927, 102 Cal. Rptr. 2d 495 (2000) . This case held
that termination of an employee because he refused to sign a confidentiality agreement
containing a severable noncompete provision whereby he would not compete for a period of
one year following termination of his employment, constituted wrongful termination in
violation of public policy. The employer argued that the noncompete covenant could be
narrowly construed to apply to nondisclosure of trade secrets or confidential information,
and that as so construed the covenant would not violate § 16600. Alternatively, the
severability clause should save the agreement in that the confidentiality and trade secret
provisions are valid if the invalid noncompete clause were severed. The appellate court
rejected these arguments, noting that the issue was not whether the employer could sever the
invalid noncompete provision and enforce the balance of the agreement if the employee had
signed the agreement. Rather, the issue was whether the employee’s termination because he
refused to sign that agreement violated public policy.
Kolani v. Gluska (App. 2 Dist. 1998) 64 Cal. App. 4th 402, 75 Cal. Rptr. 2d 257 . A
covenant not to compete in an employment agreement was an outright prohibition on
competition, and thus, was void and unenforceable under section 16600. Nevertheless, the
plaintiff might have had a claim based on misappropriation of its customer list (which would
not have been void under this section) and the trial court should have granted leave to amend.
Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal. App. 4th 881, 906, 72
Cal. Rptr. 2d 73, 89. The Court of Appeal found that a nonresident business can be held
accountable for wrongful business conduct affecting California employees and employees
under Cal. Bus. & Prof. Code §§ 16600 and 17200. The case involved covenants not to
compete in the employment agreements of employees, who were not California residents,
but who sought employment in California with a California-based employer. California’s
interests in covenants not to compete prevailed over other state’s interests as applied to
California employers and employees.
General Commercial Packaging, Inc. v. TPS Package Eng’g, Inc., (9th Cir. 1997) 126
F.3d 1131. The Ninth Circuit held that a bargained-for contractual provision barring one party
206
from courting a specific named customer, as opposed to an entire trade or industry or a
significant portion of it, did not violate Cal. Bus & Prof. Code § 16600.
Shipley Co. v. Kozlowski, 926 F. Supp. 28 (D. Mass. 1996). This Massachusetts district
court applied California law to find that while California law disfavors non-competition
provisions in employment contracts, that California recognizes a limited exception where
trade secrets are at issue.
Metro Traffic Control, Inc. v. Shadow Traffic Network (2d Dist. 1994) 22 Cal. App. 4th
853, 27 Cal. Rptr. 2d 573. A restrictive covenant, in which at-will employees agreed not to
provide traffic reporting services to any competing television or radio station for a period of
one year after termination of their employment with the employer, was held unenforceable
because the restriction standing by itself severely restricted employees’ mobility and
betterment. Furthermore, the employer’s business did not possess any trade secrets, further
justifying the holding that the at-will employees’ covenant not to compete was
unenforceable.
Vacco Industries, Inc. v. Van Den Berg (2d Dist. 1992) 5 Cal. App. 4th 34, 6 Cal. Rptr.
2d 602. In a case of first impression, the Court of Appeal held that obligations under an
enforceable covenant not to compete are not discharged when the employee is wrongfully
terminated. Termination implicates only the employee’s employment rights and is
independent from any obligation to refrain from misappropriation of trade secrets. Wrongful
termination, or breach of an employment agreement, has a clear remedy in contract. The
court held there is no justification for also excusing the employee from performing a
promise contained in the covenant not to compete. To hold otherwise would be to encourage
unfair competition and theft of trade secrets by every discharged employee who felt wronged
by an employer’s act.
Scott v. Snelling and Snelling, Inc. (N.D. Cal. 1990) 732 F. Supp. 1034. This case is the
first decision to construe Bus. & Prof. § 16600 in a franchise context. The court interpreted
the statute “as broadly as its language reads” and ruled that restrictive covenants could not be
enforced in franchise agreements. The restrictive covenant at issue was a provision for
plaintiffs not to compete with defendant’s franchise in their former franchise area for two
years after plaintiffs terminated the agreement. While a judicial exception exists which will
enforce a restrictive covenant when a former employee uses an employer’s trade secrets, the
information at issue (customer lists, business forms and procedures, and temporary
employee lists) was not a trade secret as a matter of law.
Campbell v. Trustees of Leland Stanford Jr. Univ. (9th Cir. 1987) 817 F.2d 499, 2
U.S.P.Q. 2d 1920. California courts have narrowly defined “profession, trade, or business” as
used in Bus. & Prof. Code § 16600. A contractual restraint on preparing vocational interest
exams may qualify as the requisite restraint on a business, trade, or profession, thereby
voiding any clause in a contract that restrains a psychologist from preparing such exams for a
competitor.
Moss, Adams & Co. v. Shilling (1st Dist. 1986) 179 Cal. App. 3d 124, 224 Cal. Rptr.
456. A restrictive covenant will be enforced when necessary to prevent unfair competition
such as the unauthorized use of trade secrets or confidential information. Under Bus. & Prof.
Code § 16600 antisolicitation agreements are void as unlawful business restraints unless
enforcement is necessary to protect trade secrets. Former employees of an accounting firm
did not use trade secrets when they used a rolodex to obtain names and addresses of clients
of their employer in order to mail an announcement of their new partnership since the
207
employees already knew the names of the clients they selectively looked up in the rolodex
and the clients’ addresses were readily available from a telephone directory.
Loral Corp. v. Moyes (6th Dist. 1985) 174 Cal. App. 3d 268, 280, 219 Cal. Rptr. 836 .
Employment agreement not to “raid” employees of a former employer after termination does
not violate Bus. & Prof. Code § 16600.
Smith v. CMTA-IAM Pension Trust (9th Cir. 1981) 654 F.2d 650 . A suspension clause
in a pension plan providing that retirement benefits will be suspended during any period in
which a member is employed in the metal trades industry or for a “participating employer”
does not constitute a restraint on trade in violation of Bus. & Prof. Code § 16600. The
suspension clause was limited in time and scope and also was part of a collective bargaining
agreement implemented to further fairness in the allocation of retirement benefits.
Hollingsworth Solderless Terminal Co. v. Turley (9th Cir. 1980) 622 F.2d 1324 . If a
former employee uses trade secrets of an employer or otherwise commits unfair
competition, California courts will recognize a judicially created exception to Bus. & Prof.
Code § 16600 and will enforce a restrictive covenant.
KGB, Inc. v. Giannoulas (4th Dist. 1980) 104 Cal. App. 3d 844, 164 Cal. Rptr. 571, 211
U.S.P.Q. 285. (“San Diego chicken” case.) An injunction preventing a former employee of a
radio station, who had appeared in a chicken costume as the stations’ mascot, from appearing
in any type of chicken suit in the San Diego area was invalid because it restricted the
defendant’s right to earn a living under Bus. & Prof. Code § 16600 (as well as his First
Amendment right to express himself as an artist).
Articles
McDaniel, An Alternative to California’s Prohibition on Noncompete Clauses , 27
L.A. Lawyer 25 (2004).
Brunda, Intellectual Property Law: The Cutting Edge Emerging Issues at the Interface
of Non-competition Agreements and Trade Secret Protection , 49 Orange County Lawyer 8
(Aug. 2007).
Graves, Nonpublic Information and California Tort Law: A Proposal for Harmonizing
California’s Employee Mobility and Intellectual Property Regimes Under the Uniform
Trade Secrets Act, UCLA J.L. & Tech. (Spring 2006).
§ 16601. Sale of Goodwill or Corporate Shares.

Any person who sells the goodwill of a business, or any owner of a
business entity selling or otherwise disposing of all of his or her ownership
interest in the business entity, or any owner of a business entity that sells (a) all
or substantially all of its operating assets together with the goodwill of the
business entity, (b) all or substantially all of the operating assets of a division or
a subsidiary of the business entity together with the goodwill of that division or
subsidiary, or (c) all of the ownership interest of any subsidiary, may agree with
the buyer to refrain from carrying on a similar business within a specified
geographic area in which the business so sold, or that of the business entity,
208
division, or subsidiary has been carried on, so long as the buyer, or any person
deriving title to the goodwill or ownership interest from the buyer, carries on a
like business therein. For the purposes of this section, “business entity” means
any partnership (including a limited partnership or a limited liability
partnership), limited liability company (including a series of a limited liability
company formed under the laws of a jurisdiction that recognizes such a series),
or corporation.
For the purposes of this section, “owner of a business entity” means any
partner, in the case of a business entity that is a partnership (including a limited
partnership or a limited liability partnership), or any member, in the case of a
business entity that is a limited liability company (including a series of a limited
liability company formed under the laws of a jurisdiction that recognizes such a
series), or any owner of capital stock, in the case of a business entity that is a
corporation.
For the purposes of this section, “ownership interest” means a partnership
interest, in the case of a business entity that is a partnership (including a limited
partnership a limited liability partnership), a membership interest, in the case of
a business entity that is a limited liability company (including a series of a
limited liability company formed under the laws of a jurisdiction that recognizes
such a series), or a capital stockholder, in the case of a business entity that is a
corporation.
For the purposes of this section, “subsidiary” means any business entity
over which the selling business entity has voting control or from which the
selling business entity has a right to receive a majority share of distributions
upon dissolution or other liquidation of the business entity (or has both voting
control and a right to receive these distributions.)
Added Stats 1941 ch 526 § 1. Amended Stats 1941 ch 845 § 1; Stats 1945 ch 671 § 1;
Stats 1963 ch 597 § 1; Stats 2002 ch 179 § 1 (AB 60]); Stats 2006 ch 495 § 1 (AB 339),
Annotations
Cases
Alliant Ins. Services, Inc. v. Gaddy, 159 Cal. App. 4th 1292, 72 Cal. Rptr. 3d 259
(2008). Gaddy sold his business, which was a construction insurance brokerage, to his
competitor, Alliant. Gaddy signed the sales agreement and an employment agreement, each
of which contained a noncompetition clause for about two years after termination of
employment preventing competition anywhere in the 58 counties of California, and a
nonsolicitation clause prohibiting solicitation of Alliant’s customers. The trial court issued a
preliminary injunction against Gaddy prohibiting competition and solicitation throughout
California’s 58 counties. Gaddy contended under the portion of Bus. & Prof. Code § 16601
which permits such a restraint “in a specified geographic area in which the business so sold
209
has been carried on” that the injunction should be limited to four counties in Northern
California where the business was conducted. He argued the statewide injunction exceeded
that area. Although the customers of the business were limited to four to six counties in
Northern California, the company did business with insurance companies throughout
California to procure insurance for its clients. The court held this was evidence that business,
in the form of producing the insurance, was indeed carried on statewide. As to the
nonsolicitation clause, it is valid to the extent necessary to protect trade secrets. Information
regarding customers, their specific insurance needs, and expiration dates of their policies can
constitute such a trade secret. Therefore, the nonsolicitation clause is valid. The statewide
injunction was therefore affirmed.
§ 16602. Agreement Not to Compete in Connection with

Dissolution of Partnership Not Void.
(a) Any partner may, upon or in anticipation of any of the circumstances
described in subdivision (b), agree that he or she will not carry on a similar
business within a specified geographic area where the partnership business has
been transacted, so long as any other member of the partnership, or any person
deriving title to the business or its goodwill from any such other member of the
partnership, carries on a like business therein.
(b) Subdivision (a) applies to either of the following circumstances:
(1) A dissolution of the partnership.
(2) Dissociation of the partner from the partnership.
Leg.H. 1941 ch. 526, 1961 ch. 1091, 1996 ch. 1003, 2002 ch. 179.
Annotations
Cases
Howard v. Babcock (1993) 6 Cal. 4th 409, 25 Cal. Rptr. 2d 80, 863 P.2d 150 . The
California Supreme Court resolved a split among the California courts of appeal concerning
the applicability of Bus. & Prof. Code § 16602 to law firms. The Court held that Bus. & Prof.
Code § 16602 applies to partners in law firms. Therefore, the Court held, an agreement
among partners imposing a reasonable cost on departing partners who compete with the law
firm in a limited geographical area is not void on its face as against public policy,
notwithstanding Cal. Rules Prof. Conduct, Rule 1-500(A), which prohibits a State Bar
member from making an agreement that restricts his or her right to practice law on
termination of an employment, shareholder, or partnership relationship. The Court cautioned
that restraint of competition among partners is permissible only to the extent that it protects
the reasonable interests of the business seeking the restraint. However, to the extent that an
agreement merely assesses a toll on competition within a specified geographical area,
comparable to a liquidated damage clause, it may be reasonable.
Haight, Brown & Bonesteel v. Superior Court (2d Dist. 1991) 234 Cal. App. 3d 963,
210
285 Cal. Rptr. 845. Lawyers are to be treated as other professionals (such as physicians and
certified public accountants) for the purpose of Bus. & Prof. Code § 16602, and so may
enter into noncompetition agreements which are in accordance with Bus. & Prof. Code §
16602. Such agreements do not conflict with the Rules of Professional Conduct of the State
Bar which prohibit any agreement restricting the right of an attorney to practice law. Rule 1-
500 provides, in pertinent part, that an attorney licensed to practice in California may not “be
a party to … an agreement … if the agreement restricts the right of a member to practice
law.” The provision at issue reads as follows:
[E]ach Partner agrees that, if he withdraws or voluntarily retires from the Partnership, he
will not engage in any area of the practice of law regularly practiced by the law firm and in so
doing represent or become associated with any firm that represents any client represented by
this law firm within a twelve (12) month period prior to said person leaving the firm, within
the Counties of Los Angeles, Ventura, Orange, Riverside or San Bernardino nor within any
City in such counties for a period of three (3) years from the date of withdrawal or
retirement, so long as continuing members of this firm engage in practice in the same areas
of law. … A Partner … may violate this Section … However, by so doing, he forfeits any and
all rights and interests, financial and otherwise, to which he would otherwise be thereafter
entitled as a departing Partner under the terms of this Agreement.
Articles
Hillman, The Law Firm as Jurassic Park: Comments on Howard v. Babcock, 27 U.C.
Davis L. Rev. 533 (1994).
§ 16602.5. Agreement by Member Not to Carry on

Similar Business Within Specified Locality.
Any member may, upon or in anticipation of a dissolution of, or the
termination of his or her interest in, a limited liability company (including a
series of a limited liability company formed under the laws of a jurisdiction
recognizing such a series), agree that he or she or it will not carry on a similar
business within a specified geographic area where the limited liability company
business has been transacted, so long as any other member of the limited
liability company, or any person deriving title to the business or its goodwill
from any such other member of the limited liability company, carries on a like
business therein.
Added Stats 1994 ch 1200 § 1 (SB 469), effective September 30, 1994. Amended Stats
2002 ch 179 § 3 (AB 601); Stats 2006 ch 495 § 2 (AB 339), effective January 1, 2007.
§ 16606. Customer List of Telephone Answering Service

as Trade Secret.
The customer list, including the names, addresses, and identity of customers,
of a telephone answering service shall constitute a trade secret and confidential
211
information of, and shall belong to, the owner of the telephone answering
service.
Leg.H. 1968 ch. 720.
The law is unclear as to whether a departing employee is permitted to send simple
announcements concerning his or her departure to the customers of the former employer
when the departing employee uses a list of those customers that was a trade secret of the
former employer. Compare American Credit Indemnity Co. v. Sacks (2d Dist. 1989) 213
Cal. App. 3d 622, 262 Cal. Rptr. 92 , with Moss, Adams & Co. v. Shilling (1st Dist. 1986),
179 Cal. App. 3d 124, 224 Cal. Rptr. 456 (dictum in American Credit indicates that this
would not be prohibited solicitation, whereas dictum in Moss, Adams indicated that any use
of the former employer’s trade secret customer list would be forbidden).
§ 16607. Customer List of Employment Agency as

Trade Secret.
(a) Except as provided in subdivision (b), the customer list, including the
names, addresses and identity of all employer customers who have listed job
orders with an employment agency within a period of 180 days prior to the
separation of an employee from the agency and including the names, addresses
and identity of all applicant customers of the employment agency, shall
constitute a trade secret and confidential information of, and shall belong to, the
employment agency.
( b) Notwithstanding the provisions of subdivision (a), no liability shall
attach to, and no cause of action shall arise from, the use of a customer list of an
employment agency by a former employee who enters into business as an
employment agency more than one year immediately following termination of
his employment.
Leg.H. 1973 ch. 1116.
CHAPTER 5
ENFORCEMENT
§ 17200. Definition of “Unfair Competition.”
212
As used in this chapter, unfair competition shall mean and include any
unlawful, unfair or fraudulent business act or practice and unfair, deceptive,
untrue or misleading advertising and any act prohibited by Chapter 1
(commencing with Section 17500) of Part 3 of Division 7 of the Business and
Professions Code.
Leg.H. 1977 ch. 299, 1992 ch. 430.
213
The courts have used different names to refer to sections 17200–17209 (now 17200–
17210), including: Unfair Competition Act, Unfair Business Practices Act, Unfair Practices
Act. The current preferred term appears to be “Unfair Competition Law” or “UCL.” (See Stop
Youth Addiction, Inc. v. Lucky Stores, (1998) 17 Cal. 4th 553, 558, 71 Cal. Rptr. 2d 731,
734, n.2.) A reason not to refer to these statutes as the “Unfair Practices Act” or “Unfair
Business Practices Act” is the possible confusion with the “Unfair Practices Act” (“UPA”) at
17000 et seq. The UPA prohibits specific practices which the Legislature has determined to
be unfair trade practices and prescribes severe penalties. The UCL is independent of the UPA
and other laws. Its remedies are cumulative to those under the UPA, but its sanctions are less
severe. Cel-Tech Communications v. L.A. Cellular (1999) 20 Cal. 4th 163, 83 Cal. Rptr. 2d
548.
Because a 17200 claim is equitable, there is no right to a jury. See Hodge v. Superior
Court, 145 Cal. App. 4th 278, 51 Cal. Rptr. 3d 519 (2006) . Remedies under the UCL for a
private litigant are limited to equitable relief, i.e., a private litigant cannot recover damages
under the UCL, but may obtain an injunction and/or restitution. Although there used to be
some authority that restitution might only be awarded as an ancillary remedy to injunctive
relief (see David K. Lindemuth Co. v. Shannon Fin. Corp. (N.D. Cal. 1986) 637 F. Supp.
991, 994–995), the law is now clear that either an injunction or restitution or both may be
awarded in the discretion of the court. Clayworth v. Pfizer, Inc. , 49 Cal. 4th 758, 111 Cal.
Rptr. 3d 666, 233 P.3d 1066 (2010) ; ABC Intern. Traders, Inc. v. MECA, 14 Cal. 4th 1247,
1271, 61 Cal. Rptr. 2d 112, 126, 931 P.2d 290 (1997).
In addition to the annotations below, the practitioner should consult cases under § 17500
et seq. (false advertising). Because of similarities in the statutory schemes, courts are likely
to apply precedents under the false advertising law (17500 et seq.) to cases arising under the
unfair competition law (17200 et seq.) and vice-versa. See Bank of the West v. Superior
Court (1992) 2 Cal. 4th 1254, 1267, 10 Cal. Rptr. 2d 538, 546; People v. Thomas Shelton
Powers, M.D., Inc. (1992) 2 Cal. App. 4th 330, 340–341, 3 Cal. Rptr. 2d 34, 40–41.
We recommend that any claim for statutory unfair competition be joined with a claim
for common law unfair competition. Compensatory and punitive damages were awarded at
common law in California prior to enactment of these Code sections. See, e.g., Singer Mfg.
Co. v. Redlich (S.D. Cal. 1952) 109 F. Supp. 623, 626–628. Enactment of the UCL did not
eliminate common law remedies. See §§ 14210 and 17205.
On November 2, 2004 Proposition 64 was passed by the voters. Prop 64 made
significant changes to the Unfair Competition Law. The two most significant changes are: (1)
in order to sue a private plaintiff must have suffered “injury in fact” and “lost money or
property as a result of such unfair competition” (§ 17204); and (2) in order to sue in a
representative capacity a plaintiff must satisfy the class certification requirements of Code
of Civil Procedure § 382 (§ 17203).
The California Supreme Court resolved the issue of the retroactivity of the new standing
requirements for UCL claims resulting from Proposition 64. In the companion cases of
Californians for Disability Rights v. Mervyn’s , 39 Cal. 4th 223, 46 Cal. Rptr. 3d 57 (2006)
and Branick v. Downey Savings and Loan Association, 39 Cal. 4th 235, 46 Cal. Rptr. 3d 66
(2006), the Supreme Court held that the new standing requirements apply to pending cases,
but nothing in Proposition 64 prevents an amendment of the pleadings or substitution of a
214
new plaintiff to satisfy the new standing requirements. Since then, the appellate court in
Foundation for Taxpayer and Consumer Rights v. Nextel Communications Inc. , 143 Cal.
App. 4th 131, 48 Cal. Rptr. 3d 836 (2006), held it was an abuse of discretion not to allow
such an amendment.
The California Supreme Court rejected the line of cases holding that a plaintiff must be
entitled to restitution in order to have standing. See Kwikset Corp. v. Superior Court, 51
Cal. 4th 310, 120 Cal. Rptr. 3d 741, 246 P.3d 877 (2011) and Clayworth v. Pfizer, Inc. , 49
Cal. 4th 758, 111 Cal. Rptr. 3d 666, 233 P.3d 1066 (2010) . Standing under 17204 is a
separate inquiry from the right to restitution under 17203. A plaintiff might not have the right
to restitution but still have standing to pursue injunctive relief as long as the plaintiff meets
the requirement of injury in fact and loss of money or property as a result of the unfair
competition.
Annotations
Cases
Chapman v. Skype, Inc., 220 Cal. App. 4th 217, 162 Cal. Rptr. 3d 864 (2013) . Skype
offered “unlimited” plans for voice over IP calling plans. A footnote stated that a “fair usage
policy” applied, that limited the use to 6 hours per day, 10,000 minutes per month and 50
numbers called per day. Plaintiff asserted claims under 17200, 17500 and the CLRA. The
trial court sustained a demurrer because the footnote disclosed the precise terms. The
appellate court reversed and held that it is a factual issue whether the footnote would likely
be read by consumers so they would learn that an apparently “unlimited” plan actually had
some limitations.
Simpson v. Kroger Corp. , 219 Cal. App. 4th 1352, 162 Cal. Rptr. 3d 652 (2013) .
Kroger’s supermarkets sold a spreadable butter product containing canola oil or olive oil
under the “Challenge Butter” label. Plaintiff alleged this was false and deceptive because the
products were not pure butter but were spreads containing butter and other substances. The
court held that the labeling was not deceptive because it clearly disclosed that the products
contained olive oil or canola oil as well as butter.
People v. Persolve LLC, 218 Cal. App. 4th 1267, 160 Cal. Rptr. 3d 841 (2013) . The
People brought this UCL claim against a debt collection company and its attorneys based on
alleged violations of the California and federal fair debt collection practices acts. The trial
court sustained a demurrer and dismissed the case on the ground that the alleged violations in
letters to debtors were protected by the litigation privilege in Civil Code section 47. The
appellate court reversed, holding that the specific state and federal laws proscribing certain
conduct in communications with debtors overrode the litigation privilege.
Rose v. Bank of America, 57 Cal. 4th 390, 159 Cal. Rptr. 3d 693, 304 P.3d 181 (2013) .
This UCL claim is based on alleged violations of disclosure requirements in the federal Truth
in Savings Act (TISA). From 1991 to 2001 TISA included a provision (section 4310)
allowing individual suits for damages and other relief. That provision was repealed effective
2001, and based on the repeal of that provision the trial court and the court of appeal held that
a UCL claim could not proceed. Congress did not repeal section 4312 of TISA, which allows
state laws that are not inconsistent with TISA. The Supreme Court held that Congress
therefore did not preempt or prevent the use of state laws such as the UCL to enforce
215
violations of TISA.
Davis v. HSBC Bank Nevada N.A., 691 F.3d 1152 (9th Cir. 2012) . In this putative class
action Davis alleged violations of sections 17200 and 17500 for alleged nondisclosure of an
annual fee charged on a credit card. Best Buy advertised a special reward program that
operated with a credit card issued by HSBC. The advertisements did not mention an annual
fee, but when applying for the program Davis had to agree to the terms on a drop-down box
which included reference to the annual fee. The advertisement also indicated that “other
restrictions may apply.” Davis did not read the terms and conditions. The court held that there
was no false or misleading advertising or unlawful or unfair conduct because a reasonable
consumer would not assume that a credit card has no annual fee and Davis could have avoided
the problem by reading the terms and conditions or canceling his account when he learned
about the annual fee.
Wilson v. Hynek , 207 Cal. App. 4th 999, 144 Cal. Rptr. 3d 4 (2012) . To secure a series
of loans, the plaintiffs agreed to deeds of trust on a plot of vacant land and two other
properties. They alleged that they were persuaded to put up the additional properties after
they were assured that in the event of foreclosure, the lender would first foreclose on the
vacant land and secondly that if they provided an appraisal showing that the vacant land was
worth at least $5 million, the other properties would be released. When all the properties
were eventually foreclosed, plaintiffs sued on multiple theories. As to the UCL claim they
alleged the defendants had violated the unfair prong of section 17200. The court held as a
matter of law that there was no unfair conduct because the lenders complied with provisions
in the deeds of trust that permitted the foreclosures.
Hill v. Roll International Corp., 195 Cal. App. 4th 1295, 128 Cal. Rptr. 3d 109 (2011) .
Plaintiff alleged violations of 17200 and 17500 because the defendant included a green drop
on the packaging of its bottled water thereby allegedly promoting the product as
environmentally superior. The court held that the plaintiff’s allegations were unreasonable
and could not support a claim.
Sullivan v. Oracle Corp., 51 Cal. 4th 1191, 127 Cal. Rptr. 3d 185, 254 P.3d 237
(2011). Three employees of Oracle were classified as “instructors” who trained customers in
use of Oracle products. These three employees were not residents of California but
performed some of their work in California and some outside California. The issue was
whether Oracle committed an unfair business practice by failing to pay overtime. The
California Supreme Court, on request from the Ninth Circuit, held that failure to pay
overtime for work performed in California violated the UCL, but the UCL does not have
extraterritorial application. Therefore, failure to pay overtime for work performed outside
California could not be a predicate for the UCL claim.
Degelmann v. Advanced Medical Optics, Inc., 659 F.3d 835 (9th Cir. 2011) . Plaintiffs
claimed that defendant’s marketing a contact lens solution that supposedly cleaned and
disinfected the lenses violated 17200 and 17500. The Ninth Circuit held that these claims
were preempted by 1976 Medical Device Amendments to the Food, Drug, and Cosmetic Act.
MacKay v. Superior Court, 188 Cal. App. 4th 1427, 115 Cal. Rptr. 3d 893 (2010) .
Plaintiffs challenged certain insurance rating practices as violating certain Insurance Code
provisions and therefore unlawful under section 17200. There is an administrative procedure
whereby the Department of Insurance (DOI) approves insurance rates. The court held that the
DOI’s approval of rates may only be challenged by administrative mandamus. Therefore, the
section 17200 claim could not proceed.
216
Tanen v. Southwest Airlines Co., 187 Cal. App. 4th 1156, 114 Cal. Rptr. 3d 743 (2010).
This UCL claim was based on an alleged violation of Civil Code § 1749.5 which makes it
unlawful for gift certificates to have an expiration date. The court held that this claim is
preempted by the Airline Deregulation Act, 49 U.S.C. § 41713(b)(1).
Clark v. Superior Court, 50 Cal. 4th 605, 112 Cal. Rptr. 3d 876, 235 P.3d 171 (2010) .
Civil Code § 3345 provides that in actions by senior citizens or disabled persons for unfair or
deceptive acts or practices or unfair methods of competition, the recovery may be trebled.
Plaintiffs sued an insurer for violation of section 17200 by using deceptive business
practices to induce senior citizens to buy high-commission annuity contracts with large
penalties for “early surrender.” They sought restitution under section 17203 and trebling of
the recovery under Civil Code § 3345. The Supreme Court held that section 3345 cannot
apply to a recovery of restitution under section 17200. Restitution is not a punitive remedy.
The word “restitution” means the return of money or other property obtained through an
improper means to the person from whom the property was taken. The trebling provision of
section 3345 can only apply to compensatory damages or a penalty, neither of which is
recoverable under section 17200.
Nelson v. Pearson Ford Co. , 186 Cal. App. 4th 983, 112 Cal. Rptr. 3d 607 (2010) . The
UCL violation in this class action involved backdating contracts for the sale of a car and
adding to the sales price a charge for insurance. The cost of the used car purchased by the
representative plaintiff was $9,950. The effect of backdating and adding the insurance cost to
the purchase price was that plaintiff paid about $27 extra in finance charges, and about $30
extra in sales taxes and finance charges. Plaintiff had standing under the UCL based on these
excess payments resulting from the wrongful practices. As a remedy, the trial court awarded
recovery of all the money that had been paid for the car. This was error. To the extent that the
trial court allowed class plaintiffs to rescind the transaction, the remedy was erroneous.
Rescission is not a remedy under the UCL. Also, to the extent that the trial court awarded
recovery of all money paid for the car, that was also error. This was not appropriate
restitutionary relief under the UCL as it does not accomplish the statutory objective of
restoring to the victims’ sums acquired through Pearson Ford’s unfair practices.
People ex rel. City of Santa Monica v. Gabriel , 186 Cal. App. 4th 882, 112 Cal. Rptr.
3d 574 (2010). The unlawful business practice in this case was sexual harassment of a tenant
by a landlord. The landlord argued this was not a “business” practice because it was
inappropriate personal conduct unrelated to commercial activity. The court rejected that
argument and held that this was a business practice since it occurred as part of the landlord-
tenant relationship, not a personal relationship. The trial court had awarded attorney’s fees
under a theory that when the UCL action is based on a statute that allows recovery of
attorney’s fees, then attorney’s fees can be recovered in the UCL action. The appellate court
reversed the award of attorney’s fees and held that attorney’s fees are not recoverable in a
UCL action. The UCL action “borrows” the substantive law of the predicate statute, but not
its remedies.
Clayworth v. Pfizer, Inc. , 49 Cal. 4th 758, 111 Cal. Rptr. 3d 666, 233 P.3d 1066
(2010). This action alleged violations of the Cartwright Act and the UCL for alleged price-
fixing of the cost of pharmaceuticals. The plaintiffs were pharmacies and the defendants were
manufacturers. The defendants argued the plaintiffs had no damages or injury in fact because
generally they passed on overcharges to their customers. With respect to the UCL claim, the
trial court concluded the pharmacies lacked standing and also concluded they could not
217
obtain injunctive relief because they could not obtain restitutionary relief. The Supreme
Court reversed. The pharmacies indeed suffered injury in fact because they paid higher
prices. The fact that they may have mitigated or eliminated their losses by passing them on to
customers did not mean they suffered no injury in fact. Therefore they had standing. Also, the
right to injunctive relief is independent of the right to restitution. Therefore, even if they
could not recover restitution, they could still be awarded an injunction.
Koszdin v. State Comp. Ins. Fund, 186 Cal. App. 4th 480, 112 Cal. Rptr. 3d 494 (2010) .
The alleged violation in this action was failure to pay interest on attorney’s fee awards in
Workers’ Compensation proceedings. Although the court agreed that interest should have
been paid, there is no jurisdiction in the superior court to order an award of interest that is
not included in the original award from the WCAB. Section 17200 does not confer
jurisdiction in such a case.
Silvaco Data Systems v. Intel Corp., 184 Cal. App. 4th 210, 109 Cal. Rptr. 3d 27
(2010). The Uniform Trade Secret Act (UTSA) at Civil Code § 3426 et seq., preempts claims
under other statutes based on misappropriation of a trade secret, including a UCL claim.
Here, the UCL claim was based on alleged violation of a court order preventing disclosure of
information, not necessarily a trade secret. Therefore the claim was not preempted by the
UTSA claim. Nonetheless, the UCL claim failed due to lack of standing. (See annotations
under section 17204 and Civil Code sections 3426 and 3426.7.)
Drum v. San Fernando Valley Bar Assn. , 182 Cal. App. 4th 247, 106 Cal. Rptr. 3d 46
(2010). A voluntary bar association refused to sell its membership list to a mediator. The
mediator, who was a disbarred attorney, sued the bar association alleging that this was an
unfair business practice because the alleged purpose was to help maintain prices for the
association’s members. The court held there was no violation of law.
Dowell v. Biosense Webster, Inc. , 179 Cal. App. 4th 564, 102 Cal. Rptr. 3d 1 (2009) . A
UCL claim may be based on the use of an invalid noncompetition clause. (See also annotation
under section 16600.)
Powers v. Pottery Barn, Inc., 177 Cal. App. 4th 1039, 99 Cal. Rptr. 3d 693 (2009) .
When plaintiff made a purchase with her credit card, she was asked to provide her email
address. This was alleged to be a violation of the Song Beverly Act which prohibits
solicitation of a consumer’s personal information as part of a credit card transaction, and
also a violation of the UCL. The trial court had held the claim preempted by a federal law that
regulates email traffic. The appellate court reversed and found no preemption because the
Song Beverly Act prohibition against obtaining personal information, which includes an email
address, is not directed at Internet activity.
K.C. Multimedia, Inc. v. Bank of America Technology & Operations , Inc., 171 Cal.
App. 4th 939, 90 Cal. Rptr. 3d 247 (2009). The California Uniform Trade Secret Act
(CUTSA) preempts claims that are based on the same nucleus of facts as the claim for
misappropriation of trade secrets. The appellant’s claims for breach of confidence,
interference with contract and statutory unfair competition were held preempted by the
CUTSA claim.
Dey v. Continental Central Credit, 170 Cal. App. 4th 721, 88 Cal. Rptr. 3d 241 (2008) .
This UCL claim was predicated on an alleged violation of the federal Fair Debt Collection
Practices Act. The claim failed because plaintiff failed to allege any specific violation of the
act, such as an allegation that the collection fee was not authorized by the underlying contract
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or agreement, or that the fee was not permitted by law.
Paduano v. American Honda Motor Co., Inc., 169 Cal. App. 4th 1453, 88 Cal. Rptr. 3d
90 (2009). The UCL and false advertising claims in this case were based on Honda’s
advertising about fuel efficiency of a hybrid vehicle. The claims were held not preempted by
federal laws pertaining to fuel economy in the Energy Policy and Conservation Act, 49
U.S.C. § 32901 et seq.
Baudino v. SCI California Funeral Services, Inc., 169 Cal. App. 4th 773, 87 Cal. Rptr.
3d 147 (2008). This UCL claim was predicated on an alleged violation of the FTC’s “Funeral
Rule” pertaining to charges and disclosures for funeral services. The court held that the
defendants did not violate the “Funeral Rule.”
E.S.S. Entm’t 2000, Inc. v. Rock Star Videos, Inc. , 547 F.3d 1095 (9th Cir. 2008) . The
owners of a strip club in Los Angeles known as the “Play Pen” sued the developers of the
Grand Theft Auto series of video games for federal trademark infringement under § 43(a) of
the Lanham Act, state trademark infringement under Bus. & Prof. Code § 14320 (see now
Bus. & Prof. Code § 14245), statutory unfair competition under Bus. & Prof. Code § 17200,
and common law unfair competition. The video games include a fictional city called Los
Santos which was designed to resemble Los Angeles and contained a virtual strip club called
the “Pig Pen” which was modeled after plaintiff’s club. Rock Star Videos asserted two
defenses, nominative fair use and the First Amendment. The nominative fair use defense
failed because that only applies when the names used are identical. The First Amendment
defense succeeded to bar all four claims. The creator of an artistic work is entitled to the
First Amendment defense unless the interest in avoiding confusion “outweighs the public
interest in free expression” [emphasis in original]. The threshold for artistic expression is a
low one. As long as there is any artistic transformation involved the First Amendment
defense applies.
Buller v. Sutter Health, 160 Cal. App. 4th 981, 74 Cal. Rptr. 3d 47 (2008) . This claim
against a health insurer and hospital alleged that defendants have an undisclosed policy of
granting discounts on their medical bills to any customer who asks for one. This was alleged
to be unfair to customers who do not know about the policy and pay in full. The court held
that absent a duty to disclose there can be no claim based on the alleged nondisclosure. In
short, the policy is not unfair.
Puentes v. Wells Fargo Home Mortgage, Inc. , 160 Cal. App. 4th 638, 72 Cal. Rptr. 3d
903 (2008). This UCL claim challenged the method of calculating interest on a home loan
whereby each month, including February, is treated as 1/12 of a year or equivalent to 30.4
days. Plaintiffs contended that the actual number of days should be used, i.e., February only
has 28 days. The court held there is nothing unfair or unlawful in the lender’s method.
Ticconi v. Blue Shield of California Life & Health Ins. Co. , 160 Cal. App. 4th 528, 72
Cal. Rptr. 3d 888 (2008). The unlawful conduct alleged in this case is an alleged violation of
Ins. Code §§ 10113 and 10381.5 that prohibit rescission of disability insurance on the
ground of fraud in the application when the application is not endorsed on or attached to the
policy. This is a sufficient predicate for a UCL claim.
People ex rel. Gallegos v. Pacific Lumber Co. , 158 Cal. App. 4th 950, 70 Cal. Rptr. 3d
501 (2008). The state sued a lumber company alleging that the lumber company submitted
false information to an administrative agency for an environmental impact determination
under the California Environmental Quality Act. The court held that these communications
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are privileged under Civ. Code § 47(b) and the Noerr-Pennington doctrine.
Rose v. Chase Bank USA, N.A., 513 F.3d 1032 (9th Cir. 2008) . Plaintiff alleged that
Chase violated California Civ. Code § 1748.9 with respect to “convenience checks” which
are preprinted, perforated checks mailed to customers. The court held that this statute as
applied to a nationally chartered bank is preempted by the National Bank Act and regulations
promulgated thereunder by the Office of the Comptroller of the Currency.
In re Farm Raised Salmon Cases, 42 Cal. 4th 1077, 72 Cal. Rptr. 3d 112, 175 P.3d
1170 (2008). Plaintiffs brought suit asserting claims under Bus. & Prof. Code §§ 17200 and
17500, among others, alleging that various grocery stores failed to disclose artificial
coloring added to farmed salmon. The Supreme Court held these claims are not preempted by
the Federal Food, Drug, and Cosmetic Act.
Silvas v. E*Trade Mortg. Corp. , 514 F.3d 1001 (9th Cir. 2008) . This is a putative class
action against a federal savings and loan association for failing to refund so-called “lock-in”
fees, which by law are refundable. The court held these claims are preempted by the Home
Owner’s Loan Act and regulations.
In re Wash. Mut. Overdraft Prot. Litig. , 539 F. Supp. 2d 1136 (C.D. Cal. 2008) . This
action challenged the “overdraft limit feature” of ATM and debit cards as violating laws
having to do with the extension of credit, including the Truth in Lending Act (TILA). Because
ATM and debit cards are not credit cards, the court, consistent with regulations promulgated
under TILA, ruled that there is no extension of credit so that these laws do not apply.
Furthermore, the state UCL claim is preempted by Home Owners Loan Act (HOLA) and
regulations thereunder.
Reyes v. Downey S&L Ass’n, F.A. , 541 F. Supp. 2d 1108 (C.D. Cal. 2008) . This UCL
claim alleged that Downey promised borrowers a lower interest rate than actually delivered.
This claim is not preempted by the Home Owners Loan Act. On the other hand, a claim based
on alleged violation of the federal Truth in Lending Act was preempted.
True v. Am. Honda Motor Co. , 520 F. Supp. 2d 1175 (C.D. Cal. 2007) . This case
challenges as a violation of Bus. & Prof. Code §§ 17200 and 17500 allegedly misleading
representations regarding the mileage and fuel efficiency of defendant’s automobiles. The
court ruled that Plaintiff had sufficiently pleaded the claims, that Plaintiff had alleged
reliance, and that the claims are not preempted by federal law.
CRST Van Expedited, Inc. v. Werner Enters. , 479 F.3d 1099 (9th Cir. 2007) . A UCL
claim under the unlawful prong can be predicated on interference with contract or
prospective economic advantage.
Lanard Toys, Ltd. v. Novelty, Inc. , 511 F. Supp. 2d 1020 (C.D. Cal. 2007) . A claim for
trade dress infringement can be a predicate for a UCL claim. On the other hand, a UCL claim
that is not qualitatively different from a copyright claim is preempted by the Copyright Act.
In re Tobacco Cases II , 41 Cal. 4th 1257, 63 Cal. Rptr. 3d 418, 163 P.3d 106 (2007) .
The 17200 claim attacking tobacco companies for targeting minors is preempted by the
Federal Cigarette Labeling and Advertising Act.
Viva! Internat. Voice For Animals v. Adidas Promotional Retail Operations, Inc. , 41
Cal. 4th 929, 63 Cal. Rptr. 3d 50, 162 P.3d 569 (2007) . The predicate for this 17200 claim
is importation of shoes made from kangaroo leather in violation of Cal. Penal Code § 653o.
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The Supreme Court reversed the decisions of the lower courts and held that this claim is not
preempted by the Endangered Species Act.
Benson v. Kwikset Corp., 152 Cal. App. 4th 1254, 62 Cal. Rptr. 3d 284 (2007). Plaintiff
is allowed to amend his complaint to meet the standing requirements imposed by Proposition
64.
Linear Technology Corp. v. Applied Materials, Inc. , 152 Cal. App. 4th 115, 61 Cal.
Rptr. 3d 221 (2007). This case involves contracts between Linear and certain equipment
manufacturers. After purchasing the equipment Linear was sued for patent infringement.
Linear asserted several claims against the manufacturers, including a UCL claim predicated
on the failure of the manufacturers to disclose the existence of prior patent infringement
litigation of which they were aware. The UCL claim failed, not because the conduct might not
be unfair, but because Linear is neither a competitor of the manufacturers nor an ordinary
consumer, but a sophisticated customer that can obtain redress in its own right based on
contract and other claims. This case thus supports the argument that a 17200 claim is limited
to certain types of plaintiffs.
Belton v. Comcast Cable Holdings, LLC, 151 Cal. App. 4th 1224, 60 Cal. Rptr. 3d 631
(2007). Comcast offers certain music programming only as part of a basic tier package.
Plaintiffs, who are blind and only want the music, alleged that this is an unlawful tying
arrangement and a violation of the UCL. Plaintiffs’ claims failed, essentially because there is
no separate product or service where just music might be sold via cable.
Cryoport Systems v. CNA Ins. Cos., 149 Cal. App. 4th 627, 57 Cal. Rptr. 3d 358 (2007) .
Plaintiff cannot satisfy the new standing requirements imposed by Proposition 64. Plaintiff
sought an opportunity to engage in discovery in order to learn the identity of a suitable class
representative who would have standing. Held: Plaintiff has no right to proceed in this
fashion. Standing must be satisfied before discovery.
Colgan v. Leatherman Tool Group, Inc. , 135 Cal. App. 4th 663, 38 Cal. Rptr. 3d 36
(2006). This action challenged the representation that defendant’s multicomponent,
multifunction tools, comprised of components such as screwdrivers, pliers, saws, files,
corkscrews, and so on, are “Made in the U.S.A.” Defendant argued that the tools are
assembled in the U.S. The court held that defendant violated Bus. & Prof. Code §§ 17533.7,
17200, and 17500 because parts of the tools are not made in the U.S.
People ex rel. Dept. of Motor Vehicles v. Cars 4 Causes, 139 Cal. App. 4th 1006, 43
Cal. Rptr. 3d 513 (2006). In this action under Bus. & Prof. Code §§ 17200 and 17500,
plaintiff DMV contended that defendant violated smog certificate requirements in resale of
donated cars, and that defendant’s representation that towing was “free” was false advertising
because the cost of the towing was deducted from the charitable proceeds. The Court of
Appeals agreed and the trial court’s ruling to the contrary was reversed and remanded for a
new trial.
Hodge v. Superior Court, 145 Cal. App. 4th 278, 51 Cal. Rptr. 3d 519 (2006) . In this
class action, the alleged violation of section 17200 is an employer’s failure to pay overtime.
The defense is that the employees are exempt. The issue in this writ proceeding is whether
such a claim is to be tried to a jury. The court held that there is no right to a jury trial for a
17200 case because this is an equitable cause of action.
Aron v. U-Haul Co. of California , 143 Cal. App. 4th 796, 49 Cal. Rptr. 3d 555 (2006) .
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The unfair practice alleged in this class action has to do with refueling trucks rented from U-
Haul. The rental agreement provides that if the rented truck is returned with less fuel than it
had when rented, the customer incurs a $20 refueling fee plus $2 per gallon. The trucks are
rented out with whatever amount of fuel was in the tank when returned by the prior customer
and the measure of the fuel is the fuel gauge. Because the gauge is only approximate, the
customer either has to refuel to a level that equals or exceeds what the gauge read when the
truck was rented or incur the refueling charges. A customer may thus spend more for
refueling than would have been necessary if the truck had a full tank in the first place.
Plaintiff here did not incur the refueling charge but partially refueled the tank. One issue here
was whether plaintiff had standing as having lost money or property and suffered injury in fact
as a result of the alleged unlawful practice. The court held he had standing as having suffered
injury in fact because he refueled the tank The court held that the plaintiff had sufficiently
alleged a violation of the UCL and reversed a judgment on the pleadings in favor of U-Haul.
Foundation for Taxpayer and Consumer Rights v. Nextel Communications Inc. , 143
Cal. App. 4th 131, 48 Cal. Rptr. 3d 836 (2006) . The plaintiff here had filed a representative
action against Nextel in 2003 for alleged violations of the UCL regarding Nextel’s billing
policies and practices. Nextel could not meet the new standing requirements imposed by
Proposition 64 and so the trial court granted Nextel judgment on the pleadings. The appellate
court held it was an abuse of discretion by the trial court not to allow the plaintiff to amend
to substitute a plaintiff who could satisfy the new standing requirements.
California Consumer Health Care Council v. Kaiser Foundation Health Plan Inc. ,
142 Cal. App. 4th 21, 47 Cal. Rptr. 3d 593 (2006) .The alleged unfair practice here is that
when a claim is made against Kaiser it discloses to the attorneys defending the claim all
medical records of the claimant, even those records that are irrelevant to the claim. The court
held that disclosing such records to its attorneys is not a violation of the UCL.
Californians for Disability Rights v. Mervyn’s , 39 Cal. 4th 223, 46 Cal. Rptr. 3d 57
(2006). The California Supreme Court held that Proposition 64 applies to pending cases.
Prop 64 did not change the substantive law, but only changed standing requirements. Hence it
is retroactive.
Branick v. Downey Savings and Loan Association, 39 Cal. 4th 235, 46 Cal. Rptr. 3d 66
(2006). In a companion case to Mervyn’s, the California Supreme Court held that
Proposition 64 does not forbid the amendment of a complaint or substitution of a plaintiff to
satisfy the new standing requirements.
Cal. Rptr. 3d 513 (2006). Sales by Cars 4 Causes of donated vehicles without smog
certification was held to violate the UCL.
Harris v. Investor’s Business Daily Inc., 138 Cal. App. 4th 28, 41 Cal. Rptr. 3d 108
(2006). The plaintiff’s UCL claim is not preempted by the Fair Labor Standards Act.
Bardin v. Daimlerchrysler Corp., 136 Cal. App. 4th 1255, 39 Cal. Rptr. 3d 634 (2006) .
The alleged unfair practice here is the use of tubular steel in the exhaust manifold of
defendant’s cars instead of more durable and more expensive cast iron. The alleged harm is
that purchasers have to repair or replace the exhaust manifolds sooner. There was no
statutory, warranty or other violation alleged and no misrepresentation or safety issue
alleged. Thus, there could be no unlawful or fraudulent practice. Plaintiff pursued the unfair
prong of the UCL but these allegations are insufficient under any formulation of an “unfair”
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practice, because there is no policy that requires a manufacturer to use more expensive
components.
Smith v. Wells Fargo Bank N.A. , 135 Cal. App. 4th 1463, 38 Cal. Rptr. 3d 653 (2006) .
The alleged UCL violation regarding alleged nondisclosure of overdraft protection terms is
not preempted by federal regulations.
Pizarro v. Lamb’s Players Theatre , 135 Cal. App. 4th 1171, 37 Cal. Rptr. 3d 859
(2006). Defendant offered a promotional discount to people born between 1946 and 1964 to
attend a musical entitled “Boomers” about the “baby boomer” generation. Plaintiff was
denied such a discount because he was not born during that time period. He attacked the
discount as a violation of the Unruh Act and the UCL. Because the discount was offered to
the very people that the musical was about, it is not the result of arbitrary or invidious
discrimination and does not violate the Unruh Act or the UCL.
Ariz. Cartridge Remanufacturers Ass’n v. Lexmark Int’l, Inc. , 421 F.3d 981 (9th Cir.
2005). A program whereby a printer and toner cartridge manufacturer sold cartridges at a
discount when the customer agreed to return the cartridge after use was challenged by
cartridge remanufacturers under Bus. & Prof. Code §§ 17200 and 17500. The court held that
there was nothing false, misleading, or unlawful about the manufacturer’s program.
RLH Industries Inc. v. SBC Communications Inc., 133 Cal. App. 4th 1277, 35 Cal. Rptr.
3d 469 (2005). This case primarily concerns antitrust claims under the Cartwright Act, but it
also discusses the unfair competition law. The dormant commerce clause does not prevent
the application of California laws, such as the Cartwright Act and the unfair competition law
from reaching conduct outside the state of California having effects in California.
Schwartz v. Visa International Service Association, 132 Cal. App. 4th 1452, 34 Cal.
Rptr. 3d 449 (2005). This is one of several cases that have held Proposition 64 applies to
pending cases. The court held that Prop 64 did not add new standing requirements, but that it
eliminated former remedies. Accordingly, the judgment was reversed and remanded to the
trial court to consider whether to grant leave to amend for the plaintiff to attempt to satisfy
the new standing requirements.
People’s Choice Wireless Inc. v. Verizon Wireless, 131 Cal. App. 4th 656, 31 Cal. Rptr.
3d 819 (2005). Verizon sells cellular phones through its own retail stores and also through
independent dealers. When it introduces new models, sometimes it has a “holdback” period
during which the models are not available to the independent dealers but only through
Verizon’s own stores. The dealers attacked this practice as an antitrust violation and unfair
competition. The court held that this is neither because Verizon can unilaterally refuse to
deal with distributors as long as it does not have monopoly power. Because there are other
cellular phone brands available, Verizon does not have monopoly power.
McCann v. Lucky Money, Inc., 129 Cal. App. 4th 1382, 29 Cal. Rptr. 3d 437 (2005) .
Foreign exchange merchants provide foreign currency at retail exchange rates that are less
favorable than the rates at which they obtain currency on the wholesale market and do not
disclose the rates at which they acquire the currency. This was alleged to be an unfair practice
under the UCL. The court held that there is no duty to disclose the wholesale rate and
therefore no violation of the UCL.
Blakemore v. Superior Court (Avon Products), 129 Cal. App. 4th 36, 27 Cal. Rptr. 3d
877. This class action on behalf of women who sold beauty products as independent sales
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representatives alleged that Avon had a practice of shipping unordered goods to the sales
representatives and refused to accept return of the unordered goods. Avon’s demurrers were
sustained and the class action allegations were stricken. On review, the appellate court held
that the alleged practices violated the unfair and fraudulent prongs of the UCL, but not the
unlawful prong, and also that the case was properly pursued as a class action.
In re Firearm Cases, 126 Cal. App. 4th 959, 24 Cal. Rptr. 3d 659 (2005) . The UCL
claim here was that firearm manufacturers were liable for marketing and distribution
practices whereby certain gun retailers would sell guns to “high risk” users. Summary
judgment for the manufacturers was affirmed in a lengthy opinion. A primary reason for the
affirmance was the lack of evidence of a causal connection between marketing and
distribution practices of the manufacturers and the actions of a few wayward retailers.
People for the Ethical Treatment of Animals v. California Milk Producers Advisory
Board, 125 Cal. App. 4th 871, 22 Cal. Rptr. 3d 900 . PETA sued the California Milk Advisory
Board (CMAB) for injunctive relief under §§ 17200, 17500, and 17580 for alleged false
advertising with respect to CMAB’s “happy cows” campaign. The court held that CMAB is
not a “person” and therefore cannot be sued under the UCL.
Krumme v. Mercury Insurance Co., 123 Cal. App. 4th 924, 20 Cal. Rptr. 3d 485 (2004) .
This case held that an insurer’s practice of selling certain types of insurance through “broker-
agents” violated a requirement in Insurance Code § 1704 that such insurance could only be
sold through “appointed agents”, i.e., persons for whom the insurer has filed a formal
designation of appointment with the Insurance Commissioner. Consequently, this was an
unlawful business practice.
Holiday Matinee Inc. v. Rambus Inc., 118 Cal. App. 4th 1413, 13 Cal. Rptr. 3d 766
(2004). The Cartwright Act and UCL claims against the defendant in this case were held to
arise under the patent laws of the United States, as to which exclusive jurisdiction is in the
federal courts. Therefore, the demurrer was properly sustained.
Bowen v. Ziasun Technologies Inc., 116 Cal. App. 4th 777, 11 Cal. Rptr. 3d 522 (2004).
In an issue of first impression in California, the court of appeal held that § 17200 does not
apply to securities transactions. This is not an issue of federal preemption. Rather, the court
held that § 17200 is California’s “little FTC Act” which mirrors its federal counterpart, the
FTC Act, 15 U.S.C. § 41 et seq. The federal FTC Act has been held not to apply to securities
transactions. The court followed the lead of “federal and state authority from 15 other
jurisdictions” that the various “little FTC Acts” do not apply to securities transactions.
Fisherman’s Wharf Bay Cruise Corp. v. Superior Court, 114 Cal. App. 4th 309, 7 Cal.
Rptr. 3d 628 (2003). Various alleged anticompetitive practices, including below cost pricing,
were the predicate for this UCL claim.
Consumer Advocates v. Echostar Satellite Corp., 113 Cal. App. 4th 1351, 8 Cal. Rptr.
3d 22 (2003). This action under §§ 17200 and 17500 challenged certain advertising claims
by defendants who provided satellite television service. The challenged representations
included that the system provided “crystal clear digital video,” “CD quality” audio, an on-
screen program guide that would allow the customer to view the schedule “up to 7 days in
advance,” and that 50 channels would be available. The court held that the “crystal clear” and
“CD quality” statements were not actionable representations of fact, but were boasts or “all-
but-meaningless superlatives” akin to mere puffing. In contrast, the representations that a 7
day schedule would be viewable and that 50 channels would be available were actionable as
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factual misrepresentations.
Freeman v. Wal-Mart Stores Inc., 111 Cal. App. 4th 660, 3 Cal. Rptr. 3d 860 (2003) .
Wal-Mart issued gift cards that incur service charges of $1 per month if the card is not used
for 24 months. Civil Code section 1749.5 prohibits selling gift certificates with expiration
dates. Plaintiff alleged that the imposition of monthly service charges after 24 months of
non-use is effectively an expiration date in violation of Civil Code § 1749.5 and thus a
violation of B&P Code § 17200. The court held that imposition of the service fee, even
though it eventually would reduce the value of the gift card to zero, is not a predetermined
expiration date and thus not unlawful.
Kunert v. Mission Financial Services Corp., 110 Cal. App. 4th 242, 1 Cal. Rptr. 3d 589
(2003). Commissions paid to automobile dealers by finance companies were attacked as
unlawful remuneration under the Rees-Levering Act and the UCL. The court explained that
the issue was whether the transactions were “dealer-assisted loans” in which case the
commissions were unlawful under Rees-Levering, or “bona fide conditional sales contracts
followed by assignments to the lenders” in which case they were lawful. The court followed
Boerner v. Colwell Co., 21 Cal. 3d 37 (1978), and held the transactions were bona fide
conditional sales contracts followed by assignments and therefore not unlawful.
Byars v. SCME Mortgage Bankers Inc., 109 Cal. App. 4th 1134, 135 Cal. Rptr. 2d 796
(2003). Plaintiff attacked as unlawful and deceptive the payment of a rebate to a mortgage
broker on a FHA insured loan. FHA regulations prohibit loan origination fees in excess of 1
per cent. Since Byars paid an upfront 1 per cent loan origination fee, he argued that the
additional rebate from the lender referred to in the industry as a yield spread premium
(“YSP”) resulted in a fee in excess of 1 per cent and therefore unlawful. He also argued that
this was a deceptive practice. HUD regulations, however, allow for YSP’s and do not
interpret them as part of the loan origination fee. Deferring to HUD’s interpretation the court
held these fees are not unlawful. Nor were they deceptive or concealed, because even though
Byars contended they were not discussed, they were disclosed on the HUD-1 form which was
provided to him.
Herr v. Nestle U.S.A. Inc., 109 Cal. App. 4th 779, 135 Cal. Rptr. 2d 477 (2003) . The
predicate for the UCL claim in this case was age discrimination in employment in violation
of the Fair Employment and Housing Act (“FEHA”). A jury returned a verdict in favor of the
employee and the judge issued an injunction pursuant to section 17200 and 17203 enjoining
Nestle from discriminating against employees over age 40. Nestle argued in part that the
17203 injunction should not stand because the UCL is designed to benefit consumers and
competitors, not employees. The court rejected that argument as meritless. As a person who
was personally aggrieved by the age discrimination, plaintiff had the right to sue under
section 17204.
Net2Phone Inc. v. Superior Court (Consumer Cause), 109 Cal. App. 4th 583, 135 Cal.
Rptr. 2d 149 (2003). Consumer Cause brought this representative UCL action challenging
Net2Phone’s practice of “rounding up” telephone charges to the nearest minute. The “Terms
of Use” provision of Net2Phone’s website provides that the user consents to New Jersey as
the exclusive forum. Since Consumer Cause was not an actual user, it contended that the
“Terms of Use” did not apply. The trial court agreed, noting that if the Attorney General had
brought the action, the forum selection clause would not apply. The appellate court reversed.
Although the AG would not be bound, a private party is not on the same footing as the AG,
and is bound by the forum selection clause.
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Kids Against Pollution v. California Dental Association, 108 Cal. App. 4th 1003, 134
Cal. Rptr. 2d 373 (2003). This case pertains to allegations that the California Dental
Association (CDA) misinforms the public regarding mercury amalgam dental fillings. The
CDA moved to dismiss the action under CCP § 425.16 (the “anti-SLAPP statute”). The trial
court denied the motion. The appellate court reversed and ordered the action dismissed. A
lesson from this case is that a 17200 case may be subject to dismissal under the anti-SLAPP
statute.
Florez v. Linens’N Things Inc., 108 Cal. App. 4th 447, 133 Cal. Rptr. 2d 465 (2003) .
The UCL cause of action here was predicated on a violation of Civil Code § 1747.8 which
prohibits a retailer from requesting or requiring a customer to provide certain personal
information in connection with credit card transactions.
Cruz v. Pacificare Health Systems Inc., 30 Cal. 4th 303, 133 Cal. Rptr. 2d 58 (2003).
This action under sections 17200 and 17500 challenged Pacificare’s health care. The
underlying agreement contains an arbitration clause. The Supreme Court held that 17200 and
17500 claims are not arbitrable.
In re Vitamin Cases, 107 Cal. App. 4th 820, 132 Cal. Rptr. 2d 425 (2003) . A settlement
of a class action lawsuit for violation of the Cartwright Act and the UCL was challenged as
violating CCP § 384 (relating to the distribution of residuals from class action settlements)
because the settlement proceeds were to be paid to charitable organizations rather than
individual class members. The appellate court held that section 384 did not apply and
affirmed the settlement.
Hirsch v. Bank of America, 107 Cal. App. 4th 708, 132 Cal. Rptr. 2d 220 (2003). This is
an important case regarding what types of harm are redressable under the UCL. The alleged
unlawful practice was a disguised scheme whereby the Bank allowed title companies to earn
interest on deposits which arguably should have accrued to the depositors instead of the title
companies. Federal law, however, prohibits paying interest on such accounts. To the extent
that the UCL claim was based on a theory that the interest should have been paid to the
depositors instead of the title companies, the claim failed, because the title companies did
not take anything from the depositors and no interest should have been paid at all. But, to the
extent that the claim was based on a theory that excessive fees were passed on to the
customers, the claim survived under an unjust enrichment rationale.
Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 131 Cal. Rptr. 2d 29
(2003). The Supreme Court reversed the judgment of the court of appeal (90 Cal. App. 4th
902—see annotation below) and held that nonrestitutionary disgorgement of profits is not an
available remedy under the UCL. This is another important decision clarifying the remedies
available under the UCL.
Lopez v. World Savings and Loan Assn., 105 Cal. App. 4th 729, 130 Cal. Rptr. 2d 42
(2003). This UCL action challenged the practice of a federal savings and loan of charging a
$10 fee for transmission of a loan payoff statement by fax over and above the fee authorized
by Civil Code § 2943. The court held that federal regulations preempted the state statutes on
this issue and therefore the UCL claim failed.
Gregory v. Albertson’s Inc., 104 Cal. App. 4th 845, 128 Cal. Rptr. 2d 389 (2002) . This
action challenged as an unfair practice Albertson’s decision to keep a store which it had
under a long-term lease in a shopping center closed allegedly because it had opened a newer
store nearby. The court held that this is simply not actionable under the UCL.
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Gibson v. World Savings and Loan Association, 103 Cal. App. 4th 1291, 128 Cal. Rptr.
2d 19 (2002). The unfair practice alleged here involved the lender’s practice of obtaining
insurance at higher expense than necessary when the borrowers failed to maintain such
insurance. The court held that various federal laws relied on by World did not preempt the
claims.
Rosenbluth International Inc. v. Superior Court (Serrano), 101 Cal. App. 4th 1073,
124 Cal. Rptr. 2d 844 (2002). This case held that the individual plaintiff lacked standing to
proceed on a § 17200 claim when the alleged unlawful conduct was the understatement of
refunds and rebates due to large customers of the defendant travel agency. The plaintiff in the
case did not have a contract with the defendant, but was purportedly acting on behalf of the
general public. Since the “victims” of the allegedly unlawful practice were large companies
which each had contracts with the defendant, they did not constitute the general public.
Essentially, the court concluded that the individual plaintiff was not an appropriate
representative for these large companies, each of which, if it wanted, could pursue its own
claims. The dissent argued that there was a triable issue whether the plaintiff had standing.
Corbett v. Superior Court (Bank of America), 101 Cal. App. 4th 649, 125 Cal. Rptr. 2d
46 (2002). In Kraus v. Trinity Management Services, Inc. (see annotation below) the
Supreme Court held that the remedy of a “fluid recovery fund” is available in class actions,
but not actions under the UCL. Predictably, the plaintiff in this case brought a UCL action as
a class action. The trial court refused to certify the class on the rationale that a class action is
essentially incompatible with a representative action under the UCL. A divided appellate
court reversed. The majority held that class actions and representative actions under the UCL
are not mutually exclusive, and in appropriate cases a UCL action may proceed also as a class
action. The dissent argued inter alia that these two procedural mechanisms are inconsistent.
Flamingo Industries LTD. v. U.S. Postal Service, 302 F.3d 985 (9th Cir. 2002) . A
vendor of mail sacks to the Postal Service sued because its contract had been terminated
allegedly because the Postal Service wanted to obtain cheaper but inferior products from
Mexico. Federal antitrust claims were allowed to proceed, but the § 17200 claim was
preempted by federal law.
Consumer Justice Center v. Olympian Labs Inc., 99 Cal. App. 4th 1056, 121 Cal. Rptr.
2d 749 (2002). The plaintiff sued the makers and distributors of two over-the-counter dietary
supplements, seeking either to have the supplements taken off the market or to have their
advertising changed. The trial court sustained a demurrer on the ground of federal
preemption. The appellate court reversed, holding that the action was not preempted either by
the Federal Trade Commission Act or by the Food, Drug and Cosmetic Act.
Gentry v. Ebay, Inc., 99 Cal. App. 4th 816, 121 Cal. Rptr. 2d 703 (2002) . Ebay held not
responsible for sales of forged certificates of authenticity of autographed sports
memorabilia. Among other things, Ebay is not the dealer of the goods and the claims against
Ebay are preempted by 47 U.S.C. § 230, which immunizes Internet service providers from
claims attempting to equate service providers to publishers, and the like.
Jarrow Formulas Inc. v. Nutrition Now Inc., 304 F.3d 829 (9th Cir. 2002) . This was an
action for false advertising under the Lanham Act and also under sections § 17200 and §
17500. The claims were dismissed on the grounds of laches because of a seven-year delay
between the plaintiff’s awareness of its potential claims and filing suit. The focus of the
decision is the application of laches to the Lanham Act, which does not have a statute of
limitations. This is an important case on that point. Almost as an afterthought, the court held
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that the 17200 and 17500 claims were also properly dismissed on the grounds of laches.
Walker v. Countrywide Home Loans Inc., 98 Cal. App. 4th 1158, 121 Cal. Rptr. 2d 79
(2002). This action challenged Countrywide’s practice of charging defaulting borrowers for
inspection fees, based on drive-by inspections of properties where the borrower is in default.
The plaintiff alleged these fees are disguised late fees. The court held these charges are
neither unlawful, unfair, nor deceptive, and affirmed summary judgment in favor of the
defendant.
Kasky v. Nike Inc., 27 Cal. 4th 939, 119 Cal. Rptr. 2d 296 (2002) . This is an action
under sections 17200 and 17500 for alleged false advertising by Nike regarding the wages
and working conditions in Nike factories overseas. In a 4-3 decision, the California Supreme
Court held that Nike’s statements on these issues were commercial speech, with limited first
amendment protection, that false or misleading commercial speech may be regulated and
therefore the case could proceed.
Pacific Gas & Electric v. Superior Court (Emery), 95 Cal. App. 4th 1389, 116 Cal.
Rptr. 2d 562 (2002), rev. granted, 119 Cal. Rptr. 2d 854 . This section 17200 claim against
PG&E alleged that a fire was a consequence of inadequate tree trimming near power lines.
The matter was investigated by the PUC. Under Public Utilities Code § 1759 the superior
court lacks jurisdiction to review a decision of the PUC. Hence, there is no jurisdiction to
proceed against PG&E under the UCL.
Washington Mutual Bank v. Superior Court (Guilford), 95 Cal. App. 4th 606, 115 Cal.
Rptr. 2d 765 (2002). A section 17200 claim challenging the practice of charging pre-closing
interest on home loans is preempted by the Home Owners’ Loan Act ( 12 U.S.C. 1461 et
seq.).
People ex rel. Lockyer v. Fremont General Corporation , 89 Cal. App. 4th 1260, 108
Cal. Rptr. 2d 127 (2001). Sometimes the state Attorney General’s office argues that when it
litigates a case, procedural rules applicable to litigants generally should not apply to it. In this
case, the issue related to the effect of Code of Civil Procedure § 998 on an unsuccessful §
17200 case brought by the AG. To the chagrin of the AG’s office, this case held that § 998
applies to the AG just as it does to a private litigant. The AG’s case against Fremont General
failed because the AG alleged, but failed to prove, that Fremont General was the alter ego of
co-defendant Fremont Life. Fremont General made a § 998 pre-trial offer of judgment in the
amount of $2 million. The AG did not accept the offer. At trial the AG recovered an award of
$2.5 million plus other remedies against co-defendant Fremont Life, but failed against
Fremont General. As a consequence Fremont General was awarded costs, including expert
witness fees, in a total amount of about $800,000. The cost award was affirmed on appeal.
The AG’s arguments that its case under § 17200 was different from a “run of the mill” case
was unavailing. Just like any other litigant, by rejecting the § 998 offer and thereafter failing
to secure a more favorable judgment, the AG was obligated to pay the defendant’s costs.
Prata v. Superior Court (Bank One), 91 Cal. App. 4th 1128, 111 Cal. Rptr. 2d 296
(2001). The unlawful practice alleged in this case related to a Bank’s “same as cash”
promotion. Basically, the plaintiff alleged that the so-called “same as cash” credit program
was not the same as cash. The procedural issue in this case centered on the appropriateness
of the plaintiff proceeding as a representative action. The trial court ruled that the case was
not an appropriate representative action and granted summary adjudication. The appellate
court granted a writ instructing the trial court to allow the action to proceed as a
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representative UCL action.
Payne v. National Collection Systems Inc., 91 Cal. App. 4th 1037, 111 Cal. Rptr. 2d
260 (2001). This case concerns the relationship between an action brought by a public
prosecutor and a subsequent class action. The trial court had ruled that a judgment in a public
17200 action was res judicata and barred a subsequent private class action claim. The
appellate court reversed, and held that the judgment obtained by the public prosecutor is
fundamentally different from a private class action, and therefore not res judicata.
Community Assisting Recovery Inc. v. Aegis Security Insurance Co., 92 Cal. App. 4th
886, 112 Cal. Rptr. 2d 304 (2001) . This case relates to the method of calculating insured
property losses. The court held that no unlawful practice was sufficiently alleged because the
insurance companies complied with specific Insurance Code Provisions (§§ 2070 and 2071),
which allowed for alternative procedures for calculating property losses.
Chavez v. Whirlpool Corp., 93 Cal. App. 4th 363, 113 Cal. Rptr. 2d 175 (2001) .
Plaintiff alleged that Whirlpool required retailers to maintain a minimum retail price, and
that this conduct violated both the Cartwright Act (Bus. & Prof. Code § 16700 et seq.) and
the UCL. The court held that the alleged wrongful conduct did not violate the Cartwright Act
because the conduct was merely unilateral conduct and not an unlawful combination. Thus,
the Cartwright Act did not provide a predicate for an unlawful practice under § 17200. The
court recognized that a practice might be held unfair under § 17200 even if not “unlawful” as
a violation of some other specific statute. Here, however, the alleged resale maintenance
agreement could not be unfair “if the conduct is deemed reasonable and condoned under the
antitrust laws.”
Black v. Financial Freedom Senior Funding Corp. , 92 Cal. App. 4th 917, 112 Cal.
Rptr. 2d 445 (2001). The alleged unlawful practice in this case related to alleged deceptive
practices involving reverse mortgages offered to senior citizens. The trial court had granted
summary judgment for the defendant on grounds that the claims were preempted by various
federal laws. The summary judgment was reversed. The appellate court held that the claims
were not preempted by three federal regulatory schemes, including the Truth in Lending Act.
Cruz v. Pacificare Health Systems, Inc. , 91 Cal. App. 4th 1179, 111 Cal. Rptr. 2d 395
(2001) rev. granted Oct. 31, 2001. This is a class action under 17200 and 17500. The
gravamen of the complaint is that undisclosed financial incentives to Pacificare’s providers
significantly reduced the quality of healthcare its patients received. The procedural issue was
whether these claims are required to be arbitrated under an arbitration clause in Pacificare’s
agreement with the Plaintiff’s employer. The court held that these claims are not arbitrable
because the injunctive relief sought is for the benefit of the general public, and because the
judicial forum has significant institutional advantages over arbitration in administering a
public injunctive remedy. Likewise, the ancillary equitable restitutionary remedy was also not
arbitrable. Since the Supreme Court has granted review, it remains to be seen whether these
claims are arbitrable or not.
Korea Supply Co. v. Lockheed Martin Corp. , 90 Cal. App. 4th 902, 109 Cal. Rptr. 2d
417 (2001) rev. granted . The unlawful practice alleged in this case was the alleged bribery
of foreign government officials with respect to the sale of military equipment to the
Republic of Korea in violation of the Federal Foreign Corrupt Practices Act. The plaintiff in
this case claims that as a result of the bribery the Korean government accepted a higher bid
and that if the lower bid had been accepted, the plaintiff would have earned a $30 million
commission. A significant issue in the case is whether the plaintiff was seeking damages,
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(which are not recoverable under the UCL) or restitutionary relief. The court concluded that
the prayer for disgorgement of profits unjustly earned by respondents adequately pleaded a
cause of action under the UCL, and therefore reversed the trial court’s judgment of dismissal
on demurrer. The ruling in this case appears to conflict with the Supreme Court’s decisions
in Krause v. Trinity Management Services, and Cortez v. Purolator Air Filtration Products
Co., (see annotations to Section 17203). Since the Supreme Court has granted review, this
may be a vehicle for the Supreme Court to clarify whether a Section 17200 plaintiff can
recover disgorgement of profits when those profits do not appear to constitute restoration of
money or property taken from the plaintiff.
Hoffman v. Capital Cities/ABC, Inc., 255 F.3d. 1180, 59 U.S.P.Q.2d (BNA) 1363 (9th
Cir. 2001). This case concerned a magazine article which included a computer altered
photograph of Dustin Hoffman in his “Tootsie” character to make it appear that he was
modeling contemporary fashions. Hoffman had recovered compensatory and punitive
damages for misappropriation of his name and likeness in violation of Civil Code Section
3344, the Federal Lanham Act, and the common law right of publicity, and also asserted that
the conduct constituted unfair competition under Section 17200 (the District Court’s
decision is reported at 33 F. Supp. 2d 867, 50 U.S.P.Q.2d 1195 (C.D. Cal. 1999) .) On appeal
the Ninth Circuit reversed on First Amendment grounds. The Ninth Circuit reviewed the
entire article and concluded that the totality of the presentation could not reasonably be
interpreted as though Hoffman had in fact posed for the computer altered photograph, and
that readers would realize that in fact the opposite was the case.
Rothschild v. Tyco International (2000) 83 Cal. App. 4th 488, 99 Cal. Rptr. 2d 721 .
This case holds that an action under the UCL is not barred by the existence of a pending
action filed under the False Claims Act for similar conduct.
Ball v. GTE Mobilnet of California (2000) 81 Cal. App. 4th 529, 96 Cal. Rptr. 2d 801 .
This case holds that a claim under the UCL against cellular telephone service providers for
unfair practices in “rounding up” time charges is preempted by 47 U.S.C. § 332(c)(3)(A),
which prohibits state regulation of the rates charged by such providers. Because this aspect
of the UCL claim relates to rates charged, it is preempted. But other claims under the UCL,
such as non-disclosure of the practice, are not preempted and may proceed.
Shvarts v. Budget Group, Inc. (2000) 81 Cal. App. 4th 1153, 97 Cal. Rptr. 2d 722 . In a
case challenging the rental car industry’s practice of charging allegedly unfairly high prices
for refueling returned cars, the court held that no claim could be stated because the practice
is expressly authorized by Civil Code § 1936(m)(2). The complaint is that the refueling
charge per gallon is significantly more expensive than it would cost if the customer refilled
the tank. The claim failed because the rental agreement clearly stated that the customer has
the option of returning the car with a full tank, or of having the rental agency refill the tank at
a charge of $3.58 per gallon. This is permissible under § 1396, and there is no concealment
or nondisclosure, and so the court distinguished Schnall v. Hertz (see below).
Schnall v. Hertz Corp. (2000) 78 Cal. App. 4th 1144, 93 Cal. Rptr. 2d 439 . This case is
similar to Schvartz v. Budget Group (above). The result was the same except that a claim
under the UCL that the manner in which Hertz induces customers to incur the refueling
charge was allegedly deceptive, because contained in confusing language and not clearly
stating the amount of the charge.
Lazar v. Hertz Corp. (1999) 69 Cal. App. 4th 1494, 82 Cal. Rptr. 2d 368 . In this case
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Plaintiff alleged that the practice of refusing to rent to persons under age 25, or imposing
surcharges for under-age drivers, violated the UCL as age discrimination under the Unruh
Act. The court held that there is no viable claim under either the Unruh Act or the UCL
because in Civil Code § 1936 the Legislature specifically approved the practice by car rental
companies of establishing a minimum age for drivers of rental cars. This case thus fits neatly
in the paradigm of UCL cases that hold there is no violation of the UCL whenever there is a
statute which specifically permits the practice alleged to be unlawful or unfair.
Stevens v. Superior Court (API Automobile Insurance Services) (1999) 75 Cal. App.
4th 594, 89 Cal. Rptr. 2d 370. The predicate for this UCL action is the requirement under
Insurance Code § 1631 and applicable regulations that persons who sell insurance must be
licensed. The defendants argued, among other things, that no claim could be stated under the
UCL because the Insurance Code and Regulations do not provide for a private right of action.
The court swiftly rejected that argument. The UCL provides a basis for a private right of
action when the underlying statute does not. The only exceptions would be situations in which
the predicate statute “explicitly bars a private right of action, or the defendant is otherwise
privileged or immune.”
Roskind v. Morgan Stanley Dean Witter & Co. (2000) 80 Cal. App. 4th 345, 95 Cal.
Rptr. 2d 258. Claims under the UCL are not preempted by federal law.
Cel-Tech Communications v. L.A. Cellular (1999) 20 Cal. 4th 163, 83 Cal. Rptr. 2d
548. The California Supreme Court held that even though a defendant has been found not to
have violated a specific statute, it still may be held to have violated § 17200’s broad
proscription against “any unlawful, unfair or fraudulent practice.” The defendant sold both
cellular phones and services. To compete with another large purveyor of both phones and
services, it sold cellular phones below cost. The plaintiffs were competitors who only sold
cellular phones. The plaintiffs predicated their § 17200 claim on the allegedly unlawful
practice of selling below cost arguing that defendant had violated Business and Professions
Code §§ 17043 and 17044 (which generally prohibit below cost sales). But the trial court,
the appellate court and the Supreme Court all agreed that there was no violation of §§ 17043
and 17044 because defendant did not act with a purpose of harming competition, but only to
meet the prices of its competitor in the cellular service business. Nevertheless, the Supreme
Court held that its practice may be unfair “even if not specifically proscribed by some other
law.” The Court drew a distinction between conduct which is specifically made lawful by
legislation (a “safe harbor”) and conduct which simply has not been proscribed. In case of a
“safe harbor” a plaintiff may not plead around a legislative bar by casting its claim under §
17200. But when the Legislature has not provided a “safe harbor” a plaintiff can allege as an
unfair business practice conduct which is not made specifically unlawful by any particular
statute or other law.
Reese v. Wal-Mart Stores (1999) 73 Cal. App. 4th 1225, 87 Cal. Rptr. 2d 346. This case
primarily concerns denial of class certification of an alleged claim in violation of the Unruh
Act and § 17200 by the practice of providing services at a discount to women on Ladies’ Day
or Ladies’ Night promotions. In upholding denial of class certification, the Supreme Court
noted that § 17200 provided an alternative remedy, whereby restitution could be awarded
whether or not there were also an injunction against future violations.
Stop Youth Addiction, Inc. v. Lucky Stores (1998) 17 Cal. 4th 553, 71 Cal. Rptr. 2d
731. In potentially a watershed case, the California Supreme Court upheld the right of a
private corporation, which appeared to have been formed for the sole purpose of filing
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lawsuits under section 17200, to bring suit against retailers for an alleged unlawful business
practice of selling cigarettes to minors in violation of Penal Code section 308. Observing
that “only the sufficiency of the plaintiff’s complaint, not the seemliness of its litigation
strategy or its counsel’s motives, is properly before us on review,” the court held that the
plaintiff indeed had standing and had sufficiently pled a violation of section 17200 with its
skeletal complaint against 431 retailers. The concurring and dissenting opinions sharply
criticized the unrestricted standing analyses which have evolved under section 17200 since
1972 and now appear to allow any person to sue for alleged unlawful business practices, even
though the plaintiff has not been injured and the defendant may be subjected to repetitive
suits which might multiply its liabilities for attorney’s fees and restitutionary relief.
Quelimane Co. v. Stewart Title Guar. Co. 19 Cal. 4th 26, 77 Cal. Rptr. 2d 709 (1998).
In reversing the trial court’s ruling sustaining a demurrer, the California Supreme Court held
that the allegations that a representation by a title insurance company that title insurance will
be issued on any property with good title when in fact the insurer will not insure property
conveyed by tax deeds states a cause of action under the UCL as deceptive, untrue or
misleading advertising. (The lower court ruling cited in the 1999 edition, held to the
contrary.)
Hewlett v. Squaw Valley Ski Corp. (App. 3 Dist. 1997) 54 Cal. App. 4th 499, 63 Cal.
Rptr. 2d 118 . This action involved claims under 17200 against the Squaw Valley Ski Resort
for cutting trees to make a ski run. The trial court and appellate court found that the defendant
had violated 17200 by its conduct which was unlawful under the Forest Practice Act (Public
Res. Code § 4511 et seq.), the Conditional Use Permit under which the resort operated, and a
temporary restraining order which had been issued prior to the trees being cut. The appellate
court agreed with the trial court that each of these three underlying violations was an
appropriate predicate for a determination that defendant’s conduct was an unlawful business
practice under 17200.
Application Group, Inc. v. Hunter Group, Inc. (1998) 61 Cal. App. 4th 881, 906, 72
Cal. Rptr. 2d 73, 89. The Court of Appeal found that a nonresident business can be held
accountable for wrongful business conduct affecting California employees and employees
under Cal. Bus. & Prof. Code §§ 16600 and 17200. The case involved covenants not to
compete in the employment agreements of employees, who were not California residents,
but who sought employment in California with a California-based employer. California’s
interests in covenants not to compete prevailed over other state’s interests as applied to
California employers and employees.
ABC Int’l Traders, Inc. v. Matsushita Electric Corporation of America, (Cal. 1997) 14
Cal. 4th 1247, 61 Cal.Rptr. 2d 112 . The California Supreme Court held that injunctive relief
is not a prerequisite to recovery of restitution under Cal. Bus & Prof. Code §§ 17200 and
17203. The Supreme Court concluded that section 17203 authorizes a trial court to order
restitution, as defined in section 17200, whether or not the court also enjoins future
violations.
State Farm Fire & Cas. v. Superior Court , (1996) 45 Cal. App. 4th 1093, 53 Cal. Rptr.
2d 229. The court found that an insurer’s conduct constituting breach of implied covenant of
good faith may also constitute unfair business practice.
Brown v. Adidas Int’l, (S.D. Cal. 1996) 938 F. Supp. 628, 633. The court held that a
patentee’s allegation that shoe manufacturer used its unequal bargaining power in response to
patentee’s request for information did not support a cause of action under Cal. Bus. & Prof.
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Code § 17200.
Informix Software, Inc. v. Oracle Corp. , 927 F. Supp. 1283 (N.D. Cal. 1996). The
district court found that unfair competition cannot be founded on public statements that a
defendant is using a registered trademark that is licensed exclusively to the plaintiff. The
court concluded that plaintiff’s demands that the trademark owner asked defendant to stop
infringing its trademark were “simply … good business sense,” and did not constitute unfair
competition.
Bureerong v. Uvawas , 922 F. Supp. 1450 (C.D. Cal. 1996). The court found that
immigrant garment workers who were allegedly falsely imprisoned in a complex and
employed in a system of involuntary servitude stated a cause of action claim under California
law for unfair business practices.
Fenning v. Glenfed, Inc., 40 Cal. App. 4th 1285, 47 Cal. Rptr. 2d 715 (1995) . The court
found that a “customer’s fraud, negligent misrepresentation and unfair and deceptive business
practices claims against a security broker were not preempted by federal act or regulations
under the Homeowner’s Loan Act (“HOLA”).”
Cisneros v. U.D. Registry, Inc. , 39 Cal. App. 4th 548, 46 Cal. Rptr. 2d 233 (1995) . The
court found that claimants proving an unfair business practice are entitled to introduce not
only practices which affect them individually, but also similar practices involving other
members of the public who are not parties to the action.
Newman v. Checkrite California, Inc., 912 F. Supp. 1354 (E.D. Cal. 1995). The court
noted that a debt collection agency’s pattern of unfair trade practices sufficiently stated a
claim under Cal. Bus. & Prof. Code. In addition, the court stated that California law
recognizes that unclean hands and other equitable defenses are available under the Cal. Bus.
& Prof. Code.
Freeman v. The Time, Inc., Magazine Company, et al. (9th Cir. 1995) 68 F.3d 285 . The
court held that, for the purposes of determining the “members of the public” likely to be
deceived by false advertising, an “ordinary person” standard must be used rather than an
“unwary consumer” standard. This is because, unless a particularly vulnerable group of the
consumer public is targeted by the false advertising, a false or misleading advertising and
unfair business practices claim must be evaluated from the vantage point of a reasonable
consumer. This standard applies to claims for false advertising and unfair competition under
the Lanham Act, securities fraud, deceit and misrepresentation, and to claims for common
law unfair competition.
Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal. 4th 1057, 31 Cal. Rptr. 2d 358,
875 P.2d 73 . The California Supreme Court held that the Federal Cigarette Labeling and
Advertising Act, § 5(b) (15 U.S.C. § 1334(b)) did not preempt a state court action seeking to
prohibit cigarette advertising allegedly targeting minors based on state statutes prohibiting
unfair business practices and selling or furnishing cigarettes to minors (Bus. & Prof. Code §
17200; Penal Code § 308(a), (b)).
Bank of the West v. Superior Court (1992) 2 Cal. 4th 1254, 10 Cal. Rptr. 2d 538, 833
P.2d 545 . This case construed the phrase “unfair competition” as used in the 1986 standard
form Comprehensive General Liability (CGL) insurance policy issued by two insurers. While
recognizing that “unfair competition” can have a myriad of meanings in ordinary and legal
usage, the California Supreme Court concluded that as used in this particular policy, the
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phrase could not include coverage for statutory unfair competition liability created under
Bus. & Prof. Code § 17200 et seq. The Court noted that the particular circumstances of the
case presented no potential for coverage because there was no “causal connection” between
the claimed injuries to consumers and the activities of the bank. In particular, the bank had
conducted no advertising activities that could possibly have reached the consumer.
Century 21 Real Estate Corp. v. Magee, 19 U.S.P.Q. 2d 1530 (C.D. Cal. 1991) .
Establishment of the following elements entitles plaintiff to summary judgment on its unfair
competition claim under Bus. & Prof. Code § 17200: (1) that plaintiff established through
prior use and registration a valid and protectable interest in the “CENTURY 21” service mark
in connection with the advertising and sale of real estate brokerage services; (2) that
defendant used a similar mark (“CENTURY 31”) in connection with identical services; and
(3) that defendant’s use is likely to cause consumer confusion, mistake, or deception.
Tigera Group, Inc. v. Commerce and Industry Ins. (N.D. Cal. 1991) 753 F. Supp. 858.
“Unfair competition,” as used in the advertising injury provision of a comprehensive liability
policy, does not cover statutory unfair competition under Bus. & Prof. Code § 17200. The
claims in question were being asserted by customers of plaintiff who were not consumers,
and claims under Bus. & Prof. Code § 17200 address only consumer injury. Coverage also
could not be based on common-law unfair competition, because that tort is characterized by a
misappropriation that creates commercial advantage and is therefore restricted to
competitors; under the facts presented, the claimant was a customer of the insured and not a
competitor. The court expressly noted that Bank of the West (see annotation above) was
before the California Supreme Court and the latter court had expressly rejected the more
expansive views taken by the Court of Appeal in Bank of the West.
Nationwide Mut. Ins. Co. v. Dynasty Solar, Inc. (N.D. Cal. 1990) 753 F. Supp. 853
involved interpretation of the term “unfair competition” as used in advertising injury
coverage provision of insurance policies. Issue was whether the phrase “unfair competition”
giving rise to an advertising injury is limited to its common law meaning (defined by insurer
as “palming off” activity by a business competitor), or whether it also includes the broader
statutory definition of unfair competition under Bus. & Prof. Code § 17200, which also
covers consumer suits for unfair business practices. The court held that the term “unfair
competition” as used in Nationwide’s insurance policies was not ambiguous and that the only
reasonable interpretation of the term is the common law definition of palming off.
Courtesy Temporary Service, Inc. v. Camacho (2d Dist. 1990) 222 Cal. App. 3d 1278,
272 Cal. Rptr. 352. A former employee’s use of confidential information obtained from his
former employer to compete with him and to solicit the business of his former employer’s
customers is “unfair competition” under Bus. & Prof. Code § 17200.
Orion Pictures Distribution v. Syufy Enterprises (9th Cir. 1987) 829 F.2d 946, 949 .
Solicitation of blind bids by a movie distributor is not prohibited in California as an unfair
trade practice under Bus. & Prof. Code § 17200.
Toho Co., Ltd. v. Sears, Roebuck & Co. (9th Cir. 1981) 645 F.2d 788, 793–794, 210
U.S.P.Q. (BNA) 547 . Likelihood of consumer confusion as to source or sponsorship is
required for a claim of passing off under Bus. & Prof. Code § 17200.
U.S.P.Q. 285 . The appearance of a radio station’s former mascot at public sporting events,
dressed in the chicken costume he had worn while employed by the radio station, was not
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unfair competition.
Tveter v. AB Turn-O-Matic (9th Cir. 1980) 633 F.2d 831, 209 U.S.P.Q. 22 . A cause of
action for unfair competition and a cause of action for trademark infringement can be
established under the same set of facts: likelihood of consumer confusion as to source;
presence of secondary meaning; and the deliberate intent to pass off goods as those of the
plaintiff.
Barquis v. Merchants Collection Assn. (1972) 7 Cal. 3d 94, 101 Cal. Rptr. 745, 496
P.2d 817 . Under Bus. & Prof. Code § 17200, courts may enjoin ongoing wrongful business
conduct in whatever context it occurs; “unfair competition” is not limited to deceptive or
fraudulent conduct.
Articles
Brutocao on A Guide to Federal Preemption of Business & Professions Code 17200,
2009 Emerging Issues 4213 (2009).
Charlston, When Silence Means Everything: The Application of Proposition 64 to
Pending Actions, 58 Hastings L.J. 623 (2007).
Lannan, Saving 17200: An Analysis of Proposition 64, 46 Santa Clara L. Rev. 451
(2006).
Note, Advertising Injury Coverage: An Overview, 65 S. Cal. L. Rev. 919 (1992).
Stern, Litigation and Practice Under Calif. Bus. and Prof. C. §§ 17200 & 17500, The
Rutter Group, Ltd. (1989).
Divelbiss, Prevention of Unfair Business Practices in California: A Proposal for
Effective Regulation, 32 Hastings L.J. 229 (1980).

As used in this chapter, the term person shall mean and include natural
persons, corporations, firms, partnerships, joint stock companies, associations
and other organizations of persons.
Leg.H. 1977 ch. 299.
Annotations
See the annotations to Bus. & Prof. Code § 17200.
Cases
County of Santa Clara v. Astra United States, Inc., 428 F. Supp. 2d 1029 (N.D. Cal.
235
2006), rev’d, 540 F.3d 1094 (9th Cir. 2008) . The county is not a person under Bus. & Prof.
Code § 17201 and therefore cannot pursue a UCL claim.
§ 17201.5. Definitions of “Board Within the

Department of Consumer Affairs” and “Local
Consumer Affairs Agency.”
As used in this chapter:
(a) “Board within the Department of Consumer Affairs” includes any
commission, bureau, division, or other similarly constituted agency within
the Department of Consumer Affairs.
(b) “Local consumer affairs agency” means and includes any city or
county body which primarily provides consumer protection services.
Leg.H. 1979 ch. 897.
Annotations
§ 17202. Specific or Preventative Relief to Enforce a

Penalty, Forfeiture, or Penal Law.
Notwithstanding Section 3369 of the Civil Code, specific or preventive
relief may be granted to enforce a penalty, forfeiture, or penal law in a case of
unfair competition.
Leg.H. 1977 ch. 299.
Annotations
§ 17203. Injunctive Relief; Court Orders.

Any person who engages, has engaged, or proposes to engage in unfair
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competition may be enjoined in any court of competent jurisdiction. The court
may make such orders or judgments, including the appointment of a receiver, as
may be necessary to prevent the use or employment by any person of any
practice which constitutes unfair competition, as defined in this chapter, or as
may be necessary to restore to any person in interest any money or property, real
or personal, which may have been acquired by means of such unfair
competition. Any person may pursue representative claims or relief on behalf of
others only if the claimant meets the standing requirements of Section 17204 and
complies with Section 382 of the Code of Civil Procedure, but these limitations
do not apply to claims brought under this chapter by the Attorney General, or
any district attorney, county counsel, city attorney, or city prosecutor in this
state.
Leg.H. 1977 ch. 299, 1992 ch. 430, amended by Initiative (Prop. 64) at the November 2,
2004, General Election, effective November 3, 2004.
Bus. & Prof. Code § 17203 provides for injunctive relief in cases involving acts of
unfair competition or unfair trade practices. The section has been construed as a legitimate
exercise of the trial court’s injunctive powers to require defendants to maintain a standard of
honest and fair dealing.
Although patent and copyright infringement have been declared acts of unfair
competition or unfair trade practices, an issue could be raised as to whether a court has
authority under Bus. & Prof. Code § 17203 to issue an injunction when what is being
enjoined is the subject matter of the patent and copyright laws. See generally Bonito Boats,
Inc. v. Thunder Craft Boats, Inc. (1989) 489 U.S. 141, 109 S. Ct. 971, 103 L. Ed. 2d 118.
This is primarily a trade dress issue. Application of the statute to some ornamental trademark
symbols that would otherwise be copyrightable or possibly fall under design patent
protection might also be preempted.
See also Consultant’s Comments to Bus. & Prof. Code § 17200.
Annotations
Cases
Tucker v. Pacific Bell Mobile Services , 208 Cal. App. 4th 201, 145 Cal. Rptr. 3d 340
(2012). The trial court sustained demurrers to a complaint for a putative class action. The
alleged wrongful practice pertained to the amount of minutes a customer would receive from
telephone plans that charged a specific fee for a certain number of minutes. The plans were
allegedly deceptive because the practice of rounding up calls to the next full minute resulted
in fewer minutes actually being available to the consumer. The appellate court agreed with the
trial court that with respect to claims for damages, common issues did not predominate and
the case could not proceed as a class action, but held that the demurrer should not have been
sustained with respect to a claim for injunctive relief under the UCL.
237
Arias v. Superior Court, 46 Cal. 4th 969, 95 Cal. Rptr. 3d 588, 209 P.3d 923 (2009) . A
representative claim under the UCL by an employee on behalf of other employees for alleged
Labor Code violations can be brought only as a class action.
Shersher v. Superior Court, 154 Cal. App. 4th 1491, 65 Cal. Rptr. 3d 634 (2007) .
Plaintiff filed this class action seeking restitution of money paid by consumers to retailers
for Microsoft products as to which Microsoft allegedly had misrepresented or concealed
material information. Relying on Korea Supply (see annotation below), Microsoft argued,
and the trial court agreed, that plaintiff could only recover restitution for payments made
directly to Microsoft, and not for indirect payments to retailers. The court of appeal reversed
and held that this is a form of restitution that a plaintiff can recover under the UCL.
Feitelberg v. Credit Suisse First Boston , 134 Cal. App. 4th 997, 36 Cal. Rptr. 3d 592
(2005). This case squarely holds that nonrestitutionary disgorgement is not an available
remedy under the UCL. The distinction between restitutionary disgorgement (which is
recoverable under the UCL) and nonrestitutionary disgorgement (not recoverable) is that the
former focuses on what was taken from the plaintiff (and therefore is to be returned) and the
latter focuses on what was improperly gained by the defendant as a result of the alleged
unlawful conduct.
Inline v. Apace Moving Systems, Inc., 125 Cal. App. 4th 895, 23 Cal. Rptr. 3d 216
(2005). This might be a significant case illustrating the distinction between a recovery for
damages (not allowed under the UCL) versus restitution. Inline’s goods were wrongly sold at
auction. The auction netted $20.00. Inline claimed the goods were worth $100,000.00, and
that its recovery under the UCL should be in that amount, rather than the $20.00 auction
proceeds. Unfortunately for Inline, the $100,000.00 figure (or any approximation of the fair
value of the goods) would be a form of damages. The only recovery allowed under the UCL
was the $20.00 obtained at auction because that was the total obtained by the defendant, and
that would be an appropriate restitutionary award.
Hangarter v. Provident Life and Accident Insurance Co. , 373 F.3d 998 (9th Cir.
2004). This case involved a determination by an insurer that its insured was not “totally
disabled” under its disability insurance policy. The plaintiff prevailed on her breach of
contract and tort claims, recovering compensatory and punitive damages. She also prevailed
on a UCL claim, and the trial court entered an injunction against the insurer under § 17203
charging the insurer to “obey the law” and refrain from certain practices. This injunction was
reversed because the plaintiff lacked Article III standing to pursue an injunction claim. Even
though she might have had standing in state court, in federal court there is an additional
requirement that she demonstrate a real or immediate threat of irreparable injury. Since she
no longer had any contractual relationship with the insurer, she could not satisfy this
requirement.
238
section 17204.
Kraus v. Trinity Management Services, Inc. (2000) 23 Cal. 4th 116, 96 Cal. Rptr. 2d
485. This case concerns remedies under the UCL in a case which was not a class action, but a
representative action under § 17200. (At footnote 10, the Supreme Court defines a
representative action: We use the term “representative action” to refer to a UCL action that
is not certified as a class action in which a private person is the plaintiff and seeks
disgorgement and/or restitution on behalf of persons other than or in addition to the
plaintiff.) The trial and appellate court had approved an award of disgorgement to a “fluid
recovery fund” of overpayments from tenants and former tenants which were not otherwise
refunded to the persons entitled to them. The Supreme Court held that payment to a “fluid
recovery fund” is not a proper remedy in a representative action under the UCL. Such a
remedy is allowable in a class action, but not otherwise. The remedy should be for a refund to
the actual tenants or former tenants who had been overcharged. The court states that the
defendants should be ordered to identify and locate as many former tenants as possible to
make direct refunds. (The court did not say what is supposed to happen to the money which
ought to go to individuals who cannot be identified or located.)
Ultimately, the court leaves the critical question unanswered: What remedy is
appropriate when it is clear that defendant has unjustly profited by an unlawful practice, but it
is impossible to identify or locate the persons rightfully entitled to a refund? If “fluid
recovery” is not an appropriate remedy, then what is? The Supreme Court so far has artfully
dodged this question. The apparent lesson is that a plaintiff suing under the UCL should also
seek class certification. That way, fluid recovery will be available. In the consultant’s opinion,
this is a step in the wrong direction.
Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal. 4th 163, 96 Cal. Rptr.
2d 518. In a companion case to Kraus, the Supreme Court characterized an order for
payment of unpaid overtime as permitted restitution under § 17203 instead of damages
(which are not recoverable under the UCL because only equitable remedies are allowed). The
Supreme Court again dodged the question of whether disgorgement is an appropriate remedy
when the defendant has accumulated unjust profits by a UCL violation, but restitution is not
available (as for example, when there is no person or group to whom anything can be
“restored”). To all appearances the claim to unpaid overtime would appear to be a form of
damages, not restitution. Section 17203 allows the court to “restore to any person … any
money or property … which may have been acquired by means of such unfair competition.”
In Cortez the claim was that employees should have been paid overtime for certain hours they
worked, but they were only paid straight time. In other words they were underpaid for those
hours. It stretches the meaning of “restore” to apply that term to this situation. “Restore”
implies that something was taken from the injured party and should be returned or given back.
Underpayment of this sort would not appear to qualify as a basis for restitution, but would
simply be a classic type of damages. Rather than clarify the law, the effect of the Supreme
Court’s decisions in Kraus and Cortez is to restrict available remedies under the UCL, and in
certain situations to allow wrongdoers to retain their “ill-gotten gains” when it is impossible
to find the people to whom those unjust profits should be “restored.” ABC Int’l Traders, Inc.
v. Matsushita Electric Corporation of America, (Cal. 1997) 14 Cal. 4th 1247, 61 Cal.Rptr.
2d 112. The California Supreme Court held that injunctive relief is not a prerequisite to
recovery of restitution under Cal. Bus & Prof. Code §§ 17200 and 17203. The Supreme
Court concluded that section 17203 authorizes a trial court to order restitution, as defined in
section 17200, whether or not the court also enjoins future violations.
239
Duncan v. Stuetzle, 76 F.3d 1480 (9th Cir. 1996). The Ninth Circuit recognized that this
section of the code supports a claim for injunctive relief under unfair competition.
Bank of the West v. Superior Court (1992) 2 Cal. 4th 1254, 10 Cal. Rptr. 2d 538, 833
P.2d 545 . Bus. & Prof. Code § 17203 provides for disgorgement of wrongfully obtained
money. The California Supreme Court held that insurance policy proceeds are not available
for restitutionary relief under this section. The cost of disgorgement under Bus. & Prof.
Code § 17203 is not insurable. “Damages” to compensate rather than to disgorge are
available for common-law unfair competition torts.
Solorzano v. Superior Court (2d Dist. 1992) 10 Cal. App. 4th 1135, 13 Cal. Rptr. 2d
161. Federal statutes regulating HMO’s do not preempt the field or deprive the states of
jurisdiction to grant injunctive relief under state unfair trade and deceptive practices laws
(Bus. & Prof. Code §§ 17203, 17500) to parties dissatisfied with the manner in which
HMO’s solicited and enrolled Medicare recipients.
Meta-Film Associates, Inc. v. MCA, Inc. (C.D. Cal. 1984) 586 F. Supp. 1346, 222
U.S.P.Q. 211, 223 . Defendant’s alleged failure to provide plaintiff with a screen credit for
having written portions of the motion picture “Animal House” stated a claim under Bus. &
Prof. Code § 17203 because of the expansive construction given statutory unfair competition
by the California courts. Depriving plaintiff of a valuable screen credit is “unfair” and also
“wrongful” within the meaning of the statute. Under the statute, plaintiff’s remedy is limited
to injunctive relief.
§ 17204. Actions for Injunctions by Attorney General,

District Attorney, County Counsel, and City
Attorneys.
Actions for relief pursuant to this chapter shall be prosecuted exclusively in
a court of competent jurisdiction by the Attorney General or a district attorney
or by a county counsel authorized by agreement with the district attorney in
actions involving violation of a county ordinance, or by a city attorney of a city
having a population in excess of 750,000, or by a city attorney in a city and
county or, with the consent of the district attorney, by a city prosecutor in a city
having a full-time city prosecutor in the name of the people of the State of
California upon their own complaint or upon the complaint of a board, officer,
person, corporation, or association, or by a person who has suffered injury in
fact and has lost money or property as a result of the unfair competition.
Added Stats 1977 ch 299 § 1. Amended Stats 1991 ch 1195 § 1 (SB 709), ch 1196 § 1
(AB 1755); Stats 1992 ch 385 § 1 (SB 1911); Stats 1993 ch 926 § 2 (AB 2205). Amendment
approved by voters, Prop. 64 § 3, effective November 3, 2004; Stats 2007 ch 17 § 1 (SB
376), effective January 1, 2008; Stats 2008 ch 179 § 23 (SB 1498), effective January 1,
2009.
240
Annotations
Cases
Hinojos v. Kohl’s Corporation , 718 F.3d 1098 (9th Cir. 2013) . Kohl’s advertised
products as being “on sale” for less than their “original” or “regular” prices, when actually the
“sale” price amounted to the “regular” price. Plaintiff alleged he would not have purchased
the items if he had known the truth. Nonetheless, his purported class action was dismissed by
the trial court because he suffered no actual damage. The Ninth Circuit reversed and held that
the averment that he would not have purchased the items if he had known they were not truly
“on sale” was sufficient for standing under 17204.
Law Offices of Mathew Higbee v. Expungement Assistance Services, 214 Cal. App. 4th
544, 153 Cal. Rptr. 3d 865 (2013). The alleged unfair competition in this case was the
unauthorized practice of law. Attorney Higbee alleged he suffered economic injury in the
form of lost business, lost value of his law practice and increased advertising expenses to
compete with the defendant. The main issue in the case was whether Higbee had to have had
business dealings with the defendant as a result of which he had lost money or property.
Differentiating the situation of a consumer suing under the UCL, the court of appeal held that
Higbee did not have to have business dealings with defendant. As a competitor he suffered
economic injury as alleged and this was sufficient for standing under the UCL.
Medrazo v. Honda of North Hollywood, 205 Cal. App. 4th 1, 140 Cal. Rptr. 3d 20
(2012). The predicate for this UCL action is the failure by the defendant motorcycle dealer
to include “hang tags” that show the manufacturer’s suggested retail price plus additional
dealer charges as required by Vehicle Code sections 11712.5 and 24014. The trial court
dismissed the claim for lack of injury in fact because before the plaintiff purchased the
motorcycle the additional dealer charges were disclosed. The appellate court reversed and
held that the plaintiff had suffered injury in fact because the information is required to be
disclosed with a tag on the vehicle so the consumer can consider the additional charges
before choosing a motorcycle.
Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 120 Cal. Rptr. 3d 741, 246 P.3d 877
(2011). The predicate for the UCL action is labeling products as “Made in U.S.A.” when parts
of the product originate outside the U.S. The standing issue was whether plaintiffs suffered
injury in fact and lost money or property as a result of the unfair competition. The court held
that plaintiffs satisfied these requirements by having purchased products in reliance on the
representation that they were made in the U.S.A. even though they received products of equal
value for the price paid. The Supreme Court also rejected the line of cases that had held
plaintiffs must qualify for restitution in order to have standing. The standing issue under
17204 is separate from the right to restitution under 17203.
Bower v. AT&T Mobility, LLC , 196 Cal. App. 4th 1545, 127 Cal. Rptr. 3d 569 (2011) .
The plaintiff purchased a cellular phone at a discount but was charged sales tax on the
undiscounted price which was then paid over to the State. Plaintiff contended this was unfair
and misleading in that AT&T had discretion to charge tax on the discounted amount. The
court held that this did not constitute injury in fact and therefore plaintiff lacked standing.
241
(2010). In this complex case involving alleged trade secret misappropriation, the plaintiff
also alleged, inter alia, a violation of the UCL. The UCL violation pertained to alleged
inducement of another party to violate an injunction. The court analyzed the standing
requirement in two parts. First, the plaintiff must have suffered injury in fact; this
requirement is met when the plaintiff “has suffered ‘an invasion of a legally protected interest
that is “(a) concrete and particularized, and (b) actual or imminent, not conjectural or
hypothetical.”’ Second, however, the plaintiff must have lost money or property as a result of
the unlawful conduct. This means that a person must have parted with money or property that
was formerly his or within his control. The plaintiff here could not satisfy that requirement
and therefore lacked standing.
Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350, 108 Cal. Rptr. 3d 682 (2010) . The
alleged UCL violation was the discrepancy between what a hospital charged for insured
patients as opposed to uninsured patients. The plaintiff lacked standing to pursue the claim
because he did not allege that he had actually parted with any money in reliance on alleged
deceptive practices or representations.
Hale v. Sharp Healthcare , 183 Cal. App. 4th 1373, 108 Cal. Rptr. 3d 669 (2010) . In
contrast to Durell, Hale had standing to pursue similar claims. The court found Hale had paid
part of the charges and that she had relied on the representation that she would be billed
“regular” rates as opposed to allegedly excessive rates.
Troyk v. Farmers Group, Inc., 171 Cal. App. 4th 1305, 90 Cal. Rptr. 3d 589 (2009). The
predicate for this UCL class action was an insurer’s practice of requiring a monthly service
charge to be paid for buying insurance on a monthly basis but not disclosing the service
charge on the policy. This violated Insurance Code section 381(f) which requires the
premium to be disclosed on the policy. The court held that the monthly service charge was
part of the premium. Farmers argued that it should not have liability to repay the service
charges as restitution because those charges were paid to a separate finance company. The
court rejected that argument and held that the policyholders could recover restitution from
Farmers for money paid as a result of the UCL violation, even if the money was paid to
someone else. The court held that the plaintiff had sufficiently alleged and shown injury in
fact and that he had lost money as a result of the violation in order to satisfy the standing
requirements, but remanded on the issue of causation.
Morgan v. AT&T Wireless Services, Inc. , 177 Cal. App. 4th 1235, 99 Cal. Rptr. 3d 768
(2009). This UCL claim was based on AT&T’s allegedly selling a premium cell phone that
would have special capabilities that became worthless because AT&T did not maintain
adequate service for these particular phones. The plaintiffs sufficiently established standing
for the UCL claim. Plaintiffs asserted an independent false advertising claim based on
AT&T’s offer of a new phone as an “upgrade,” which was not in fact an upgrade but was
inferior to the premium phone. Plaintiffs could not establish standing for the false
advertising claim because none of them accepted AT&T’s offer, so they did not suffer injury
in fact as a result of the allegedly wrongful conduct.
In re Tobacco II Cases , 46 Cal. 4th 298, 93 Cal. Rptr. 3d 559, 207 P.3d 20 (2009) . The
California Supreme Court held that in a class action under the UCL, only the named class
representatives need to establish standing, and unnamed class members do not. The class
representatives need to establish reliance on misrepresentations and resultant injury in fact,
but it is not necessary “to plead or prove an unrealistic degree of specificity that the plaintiff
relied on particular advertisements or statements when the unfair practice is a fraudulent
242
advertising campaign.”
Citizens of Humanity v. Costco Wholesale Corp., 171 Cal. App. 4th 1, 89 Cal. Rptr. 3d
455 (2009). Harm to goodwill is not the type of injury that would entitle plaintiff to
restitution under section 17203. Therefore, plaintiff lacks standing under section 17204.
Walker v. Geico General Insurance Co. , 558 F.3d 1025 (9th Cir. 2009) . To have
standing a plaintiff must have suffered the type of loss of money or property that would
support a right to restitution.
Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court , 46 Cal. 4th
993, 95 Cal. Rptr. 3d 605, 209 P.3d 937 (2009) . Labor Unions lacked standing to pursue
UCL claims on behalf of employees for alleged violations of the Labor Code. Assignments
of claims to the Labor Union by the affected employees do not confer such standing because
a UCL claim must be pursued as a class action under section 17203.
Animal Legal Defense Fund v. Mendes, 160 Cal. App. 4th 136, 72 Cal. Rptr. 3d 553
(2008). Plaintiff filed this UCL action against calf ranchers alleging that the calves are raised
in enclosures that do not provide enough space to turn around in violation of Penal Code §
597(t). The alleged injury is that when the calves are integrated into dairy herds, customers
would not buy their milk if they knew the circumstances of their confinement as calves. This
does not constitute actual economic injury. Therefore, plaintiff lacked standing under Bus. &
Medina v. Safe-Guard Products, Internat., Inc. , 164 Cal. App. 4th 105, 78 Cal. Rptr. 3d
672 (2008). In connection with purchase of a vehicle, plaintiff purchased insurance from an
out-of-state insurer not licensed in California. He alleged a UCL violation because the
insurer is required to be licensed in order to conduct business in California. The court held
he has no actual injury because the contract is nevertheless enforceable. (See Peterson v.
Cellco annotation.)
Trujillo v. First American Registry, Inc. , 157 Cal. App. 4th 628, 68 Cal. Rptr. 3d 732
(2007). This UCL claim against a credit reporting company alleged that defendant issued
incomplete information about unlawful detainer proceedings in its tenant screening reports.
For example, the report might only show that an unlawful detainer complaint had been filed,
but not that it had been dismissed or a resulting judgment satisfied. The court held plaintiff
had not suffered actual injury as a result because uncontroverted evidence was that property
managers would have acted the same way in rejecting the tenant’s application even if the
omitted information had been included in the report. Further, the tenant did not lose money
or property as a result. Therefore, plaintiff lacked standing under Bus. & Prof. Code § 17204.
Peterson v. Cellco Partnership, 164 Cal. App. 4th 1583, 80 Cal. Rptr. 3d 316 (2008) .
In connection with purchase of cell phones, defendant sells insurance. Plaintiff alleged
defendant lacks a license to sell insurance. Plaintiff cannot satisfy the standing requirement
in Bus. & Prof. Code § 17204 because there is no actual injury. (See Medina v. Safeguard
annotation.)
Hall v. Time Inc. , 158 Cal. App. 4th 847, 70 Cal. Rptr. 3d 466 (2008) . This action
against a book seller alleged that the seller offered a ‘free preview period’ but then sent an
invoice to the customer before the preview period expired. The court held that there was no
injury in fact as required by Bus. & Prof. Code § 17204 because the consumer kept the book,
paid for it well after expiration of the preview period, and thus suffered no damages.
243
Buckland v. Threshold Enterprises, Ltd. , 155 Cal. App. 4th 798, 66 Cal. Rptr. 3d 543
(2007). This action asserts claims under Bus. & Prof. Code §§ 17200 and 17500, among
others, for alleged failure to disclose certain chemicals that are included as components of
various cosmetic products. Plaintiffs did not satisfy the reliance requirement and therefore
lacks standing under Bus. & Prof. Code §§ 17204 and 17535.
Overstock.com, Inc. v. Gradient Analytics, Inc., 151 Cal. App. 4th 688, 61 Cal. Rptr. 3d
29 (2007). This action by a retailer alleged that a publisher of analytic reports deliberately
produced custom negative reports about the retailer. The court held that plaintiff satisfied the
standing requirement of Bus. & Prof. Code § 17204 because the alleged unlawful conduct
caused diminution in the value of its assets and decline in market capitalization. The court
distinguished Bowen v. Ziasun Technologies, Inc. , 116 Cal. App. 4th 777, 11 Cal. Rptr. 3d
522 (2004) (See annotation under Bus. & Prof. Code § 17200.)
Lozano v. AT&T Wireless Servs. , 504 F.3d 718 (2007). In a putative class action,
plaintiff challenged “out-of-cycle billing” for cellular telephone services and alleged that
AT&T did not adequately disclose this practice to customers. When a customer places a
“roaming call,” AT&T would include the charge for that call when AT&T learned of the call,
which sometimes would be in a different billing cycle than the one in which the call was
made. For example, a roaming call placed in August would not be included in the bill for
August, but in the bill for September instead. Consequently, a customer might exceed the
amount of minutes covered by the plan and incur an additional charge. The court held that
Lozano had sufficiently stated a claim under the UCL. Further, customers who were aware of
the practice and “reserved” minutes each week to compensate for charges for calls from
prior months incurred actual injury to satisfy the standing requirement of Bus. & Prof. Code
§ 17204 in the form of getting fewer minutes each month.
Chavez v. Blue Sky Natural Bev. Co. , 503 F. Supp. 2d 1370 (N.D. Cal. 2007). Plaintiff
sued Blue Sky for unfair competition and false advertising for alleged misrepresentations
regarding the place of origin of Blue Sky beverages. Specifically, plaintiff contended that
Blue Sky’s advertising and other materials represented that the beverages were produced and
bottled in New Mexico, when the beverages actually came from other places. Plaintiff
alleged he purchased the beverages only because he believed they truly came from New
Mexico and that he suffered actual damages and injury in fact equal to the amount he paid for
each beverage. The court rejected all claims on the ground that there is and can be no
damages or injury because plaintiff could not allege that the value of the beverages was less
than what he paid. Because he had no compensable damages, he lacked standing under Bus. &
Prof. Code §§ 17204 and 17535.
Daghlian v. DeVry Univ., Inc. , 461 F. Supp. 2d 1121 (C.D. Cal. 2006) . A student sued a
private university alleging that the university failed to disclose that academic units earned at
the university probably would not transfer to other educational institutions. The plaintiff’s
standing requirements in Bus. & Prof. Code §§ 17204 and 17535 are satisfied by reason of
his enrollment in the university and incursion of $40,000 in debt.
244
section 17204.
Santa Monica Rent Control Bd. v. Bluvshtein (2d Dist. 1991) 230 Cal. App. 3d 308,
281 Cal. Rptr. 298. The Santa Monica Rent Control Board is a government agency and is not
considered a “person” within the meaning of Bus. & Prof. Code § 17204. Therefore, the
Santa Monica Rent Control Board has no standing to bring an action to enjoin an alleged
unfair business practice.
Midpeninsula Citizens for Fair Housing v. Westwood Investors (6th Dist. 1990) 221
Cal. App. 3d 1377, 271 Cal. Rptr. 99 . A corporation that does not have representative
standing under the Unruh Act to sue on behalf of its members nevertheless has standing under
Bus. & Prof. Code § 17204 to sue for violations of the Unruh Act.
Hernandez v. Atlantic Finance Co. (1st Dist. 1980) 105 Cal. App. 3d 65, 164 Cal. Rptr.
279. An individual who had not purchased the consumer goods involved, had not applied for
credit, and had not been injured or personally aggrieved sued for injunction based on
allegedly misleading financial practices. The court allowed suit for injunction under Bus. &
Prof. Code § 17204, finding that the statute expressly authorized suit by any person on behalf
of the general public.
Articles
Arledge, Standing Under the Unfair Competition Law is Unlikely to Exist for
Competitors, 50 Orange County Lawyer 51 (2008).
Carlin, Chapter 17: Giving San Francisco a Leg to Stand on in UCL Actions, 39
McGeorge L. Rev. 392 (2008).
§ 17204.5. Prosecution of Actions by City Attorney of

San Jose.
In addition to the persons authorized to bring an action pursuant to Section
17204, the City Attorney of the City of San Jose, with the annual consent of the
Santa Clara County District Attorney, is authorized to prosecute those actions.
This section shall remain in effect until such time as the population of the City of
San Jose exceeds 750,000, as determined by the Population Research Unit of the
Department of Finance, and at that time shall be repealed.
Leg.H. 1988 ch. 790.
Annotations
245
§ 17205. Remedies Provided by Chapter Are
Cumulative.
Unless otherwise expressly provided, the remedies or penalties provided by
this chapter are cumulative to each other and to the remedies or penalties
available under all other laws of this state.
Leg.H. 1977 ch. 299.
Bus. & Prof. Code §§ 17200–17210 provide for injunctive, civil penalty, and
restitutional remedies only. A number of cases have interpreted these sections as precluding
an award of compensatory damages or punitive damages. Bus. & Prof. Code § 17205,
however, provides that remedies and penalties provided by Bus. & Prof. Code §§ 17200–
17210 are cumulative to each other and to the remedies and penalties available under all
other laws of this state. Bus. & Prof. Code § 17205 presumably draws in all remedies that
were otherwise available under common law. This could be used as a “boot strap” to argue
that punitive damages, which are available for malicious, oppressive or fraudulent conduct at
common law, are not excluded under the statutory scheme of this chapter. Suing under Bus.
& Prof. Code §§ 17200–17210 therefore does not necessarily exclude one from asking for
punitive damages and compensatory damages for acts of common law unfair competition. For
this reason, a complaint should include counts of common law unfair competition in addition
to statutory unfair competition in order to make these remedies available to the plaintiff.
See also Consultant’s Comments to Bus. & Prof. Code § 17200.
Annotations
Cases
State of California v. Altus Finance, 36 Cal. 4th 1284, 32 Cal. Rptr. 3d 498, 116 P.3d
1175 (2005). The Insurance Commissioner was acting as conservator or liquidator of an
insolvent insurance company. The issues presented in this case were whether the Attorney
General (AG) could pursue claims against the insolvent insurer under the California False
Claims Act (CFCA) or the UCL. No claim could proceed under the CFCA because the funds
held by the Insurance Commissioner are in trust for policyholders and are not state funds.
The UCL claim could proceed, but only as to certain remedies. Restitution could not be
recovered in an action by the AG because this would interfere with the Insurance
Commissioner’s core function of collecting and preserving assets for policyholders. The AG
can; however, seek civil penalties because this is a remedy pursued by the AG as the chief law
enforcement officer of the state. Finally, as to injunctive relief, the AG can pursue an
injunction to the extent that it implicates core law enforcement functions and does not
duplicate the role of the Insurance Commissioner.
People ex rel. Orloff v. Pacific Bell , 31 Cal. 4th 1132, 7 Cal. Rptr. 3d 315, 80 P.3d 201
(2003). Reversing the lower courts, the California Supreme Court held that the parallel
actions by three district attorneys for alleged unfair practices and false advertising under the
UCL could proceed against Pacific Bell notwithstanding the fact that the same conduct was
246
the subject of a PUC proceeding which resulted in a large fine against Pacific Bell.
Significant factors are that this action was brought by public prosecutors on behalf of the
public and the remedies in this UCL action are different than the remedies in the PUC
proceeding.
Hewlett v. Squaw Valley Ski Corp. (1997), 54 Cal. App. 4th 499, 63 Cal. Rptr. 2d 118 .
Section 17205 specifically states that remedies are cumulative. Therefore, the fact that other
entities might have addressed the issue of whether a ski resort’s removal of trees violated the
Forest Practice Act, its conditional use permit, or a temporary restraining order, had no
bearing on whether defendant’s conduct also constituted an unlawful business practice under
section 17200.
See the annotation under Bus. & Prof. Code § 17200.
§ 17206. Civil Penalty for Violation of Chapter.

(a) Any person who engages, has engaged, or proposes to engage in unfair
competition shall be liable for a civil penalty not to exceed two thousand five
hundred dollars ($2,500) for each violation, which shall be assessed and
recovered in a civil action brought in the name of the people of the State of
California by the Attorney General, by any district attorney, by any county
counsel authorized by agreement with the district attorney in actions involving
violation of a county ordinance, by any city attorney of a city having a
population in excess of 750,000, by any city attorney of any city and county, or,
with the consent of the district attorney, by a city prosecutor in any city having a
full-time city prosecutor, in any court of competent jurisdiction.
(b) The court shall impose a civil penalty for each violation of this chapter.
In assessing the amount of the civil penalty, the court shall consider any one or
more of the relevant circumstances presented by any of the parties to the case,
including, but not limited to, the following: the nature and seriousness of the
misconduct, the number of violations, the persistence of the misconduct, the
length of time over which the misconduct occurred, the willfulness of the
defendant’s misconduct, and the defendant’s assets, liabilities, and net worth.
(c) If the action is brought by the Attorney General, one-half of the penalty
collected shall be paid to the treasurer of the county in which the judgment was
entered, and one-half to the General Fund. If the action is brought by a district
attorney or county counsel, the penalty collected shall be paid to the treasurer of
the county in which the judgment was entered. Except as provided in
subdivision (e), if the action is brought by a city attorney or city prosecutor,
one-half of the penalty collected shall be paid to the treasurer of the city in
which the judgment was entered, and one-half to the treasurer of the county in
which the judgment was entered. The aforementioned funds shall be for the
exclusive use by the Attorney General, the district attorney, the county counsel,
and the city attorney for the enforcement of consumer protection laws.
247
(d) The Unfair Competition Law Fund is hereby created as a special account
within the General Fund in the State Treasury. The portion of penalties that is
payable to the General Fund or to the Treasurer recovered by the Attorney
General from an action or settlement of a claim made by the Attorney General
pursuant to this chapter or Chapter 1 (commencing with Section 17500) of Part
3 shall be deposited into this fund. Moneys in this fund, upon appropriation by
the Legislature, shall be used by the Attorney General to support investigations
and prosecutions of California’s consumer protection laws, including
implementation of judgments obtained from such prosecutions or investigations
and other activities which are in furtherance of this chapter or Chapter 1
(commencing with Section 17500) of Part 3. Notwithstanding Section 13340
of the Government Code, any civil penalties deposited in the fund pursuant
to the National Mortgage Settlement, as provided in Section 12531 of the
Government Code, are continuously appropriated to the Department of
Justice for the purpose of offsetting General Fund costs incurred by the
Department of Justice.
(e) If the action is brought at the request of a board within the Department of
Consumer Affairs or a local consumer affairs agency, the court shall determine
the reasonable expenses incurred by the board or local agency in the
investigation and prosecution of the action.
Before any penalty collected is paid out pursuant to subdivision (c), the
amount of any reasonable expenses incurred by the board shall be paid to the
Treasurer for deposit in the special fund of the board described in Section 205.
If the board has no such special fund, the moneys shall be paid to the Treasurer.
The amount of any reasonable expenses incurred by a local consumer affairs
agency shall be paid to the general fund of the municipality or county that funds
the local agency.
(f) If the action is brought by a city attorney of a city and county, the entire
amount of the penalty collected shall be paid to the treasurer of the city and
county in which the judgment was entered for the exclusive use by the city
attorney for the enforcement of consumer protection laws. However, if the
action is brought by a city attorney of a city and county for the purposes of civil
enforcement pursuant to Section 17980 of the Health and Safety Code or Article
3 (commencing with Section 11570) of Chapter 10 of Division 10 of the Health
and Safety Code, either the penalty collected shall be paid entirely to the
treasurer of the city and county in which the judgment was entered or, upon the
request of the city attorney, the court may order that up to one-half of the penalty,
under court supervision and approval, be paid for the purpose of restoring,
maintaining, or enhancing the premises that were the subject of the action, and
that the balance of the penalty be paid to the treasurer of the city and county.
248
(SB 709), ch 1196 § 2 (AB 1755); Stats 1992 ch 430 § 4 (SB 1586); Stats 1997 ch 17 § 11
(SB 947). Amendment approved by voters, Prop. 64 § 4, effective November 3, 2004.
Amended Stats 2005 ch 74 § 23 (AB 139), effective July 19, 2005; Stats 2007 ch 17 § 2 (SB
376), effective January 1, 2008; Stats 2012 ch 32 § 1 (SB 1006), effective June 27, 2012.
§ 17206.1. Additional Civil Penalty; Acts Against Senior

Citizens or Disabled Persons.
(a)
(1) In addition to any liability for a civil penalty pursuant to Section
17206, any a person who violates this chapter, and the act or acts of unfair
competition are perpetrated against one or more senior citizens or disabled
persons, may be liable for a civil penalty not to exceed two thousand five
hundred dollars ($2,500) for each violation, which may be assessed and
recovered in a civil action as prescribed in Section 17206.
( 2 ) Subject to subdivision (d), any civil penalty shall be paid as
prescribed by subdivisions (b) and (c) of Section 17206.
( b ) As used in this section, the following terms have the following
meanings:
(1) “Senior citizen” means a person who is 65 years of age or older.
(2) “Disabled person” means any a person who has a physical or mental
impairment that substantially limits one or more major life activities.
(A) As used in this subdivision, “physical or mental impairment”
means any of the following:
( i ) Any A physiological disorder or condition, cosmetic
disfigurement, or anatomical loss substantially affecting one or more
of the following body systems: neurological; musculoskeletal;
special sense organs; respiratory, including speech organs;
cardiovascular; reproductive; digestive; genitourinary; hemic and
lymphatic; skin; or endocrine.
(ii) Any A mental or psychological disorder, such as mental
retardation, including intellectual disability, organic brain
syndrome, emotional or mental illness, and specific learning
disabilities.
“Physical or mental impairment” includes, but is not limited to,
such diseases and conditions as including orthopedic, visual,
speech, and hearing impairment, cerebral palsy, epilepsy, muscular
dystrophy, multiple sclerosis, cancer, heart disease, diabetes,
249
mental retardation, intellectual disability, and emotional illness.
(B) “Major life activities” means functions such as that include
caring for one’s self, performing manual tasks, walking, seeing, hearing,
speaking, breathing, learning, and working.
(c) In determining whether to impose a civil penalty pursuant to subdivision
(a) and the amount thereof, the court shall consider, in addition to any other
appropriate factors, the extent to which one or more of the following factors are
present:
(1) Whether the defendant knew or should have known that his or her
conduct was directed to one or more senior citizens or disabled persons.
(2) Whether the defendant’s conduct caused one or more senior citizens
or disabled persons to suffer: suffer any of the following: loss or
encumbrance of a primary residence, principal employment, or source of
income; substantial loss of property set aside for retirement, or for personal
or family care and maintenance; or substantial loss of payments received
under a pension or retirement plan or a government benefits program, or
assets essential to the health or welfare of the senior citizen or disabled
person.
( 3 ) Whether one or more senior citizens or disabled persons are
substantially more vulnerable than other members of the public to the
defendant’s conduct because of age, poor health or infirmity, impaired
understanding, restricted mobility, or disability, and actually suffered
substantial physical, emotional, or economic damage resulting from the
defendant’s conduct.
(d) Any A court of competent jurisdiction hearing an action pursuant to this
section may make orders and judgments as may be necessary to restore to any a
senior citizen or disabled person any money or property, real or personal,
which personal that may have been acquired by means of a violation of this
chapter. Restitution ordered pursuant to this subdivision shall be given priority
over recovery of any a civil penalty designated by the court as imposed
pursuant to subdivision (a), but shall not be given priority over any a civil
penalty imposed pursuant to subdivision (a) of Section 17206. If the court
determines that full restitution cannot be made to those senior citizens or
disabled persons, either at the time of judgment or by a future date determined
by the court, then restitution under this subdivision shall be made on a pro rata
basis depending on the amount of loss.
January 1, 2007; Stats 2012 ch 448 § 3 (AB 2370), effective January 1, 2013, ch 457 § 3 (SB
1381), effective January 1, 2013.
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§ 17207. Civil Penalties for Intentional Violation of
Injunction; Expenses of Prosecution.
(a) Any person who intentionally violates any injunction prohibiting unfair
competition issued pursuant to Section 17203 shall be liable for a civil penalty
not to exceed six thousand dollars ($6,000) for each violation. Where the
conduct constituting a violation is of a continuing nature, each day of that
conduct is a separate and distinct violation. In determining the amount of the
civil penalty, the court shall consider all relevant circumstances, including, but
not limited to, the extent of the harm caused by the conduct constituting a
violation, the nature and persistence of that conduct, the length of time over
which the conduct occurred, the assets, liabilities, and net worth of the person,
whether corporate or individual, and any corrective action taken by the
defendant.
( b ) The civil penalty prescribed by this section shall be assessed and
recovered in a civil action brought in any county in which the violation occurs
or where the injunction was issued in the name of the people of the State of
California by the Attorney General or by any district attorney, any county
counsel authorized by agreement with the district attorney in actions involving
violation of a county ordinance, or any city attorney in any court of competent
jurisdiction within his or her jurisdiction without regard to the county from
which the original injunction was issued. An action brought pursuant to this
section to recover civil penalties shall take precedence over all civil matters on
the calendar of the court except those matters to which equal precedence on the
calendar is granted by law.
(c) If such an action is brought by the Attorney General, one-half of the
penalty collected pursuant to this section shall be paid to the treasurer of the
county in which the judgment was entered, and one-half to the State Treasurer. If
brought by a district attorney or county counsel the entire amount of the penalty
collected shall be paid to the treasurer of the county in which the judgment is
entered. If brought by a city attorney or city prosecutor, one-half of the penalty
shall be paid to the treasurer of the county in which the judgment was entered
and one-half to the city, except that if the action was brought by a city attorney of
a city and county the entire amount of the penalty collected shall be paid to the
treasurer of the city and county in which the judgment is entered.
(d) If the action is brought at the request of a board within the Department of
investigation and prosecution of the action. Before any penalty collected is paid
out pursuant to subdivision (c), the amount of the reasonable expenses incurred
by the board shall be paid to the State Treasurer for deposit in the special fund
251
of the board described in Section 205. If the board has no such special fund, the
moneys shall be paid to the State Treasurer. The amount of the reasonable
expenses incurred by a local consumer affairs agency shall be paid to the
general fund of the municipality or county which funds the local agency.
Leg.H. 1977 ch. 299, 1979 ch. 897, 1991 chs. 1195, 1196.
Annotations
§ 17208. Limitation on Commencement of Actions.

Any action to enforce any cause of action pursuant to this chapter shall be
commenced within four years after the cause of action accrued. No cause of
action barred under existing law on the effective date of this section shall be
revived by its enactment.
Leg.H. 1977 ch. 299.
Annotations
Cases
Salenga v. Mitsubishi Motors Credit of America, Inc. , 183 Cal. App. 4th 986, 107 Cal.
Rptr. 3d 836 (2010). Mitsubishi pursued a deficiency judgment after a repossessed car had
been sold at auction. Salenga filed a cross-complaint under the UCL challenging the
deficiency process. A demurrer to the cross-complaint was sustained on the ground that her
cross-complaint, filed five years after she received the notice of deficiency, was barred by
the four-year statute of limitations. The court observed that there is no tolling of the four-
year statute. An action under the UCL must be commenced within four years of its accrual
regardless of when the claimant became aware of it. Here, however, Salenga argued that the
cause of action had not accrued when the notice was given but only when the creditor tried to
enforce the deficiency, which was well within the four years. Accordingly, the judgment of
dismissal was reversed with directions to allow Salenga to amend.
Broberg v. The Guardian Life Ins. Co. of America , 171 Cal. App. 4th 912, 90 Cal. Rptr.
3d 225 (2009). Courts appear to be split on the issue of whether the four-year statute of
limitations for a UCL claim is tolled pending discovery. When the claim is based on
deceptive representations or nondisclosure, this court held that the cause of action accrues
252
when it should have been reasonably discovered.
Snapp & Associates Insurance Services, Inc. v. Robertson, 96 Cal. App. 4th 884, 117
Cal. Rptr. 2d 331 (2002). The four-year statute of limitations for UCL actions is not tolled
based on alleged fraudulent concealment of the cause of action.
Stutz Motor Car of America, Inc. v. Reebok Intern., Ltd. (C.D. Cal. 1995) 909 F. Supp.
1353, 38 U.S.P.Q.2d 1253 , affirmed, 113 F.3d 1258 , certiorari denied, 118 S.Ct. 169, 139
L.Ed.2d 112. Statute of limitations on plaintiff’s cause of action for unfair competition,
which arose from allegations that shoe manufacturer had used plaintiff’s air bladder trade
secret, began to run when manufacturer allegedly misappropriated and began application and
use of plaintiff’s secret.
§ 17209. Service of Notice.

If a violation of this chapter is alleged or the application or construction of
this chapter is in issue in any proceeding in the Supreme Court of California, a
state court of appeal, or the appellate division of a superior court, each person
filing any brief or petition with the court in that proceeding shall serve, within
three days of filing with the court, a copy of that brief or petition on the Attorney
General, directed to the attention of the Consumer Law Section at a service
address designated on the Attorney General’s official Web site for service of
papers under this section or, if no service address is designated, at the Attorney
General’s office in San Francisco, California, and on the district attorney of the
county in which the lower court action or proceeding was originally filed. Upon
the Attorney General’s or district attorney’s request, each person who has filed
any other document, including all or a portion of the appellate record, with the
court in addition to a brief or petition shall provide a copy of that document
without charge to the Attorney General or the district attorney within five days
of the request. The time for service may be extended by the Chief Justice or
presiding justice or judge for good cause shown. No judgment or relief,
temporary or permanent, shall be granted or opinion issued until proof of
service of the brief or petition on the Attorney General and district attorney is
filed with the court.
Leg.H. 1992 ch. 385, 1998 ch. 931, effective September 28, 1998, 2004 ch. 529 (AB
1711).
Annotations
Cases
Black v. Financial Freedom Senior Funding Corp. , 92 Cal. App. 4th 917, 112 Cal.
Rptr. 2d 445 (2001). In footnote 6 of the opinion in this case the appellate court
retroactively granted the appellants’ motion to belatedly serve their brief on the Attorney
253
General. Thus, the failure to timely serve the brief on the AG as per § 17209 was forgiven.
(See also annotation under § 17200.)
Visionshape Inc. v. Kofax Image Products Inc. , 88 Cal. App. 4th 549, 106 Cal. Rptr. 2d
20 (2001) depublished. This case involved multiple claims which were dismissed on
demurrer. Of interest here was the sixth cause of action for violation of § 17200. On appeal
the plaintiff/appellant failed to comply with § 17209, i.e., a copy of its brief was not served
on the Attorney General. As a result of that failure (plus appellant’s failure to submit a letter
brief on the issue after the appellate court’s request), the appellate court declined to review
the dismissal of the 17200 claim. This case has been ordered depublished and so it cannot be
cited as precedent. Nevertheless, it illustrates that appellants need to comply with § 17209 or
risk having the appellate court refuse to review an adverse decision.
Californians for Population Stabilization v. Hewlett-Packard Co. (1997) 58 Cal. App.
4th 273, 67 Cal. Rptr. 2d 621. Under this statute, the Attorney General and local district
attorney must be served with appellant’s opening brief within three days of its being filed. No
judgment or relief may be granted by the appellate court if the Attorney General and local
district attorney are not so served, unless time for serving the brief has been extended for
good cause shown.
§ 17210. “Hotel”; “Handbill”; Unfair Competition with

Respect to Distributing Handbills to Individual
Guest Rooms.
(a) For purposes of this section, “hotel” means any hotel, motel, bed and
breakfast inn, or other similar transient lodging establishment, but it does not
include any residential hotel as defined in Section 50519 of the Health and
Safety Code. “Innkeeper” means the owner or operator of a hotel, or the duly
authorized agent or employee of the owner or operator.
( b ) For purposes of this section, “handbill” means, and is specifically
limited to, any tangible commercial solicitation to guests of the hotel urging that
they patronize any commercial enterprise.
(c) Every person (hereinafter “distributor”) engages in unfair competition
for purposes of this chapter who deposits, places, throws, scatters, casts, or
otherwise distributes any handbill to any individual guest rooms in any hotel,
including, but not limited to, placing, throwing, leaving, or attaching any
handbill adjacent to, upon, or underneath any guest room door, doorknob, or
guest room entryway, where either the innkeeper has expressed objection to
handbill distribution, either orally to the distributor or by the posting of a sign or
other notice in a conspicuous place within the lobby area and at all points of
access from the exterior of the premises to guest room areas indicating that
handbill distribution is prohibited, or the distributor has received written notice
pursuant to subdivision (e) that the innkeeper has expressed objection to the
distribution of handbills to guest rooms in the hotel.
254
(d) Every person (hereinafter “contractor”) engages in unfair competition
for purposes of this chapter who causes or directs any other person, firm,
business, or entity to distribute, or cause the distribution of, any handbill to any
individual guest rooms in any hotel in violation of subdivision (c) of this
section, if the contractor has received written notice from the innkeeper
objecting to the distribution of handbills to individual guest rooms in the hotel.
(e) Every contractor who causes or directs any distributor to distribute, or
cause the distribution of, any handbills to any individual guest rooms in any
hotel, if the contractor has received written notice from the innkeeper or from
any other contractor or intermediary pursuant to this subdivision, objecting to
the distribution of handbills to individual guest rooms in the hotel has failed to
provide a written copy of that notice to each distributor prior to the
commencement of distribution of handbills by the distributor or by any person
hired or retained by the distributor for that purpose, or, within 24 hours
following the receipt of the notice by the contractor if received after the
commencement of distribution, and has failed to instruct and demand any
distributor to not distribute, or to cease the distribution of, the handbills to
individual guest rooms in any hotel for which such a notice has been received is
in violation of this section.
( f) Any written notice given, or caused to be given, by the innkeeper
pursuant to or required by any provision of this section shall be deemed to be in
full force and effect until such time as the notice is revoked in writing.
(g) Nothing in this section shall be deemed to prohibit the distribution of a
handbill to guest rooms in any hotel where the distribution has been requested or
approved in writing by the innkeeper, or to any individual guest room when the
occupant thereof has affirmatively requested or approved the distribution of the
handbill during the duration of the guest’s occupancy.
Leg.H. 1999 ch. 354.
PART 3
Representations to the Public

CHAPTER 1
ADVERTISING
255
ARTICLE 1
False Advertising in General
§ 17500. False or Misleading Statements Generally.

It is unlawful for any person, firm, corporation or association, or any
employee thereof with intent directly or indirectly to dispose of real or personal
property or to perform services, professional or otherwise, or anything of any
nature whatsoever or to induce the public to enter into any obligation relating
thereto, to make or disseminate or cause to be made or disseminated before the
public in this state, or to make or disseminate or cause to be made or
disseminated from this state before the public in any state, in any newspaper or
other publication, or any advertising device, or by public outcry or
proclamation, or in any other manner or means whatever, including over the
Internet, any statement, concerning that real or personal property or those
services, professional or otherwise, or concerning any circumstance or matter of
fact connected with the proposed performance or disposition thereof, which is
untrue or misleading, and which is known, or which by the exercise of
reasonable care should be known, to be untrue or misleading, or for any person,
firm, or corporation to so make or disseminate or cause to be so made or
disseminated any such statement as part of a plan or scheme with the intent not
to sell that personal property or those services, professional or otherwise, so
advertised at the price stated therein, or as so advertised. Any violation of the
provisions of this section is a misdemeanor punishable by imprisonment in the
county jail not exceeding six months, or by a fine not exceeding two thousand
five hundred dollars ($2,500), or by both that imprisonment and fine.
Stats 1979 ch 492 § 1; Stats 1998 ch 599 § 2.5 (SB 597).
Because of similarities in the statutory schemes, courts are likely to apply precedents
under the false advertising law (Bus. & Prof. Code § 17500 et seq.) to cases arising under the
unfair competition law (Bus. & Prof. Code § 17200 et seq.) and vice-versa. See Bank of the
West v. Superior Court , 2 Cal. 4th 1254, 1267, 10 Cal. Rptr. 2d 538, 546, 833 P.2d 545
(1992); People v. Thomas Shelton Powers, M.D., Inc., 2 Cal. App. 4th 330, 340–341, 3 Cal.
Rptr. 2d 34, 40–41 (1992), overruled in part, Kraus v. Trinity Management Services, Inc. ,
23 Cal. 4th 116, 96 Cal. Rptr. 2d 485, 999 P.2d 718 (2000).
Annotations
256
Cases
Davis v. HSBC Bank Nevada N.A., 691 F.3d 1152 (9th Cir. 2012) . In this putative class
action Davis alleged violations of sections 17200 and 17500 for alleged nondisclosure of an
annual fee charged on a credit card. Best Buy advertised a special reward program that
operated with a credit card issued by HSBC. The advertisements did not mention an annual
fee, but when applying for the program Davis had to agree to the terms on a drop-down box
which included reference to the annual fee. The advertisement also indicated that “other
restrictions may apply.” Davis did not read the terms and conditions. The court held that there
was no false or misleading advertising or unlawful or unfair conduct because a reasonable
consumer would not assume that a credit card has no annual fee and Davis could have avoided
the problem by reading the terms and conditions or canceling his account when he learned
about the annual fee.
Duncan v. McCaffrey Group, Inc., 200 Cal. App. 4th 346, 133 Cal. Rptr. 3d 280 (2011) .
Plaintiffs claimed that defendants misrepresented their intentions of limiting housing in their
development to units with at least 2700 square feet, when in fact they intended to and did
include smaller houses in the development thereby lowering the value of plaintiffs’
properties. The trial court had relied on the parol evidence rule to preclude the false
advertising claim. This was an erroneous application of the parol evidence rule. Plaintiffs
were not introducing this evidence to attempt to alter or vary the terms of their purchase
contract but to prove misrepresentations or false advertising.
Williams v. Gerber Prods. Co. , 523 F.3d 934 (9th Cir. 2008) . Consumers, as parents of
small children, sued Gerber alleging that packaging of its fruit juice snacks for toddlers was
misleading. For example, packaging included pictures of fruits that the snacks did not
contain; the packaging described the products as made “with real fruit juice and other all
natural ingredients” even though the two most prominent ingredients were corn syrup and
sugar; that the snacks were “nutritious”; and that the product more accurately should be called
“candy,” a “sweet,” or a “treat.” The Court of Appeals held that these allegations were
sufficient and reversed the District Court’s order of dismissal.
In re Farm Raised Salmon Cases, 42 Cal. 4th 1077, 72 Cal. Rptr. 3d 112, 175 P.3d
1170 (2008). Plaintiffs brought suit asserting claims under Bus. & Prof. Code §§ 17200 and
17500, among others, alleging that various grocery stores failed to disclose artificial
coloring added to farmed salmon. The Supreme Court held these claims are not preempted by
the Federal Food, Drug, and Cosmetic Act.
Silvas v. E*Trade Mortg. Corp., 514 F.3d 1001 (9th Cir. 2008) . This is a putative class
action against a federal savings and loan association for failing to refund so-called “lock-in”
fees, which by law are refundable. The court held these claims are preempted by the Home
Owner’s Loan Act and regulations.
Cal. Rptr. 3d 513 (2006). In this action under Bus. & Prof. Code §§ 17200 and 17500,
plaintiff DMV contended that defendant violated smog certificate requirements in resale of
donated cars, and that defendant’s representation that towing was “free” was false advertising
because the cost of the towing was deducted from the charitable proceeds. The Court of
Appeals agreed and the trial court’s ruling to the contrary was reversed and remanded for a
new trial.
257
17200 and 17500 because parts of the tools are not made in the U.S.
Ariz. Cartridge Remanufacturers Ass’n v. Lexmark Int’l, Inc. , 421 F.3d 981 (9th Cir.
2005). A program whereby a printer and toner cartridge manufacturer sold cartridges at a
discount when the customer agreed to return the cartridge after use was challenged by
cartridge remanufacturers under Bus. & Prof. Code §§ 17200 and 17500. The court held that
there was nothing false, misleading, or unlawful about the manufacturer’s program.
Consumer Advocates v. Echostar Satellite Corp., 113 Cal. App. 4th 1351, 8 Cal. Rptr.
3d 22 (2003). This action under Bus. & Prof. Code §§ 17200 and 17500 challenged certain
advertising claims by defendants who provided satellite television service. The challenged
representations included that the system provided “crystal clear digital video,” “CD quality”
audio, an on-screen program guide that would allow the customer to view the schedule “up to
7 days in advance,” and that 50 channels would be available. The court held that the “crystal
clear” and “CD quality” statements were not actionable representations of fact, but were
boasts or “all-but-meaningless superlatives” akin to mere puffing. In contrast, the
representations that a seven-day schedule would be viewable and that 50 channels would be
available were actionable as factual misrepresentations.
National Council Against Health Fraud, Inc. v. King Bio Pharmaceuticals, Inc., 107
Cal. App. 4th 1336, 133 Cal. Rptr. 2d 207 (2003) . This action alleged that King Bio’s
advertising that its homeopathic remedies are effective constitute false advertising in
violation of Bus. & Prof. Code §§ 17500 and 17200. Plaintiff lost at trial. On appeal plaintiff
argued that the burden should be placed on the defendant to prove that the advertising is
accurate, rather than on the plaintiff to prove that it is inaccurate. The court rejected the
plaintiff’s reasoning and held that the burden remains on the plaintiff.
Lavie v. Procter & Gamble Co. , 105 Cal. App. 4th 496, 129 Cal. Rptr. 2d 486 (2003) .
This action challenged P&G’s advertising for its pain reliever Aleve, which said that “Aleve is
gentler to your stomach lining than aspirin,” as false and misleading. Plaintiff, who had an
inactive ulcer and had been told years before to avoid aspirin, saw the ads and decided to try
Aleve. He developed internal bleeding and later sued. After a bench trial, the trial court found
that the ads were true and the defendant prevailed. The Attorney General filed an amicus brief
arguing that the test for false or misleading advertising should not be a “reasonable
consumer” but “the least sophisticated consumer.” The appellate court rejected the Attorney
General’s position, and agreed with a long line of other cases that the standard should be a
“reasonable consumer.”
Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829 (9th Cir. 2002). This was an
action for false advertising under the Lanham Act and also under Bus. & Prof. Code §§ 17200
and 17500. The claims were dismissed on the grounds of laches because of a seven-year
delay between the plaintiff’s awareness of its potential claims and filing suit. The focus of the
decision is the application of laches to the Lanham Act, which does not have a statute of
limitations. This is an important case on that point. Almost as an afterthought, the court held
that the §§ 17200 and 17500 claims were also properly dismissed on the grounds of laches.
Solorzano v. Superior Court, 10 Cal. App. 4th 1135, 13 Cal. Rptr. 2d 161 (1992) .
258
Federal statutes regulating health maintenance organizations (HMOs) do not preempt the
field or deprive the states of jurisdiction to grant injunctive relief under the state’s unfair
trade and deceptive practices laws (Bus. & Prof. Code §§ 17203, 17500) to parties
dissatisfied with the manner in which HMOs solicit and enroll Medicare recipients.
§ 17500.1. Prohibition Against Enactment of Rule,

Regulation, or Code of Ethics Restricting or
Prohibiting Advertising Not Violative of Law.
Notwithstanding any other provision of law, no trade or professional
association, or state agency, state board, or state commission within the
Department of Consumer Affairs shall enact any rule, regulation, or code of
professional ethics which shall restrict or prohibit advertising by any
commercial or professional person, firm, partnership or corporation which does
not violate the provisions of Section 17500 of the Business and Professions
Code, or which is not prohibited by other provisions of law.
The provisions of this section shall not apply to any rules or regulations
heretofore or hereafter formulated pursuant to Section 6076.
12.
§ 17500.3. Solicitation of Sales at Residence or by

Telephone.
(a) It is unlawful for any person to solicit a sale or order for sale of goods
or services at the residence of a prospective buyer, in person or by means of
telephone, without clearly, affirmatively and expressly revealing at the time the
person initially contacts the prospective buyer, and before making any other
statement, except a greeting, or asking the prospective buyer any other questions,
that the purpose of the contact is to effect a sale, by doing all of the following:
(1) Stating the identity of the person making the solicitation.
( 2 ) Stating the trade name of the person represented by the person
making the solicitation.
(3) Stating the kind of goods or services being offered for sale.
(4) And, in the case of an “in person” contact, the person making the
solicitation shall, in addition to meeting the requirements of paragraphs (1),
(2) and (3), show or display identification which states the information
required by paragraphs (1) and (2) as well as the address of the place of
business of one of such persons so identified.
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(b) It is unlawful for any person, in soliciting a sale or order for the sale of
goods or services at the residence of a prospective buyer, in person or by
telephone, to use any plan, scheme, or ruse which misrepresents his true status
or mission for the purpose of making such sale or order for the sale of goods or
services.
(c) In addition to any other penalties or remedies applicable to violations of
this section, the intentional violation of this section shall entitle persons bound
to a contract, when there was a sales approach or presentation or both in which
such intentional violation of this section took place, to damages of two times the
amount of the sale price or up to two hundred fifty dollars ($250), whichever is
greater, but in no case shall such damages be less than fifty dollars ($50);
provided, however, that as a condition precedent to instituting such action
hereunder against the person represented by the person making the solicitation,
the aggrieved party shall, in writing, demand that the person represented by the
solicitor terminate such contract and return any and all payments made
thereunder, and that the person represented by the solicitor shall have refused
within a reasonable time, such termination and return. If the person represented
by the person making the solicitation elects to terminate, he shall return to the
aggrieved party payments received for any and all goods, and for services not
rendered, and upon return of such payments, the aggrieved party shall return any
and all goods received under the contract. For the purposes of this section, a
reasonable time shall mean 20 business days from the date of demand. This
subdivision shall not apply to a cause of action commenced under any other
provision of law, including, but not limited to, a cause of action commenced
pursuant to Section 382 of the Code of Civil Procedure or Section 1781 of the
Civil Code.
Any rights under this subdivision shall be waived if subsequent to the
signing of the contract the party bound by the contract states that
identification, as required by this section, was given.
(d) Persons represented by the person making the solicitation shall keep and
maintain copies of all demands for termination for violation of this section for a
period of one year from date of receipt. Failure to maintain such records shall
create a presumption affecting the burden of proof that demand for termination
had been properly made.
(e) Where any provision of law provides a penalty for the violation of any
offense specified in this section, it shall be a defense to the imposition of such
penalty as to any defendant who did not commit the act or acts constituting the
offense that such defendant did not know, and with the exercise of reasonable
care could not have known, that the act was committed, which constitutes the
violation of this section.
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( f ) As used in this section “person” includes any individual, firm,
partnership, corporation, association or other organization, but does not include
any nonprofit charitable organization, or any person selling any intangibles, or
any items defined in Section 1590(a)(1) of Title 18 of the California
Administrative Code as it read on July 15, 1972.
( g) This section shall not prohibit nor authorize the enactment by the
governing body of any city, county, or city and county, of ordinances relating to
home solicitations which are more restrictive of such solicitation than the
provisions of this section.
Added Stats 1972 ch 1415 § 1. Amended Stats 1975 ch 343 § 1.
§ 17500.5. Advertisements as to Quantity of Article to

Be Sold to Single Customer.
(a) It is unlawful for any person, firm, corporation or association to falsely
represent by advertisement the quantity of any article so advertised that will be
sold to any one customer on his demand in a single transaction, and willfully or
negligently to fail to include in such advertisement a statement that any
restriction that is in fact put upon the quantity of any article so advertised that is
sold or offered for sale to any one customer on his demand in a single
transaction.
(b) Any person, firm, corporation, or association who, by means of such
false or negligent advertisement or publicity, induces any individual retail
purchaser and consumer to enter any place of business designated therein
seeking to buy any article so advertised or publicized, and then refuses to sell to
such person the article at the price advertised in any quantity then available for
sale on said premises, shall be liable to each person so induced and refused, for
the losses and expenses thereby incurred, and the sum of fifty dollars ($50) in
addition thereto.
(c) Nothing in this section shall affect any right a seller may have to refuse
to extend credit to a customer, and this section shall not be applicable to a
customer purchasing for resale.
(d) The provisions of subdivision (b) are applicable only to actions brought
in the name of, and on behalf of, a single plaintiff and shall not be applicable in
multiple plaintiff or class actions.
Added Stats 1970 ch 1121 § 1.
§ 17501. Value Determinations; Former Price

Advertisements.
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For the purpose of this article the worth or value of any thing advertised is
the prevailing market price, wholesale if the offer is at wholesale, retail if the
offer is at retail, at the time of publication of such advertisement in the locality
wherein the advertisement is published.
No price shall be advertised as a former price of any advertised thing,
unless the alleged former price was the prevailing market price as above
defined within three months next immediately preceding the publication of the
advertisement or unless the date when the alleged former price did prevail is
clearly, exactly and conspicuously stated in the advertisement.
§ 17502. Exemption of Broadcasting Stations and

Publishers From Provisions of Article.
This article does not apply to any visual or sound radio broadcasting
station, to any internet service provider or commercial online service, or to any
publisher of a newspaper, magazine, or other publication, who broadcasts or
publishes, including over the Internet, an advertisement in good faith, without
knowledge of its false, deceptive, or misleading character.
Added Stats 1941 ch 63 § 1. Amended Stats 1951 ch 627 § 1; Stats 1998 ch 599 § 3 (SB
597).
§ 17503. [No Section of This Number.]

[Reserved]
§ 17504. Advertisement of Price of Goods or Services

Sold in Multiple Units.
( a ) Any person, partnership, corporation, firm, joint stock company,
association, or organization engaged in business in this state as a retail seller
who sells any consumer good or service which is sold only in multiple units and
which is advertised by price shall advertise those goods or services at the price
of the minimum multiple unit in which they are offered.
(b) Nothing contained in subdivision (a) shall prohibit a retail seller from
advertising any consumer good or service for sale at a single unit price where
the goods or services are sold only in multiple units and not in single units as
long as the advertisement also discloses, at least as prominently, the price of the
minimum multiple unit in which they are offered.
(c) For purposes of subdivisions (a) and (b), “consumer good” means any
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article which is used or bought for use primarily for personal, family, or
household purposes, but does not include any food item.
(d) For the purposes of subdivisions (a) and (b), “consumer service” means
any service which is obtained for use primarily for personal, family, or
household purposes.
( e ) For purposes of subdivisions (a) and (b), “retail seller” means an
individual, firm, partnership, corporation, joint stock company, association,
organization, or other legal relationship which engages in the business of selling
consumer goods or services to retail buyers.
Added Stats 1975 ch 1123 § 1. Amended Stats 1983 ch 64 § 1; Stats 1987 ch 439 § 1.
§ 17505. Misrepresentation as to Nature of Business.

No person shall state, in an advertisement of his goods, that he is a
producer, manufacturer, processor, wholesaler, or importer, or that he owns or
controls a factory or other source of supply of goods, when such is not the fact,
and no person shall in any other manner misrepresent the character, extent,
volume, or type of his business.
§ 17505.2. Requirements for Representing Oneself as

Recreation Therapist; Civil Action for Violation.
(a) It is unlawful for a person to represent himself or herself as a recreation
therapist, to represent the services he or she performs as recreation therapy, or
to use terms set forth in subdivision (c) in connection with his or her services,
name, or place of business, unless he or she meets all of the following
requirements:
(1) Graduation from an accredited college or university with a minimum
of a baccalaureate degree in recreation therapy or in recreation and leisure
studies with a specialization in recreation therapy. Alternatively, a person
who does not have one of the preceding degrees may qualify if he or she has
a baccalaureate degree in a specialization acceptable for certification or
eligible for certification by any accrediting body specified in paragraph (2).
(2) Current certification or eligibility for certification as a recreation
therapist by the California Board of Recreation and Park Certification or by
the National Council for Therapeutic Recreation Certification, Inc.
(b) No person shall represent himself or herself as a recreation therapist
assistant, or represent the services he or she performs as being in any way
related to recreation therapy, unless he or she at a minimum has current
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certification, or has eligibility for certification, by the California Board of
Recreation and Park Certification or by the National Council for Therapeutic
Recreation Certification, Inc., as a recreation therapist assistant.
(c) A person who does not meet the requirements of subdivision (a) or (b)
may not use any of the following words or abbreviations in connection with his
or her services, name, or place of business:
(1) Recreation therapist registered.
(2) Recreation therapist certified.
(3) Certified therapeutic recreation specialist.
(4) Recreation therapist.
(5) Recreation therapist assistant registered.
(6) Certified therapeutic recreation assistant.
(7) RTR.
(8) RTC.
(9) CTRS.
(10) RT.
(11) RTAR.
(12) CTRA.
( d ) For purposes of subdivision (c), the abbreviation RT shall not be
construed to include rehabilitation therapist or respiratory therapist.
(e) Any person injured by a violation of this section may bring a civil action
and may recover one thousand five hundred dollars ($1,500) for the first
violation and two thousand five hundred dollars ($2,500) for each subsequent
violation. This is the sole remedy for a violation of this section.
Added Stats 1997 ch 677 § 6 (SB 1347). Amended Stats 1998 ch 485 § 26 (AB 2803).
§ 17506. “Person”.
As used in this chapter, “person” includes any individual, partnership, firm,
association, or corporation.
Added Stats l970 ch 664 § 1.
§ 17506.5. “Board Within the Department of Consumer

Affairs”; “Local Consumer Affairs Agency”.
264
As used in this chapter:
(a) “Board within the Department of Consumer Affairs” includes any
commission, bureau, division, or other similarly constituted agency within
the Department of Consumer Affairs.
(b) “Local consumer affairs agency” means and includes any city or
county body which primarily provides consumer protection services.
§ 17507. Disclosure of Price Differentials Respecting

More Than One Article of Merchandise or Type of
Service Within Same Class.
It is unlawful for any person, firm, corporation or association to make an
advertising claim or representation pertaining to more than one article of
merchandise or type of service, within the same class of merchandise or
service, if any price is set forth in such claim or representation does not clearly
and conspicuously identify the article of merchandise or type of service to
which it relates. Disclosure of the relationship between the price and particular
article of merchandise or type of service by means of an asterisk or other
symbol, and corresponding footnote, does not meet the requirement of clear and
conspicuous identification when the particular article of merchandise or type of
service is not represented pictorially.
§ 17508. Purportedly Fact-Based or Brand-Comparison

Advertisements.
(a) It shall be unlawful for any person doing business in California and
advertising to consumers in California to make any false or misleading
advertising claim, including claims that (1) purport to be based on factual,
objective, or clinical evidence, (2) compare the product’s effectiveness or
safety to that of other brands or products, or (3) purport to be based on any fact.
(b) Upon written request of the Director of Consumer Affairs, the Attorney
General, any city attorney, or any district attorney, any person doing business in
California and in whose behalf advertising claims are made to consumers in
California, including claims that (1) purport to be based on factual, objective, or
clinical evidence, (2) compare the product’s effectiveness or safety to that of
other brands or products, or (3) purport to be based on any fact, shall provide to
the department or official making the request evidence of the facts on which the
advertising claims are based. The request shall be made within one year of the
265
last day on which the advertising claims were made.
Any city attorney or district attorney who makes a request pursuant to this
subdivision shall give prior notice of the request to the Attorney General.
(c) The Director of Consumer Affairs, Attorney General, any city attorney,
or any district attorney may, upon failure of an advertiser to respond by
adequately substantiating the claim within a reasonable time, or if the Director
of Consumer Affairs, Attorney General, city attorney, or district attorney shall
have reason to believe that the advertising claim is false or misleading, do
either or both of the following:
(1) Seek an immediate termination or modification of the claim by the
person in accordance with Section 17535.
(2) Disseminate information, taking due care to protect legitimate trade
secrets, concerning the veracity of the claims or why the claims are
misleading to the consumers of this state.
(d) The relief provided for in subdivision (c) is in addition to any other
relief that may be sought for a violation of this chapter. Section 17534 shall not
apply to violations of this section.
( e ) Nothing in this section shall be construed to hold any newspaper
publisher or radio or television broadcaster liable for publishing or
broadcasting any advertising claims referred to in subdivision (a), unless the
publisher or broadcaster is the person making the claims.
(f) The plaintiff shall have the burden of proof in establishing any violation
of this section.
(g) If an advertisement is in violation of subdivision (a) and Section 17500,
the court shall not impose a separate civil penalty pursuant to Section 17536 for
the violation of subdivision (a) and the violation of Section 17500 but shall
impose a civil penalty for the violation of either subdivision (a) or Section
17500.
Stats 1989 ch 947 § 1; Stats 2006 ch 538 § 24 (SB 1852), effective January 1, 2007.

Added Stats 1990 ch 1413 § 1 (AB 3994). Amended Stats 1991 ch 1091 § 11 (AB
1487). Repealed Stats 1995 ch 642 § 2 (SB 426). See B & P C §§ 17580, 17580.5.
§ 17509. Advertisements Soliciting Purchase of Product

Conditioned on Purchase of Different Product; Price
266
Disclosure; Good Faith Exemption for Publishers.
( a ) Any advertisement, including any advertisement over the Internet,
soliciting the purchase or lease of a product or service, or any combination
thereof, that requires, as a condition of sale, the purchase or lease of a different
product or service, or any combination thereof, shall conspicuously disclose in
the advertisement the price of all those products or services. This requirement
shall not in any way affect the provisions of Sections 16726 and 16727, with
respect to unlawful buying arrangements.
(b) Subdivision (a) does not apply to any of the following:
(1) Contractual plans or arrangements complying with this paragraph
under which the seller periodically provides the consumer with a form or
announcement card which the consumer may use to instruct the seller not to
ship the offered merchandise. Any instructions not to ship merchandise
included on the form or card shall be printed in type as large as all other
instructions and terms stated on the form or card. The form or card shall
specify a date by which it shall be mailed by the consumer (the “mailing
date”) or received by the seller (the “return date”). to prevent shipment of
the offered merchandise. The seller shall mail the form or card either at
least 25 days prior to the return date or at least 20 days prior to the mailing
date, or provide a mailing date of at least 10 days after receipt by the
consumer, except that whichever system the seller chooses for mailing the
form or card, shall be calculated to afford the consumer at least 10 days in
which to mail his or her form or card. The form or card shall be
preaddressed to the seller so that it may serve as a postal reply card or,
alternatively, the form or card shall be accompanied by a return envelope
addressed to seller. Upon the membership contract or application form or on
the same page and immediately adjacent to the contract or form, and in clear
and conspicuous language, there shall be disclosed the material terms of the
plan or arrangement including all of the following:
(A) That aspect of the plan under which the subscriber shall notify
the seller, in the manner provided for by the seller, if the seller does not
wish to purchase or receive the selection.
( B ) Any obligation assumed by the subscriber to purchase a
minimum quantity of merchandise.
(C) The right of a contract-complete subscriber to cancel his or her
membership at any time.
(D) Whether billing charges will include an amount for postage and
handling.
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( 2 ) Other contractual plans or arrangements not covered under
subdivision (a), such as continuity plans, subscription arrangements,
standing order arrangements, supplements, and series arrangements under
which the seller periodically ships merchandise to a consumer who has
consented in advance to receive that merchandise on a periodic basis.
( c ) This section shall not apply to the publisher of any newspaper,
periodical, or other publication, or any radio or television broadcaster, or the
owner or operator of any cable, satellite, or other medium of communication
who broadcasts or publishes, including over the Internet, an advertisement or
offer in good faith, without knowledge of its violation of subdivision (a).
Added Stats 1984 ch 643 § 1, Amended Stats 1998 ch 599 § 4 (SB 597).
ARTICLE 1.6
Cyber Piracy
§ 17525. Domain Names.

(a) It is unlawful for a person, with a bad faith intent to register, traffic in, or
use a domain name, that is identical or confusingly similar to the personal name
of another living person or deceased personality, without regard to the goods or
services of the parties.
(b) This section shall not apply if the name registered as a domain name is
connected to a work of authorship, including, but not limited to, fictional or
nonfictional entertainment, and dramatic, literary, audiovisual, or musical
works.
(c) A domain name registrar, a domain name registry, or any other domain
name registration authority that takes any action described in subdivision (a) that
affects a domain name shall not be liable to any person for that action,
regardless of whether the domain name is finally determined to infringe or dilute
a trademark or service mark.
Leg.H. 2000 ch. 218.
§ 17526. Factors in Determining Bad Faith Intent.

In determining whether there is a bad faith intent pursuant to Section 17525,
a court may consider factors, including, but not limited to, the following:
( a ) The trademark or other intellectual property rights of the person
alleged to be in violation of this article, if any, in the domain name.
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(b) The extent to which the domain name consists of the legal name of
the person alleged to be in violation of this article or a name that is
otherwise commonly used to identify that person.
(c) The prior use, if any, by the person alleged to be in violation of this
article of the domain name in connection with the bona fide offering of any
goods or services.
( d ) The legitimate noncommercial or fair use of the person’s or
deceased personality’s name in an Internet Web site accessible under the
domain name by the person alleged to be in violation of this article.
(e) The intent of a person alleged to be in violation of this article to
divert consumers from the person’s or deceased personality’s name online
location to a site accessible under the domain name that could harm the
goodwill represented by the person’s or deceased personality’s name either
for commercial gain or with the intent to tarnish or disparage the person’s or
deceased personality’s name by creating a likelihood of confusion as to the
source, sponsorship, affiliation, or endorsement of the site.
(f) The offer by a person alleged to be in violation of this article to
transfer, sell, or otherwise assign the domain name to the rightful owner or
any third party for substantial consideration without having used, or having
an intent to use, the domain name in the bona fide offering of any goods or
services.
(g) The intentional provision by the person alleged to be in violation of
this article of material and misleading false contact information when
applying for the registration of the domain name.
( h) The registration or acquisition by the person alleged to be in
violation of this article of multiple domain names that are identical or
confusingly similar to names of other living persons or deceased
personalities.
(i) Whether the person alleged to be in violation of this article sought or
obtained consent from the rightful owner to register, traffic in, or use the
domain name.
(j) The intent of a person alleged to be in violation of this article to
mislead, deceive, or defraud voters.
Leg.H. 2000 ch. 218, 2003 ch. 277.
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(a) “Deceased personality” shall have the same meaning as defined in
Section 3344.1 of the Civil Code.
( b ) “Domain name” means any alphanumeric designation that is
registered with or assigned by any domain name registrar, domain name
registry, or other domain name registration authority as part of an electronic
address on the internet.
(c) “Internet” shall have the meaning specified in Section 17538.
(d) “Traffic in” refers to transactions that include, but are not limited to,
sales, purchases, loans, pledges, licenses, exchanges of currency, or any
other transfer for consideration or receipt in exchange for consideration.
Leg.H. 2000 ch. 218.
§ 17528. Jurisdiction.
Jurisdiction for actions brought pursuant to this article shall be in
accordance with Section 410.10 of the Code of Civil Procedure.
Leg.H. 2000 ch. 218.
§ 17528.5. Transfer of Domain Name as Part of Relief

for Violation of Article.
In addition to any other remedies available under law, a court may order the
transfer of a domain name as part of the relief awarded for a violation of this
article.
Leg.H. 2003 ch. 277.
ARTICLE 1.8
Restrictions on Unsolicited Commercial E-mail

Advertisers
§ 17529. Legislative Findings.
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The Legislature hereby finds and declares all of the following:
( a ) Roughly 40 percent of all e-mail traffic in the United States is
comprised of unsolicited commercial e-mail advertisements (hereafter
spam) and industry experts predict that by the end of 2003 half of all e-mail
traffic will be comprised of spam.
( b ) The increase in spam is not only an annoyance but is also an
increasing drain on corporate budgets and possibly a threat to the continued
usefulness of the most successful tool of the computer age.
(c) Complaints from irate business and home-computer users regarding
spam have skyrocketed, and polls have reported that 74 percent of
respondents favor making mass spamming illegal and only 12 percent are
opposed, and that 80 percent of respondents consider spam very annoying.
( d ) According to Ferris Research Inc., a San Francisco consulting
group, spam will cost United States organizations more than ten billion
dollars ($10,000,000,000) this year, including lost productivity and the
additional equipment, software, and manpower needed to combat the
problem. California is 12 percent of the United States population with an
emphasis on technology business, and it is therefore estimated that spam
costs California organizations well over 1.2 billion dollars
($1,200,000,000).
(e) Like junk faxes, spam imposes a cost on users, using up valuable
storage space in e-mail inboxes, as well as costly computer band width, and
on networks and the computer servers that power them, and discourages
people from using e-mail.
(f) Spam filters have not proven effective.
(g) Like traditional paper “junk” mail, spam can be annoying and waste
time, but it also causes many additional problems because it is easy and
inexpensive to create, but difficult and costly to eliminate.
(h) The “cost shifting” from deceptive spammers to Internet business
and e-mail users has been likened to sending junk mail with postage due or
making telemarketing calls to someone’s pay-per-minute cellular phone.
(i) Many spammers have become so adept at masking their tracks that
they are rarely found, and are so technologically sophisticated that they can
adjust their systems to counter special filters and other barriers against spam
and can even electronically commandeer unprotected computers, turning
them into spam-launching weapons of mass production.
(j) There is a need to regulate the advertisers who use spam, as well as
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the actual spammers, because the actual spammers can be difficult to track
down due to some return addresses that show up on the display as
“unknown” and many others being obvious fakes and they are often located
offshore.
(k) The true beneficiaries of spam are the advertisers who benefit from
the marketing derived from the advertisements.
(l) In addition, spam is responsible for virus proliferation that can cause
tremendous damage both to individual computers and to business systems.
( m) Because of the above problems, it is necessary that spam be
prohibited and that commercial advertising e-mails be regulated as set forth
in this article.
Added Stats 2003 ch 487 § 1 (SB 186).
Annotations
Articles
Zhang, The CAN-SPAM Act: An Insufficient Response to the Growing Spam Problem ,
20 Berkeley Tech. L.J. 301 (2005).
For the purpose of this article, the following definitions apply:
(a) “Advertiser” means a person or entity that advertises through the use
of commercial e-mail advertisements.
(b) “California electronic mail address” or “California e-mail address”
means any of the following:
( 1 ) An e-mail address furnished by an electronic mail service
provider that sends bills for furnishing and maintaining that e-mail
address to a mailing address in this state.
(2) An e-mail address ordinarily accessed from a computer located
in this state.
(3) An e-mail address furnished to a resident of this state.
( c ) “Commercial e-mail advertisement” means any electronic mail
message initiated for the purpose of advertising or promoting the lease, sale,
rental, gift offer, or other disposition of any property, goods, services, or
extension of credit.
(d) “Direct consent” means that the recipient has expressly consented to
272
receive e-mail advertisements from the advertiser, either in response to a
clear and conspicuous request for the consent or at the recipient’s own
initiative.
( e ) “Domain name” means any alphanumeric designation that is
registered with or assigned by any domain name registrar as part of an
electronic address on the Internet.
(f) “Electronic mail” or “e-mail” means an electronic message that is
sent to an e-mail address and transmitted between two or more
telecommunications devices, computers, or electronic devices capable of
receiving electronic messages, whether or not the message is converted to
hard copy format after receipt, viewed upon transmission, or stored for later
retrieval. “Electronic mail” or “e-mail” includes electronic messages that
are transmitted through a local, regional, or global computer network.
(g) “Electronic mail address” or “e-mail address” means a destination,
commonly expressed as a string of characters, to which electronic mail can
be sent or delivered. An “electronic mail address” or “e-mail address”
consists of a user name or mailbox and a reference to an Internet domain.
(h) “Electronic mail service provider” means any person, including an
Internet service provider, that is an intermediary in sending or receiving
electronic mail or that provides to end users of the electronic mail service
the ability to send or receive electronic mail.
(i) “Initiate” means to transmit or cause to be transmitted a commercial
e-mail advertisement or assist in the transmission of a commercial e-mail
advertisement by providing electronic mail addresses where the
advertisement may be sent, but does not include the routine transmission of
the advertisement through the network or system of a telecommunications
utility or an electronic mail service provider through its network or system.
( j ) “Incident” means a single transmission or delivery to a single
recipient or to multiple recipients of an unsolicited commercial e-mail
advertisement containing substantially similar content.
(k) “Internet” has the meaning set forth in paragraph (6) of subdivision
(e) of Section 17538.
(l) “Preexisting or current business relationship,” as used in connection
with the sending of a commercial e-mail advertisement, means that the
recipient has made an inquiry and has provided his or her e-mail address, or
has made an application, purchase, or transaction, with or without
consideration, regarding products or services offered by the advertiser.
Commercial e-mail advertisements sent pursuant to the exemption provided
273
for a preexisting or current business relationship shall provide the recipient
of the commercial e-mail advertisement with the ability to “opt-out” from
receiving further commercial e-mail advertisements by calling a toll-free
telephone number or by sending an “unsubscribe” e-mail to the advertiser
offering the products or services in the commercial e-mail advertisement.
This opt-out provision does not apply to recipients who are receiving free
e-mail service with regard to commercial e-mail advertisements sent by the
provider of the e-mail service.
(m) “Recipient” means the addressee of an unsolicited commercial e-
mail advertisement. If an addressee of an unsolicited commercial e-mail
advertisement has one or more e-mail addresses to which an unsolicited
commercial e-mail advertisement is sent, the addressee shall be deemed to
be a separate recipient for each e-mail address to which the e-mail
advertisement is sent.
( n) “Routine transmission” means the transmission, routing, relaying,
handling, or storing of an electronic mail message through an automatic
technical process. “Routine transmission” shall not include the sending, or
the knowing participation in the sending, of unsolicited commercial e-mail
advertisements.
(o) “Unsolicited commercial e-mail advertisement” means a commercial
e-mail advertisement sent to a recipient who meets both of the following
criteria:
( 1 ) The recipient has not provided direct consent to receive
advertisements from the advertiser.
(2) The recipient does not have a preexisting or current business
relationship, as defined in subdivision (l), with the advertiser promoting
the lease, sale, rental, gift offer, or other disposition of any property,
goods, services, or extension of credit.
Added Stats 2003 ch 487 § 1 (SB 186). Amended Stats 2004 ch 183 § 14 (AB 3082).
§ 17529.2. Unsolicited Commercial E-mail

Advertisements Prohibited; Severability.
Notwithstanding any other provision of law, a person or entity may not do
any of the following:
( a ) Initiate or advertise in an unsolicited commercial e-mail
advertisement from California or advertise in an unsolicited commercial e-
mail advertisement sent from California.
( b ) Initiate or advertise in an unsolicited commercial e-mail
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advertisement to a California electronic mail address, or advertise in an
unsolicited commercial e-mail advertisement sent to a California electronic
mail address.
(c) The provisions of this section are severable. If any provision of this
section or its application is held invalid, that invalidity shall not affect any
other provision or application that can be given effect without the invalid
provision or application.
Added Stats 2003 ch 487 § 1 (SB 186).
§ 17529.3. Effect on Internet Access Service Provider

Policy.
Nothing in this article shall be construed to limit or restrict the adoption,
implementation, or enforcement by a provider of Internet access service of a
policy of declining to transmit, receive, route, relay, handle, or store certain
types of electronic mail messages.
Added Stats 2003 ch 487 § 1 (SB 186).
§ 17529.4. Collection and Use of Electronic Mail

Addresses for Certain Purposes Unlawful.
( a ) It is unlawful for any person or entity to collect electronic mail
addresses posted on the Internet if the purpose of the collection is for the
electronic mail addresses to be used to do either of the following:
( 1 ) Initiate or advertise in an unsolicited commercial e-mail
advertisement from California, or advertise in an unsolicited commercial e-
unsolicited commercial e-mail advertisement sent to California electronic
mail address.
(b) It is unlawful for any person or entity to use an electronic mail address
obtained by using automated means based on a combination of names, letters, or
numbers to do either of the following:
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mail address.
(c) It is unlawful for any person to use scripts or other automated means to
register for multiple electronic mail accounts from which to do, or to enable
another person to do, either of the following:
mail address.
Added Stats 2003 ch 487 § 1 (SB 186).
Annotations
Cases
Facebook, Inc. v. ConnectU LLC, 489 F. Supp. 2d 1087 (N.D. Cal. 2007). Defendant
social networking website accessed plaintiff competitor’s website without permission,
compiled a list of members’ email addresses and sent solicitations to those addresses.
Plaintiff claimed, among other claims, that defendant’s actions violated Penal Code § 502,
and Bus. and Prof. Code §§ 17529.4 and 17538.45, to which defendant demurred. The court
ruled that plaintiff stated a claim for defendant’s “knowingly” accessing plaintiff’s website
and making use of its data without permission in violation of Penal Code § 502. Plaintiff’s
claims under Bus. & Prof. Code §§ 17529.4 and 17538.45 were preempted by a provision of
the Federal “CAN SPAM” Act, 15 U.S.C. § 7707(b)(1).
§ 17529.5. Commercial E-mail Advertisements

Unlawful Under Specified Circumstances; Remedies;
Punishment.
(a) It is unlawful for any person or entity to advertise in a commercial e-
mail advertisement either sent from California or sent to a California electronic
mail address under any of the following circumstances:
(1) The e-mail advertisement contains or is accompanied by a third-
party’s domain name without the permission of the third party.
(2) The e-mail advertisement contains or is accompanied by falsified,
misrepresented, or forged header information. This paragraph does not
apply to truthful information used by a third party who has been lawfully
authorized by the advertiser to use that information.
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(3) The e-mail advertisement has a subject line that a person knows
would be likely to mislead a recipient, acting reasonably under the
circumstances, about a material fact regarding the contents or subject matter
of the message.
(b)
(1)
( A ) In addition to any other remedies provided by any other
provision of law, the following may bring an action against a person or
entity that violates any provision of this section:
(i) The Attorney General.
(ii) An electronic mail service provider.
( i i i ) A recipient of an unsolicited commercial e-mail
advertisement, as defined in Section 17529.1.
(B) A person or entity bringing an action pursuant to subparagraph
(A) may recover either or both of the following:
(i) Actual damages.
(ii) Liquidated damages of one thousand dollars ($1,000) for
each unsolicited commercial e-mail advertisement transmitted in
violation of this section, up to one million dollars ($1,000,000) per
incident.
( C ) The recipient, an electronic mail service provider, or the
Attorney General, if the prevailing plaintiff, may also recover
reasonable attorney’s fees and costs.
(D) However, there shall not be a cause of action under this section
against an electronic mail service provider that is only involved in the
routine transmission of the e-mail advertisement over its computer
network.
(2) If the court finds that the defendant established and implemented,
with due care, practices and procedures reasonably designed to effectively
prevent unsolicited commercial e-mail advertisements that are in violation
of this section, the court shall reduce the liquidated damages recoverable
under paragraph (1) to a maximum of one hundred dollars ($100) for each
unsolicited commercial e-mail advertisement, or a maximum of one hundred
thousand dollars ($100,000) per incident.
(3)
(A) A person who has brought an action against a party under this
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section shall not bring an action against that party under Section 17529.8
or 17538.45 for the same commercial e-mail advertisement, as defined
in subdivision (c) of Section 17529.1.
( B ) A person who has brought an action against a party under
Section 17529.8 or 17538.45 shall not bring an action against that party
under this section for the same commercial e-mail advertisement, as
defined in subdivision (c) of Section 17529.1.
(c) A violation of this section is a misdemeanor, punishable by a fine of not
more than one thousand dollars ($1,000), imprisonment in a county jail for not
more than six months, or both that fine and imprisonment.
Added Stats 2003 ch 487 § 1 (SB 186). Amended Stats 2004 ch 571 § 1 (SB 1457);
Stats 2005 ch 247 § 1 (SB 97), effective January 1, 2006.
Annotations
Cases
Balsam v. Trancos Inc., 203 Cal. App. 4th 1083, 138 Cal. Rptr. 3d 108, cert. denied 133
S. Ct. 544 (2012). The court distinguished Kleffman (see annotation below) and held that the
use of fake company names in email violated section 17529.5. An award of $7,000.00
($1,000 for each of 7 unsolicited emails) and $81,900.00 in attorney’s fees was affirmed on
appeal.
Hypertouch, Inc. v. ValueClick, Inc. , 192 Cal. App. 4th 805, 123 Cal. Rptr. 3d 8 (2011) .
Section 17529.5 is not preempted by the CAN-SPAM Act.
Kleffman v. Vonage Holdings Corp. , 49 Cal. 4th 334, 110 Cal. Rptr. 3d 628, 232 P.3d
625 (2010). Under section 17529.5, it is unlawful to advertise in a commercial electronic
mail (e-mail) advertisement—commonly known as “spam”—if the advertisement “contains
or is accompanied by falsified, misrepresented, or forged header information.” Using
multiple domain names to send such advertisements in order to bypass spam filters does not
violate this statute.
§ 17529.8. Action for Actual and Liquidated Damages;

Attorney’s Fees and Costs.
(a)
(1) In addition to any other remedies provided by this article or by any
other provisions of law, a recipient of an unsolicited commercial e-mail
advertisement transmitted in violation of this article, an electronic mail
service provider, or the Attorney General may bring an action against an
entity that violates any provision of this article to recover either or both of
the following:
278
(A) Liquidated damages of one thousand dollars ($1,000) for each
unsolicited commercial e-mail advertisement transmitted in violation of
Section 17529.2, up to one million dollars ($1,000,000) per incident.
(B) Actual damages.
(2) The recipient, an electronic mail service provider, or the Attorney
General, if the prevailing plaintiff, may also recover reasonable attorney’s
fees and costs.
(3) However, there shall not be a cause of action against an electronic
mail service provider that is only involved in the routine transmission of the
unsolicited commercial e-mail advertisement over its computer network.
(b) If the court finds that the defendant established and implemented, with
due care, practices and procedures reasonably designed to effectively prevent
unsolicited commercial e-mail advertisements that are in violation of this
article, the court shall reduce the liquidated damages recoverable under
subdivision (a) to a maximum of one hundred dollars ($100) for each
unsolicited commercial e-mail advertisement, or a maximum of one hundred
thousand dollars ($100,000) per incident.
Added Stats 2003 ch 487 § 1 (SB 186).
§ 17529.9. Severability.
The provisions of this article are severable. If any provision of this article
or its application is held invalid, that invalidity shall not affect any other
provision or application that can be given effect without the invalid provision or
application.
Added Stats 2003 ch 487 § 1 (SB 186).
ARTICLE 2
Particular Offenses
§ 17530. False Statement Concerning Realty.

It is unlawful for any person, firm, corporation, or association, or any
employee or agent therefor, to make or disseminate any statement or assertion of
fact in a newspaper, circular, circular or form letter, or other publication
published or circulated, including over the Internet, in any language in this state,
concerning the extent, location, ownership, title, or other characteristic, quality,
or attribute of any real estate located in this state or elsewhere, which is known
279
to be untrue and which is made or disseminated with the intention of misleading.
Nothing in this section shall be construed to hold the publisher of any
newspaper, or any job printer, liable for any publication herein referred to
unless the publisher or printer has an interest, either as owner or agent, in the
real estate so advertised.
Added Stats 1941 ch 63 § 1. Amended Stats 1998 ch 599 § 7 (SB 597).
§ 17530.1. Recommending Insolvent to Act as Trustee.

(a) It shall be unlawful for a person to recommend to a prospective trustor
any person to serve as trustee with knowledge or having reason to believe that
the proposed trustee is insolvent or is about to become insolvent.
For purposes of this section, “insolvent” means a person who has ceased to
pay that person’s debts as they become due or whose liabilities exceed that
person’s assets.
(b) The provisions of this section shall not apply to any trustee named in any
deed of trust or mortgage which secures a note or evidence of indebtedness on
real property when such trustee acts solely in that capacity.
Added Stats 1979 ch 763 § 1, effective September 19, 1979.
§ 17530.5. Disclosure of Tax Return Data.

( a ) It is a misdemeanor for any person, including an individual, firm,
corporation, association, partnership, or joint venture, or any employee or agent
thereof, to disclose any information obtained in the business of preparing
federal or state income tax returns or assisting taxpayers in preparing those
returns, including any instance in which this information is obtained through an
electronic medium, unless the disclosure is within any of the following:
(1) Consented to in writing by the taxpayer in a separate document that
states to whom the disclosure will be made and how the information will be
used. If the taxpayer agrees, this separate consent document may be in the
form of an electronic record, executed by an electronic signature as
provided by Title 2.5 (commencing with Section 1633.1) of Part 2 of
Division 3 of the Civil Code.
(2) Expressly authorized by state or federal law.
(3) Necessary to the preparation of the return.
(4) Pursuant to court order.
(b) For the purposes of this section, a person is engaged in the business of
280
preparing federal or state income tax returns or assisting taxpayers in preparing
those returns if the person does any of the following:
(1) Advertises, or gives publicity to the effect that the person prepares
or assists others in the preparation of state or federal income tax returns.
( 2) Prepares or assists others in the preparation of state or federal
income tax returns for compensation.
(3) Files a state or federal income tax return by electronic transmittal of
return data directly to the Franchise Tax Board or to the Internal Revenue
Service.
( c ) A disclosure prohibited by this section includes a disclosure made
internally within the entity preparing or assisting in preparing the return for any
purpose other than tax preparation or made by that entity to any of its
subsidiaries or affiliates.
(d) For purposes of this section, “affiliate” means any entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or is
under common control with, another entity.
(e) Contacting a taxpayer to obtain his or her written consent to disclosure
does not constitute a violation of this section.
Added Stats 1970 ch 34 § 1, effective March 31, 1970. Amended Stats 2000 ch 1084 §
1 (SB 1724).
§ 17530.7. Retail Sale of Casket or Other Burial

Container, by Person Other Than Funeral Director,
Without Specified Disclosures.
It is unlawful for any person, other than a funeral director as defined in
Section 7615, to sell, or offer to sell, on a retail basis, a casket, alternative
container, or outer burial container, unless that person does all of the following:
(a) Provides to any person, upon beginning any discussion of prices, a
written or printed list containing, but not necessarily limited to, the price of
all caskets and containers that are normally offered for sale by that seller,
The seller shall also provide a written statement or list that, at a minimum,
specifically identifies particular caskets or containers by price and by
thickness of metal, type of wood, or other construction, and by interior and
color, when a request for specific information on caskets or containers is
made in person by any individual. This information shall also be provided
over the telephone, upon request.
(b) Places the price in a conspicuous manner on each casket. Individual
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price tags on caskets shall include the thickness of metal and type of wood
or other construction, as applicable, in addition to interior and color
information.
( c ) Places in a conspicuous manner on each casket represented as
having a sealing device of any kind, the following notices in at least eight-
point boldface type: “THERE IS NO SCIENTIFIC OR OTHER EVIDENCE
THAT ANY CASKET WITH A SEALING DEVICE WILL PRESERVE
HUMAN REMAINS.”
(d) Furnishes to the buyer prior to the sale, a written or printed itemized
statement of all costs associated with the sale.
(e) Provides to the buyer a statement that includes a notice to the buyer
that he or she may contact the office of the district attorney in that
jurisdiction with any questions or complaints. At a minimum, the
information shall be in eight-point boldface type, and state the following:
“THE SELLER IS NOT A FUNERAL DIRECTOR AND IS NOT
LICENSED BY THE DEPARTMENT OF CONSUMER AFFAIRS, AND
MAY NOT OFFER OR PERFORM FUNERAL SERVICES. STATE AND
FEDERAL LAWS PROHIBIT A FUNERAL DIRECTOR FROM
CHARGING HANDLING FEES FOR A CASKET SUPPLIED BY
ANOTHER PARTY. THE MONEYS RECEIVED BY THE SELLER FOR
THE PURCHASE OF A CASKET ARE NOT SUBJECT TO STATE LAW
GOVERNING MONEY HELD IN TRUST. THE SELLER IS NOT BOUND
BY STATE LAWS OR REGULATIONS THAT GOVERN FUNERAL
HOMES AND CEMETERIES. THE PURCHASER ENTERS THIS
AGREEMENT AT HIS OR HER OWN RISK. FOR MORE
INFORMATION, CONTACT THE OFFICE OF THE DISTRICT
ATTORNEY IN YOUR COUNTY.”
Added Stats 1998 ch 286 § 3 (AB 1709).
§ 17531. Advertising Second-Hand, Blemished or

Rejected Merchandise.
It is unlawful for any person, firm, or corporation, in any newspaper,
magazine, circular, form letter or any open publication, published, distributed,
or circulated in this state, including over the Internet, or on any billboard, card,
label, or other advertising medium, or by means of any other advertising device,
to advertise, call attention to or give publicity to the sale of any merchandise,
which merchandise is secondhand or used merchandise, or which merchandise
is defective in any manner, or which merchandise consists of articles or units or
parts known as “seconds,” or blemished merchandise, or which merchandise
has been rejected by the manufacturer thereof as not first class, unless there is
282
conspicuously displayed directly in connection with the name and description of
that merchandise and each specified article, unit, or part thereof, a direct and
unequivocal statement, phrase, or word which will clearly indicate that the
merchandise or each article, unit, or part thereof so advertised is secondhand,
used, defective, or consists of “seconds” or is blemished merchandise, or has
been rejected by the manufacturer thereof, as the case may be. Any violation of
this section is a misdemeanor punishable by imprisonment in the county jail not
exceeding six months, or by a fine not exceeding two thousand five hundred
dollars ($2,500), or by both that imprisonment and fine.
Added Stats 1941 ch. 63 § 1. Amended Stats 1976 ch 1125 § 5; Stats 1998 ch 599 § 8
(SB 597).
§ 17531.1. Labeling Packages of Unassembled Toys.

Every manufacturer, wholesaler, jobber, distributor, or other person, who
packages children’s toys for sale to any retailer, shall clearly state on the
outside of the package that the toy is unassembled if such is the case. If
children’s toys are packaged outside this State, the first wholesaler, jobber,
distributor, or other person who has possession or control of the toys in this
State in the course of distribution or marketing of such toys for sale to any
retailer shall not further distribute or market such toys if they are unassembled
unless and until the outside of each package which contains any such toys
clearly states that the toys are unassembled.
§ 17531.5. Advertisement of Federal Surplus Materials.

It is unlawful for any person, firm, or corporation, in any newspaper,
magazine, circular, form letter, or any open publication, published, distributed,
or circulated in the State of California, including over the Internet, or on any
billboard, card, label, or other advertising medium, or by means of any other
advertising device, to advertise, call attention to, or give publicity to the sale of
any merchandise, which merchandise is surplus materials as defined in the
federal Surplus Property Act of 1944 (50 U.S.C. App. Sec. 1622 et seq.) unless
there is conspicuously displayed directly in connection with the name and
description of that merchandise and each specified article, unit, or part thereof,
a direct and unequivocal statement, phrase, or word which will clearly indicate
that the merchandise or each article, unit, or part thereof so advertised is or
consists of surplus materials as defined in the federal Surplus Property Act of
1944.
283
§ 17531.6. Definitions Pertaining to Picture Tubes.
As used in Sections 17531.7 and 17531.8, the term:
( a ) “Picture tube” means cathode ray tube, otherwise known as
kinescope or CRT.
( b ) “Rejuvenate,” or words of like import such as “reactivate” or
“restore,” means the repair of any internal malfunction of a picture tube by
burning out shorts in the electron gun assembly, or flaking the cathode by
heating and vibrating the cathode, or activities of a similar nature.
(c) “Seconds,” or terms of like import such as “rejects,” mean that the
picture tube, though giving satisfactory performance, does not meet the
quality and workmanship maintained by the manufacturer with respect to the
general run of tubes of the same type.
( d ) “Person” includes individual, partnership, firm, association, or
corporation.
§ 17531.7. Labeling Television Picture Tubes.

(a) No manufacturer, processor, or distributor of television picture tubes
shall sell, offer for sale, or expose for sale any such tube unless the television
picture tube and its container, if any, are correctly labeled to indicate the new
and used materials of such tube according to the schedule and manner as
hereinafter provided.
Description of the picture tube by new and used components and materials
shall be indicated by setting forth on the label the particular grade and
verbatim description as selected from the following which applies to such
tube.
Schedule
Black and White Picture Tubes
Grade AA—Description—All new components and materials including
new glass envelope.
Grade A—Description—Used glass envelope, all other components and
materials are new.
Grade B—Description—Used glass envelope, used phosphorescent
viewing screen, used aluminization, used internal conductive coating, all
other components and materials are new.
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Grade C—Description—Used picture tube for resale, all significant
components and materials are used.
Color Picture Tubes
Grade AA—Description—All new components and materials, including
new glass envelope.
Grade A—Description—Used glass envelope, new or used shadow mask,
all other components and materials are new.
Grade B—Description—New electron gun, all other components and
materials are used.
Grade C—Description—Used picture tube for resale, all significant
components and materials are used.
(b) The fact that a used picture tube has been rejuvenated, or has a new or
used brightener attached to it, or has fresh paint or coating on the outside, or any
combination of the above, shall not change its status or description as a Grade C
picture tube, and the terms “rebuilt” or “reconditioned” or words of like import
shall not be used to describe such tube.
(c) Where a picture tube is a “second” such tube shall be designated by
label as a “second” to the exclusion of any other grade designation or
component description and the following additional notation shall appear
verbatim on the label:
—This picture tube is a manufacturer’s reject or

second line quality tube but it is capable of
giving satisfactory performance—
Added Stats 1965 ch 725 § 2. Amended Stats 1969 ch 694 § 1.
§ 17531.8. Prohibition Against Removal or Alteration of

Tube Label.
No person other than a purchaser at retail for his own use and consumption
shall remove, deface, cover, obliterate, mutilate, alter, or cause to be removed,
defaced, covered, obliterated, mutilated, or altered any label required to be
placed on a picture tube by this code.
§ 17531.9. Injunction Against Mislabeling Picture

Tubes or Removal or Alteration of Labels.
285
Any person violating any of the provisions of Section 17531.7 or 17531.8
may be enjoined by any superior court of competent jurisdiction upon action for
injunction, brought by the Attorney General or any district attorney in this state,
and the superior court shall, after proof of violation, issue an injunction or other
appropriate order restraining such conduct. This injunctive remedy shall not be
construed to limit the district attorney of the county wherein the violation
occurred from prosecuting criminal action for any violations of Section 17531.7
or 17531.8.
§ 17532. Fraudulent Coal Sales.

It is unlawful wilfully or knowingly, with intent to defraud, to sell or
exchange, or offer or expose for sale or exchange, coal of a specific name or
kind under any other name or description, or as the output of any mine other than
the mine of which it is the product.
§ 17533. Misrepresenting Volume of Newspaper or

Periodical Circulation.
It is unlawful for any proprietor or publisher of any newspaper or
periodical, including any newspaper or periodical published over the Internet,
willfully and knowingly to misrepresent the circulation of the newspaper or
periodical, for the purpose of securing advertising or other patronage.
§ 17533.5. Sale of Federal Surplus Materials.

It shall be unlawful for any person, firm, corporation or association to sell
or offer for sale any surplus materials as defined in the Federal Surplus
Property Act of 1944, being Chapter 479, Public Laws United States 457,
approved October 3, 1944, if such person, firm, corporation or association does
business, carries on or trades under or in any way uses in dealing with the
public, directly or indirectly, any name which by reason of the inclusion of a
word or words such as “Army,” “Navy,” “United States,” “Federal,”
“treasury,” “procurement,” “G.J.,” or any others which connote the United
States Government or its armed forces or any of its departments or agencies, has
a tendency to lead the purchasing public to believe, contrary to fact, that the
establishment at which such materials are offered for sale has some official
relationship to the United States Government or that all of the articles sold or
offered for sale are such surplus materials or that the articles there sold are of
286
higher quality and lower prices than those elsewhere obtainable; provided,
however, that this section shall not prohibit the continued use of a trade name by
an establishment which for three years prior to the effective date of this section
has continually used such word or words as its trade name or as a portion
thereof.
§ 17533.6. Use of term, symbol, or content indicating

governmental connection; Exception in the case of
endorsement; Solicitation indicating governmental
connection; Violation; Remedies.
(a) Except as described in subdivisions (b) and (c), it is unlawful for any
person, firm, corporation, or association that is a nongovernmental entity to
use a seal, emblem, insignia, trade or brand name, or any other term,
symbol, or content that reasonably could be interpreted or construed as
implying any federal, state, or local government, military veteran entity, or
military or veteran service organization connection, approval, or
endorsement of any product or service, including, but not limited to, any
financial product, goods, or services, by any means, including, but not
limited to, a mailing, electronic message, Internet Web site, periodical, or
television commercial disseminated in this state, unless the
nongovernmental entity has an expressed connection with, or the approval
or endorsement of, a federal, state, or local government, military veteran
entity, or military or veteran service organization.
(b) Notwithstanding subdivision (a) and if permitted by other provisions
of law, any person, firm, corporation, or association that is a
nongovernmental entity may advertise or promote any event, presentation,
seminar, workshop, or other public gathering using a seal, emblem,
insignia, trade or brand name, or any other term, symbol, or content as
described in subdivision (a), if the person, firm, corporation, or association
that is a nongovernmental entity has an expressed connection with, or the
approval or endorsement of, a federal, state, or local government, military
veteran entity, or military or veteran service organization.
(c) It is unlawful for Notwithstanding subdivision (a), any person, firm,
corporation, or association that is a nongovernmental entity to solicit
information, or to may solicit information, solicit the purchase of or payment
for a product or service, or to solicit the contribution of funds or membership
fees, by any means of, including, but not limited to, a mailing, electronic
287
message, or Internet Web site that contains Internet Web site, periodical, or
television commercial disseminated in this state, using a seal, emblem,
insignia, trade or brand name, or any other term, symbol, or content that
reasonably could be interpreted or construed as implying any federal, state,
or local government connection, approval, or endorsement, unless as
described in subdivision (a), if the person, firm, corporation, or association
that is a nongovernmental entity meets the requirements of paragraph (1) or
(2) have been met, as follows:
(1) The nongovernmental entity has an expressed connection with, or the
approval or endorsement of, a federal, state, or local government entity, if
permitted by other provisions of law.
(2)
(A) The solicitation meets all of the following requirements:
(A) (i) The solicitation conspicuously displays the following
disclosure on the front and back of every page of the solicitation:
“THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED
OR ENDORSED BY ANY GOVERNMENTAL AGENCY, AND
THIS OFFER IS NOT BEING MADE BY AN AGENCY OF THE
GOVERNMENT.”
(B) (ii) In the case of a mailed solicitation, the front of the
envelope, outside cover, or wrapper in which the matter is mailed
conspicuously displays the following disclosure:
“THIS IS NOT A GOVERNMENT DOCUMENT.”
(iii) If permitted by other provisions of law, in the case of a
television commercial disseminated in this state, the solicitation
conspicuously displays the following disclosure at the top of the
television screen for the entire duration of the television
commercial:
“THIS PRODUCT OR SERVICE HAS NOT BEEN
APPROVED OR ENDORSED BY ANY GOVERNMENTAL
AGENCY, AND THIS OFFER IS NOT BEING MADE BY AN
AGENCY OF THE GOVERNMENT.”
(C) (iv) The disclosure in subparagraph (A) clause (i) shall be
displayed conspicuously, as provided in subdivision (d)(f), and
immediately below each portion of the solicitation that reasonably
could be construed to specify an amount due and payable by the
recipient. The disclosure in subparagraph (B)clause (ii) shall be
288
displayed conspicuously, as provided in subdivision (d)(f), and
immediately below the area of the envelope, outside cover, or
wrapper that is used for a return address. The disclosure in clause
(iii) shall be displayed conspicuously, as provided in subdivision
(f), and at the top of the television screen. The disclosures in
subparagraphs (A) and (B)clauses (i), (ii), and (iii) shall not be
preceded, followed, or surrounded by symbols, terms, or other
content that result in the disclosures not being conspicuous or that
introduce, modify, qualify, or explain the text of those disclosures.
(D)(v) The solicitation does not use a title or trade or brand name
that reasonably could be interpreted or construed as implying any
federal, state, or local government connection, approval, or
endorsement, including, but not limited to, use of the term “agency,”
“administrative,” “assessor,” “board,” “bureau,” “collector,”
“commission,” “committee,” “department,” “division,” “recorder,”
“unit,” “federal,” “state,” “county,” “city,” or “municipal,” or the
name or division of any government agency.
(E)(vi) The solicitation does not specify a date or time period
when payment to the soliciting nongovernmental person, firm,
corporation, or association is due, including, but not limited to, use
of the terms “due date,” “due now,” “remit by,” “remit immediately,”
“payment due,” “pay now,” “pay immediately,” or “pay no later
than,” unless the solicitation displays, in the same sentence as the
date or time period specified, how the information being solicited
will be used, a description of the product or service that is to be
provided and to what government agency it shall be rendered, or
how the solicited funds or membership fees will be used, as
applicable.
(F)(vii) The solicitation does not state or imply that payment to
any person, firm, corporation, or association that is not a government
entity is mandatory or required by law, or state or imply that
penalties, fines, or consequences will occur if payment is not made
to the soliciting nongovernmental person, firm, corporation, or
association.
(B) Subparagraph (A) is not applicable to seals, emblems,
insignia, trade or brand name, or any other term, symbol, or content
of the United States Department of Veterans Affairs, the Department
of Veterans Affairs, the federal and state military, military veteran
entities, and military or veteran service organizations.
289
(b)(d) Notwithstanding Section 17534, any violation of this section is a
misdemeanor punishable by imprisonment in a county jail not exceeding six
months, or by a fine not exceeding two thousand five hundred dollars
($2,500), or by both that fine and imprisonment.
(c)(e) Any person who is harmed as a result of a violation of this
section shall be entitled to recover, in addition to any other available
remedies, damages in an amount equal to three times the amount solicited.
(d)(f) For purposes of this section, “conspicuous” or “conspicuously”
means displayed apart from other print on the page, envelope, outside cover,
or wrapper and in not less than 12-point boldface font type in capital letters
that is at least 2-point boldface font type sizes larger than the next largest
print on the page, envelope, outside cover, or wrapper and in contrasting
type, layout, font, or color in a manner that clearly calls attention to the
language.
Added Stats 1993 ch 348 § 1 (AB 532). Amended Stats 1997 ch 249 § 1 (AB 1178);
Stats 2002 ch 319 § 1 (SB 1240); Stats 2008 ch 256 § 1 (AB 2919), effective January 1,
2009; Stats 2009 ch 140 § 19 (AB 1164), effective January 1, 2010; Stats 2011 ch 269 § 1
(AB 75), effective January 1, 2012; Stats 2013 ch 695 § 1 (SB 272), effective January 1,
2014.
2011 Amendment:
Substituted the section for the former section which read: “(a) It is unlawful for any
person, firm, corporation, or association that is a nongovernmental entity to solicit
information, or to solicit the purchase of or payment for a product or service, or to solicit
the contribution of funds or membership fees, by means of a mailing, electronic message, or
Internet Web site that contains a seal, insignia, trade or brand name, or any other term or
symbol that reasonably could be interpreted or construed as implying any state or local
government connection, approval, or endorsement, unless the requirements of paragraph (1)
or (2) have been met, as follows: (1) The nongovernmental entity has an expressed
connection with, or the approval or endorsement of, a state or local government entity, if
permitted by other provisions of law. (2) The solicitation meets both of the following
requirements: (A) The solicitation bears on its face, in conspicuous and legible type in
contrast by typography, layout, or color with other type on its face, the following notice:
‘THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED BY ANY
GOVERNMENTAL AGENCY, AND THIS OFFER IS NOT BEING MADE BY AN AGENCY
OF THE GOVERNMENT.’ (B) In the case of a mailed solicitation, the envelope or outside
cover or wrapper in which the matter is mailed bears on its face in capital letters and in
conspicuous and legible type, the following notice: ‘THIS IS NOT A GOVERNMENT
DOCUMENT.’ (b) Except as provided in subdivision (c), any business that solicits the
purchase of, or payment for, a service by means of an unsolicited mailing that offers to assist
the recipient in dealing with a state or local governmental agency shall do both of the
following: (1) State on the envelope and in the mailing that the business is not a governmental
agency and is not associated with the governmental agency referenced. (2) Include in the
mailing the contact information for the governmental agency referenced. (c) Subdivision (b)
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shall not apply if either of the following requirements has been met: (1) The business has an
expressed connection with, or the approval or endorsement of, a state or local governmental
entity, if permitted by other provisions of law. (2) The business has an ‘established business
relationship,’ as defined in Section 1798.83 of the Civil Code, with the recipient.”
2013 Amendment:
(1) Added subds (a), (b), (c)(2)(A)(iii), and (c)(2)(B); (2) redesignated former subds (a),
(a)(2)(A)-(a)(2)(F), (b)-(d) to be subds (c), (c)(2)(A)(i)-(c)(2)(A)(vii), and (d)-(f); (3)
amended the introductory clause of subd (c) by (a) substituting “Notwithstanding subdivision
(a),” for “It is unlawful for”; (b) substituting “may solicit information,” for “to solicit
information, or to”; (c) substituting “any means, including, but not limited to,” for “means
of”; (d) substituting “Internet Web site, periodical, or television commercial disseminated in
this state, using” for “or Internet Web site that contains”; (e) substituting “as described in
subdivision (a), if the person, firm, corporation, or association that is a nongovernmental
entity meets” for “that reasonably could be interpreted or construed as implying any federal,
state, or local government connection, approval, or endorsement, unless”; and (f) deleting
“have been met,” after “paragraph (1) or (2)”; (4) added subdivision designation (c)(2)(A); and
(5) amended subd (c)(2)(A)(iv) by (a) substituting “clause (i)” for “subparagraph (A)” in the
first sentence; (b) substituting “subdivision (f)” for “subdivision (d)” in the first and second
sentences; (c) substituting “clause (ii)” for “subparagraph (B)” in the second sentence; (d)
adding the third sentence; and (e) substituting “clauses (i), (ii), and (iii)” for “subparagraphs
(A) and (B)” in the last sentence.
§ 17533.7. Use of Words “Made in U.S.A.” or Similar

Words.
It is unlawful for any person, firm, corporation or association to sell or offer
for sale in this State any merchandise on which merchandise or on its container
there appears the words “Made in U.S.A.,” Made in America,” “U.S.A.,” or
similar words when the merchandise or any article, unit, or part thereof, has
been entirely or substantially made, manufactured, or produced outside of the
United States.
Annotations
Cases
17200 and 17500 because parts of the tools are not made in the U.S.
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§ 17533.8. Offer of Prize or Gift Without Disclosing
Intended Sales Presentation; Exemption for Good
Faith Broadcast or Publication by Media.
(a) It is unlawful for any person to offer, by mail, by telephone, in person, or
by any other means or in any other form, including over the Internet, a prize or
gift, with the intent to offer a sales presentation, without disclosing at the time of
the offer of the prize or gift, in a clear and unequivocal manner, the intent to
offer that sales presentation.
( b ) This section shall not apply to the publisher of any newspaper,
periodical, or other publication, or any radio or television broadcaster, or the
owner or operator of any cable, satellite, or other medium of communications
who broadcasts or publishes, including over the Internet, an advertisement or
offer in good faith, without knowledge of its violation of subdivision (a).
Stats 1998 ch 599 § 11 (SB 597).
§ 17533.9. Advertisement of Tear Gas, Weapons, or

Devices Without Warning of Prohibition of
Possession Without Permit.
It shall be unlawful for any person, firm, corporation, or association, in any
newspaper, magazine, circular, form letter, or open publication, published,
distributed, or circulated in this state, including over the Internet, or on any
advertising device, to advertise the sale of tear gas, tear gas devices, and tear
gas weapons, as defined in Sections 17240 and 17250 of the Penal Code, unless
there is conspicuously displayed or stated in connection with the name and
description of that tear gas, or those tear gas weapons or devices, a direct and
unequivocal statement that will clearly indicate that possession or transportation
of tear gas and tear gas weapons or devices is prohibited by law unless
specifically exempted or permitted pursuant to the authority contained in
Division 11 (commencing with Section 22810) of Title 3 of Part 6 of the Penal
Code.
Added Stats 1975 ch 520 § 1. Amended Stats 1998 ch 599 § 12 (SB 597); Stats 2010 ch
178 § 14 (SB 1115), effective January 1, 2011, operative January 1, 2012.
§ 17533.10. Advertising of Anabolic Steroids.

It shall be unlawful for any person, firm, corporation, or association, in any
newspaper, magazine, circular, form letter, or open publication, published,
292
distributed, or circulated in this state, including over the Internet, or on any
advertising device, to advertise the sale of anabolic steroids, as defined in
subdivision (f) of Section 11056 of the Health and Safety Code , unless there
is conspicuously displayed or stated in connection with the name and
description of any of those anabolic steroids, a direct and unequivocal statement
that will clearly indicate that the possession by, or sale to, an ultimate consumer
of anabolic steroids is a crime punishable by a substantial fine and
imprisonment, unless upon the prescription of a physician, dentist, podiatrist, or
veterinarian, licensed to practice in this state, pursuant to Sections 11377,
11378, and 11379 of the Health and Safety Code.
Added Stats 1990 ch 67 § 1 (AB 2064). Amended Stats 1998 ch 599 § 13 (SB 597).
§ 17534. Punishment for Violation.

Any person, firm, corporation, partnership or association or any employee
or agent thereof who violates this chapter is guilty of a misdemeanor.
§ 17534.5. Remedies or Penalties Cumulative.

Unless otherwise expressly provided, the remedies or penalties provided by
this chapter are cumulative to each other and to the remedies or penalties
available under all other laws of this state.
§ 17535. Obtaining Injunctive Relief.

Any person, corporation, firm, partnership, joint stock company, or any
other association or organization which violates or proposes to violate this
chapter may be enjoined by any court of competent jurisdiction. The court may
make such orders or judgments, including the appointment of a receiver, as may
be necessary to prevent the use or employment by any person, corporation, firm,
partnership, joint stock company, or any other association or organization of any
practices which violate this chapter, or which may be necessary to restore to
any person in interest any money or property, real or personal, which may have
been acquired by means of any practice in this chapter declared to be unlawful.
Actions for injunction under this section may be prosecuted by the Attorney
General or any district attorney, county counsel, city attorney, or city prosecutor
in this state in the name of the people of the State of California upon their own
complaint or upon the complaint of any board, officer, person, corporation or
association or by any person who has suffered injury in fact and has lost money
293
or property as a result of a violation of this chapter. Any person may pursue
representative claims or relief on behalf of others only if the claimant meets the
standing requirements of this section and complies with Section 382 of the
Code of Civil Procedure, but these limitations do not apply to claims brought
under this chapter by the Attorney General, or any district attorney, county
counsel, city attorney, or city prosecutor in this state.
Added Stats 1941 ch 63 § 1. Amended Stats 1972 ch 244 § 1, ch 711 § 3; amendment
approved by voters, Prop. 64 § 5, effective November 3, 2004.
Annotations
Cases
Buckland v. Threshold Enterprises, Ltd. , 155 Cal. App. 4th 798, 66 Cal. Rptr. 3d 543
(2007). This action asserts claims under Bus. & Prof. Code §§ 17200 and 17500, among
others, for alleged failure to disclose certain chemicals that are included as components of
various cosmetic products. Plaintiff did not satisfy the reliance requirement and therefore
lacks standing under Bus. & Prof. Code §§ 17204 and 17535.
Daghlian v. DeVry Univ., Inc. , 461 F. Supp. 2d 1121 (C.D. Cal. 2006) . A student sued a
private university alleging that the university failed to disclose that academic units earned at
the university probably would not transfer to other educational institutions. The plaintiff’s
standing requirements in Bus. & Prof. Code §§ 17204 and 17535 are satisfied by reason of
his enrollment in the university and incursion of $40,000 in debt.
§ 17535.5. Penalty for Violating Injunction;

Proceedings; Disposition of Proceeds.
(a) Any person who intentionally violates any injunction issued pursuant to
Section 17535 shall be liable for a civil penalty not to exceed six thousand
dollars ($6,000) for each violation. Where the conduct constituting a violation
is of a continuing nature, each day of such conduct is a separate and distinct
violation. In determining the amount of the civil penalty, the court shall consider
all relevant circumstances, including, but not limited to, the extent of harm
caused by the conduct constituting a violation, the nature and persistence of such
conduct, the length of time over which the conduct occurred, the assets,
liabilities and net worth of the person, whether corporate or individual, and any
corrective action taken by the defendant.
( b ) The civil penalty prescribed by this section shall be assessed and
recovered in a civil action brought in any county in which the violation occurs
or where the injunction was issued in the name of the people of the State of
California by the Attorney General or by any district attorney, county counsel, or
city attorney in any court of competent jurisdiction within his jurisdiction
without regard to the county from which the original injunction was issued. An
294
action brought pursuant to this section to recover such civil penalties shall take
special precedence over all civil matters on the calendar of the court except
those matters to which equal precedence on the calendar is granted by law.
(c) If such an action is brought by the Attorney General, one-half of the
penalty collected pursuant to this section shall be paid to the treasurer of the
county in which the judgment was entered, and one-half to the State Treasurer. If
brought by a district attorney or county counsel, the entire amount of the penalty
collected shall be paid to the treasurer of the county in which the judgment is
entered. If brought by a city attorney or city prosecutor, one-half of the penalty
shall be paid to the treasurer of the county in which the judgment was entered
and one-half to the city.
amount of such reasonable expenses incurred by the board shall be paid to the
State Treasurer for deposit in the special fund of the board described in Section
205. If the board has no such special fund, the moneys shall be paid to the State
Treasurer. The amount of such reasonable expenses incurred by a local
consumer affairs agency shall be paid to the general fund of the municipality or
county which funds the local agency.
§ 17536. Penalty for Violations of Chapter;

Proceedings; Disposition of Proceeds.
(a) Any person who violates any provision of this chapter shall be liable for
a civil penalty not to exceed two thousand five hundred dollars ($2,500) for
each violation, which shall be assessed and recovered in a civil action brought
in the name of the people of the State of California by the Attorney General or
by any district attorney, county counsel, or city attorney in any court of
competent jurisdiction.
(b) The court shall impose a civil penalty for each violation of this chapter.
In assessing the amount of the civil penalty, the court shall consider any one or
more of the relevant circumstances presented by any of the parties to the case,
including, but not limited to, the following: the nature and seriousness of the
misconduct, the number of violations, the persistence of the misconduct, the
length of time over which the misconduct occurred, the willfulness of the
defendant’s misconduct, and the defendant’s assets, liabilities, and net worth.
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(c) If the action is brought by the Attorney General, one-half of the penalty
collected shall be paid to the treasurer of the county in which the judgment was
entered, and one-half to the State Treasurer.
If brought by a district attorney or county counsel, the entire amount of
penalty collected shall be paid to the treasurer of the county in which the
judgment was entered. If brought by a city attorney or city prosecutor, one-
half of the penalty shall be paid to the treasurer of the county and one-half to
the city. The aforementioned funds shall be for the exclusive use by the
Attorney General, district attorney, county counsel, and city attorney for the
enforcement of consumer protection laws.
amount of such reasonable expenses incurred by the board shall be paid to
the State Treasurer for deposit in the special fund of the board described in
Section 205. If the board has no such special fund the moneys shall be paid
to the State Treasurer. The amount of such reasonable expenses incurred by
a local consumer affairs agency shall be paid to the general fund of the
municipality which funds the local agency.
(e) As applied to the penalties for acts in violation of Section 17530, the
remedies provided by this section and Section 17534 are mutually exclusive.
Added Stats 1965 ch 827 § 1. Amended Stats 1972 ch 711 § 2, ch 1105 § 2; Stats 1973
ch 752 § 1; Stats 1974 ch 875 § 1; Stats 1979 ch 897 § 6; Stats 1992 ch 430 § 5 (SB 1586);
amendment approved by voters, Prop. 64 § 6, effective November 3, 2004.
§ 17536.5. Notice of Issue in Action Before Appellate

Court.
If a violation of this chapter is alleged or the application or construction of
this chapter is in issue in any proceeding in the Supreme Court of California, a
state court of appeal, or the appellate division of a superior court, each person
filing any brief or petition with the court in that proceeding shall serve, within
three days of filing with the court, a copy of that brief or petition on the Attorney
General, directed to the attention of the Consumer Law Section at a service
address designated on the Attorney General’s official Web site for service of
papers under this section or, if no service address is designated, at the Attorney
General’s office in San Francisco, California, and on the district attorney of the
county in which the lower court action or proceeding was originally filed. Upon
296
the Attorney General’s or district attorney’s request, each person who has filed
any other document, including all or a portion of the appellate record, with the
court in addition to a brief or petition shall provide a copy of that document
without charge to the Attorney General or the district attorney within five days
of the request. The time for service may be extended by the Chief Justice or
presiding justice or judge for good cause shown. No judgment or relief,
temporary or permanent, shall be granted or opinion issued until proof of
service of the petition or brief on the Attorney General and district attorney is
filed with the court.
Added Stats 1992 ch 385 § 3 (SB 1911). Amended Stats 1998 ch 931 § 10 (SB 2139),
effective September 28, 1998; Stats 2004 ch 529 § 5 (AB 1711).
§ 17537. Conditioning Prize-Winning on Purchase or

Rental.
(a) It is unlawful for any person to use the term “prize” or “gift” or other
similar term in any manner that would be untrue or misleading, including, but not
limited to, the manner made unlawful in subdivision (b) or (c).
( b ) It is unlawful to notify any person by any means, as a part of an
advertising plan or program, that he or she has won a prize and that as a
condition of receiving such prize he or she must pay any money or purchase or
rent any goods or services.
(c) It is unlawful to notify any person by any means that he or she will
receive a gift and that as a condition of receiving the gift he or she must pay any
money, or purchase or lease (including rent) any goods or services, if any one or
more of the following conditions exist:
( 1) The shipping charge, depending on the method of shipping used,
exceeds (A) the average cost of postage or the average charge of a delivery
service in the business of delivering goods of like size, weight, and kind for
shippers other than the offeror of the gift for the geographic area in which
the gift is being distributed, or (B) the exact amount for shipping paid to an
independent fulfillment house or an independent supplier, either of which is
in the business of shipping goods for shippers other than the offeror of the
gift.
(2) The handling charge (A) is not reasonable, or (B) exceeds the actual
cost of handling, or (C) exceeds the greater of three dollars ($3) in any
transaction or 80 percent of the actual cost of the gift item to the offeror or
its agent, or (D) in the case of a general merchandise retailer, exceeds the
actual amount for handling paid to an independent fulfillment house or
supplier, either of which is in the business of handling goods for businesses
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other than the offeror of the gift.
(3) Any goods or services which must be purchased or leased by the
offeree of the gift in order to obtain the gift could have been purchased
through the same marketing channel in which the gift was offered for a lower
price without the gift items at or proximate to the time the gift was offered.
(4) The majority of the gift offeror’s sales or leases within the preceding
year, through the marketing channel in which the gift is offered or through in-
person sales at retail outlets, of the type of goods or services which must be
purchased or leased in order to obtain the gift item was made in conjunction
with the offer of a gift.
This paragraph does not apply to a gift offer made by a general
merchandise retailer in conjunction with the sale or lease through mail
order of goods or services (excluding catalog sales) if (A) the goods or
services are of a type unlike any other type of goods or services sold or
leased by the general merchandise retailer at any time during the period
beginning six months before and continuing until six months after the gift
offer, (B) the gift offer does not extend for a period of more than two
months, and (C) the gift offer is not untrue or misleading in any manner.
( 5 ) The gift offeror represents that the offeree has been specially
selected in any manner unless (A) the representation is true and (B) the
offeree made a purchase from the gift offeror within the six-month period
before the gift offer was made or has a credit card issued by, or a retail
installment account with, the gift offeror.
(d) The following definitions apply to this section:
( 1 ) “Marketing channel” means a method of retail distribution,
including, but not limited to, catalog sales, mail order, telephone sales, and
in-person sales at retail outlets.
( 2 ) “General merchandise retailer” means any person or entity
regardless of the form of organization that has continuously offered for sale
or lease more than 100 different types of goods or services to the public in
California throughout a period exceeding five years.
( e ) Each violation of the provisions of this section is a misdemeanor
punishable by imprisonment in the county jail not exceeding six months, or by a
fine not exceeding two thousand five hundred dollars ($2,500), or by both.
Added Stats 1970 ch 1119 § 1. Amended Stats 1971 ch 709 § 1; Stats 1976 ch. 1125 §
6; Stats 1984 ch 101 § 1; Stats 1986 ch 812 § 1, effective September 15, 1986.
§ 17537.1. Offering Prize or Gift as Inducement to Visit
298
Location or Attend Sales Presentation; Required
Disclosures.
( a ) It is unlawful for any person, or an employee, agent or independent
contractor employed or authorized by that person, by any means, as part of an
advertising plan or program, to offer any incentive as an inducement to the
recipient to visit a location, attend a sales presentation, or contact a sales agent
in person, by telephone or by mail, unless the offer clearly and conspicuously
discloses in writing, in readily understandable language, all of the information
required in paragraphs (1) and (2). If the offer is not initially made in writing,
the required disclosures shall be received by the recipient in writing prior to
any scheduled visit to a location, sales presentation, or contact with a sales
agent. For purposes of this section, the term “incentive” means any item or
service of value, including, but not limited to, any prize, gift, money, or other
tangible property.
(1) The following disclosures shall appear on the front (or first) page of
the offer:
(A) The name and street address of the owner of the real or personal
property or the provider of the services which are the subject of the
visit, sales presentation, or contact with a sales agent. If the offer is
made by an agent or independent contractor employed or authorized by
the owner or provider, or is made under a name other than the true name
of the owner or provider, the name of the owner or provider shall be
more prominently and conspicuously displayed than the name of the
agent, independent contractor, or other name.
(B) A general description of the business of the owner or provider
identified pursuant to subparagraph (A), and the purpose of any
requested visit, sales presentation, or contact with a sales agent, which
shall include a general description of the real or personal property or
services which are the subject of the sales presentation and a clear
statement, if applicable, that there will be a sales presentation and the
approximate duration of the visit and sales presentation.
( C ) If the recipient is not assured of receiving any particular
incentive, a statement of the odds of receiving each incentive offered or,
in the alternative, a clear statement describing the location in the offer
where the odds can be found. The odds shall be stated in whole Arabic
numbers in a format such as: “1 chance in 100,000” or “1:100,000.” The
odds and, where applicable, the alternative statement describing their
location, shall be printed in a type size that is at least equal to that used
for the standard text on the front (or first) page of the offer.
299
( D) A clear statement, if applicable, that the offer is subject to
specific restrictions, qualifications, and conditions and a statement
describing the location in the offer where the restrictions, qualifications,
and conditions may be found. Both statements shall be printed in a type
size that is at least equal to that used for the standard text on the front (or
first) page of the offer.
(2) The following disclosures shall appear in the offer, but need not
appear on the front (or first) page of the offer:
(A) Unless the odds are disclosed on the front (or first) page of the
offer, a statement of the odds of receiving each incentive offered, printed
in the size and format set forth in subparagraph (C) of paragraph (1).
(B) All restrictions, qualifications, and other conditions which must
be satisfied before the recipient is entitled to receive the incentive,
including but not limited to:
(i) Any deadline by which the recipient must visit the location,
attend the sales presentation, or contact the sales agent in order to
receive an incentive.
(ii) Any other conditions, such as a minimum age qualification, a
financial qualification, or a requirement that if the recipient is
married both husband and wife must be present in order to receive
the incentive. Any financial qualifications shall be stated with a
specificity sufficient to enable the recipient to reasonably determine
his or her eligibility.
(C) A statement that the owner or provider identified pursuant to
subparagraph (A) of paragraph (1) reserves the right to provide a
raincheck, or a substitute or like incentive, if those rights are reserved.
(D) A statement that a recipient who receives an offered incentive
may request and will receive evidence showing that the incentive
provided matches the incentive randomly or otherwise selected for
distribution to that recipient.
( E ) All other rules, terms, and conditions of the offer, plan, or
program.
(b) It is unlawful for any person making an offer subject to subdivision (a),
or any employee, agent, or independent contractor employed or authorized by
that person, to offer any incentive when the person knows or has reason to know
that the offered item will not be available in a sufficient quantity based upon the
reasonably anticipated response to the offer.
(c) It is unlawful for any person making an offer subject to subdivision (a),
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that person, to fail to provide any offered incentive which any recipient who has
responded to the offer in the manner specified therein, who has performed the
requirements disclosed therein, and who has met the qualifications described
therein, is entitled to receive, unless the offered incentive is not reasonably
available and the offer discloses the reservation of a right to provide a
raincheck, or a like or substitute incentive, if the offered incentive is
unavailable.
(d) If the person making an offer subject to subdivision (a) is unable to
provide an offered incentive because of limitations of supply, quantity, or
quality that were not reasonably foreseeable or controllable by the person
making the offer, the person making the offer shall inform the recipient of the
recipient’s right to receive a raincheck for the incentive offered, unless the
person making the offer knows or has reasonable basis for knowing that the
incentive will not be reasonably available and shall inform the recipient of the
recipient’s right to at least one of the following additional options:
( 1 ) The person making the offer will provide a like incentive of
equivalent or greater retail value or a raincheck therefor.
(2) The person making the offer will provide a substitute incentive of
equivalent or greater retail value.
(3) The person making the offer will provide a raincheck for the like or
substitute incentive.
( e ) If a raincheck is provided, the person making an offer subject to
subdivision (a) shall, within a reasonable time, and in no event later than 80
days, deliver the agreed incentive to the recipient’s address without additional
cost or obligation to the recipient, unless the incentive for which the raincheck
is provided remains unavailable because of limitations of supply, quantity, or
quality not reasonably foreseeable or controllable by the person making the
offer. In that case, the person making the offer shall, not later than 30 days after
the expiration of the 80 days, deliver a like incentive of equal or greater retail
value or, if an incentive is not reasonably available to the person making the
offer, a substitute incentive of equal or greater retail value.
(f) Upon the request of a recipient who has received or claims a right to
receive any offered incentive, the person making an offer subject to subdivision
(a) shall furnish to the person sufficient evidence showing that the incentive
provided matches the incentive randomly or otherwise selected for distribution
to that recipient.
(g) It is unlawful for any person making an offer subject to subdivision (a),
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that person, to:
(1) Use any printing styles, graphics, layouts, text, colors, or formats on
envelopes or on the offer which, implies, creates an appearance, or would
lead a reasonable person to believe, that the offer originates from or is
issued by or on behalf of a government or public agency, public utility,
public organization, insurance company, credit reporting agency, bill
collecting company or law firm, unless the same is true.
(2) Misrepresent the size, quantity, identity, value, or qualities of any
incentive.
( 3) Misrepresent in any manner the odds of receiving any particular
incentive.
(4) Represent directly or by implication that the number of participants
has been significantly limited or that any person has been selected to receive
a particular incentive unless that is the fact.
(5) Label any offer a notice of termination or notice of cancellation.
( 6 ) Misrepresent, in any manner, the offer, plan, program or the
affiliation, connection, association, or contractual relationship between the
person making the offer and the owner or provider, if they are not the same.
( h ) If the major incentives are awarded or given at random, by the
assignment of a number to the incentives, that number shall be actually assigned
by the party contractually responsible for doing so. The person making an offer
subject to subdivision (a) hereof, or the agent, employee, or independent
contractor employed or authorized by that person, if any, shall maintain, for a
period of one year after the date the offer is made, the records that show that the
winning numbers or opportunity to receive the major incentives have been
deposited in the mail or otherwise made available to recipients in accordance
with the odds statement provided pursuant to subparagraph (C) of paragraph (1)
of subdivision (a) hereof. The records shall be made available to the Attorney
General within 30 days after written request therefor. Postal receipt records,
affidavits of mailing, or a list of winners or recipients of the major incentives
shall be deemed to satisfy the requirements of this section.
§ 17537.2. What Constitutes Deceptive and Unfair

Trade Practices With Respect to Inducement to Visit
Location or Attend Sales Presentation.
The following, when used as part of an advertising plan or program defined
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in Section 17537.1, are deceptive and constitute unfair trade practices:
(a) When, in order to utilize the incentive, the recipient is requested to
pay any money to any person or entity named or referred to in the offer, or to
purchase, rent, or otherwise pay that person or entity for any product or
service including a deposit, whether returnable or not, whether payment is
for an item, a service, shipping, handling, insurance or payment for anything.
Notwithstanding the preceding paragraph, when the offered incentive is
a certificate or coupon redeemable for transportation, accommodations,
recreation, vacation, entertainment, or like services, the offer may place
a condition on the use of the incentive which requires the recipient to
pay directly to the transportation company, the accommodation,
recreation, vacation or entertainment facility, or similar direct provider
of like services, a refundable deposit, not to exceed fifty dollars ($50),
to reserve space availability or admission, only if the deposit shall be
returned in United States dollars immediately upon the recipient’s
arrival at the location of the provider to whom the recipient paid the
deposit. If the incentive is such a certificate or coupon, and if
government-imposed taxes directly related to the service being provided
are not included in the incentive, the offer itself, in close proximity to
the description of the incentive which is evidenced by the certificate or
coupon, shall disclose those government-imposed taxes which will be
the recipient’s responsibility and the approximate dollar amount of those
taxes. A deposit from the recipient may be collected to cover the cost of
those government-imposed taxes.
(b) Stating or implying in the offer that the recipient is one of a selected
group to receive a particular incentive or one or more of a group of
incentives, without clearly and conspicuously disclosing in close proximity
to the statement or implied statement of selection the total number of persons
in that select group or the odds of receiving the incentive or incentives.
Statements of selection which require such disclosure include such phrases
as “you are a finalist,” “we are sending this to a limited number of people,”
“either you or another named person has won the major prize,” “if you do
not respond, your incentive will be given to someone else.”
(c) Stating or implying in the offer that the recipient is likely to receive
one or more of the offered incentives because other named people have
already received other named incentives, unless the offer clearly and
conspicuously discloses in close proximity to the statement the recipient’s
odds of receiving the identified incentive.
(d) When the solicitation states or implies that the recipient is likely to
receive an incentive which has a normal retail price which is higher than
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that of another named incentive unless that statement is true. For purposes of
this section, a list of incentives implies that the incentives are in descending
or ascending order of value unless the solicitation clearly and conspicuously
negates the implication in close proximity to the list.
( e ) Describing an incentive or incentives in an untrue or misleading
manner. Untrue or misleading descriptions include those which imply that
the incentive being offered is of greater fair market value or of a different
kind or nature than a recipient would be led to believe from a reasonable
reading of the offer, or which lists the recipient’s name in close proximity to
a specific incentive unless the offer clearly and conspicuously discloses
immediately next to or immediately under or above the recipient’s name the
recipient’s odds of receiving the specific incentive.
( f ) Subdivision (a) shall not apply to an incentive constituting an
opportunity to stay at a hotel or other resort accommodations at a discount
from the standard rate for the hotel or resort accommodations, if all of the
following conditions are met:
(1) The fee to utilize the incentive and the requirement, if any, to
attend a sales presentation are clearly and conspicuously disclosed in
close proximity to the description of the offered incentive.
(2) A statement appears in close proximity to the description of the
offered incentive and in substantially the following form: The recipient
is responsible for payment of any government-imposed taxes directly
related to the service being provided and any personal expenses
incurred when utilizing this offer.
( 3 ) The accommodations to be occupied by the recipient of the
incentive are within a 20-mile radius of the property on which the
accommodations offered for sale are located or, if not within that radius,
the accommodations offered for sale are managed and operated by the
same person as, an affiliate (as defined in Section 150 of the
Corporations Code) of, or a franchisee (as defined in Section 20002) of,
the manager and operator of the accommodations to be occupied, and the
manager and operator of the accommodations offered for sale or the
manager and operator of the accommodations to be occupied is an issuer
or subsidiary of an issuer that has a security listed on a national
securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of
Securities Dealers, Inc. and the exchange or interdealer quotation system
has been certified by rule or order of the Commissioner of Corporations
under subdivision (Q) of Section 25100 of the Corporations Code. A
subsidiary of an issuer that qualifies under this paragraph does not itself
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qualify under this paragraph unless not less than 60 percent of the voting
power of its shares is owned by the qualifying issuer or issuers.
( 4) If the incentive is offered in conjunction with any additional
incentive or incentives or as one or more of a group of incentives, the
offer of such additional incentive or incentives shall comply with
Section 17537.1 and the following:
( A ) The additional incentive or incentives are typically and
customarily included in a vacation package and may include, but not
be limited to, transportation, dining, entertainment, or recreation.
( B ) The fee and additional requirements, if any, to use the
additional incentive or incentives are clearly and conspicuously
disclosed in close proximity to the description of the offer of them.
Stats 1992 ch l79 § l (SB 1678); Stats 1994 ch 1123 § 1 (AB 918).
§ 17537.3. Prohibited Acts Concerning Advertising of

Smokeless Tobacco Products.
The following acts are prohibited:
(a) For any person to offer as part of an advertising plan or program,
promotional offers of smokeless tobacco products which require proof of
purchase of a smokeless tobacco product unless it carries a designation that
the offer is not available to minors. Each promotional offer shall include in
any mail-in coupon a statement requesting purchasers to verify that the
purchaser is 18 years of age or older.
( b ) For any person to honor mail-in and telephone requests for
promotional offers of smokeless tobacco products unless appropriate efforts
are made to ascertain that a purchaser is over 18 years of age. For purposes
of this subdivision, appropriate efforts to ascertain the age of a purchaser
includes, but is not limited to, requests for a purchaser’s birth date.
( c ) For any person by any means, as part of an advertising plan or
program, to distribute free samples of smokeless tobacco products within a
two block radius of any premises or facilities whose primary purpose is
directed toward persons under the age of 18 years including, but not limited
to, schools, clubhouses, and youth centers, when those premises are being
used for their primary purposes.
( d) For any person to distribute, as part of any advertising plan or
program, unsolicited samples of smokeless tobacco products through a mail
campaign.
305
§ 17537.4. Civil Action for Making Prohibited Offers.

If the person making an offer subject to Section 17537 or to subdivision (a)
of Section 17537.1, or any employee, agent, or independent contractor
employed or authorized by that person, violates any provision of Section 17537,
17537.1, or 17537.2, the recipient of the offer who is damaged by the violation
may bring a civil action against the person making the offer for, and may be
awarded, treble damages. The court may award reasonable attorneys’ fees to the
prevailing party.
Added Stats 1989 ch 520 § 1, as B & P C § 17537.2. Amended and renumbered by Stats
1990 ch 1529 § 2 (SB 2230).
§ 17537.5. False Statements Relating to Energy

Conservation Products or Services.
( a ) It is unlawful for any person soliciting a sale or order for energy
conservation products or services, including over the Internet, to do any of the
following:
(1) Make false claims of affiliation or association with an electrical or
gas corporation or municipally owned and operated electrical or gas utility
or its energy conservation programs.
(2) Falsely represent that the purchase of an energy conservation service
or the purchase or installation of an energy conservation product is required
by law.
( 3 ) Misrepresent the nature of the purchaser’s obligation for the
purchase price of the energy conservation products or services.
( 4 ) Misrepresent the tax consequences of purchasing energy
conservation products or services.
( b ) Any person, firm, corporation, partnership or association, and any
employee or agent thereof who violates this section (1) in the course of
solicitation of a sale or order at a residence; (2) by telephone; or (3) by any
other method or at any other location, including over the Internet, shall be liable
for the damages provided by subdivision (c) of Section 17500.3, in addition to
all other penalties provided by law.
§ 17537.6. Untrue or Misleading Statements by
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Homestead Filing Service; Disclosure; Fees.
(a) It is unlawful for any person to make any untrue or misleading statements
in any manner in connection with the offering or performance of a homestead
filing service. For the purpose of this section, an “untrue or misleading
statement” means and includes any representation that any of the following is
true:
(1) The preparation or recordation of a homestead declaration will in
any manner prevent the forced sale of a judgment debtor’s dwelling.
( 2) The preparation or recordation of a homestead declaration will
prevent the foreclosure of a mortgage, deed of trust, or mechanic’s lien.
(3) Any of the provisions relating to the homestead exemption set forth
in Article 4 (commencing with Section 704.710) of Chapter 4 of Division 2
of Title 9 of Part 2 of the Code of Civil Procedure are available only to
persons who prepare or record a homestead declaration.
(4) A homestead declaration is in any way related to the obtaining of
any applicable homeowner’s exemption to real property taxes.
( 5 ) The preparation or recordation of a homestead declaration is
required by law in any manner.
( 6) The offeror of the homestead filing service has a file or record
covering a person to whom a solicitation is made.
(7) The offeror of the homestead filing service is, or is affiliated with,
any charitable or public service entity unless the offeror is, or is affiliated
with, a charitable organization which has qualified for a tax exemption
under Section 501(c)(3) of the Internal Revenue Code.
(8) The offeror of the homestead filing service is, or is affiliated with,
any governmental entity. A violation of this paragraph includes, but is not
limited to, the following:
(A) The misleading use of any governmental seal, emblem, or other
similar symbol.
(B) The use of a business name including the word “homestead” and
the word “agency,” “bureau,” “department,” “division,” “federal,”
“state,” “county,” “city,” “municipal,” “California,” or “United States,”
or the name of any city, county, city and county, or any governmental
entity.
(C) The use of an envelope that simulates an envelope containing a
government check, tax bill, or government notice or an envelope which
307
otherwise has the capacity to be confused with, or mistaken for, an
envelope sent by a governmental entity.
(b)
(1) It is unlawful to offer to perform a homestead filing service without
making the following disclosure:
THIS HOMESTEAD FILING SERVICE IS NOT ASSOCIATED WITH
ANY GOVERNMENT AGENCY.
YOU DO NOT HAVE TO RECORD A HOMESTEAD
DECLARATION. RECORDING A HOMESTEAD DECLARATION
DOES NOT PROTECT YOUR HOME AGAINST FORCED SALE BY
A CREDITOR. YOU MAY WISH TO CONSULT A LAWYER ABOUT
THE BENEFITS OF RECORDING A HOMESTEAD DECLARATION.
IF YOU WANT TO RECORD A HOMESTEAD, YOU CAN FILL OUT
A HOMESTEAD DECLARATION FORM BY YOURSELF, HAVE
YOUR SIGNATURE NOTARIZED, AND HAVE THE FORM
RECORDED BY THE COUNTY RECORDER.
(2) The disclosure specified in paragraph (1) shall be placed at the top
of each page of every advertisement or promotional material disseminated
by an offeror of a homestead filing service and shall be printed in 12-point
boldface type enclosed in a box formed by a heavy line.
(3) The disclosure specified in paragraph (1) shall be recited at the
beginning of every oral solicitation and every broadcast advertisement and
shall be delivered in printed form as prescribed by paragraph (2) before the
time each person who responds to the oral solicitation or broadcast
advertisement is obligated to pay for any service.
(c) In addition to any other service, every offeror of a homestead filing
service shall deliver each notarized homestead declaration to the appropriate
county recorder for recordation as soon as needed or required by a homestead
declarant, but no later than 10 days after the homestead declaration is notarized.
The offeror of the homestead filing service shall pay all fees charged in
connection with the notarization and recordation of the homestead declaration.
(d) No offeror of a homestead filing service shall charge, demand, or collect
any money until after the homestead declaration is recorded. The total amount
charged, demanded, or collected by an offeror of a homestead filing service,
including all fees for notarization and recordation, shall not exceed twenty-five
dollars ($25).
(e) For the purposes of this section, the following definitions apply:
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(1) “Homestead filing service” means any service performed or offered
to be performed for compensation in connection with the preparation or
completion of a homestead declaration or in connection with the assistance
in any manner of another person to prepare or complete a homestead
declaration. “Homestead filing service” does not include any service
performed by an attorney at law authorized to practice in this state for a
client who has retained that attorney or an employee of that attorney acting
under the attorney’s direction and supervision.
(2) A “homestead declaration” has the meaning described in Article 5
(commencing with Section 704.910) of Chapter 4 of Division 2 of Title 9
of Part 2 of the Code of Civil Procedure.
§ 17537.7. Unlawful Use of Specified Terms to Refer to

Dealer’s Cost for Motor Vehicle.
Except as to communications described in paragraph (2) of subdivision (n)
of Section 11713.1 of the Vehicle Code, it is unlawful for any person to use the
terms “invoice,” “dealer invoice,” “wholesale price,” or similar terms that refer
to a dealer’s cost for a motor vehicle in an advertisement for the sale or lease of
a vehicle, or advertise that the selling price of a vehicle is above, below, or at
either of the following:
( a ) The manufacturer’s or distributor’s invoice or selling price to a
dealer.
(b) A dealer’s cost.
Added Stats 1995 ch 585 § 1 (AB 192).

Homeowners’ Exemption Filing Service.
in any manner in connection with the offering or performance of a homeowners’
exemption filing service. For the purpose of this section, an “untrue or
misleading statement” includes, but is not limited to, any representation that any
of the following is true:
(1) A fee is required in order to receive the homeowners’ exemption.
(2) The offeror of the homeowners’ exemption filing service has a file
or record covering a person to whom a solicitation is made.
(3) The offeror of the homeowners’ exemption filing service is, or is
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affiliated with, any governmental entity. A violation of this paragraph
includes, but is not limited to, the following:
similar symbol.
(B) The use of a business name including the word “homeowners’
exemption” or “exemption” and the word “assessor,” “auditor,”
“agency,” “bureau,” “department,” “division,” “federal,” “state,”
“county,” “city,” or “municipal,” or the name of any city, county, city
and county, or any governmental entity.
government check, tax bill, or government notice or an envelope that
(D) The use of an envelope or outside cover or wrapper in which a
solicitation is mailed that does not bear on its face in capital letters and
in conspicuous and legible type the following notice: “THIS IS NOT A
GOVERNMENT DOCUMENT.”
(b)
(1) It is unlawful to offer to perform a homeowners’ exemption filing
service without making the following disclosure:
“THIS HOMEOWNERS’ EXEMPTION FILING SERVICE IS NOT
ASSOCIATED WITH ANY GOVERNMENT AGENCY. YOU CAN
OBTAIN AND FILE A HOMEOWNERS’ EXEMPTION CLAIM FORM,
AT NO COST, WITH THE COUNTY ASSESSOR’S OFFICE.”
(2) The disclosures specified in paragraph (1) shall be placed at the top
by an offeror of a homeowners’ exemption filing service and shall be
printed in 12-point boldface type enclosed in a box formed by a heavy line.
advertisement is obligated to pay for the service.
( c ) No offeror of a homeowners’ exemption filing service shall charge,
demand, or collect any money until after the homeowners’ exemption is filed
with the county assessor. The total amount charged, demanded, or collected by
an offeror of a homeowners’ exemption filing service shall not exceed twenty-
310
five dollars ($25).
(d) For the purposes of this section, the following definitions apply:
( 1 ) “Homeowners’ exemption filing service” means any service
performed or offered to be performed for compensation in connection with
the preparation or completion of a homeowners’ exemption claim or in
connection with the assistance in any manner of another person to prepare or
complete a homeowners’ exemption claim.
(2) “Homeowners’ exemption” has the meaning described in Section
218 of the Revenue and Taxation Code.
Added Stats 1997 ch 249 § 2 (AB 1178).

Assessment Reduction Filing Service.
in any manner in connection with the offering or performance of an assessment
reduction filing service. For the purpose purposes of this section, an “untrue or
misleading statement” includes, but is not limited to, any representation that any
of the following is true:
(1) The preparation of a request for review or an assessment appeal
application will result in a guaranteed reduction of property taxes.
(2) A fee is required in order for the county to process a reduction of a
property’s assessed value where the county has no applicable fee.
( 3 ) The offeror of the assessment reduction filing service will be
physically present to represent the person to whom a solicitation is made
before county assessor staff, an assessment appeals board, county board of
equalization, or an assessment hearing officer, unless the fee includes this
service.
(4) The offeror of the assessment reduction filing service will prepare
or complete informal assessor review data or prepare or complete the
application in full, with the exception of the property owner’s signature, on
behalf of the person to whom a solicitation is made, unless the fee includes
this service.
(5) The offeror of the assessment reduction filing service has a file or
record covering a person to whom a solicitation is made.
( 6 ) The offeror of the assessment reduction filing service is, or is
affiliated with, any governmental entity. A violation of this paragraph
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includes, but is not limited to, the following:
similar symbol.
(B) The use of a business name including the word “appeal” or “tax”
and the word “agency,” “assessor,” “agency,” “bureau,” “board,”
“bureau,” “commission,” “department,” “division,” “federal,” “state,”
“county,” “city,” or “municipal,” or the name of any city, county, city
and county, or any governmental entity.
in conspicuous and legible type the following notice:
“THIS IS NOT A GOVERNMENT DOCUMENT.”
(7) A late fee is required if the person to whom the solicitation is sent
fails to respond to the offeror of the assessment reduction filing service by a
date stated in the solicitation.
(b)
( 1) It is unlawful to offer to perform an assessment reduction filing
service without making the following disclosure:
“THIS ASSESSMENT REDUCTION FILING SERVICE IS NOT
ASSOCIATED WITH ANY GOVERNMENT AGENCY. IF YOU
DISAGREE WITH THE ASSESSED VALUE OF YOUR PROPERTY,
YOU HAVE THE RIGHT TO AN INFORMAL ASSESSMENT REVIEW,
AT NO COST, BY CONTACTING THE ASSESSOR’S OFFICE
DIRECTLY. IF YOU AND THE ASSESSOR CANNOT AGREE TO THE
VALUE OF THE PROPERTY OR IF YOU DO NOT WISH TO CONTACT
THE ASSESSOR YOU CAN OBTAIN AND FILE AN APPLICATION
FOR CHANGED ASSESSMENT WITH THE COUNTY BOARD OF
EQUALIZATION OR ASSESSMENT APPEALS BOARD ON YOUR
OWN BEHALF. AN APPEALS BOARD HAS THE AUTHORITY TO
RAISE PROPERTY VALUES (BUT IN NO CASE HIGHER THAN THE
PROPOSITION 13 PROTECTED VALUE) AS WELL AS TO LOWER
PROPERTY VALUES.”
(2) The disclosures specified in paragraph (1) shall be placed at the top
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by an offeror of an assessment reduction filing service and shall be printed
i n not less than 12-point boldface font type that is at least 2-point
boldface font type sizes larger than the next largest print on the page
and enclosed in a box formed by a heavy line.
(c)
(1) No offeror of an assessment reduction filing service shall charge,
demand, or collect any money in connection with a request for review until
after the request is filed with the assessor.
(2) No offeror of an assessment reduction filing service shall charge,
demand, or collect any money in connection with an assessment appeal
application until after the application is filed with the clerk of the
assessment appeals board.
(d) For the purposes of this section, the following definitions apply:
(1) “Assessment reduction filing service” means any service performed
or offered to be performed for compensation in connection with the
preparation or completion of an application or request of any kind for
reduction in assessment of residential property or in connection with the
assistance in any manner of another person to either (A) prepare or
complete an application or request of any kind for reduction in assessment
of residential property or (B) provide comparable sales information in
connection with an application or request for reduction in assessment of
residential property.
( 2 ) “Assessment appeal application” has the meaning described in
Section 1603 of the Revenue and Taxation Code.
(e)
(1) It is unlawful for an offeror of an assessment reduction filing service
to file a request or application of any kind for reduction in assessment
without first obtaining a written authorization from the property owner.
( 2 ) A true and correct copy of the written authorization shall be
submitted with any request or application for reduction in assessment. The
offeror shall maintain the original written authorization for a period of three
313
years and shall make it available for inspection and copying within 24 hours
of a request without a warrant to law enforcement, the Attorney General,
district attorney, or city attorney.
Added Stats 1997 ch 249 § 3 (AB 1178). Amended Stats 2009 ch 496 § 1 (AB 992),
effective January 1, 2010; Stats 2011 ch 269 § 2 (AB 75), effective January 1, 2012.
§ 17537.10. Untrue or Misleading Statement Relating to

Offering or Performance of Grant Deed Copy
Service; Required Disclosures.
(a) It is unlawful for any person, firm, corporation, association, or any other
business entity to make any untrue or misleading statements in any manner in
connection with the offering or performance of a grant deed copy service. For
the purpose of this section, an “untrue or misleading statement” includes, but is
not limited to, any representation, with regard to property identified by its
address or assessor’s parcel number, that any of the following is true:
( 1) That due to property foreclosures and loan modifications in the
county where the property is located, the property owner should obtain a
copy of his or her grant deed or other record of title.
(2) That a governmental entity, or any other entity that includes in its
name words that could lead a person to reasonably believe that the entity is
affiliated with government, has recommended that a property owner should
have a copy of his or her grant deed or other record of title.
(3) That the offeror of the grant deed copy service is, or is affiliated
with, any governmental entity. A violation of this paragraph includes, but is
not limited to, the following:
similar symbol.
(B) The use of a business name including the words “title” or “grant
deed” or “public record” and the word “agency,” “bureau,”
“department,” “division,” “federal,” “state,” “county,” “city,” or
“municipal,” or the name of any city, county, city and county, or any
governmental entity.
314
in conspicuous and legible type the following notice: “THIS IS NOT A
GOVERNMENT APPROVED OR AUTHORIZED DOCUMENT.”
(4) That there is a fee payment deadline to obtain a copy of a property
owner’s grant deed or other record of title.
(b)
(1) It is unlawful to offer to perform a grant deed copy service without
making the following disclosure:
“THIS SERVICE TO OBTAIN A COPY OF YOUR GRANT DEED OR
OTHER RECORD OF TITLE IS NOT ASSOCIATED WITH ANY
GOVERNMENTAL AGENCY. YOU CAN OBTAIN A COPY OF YOUR
GRANT DEED OR OTHER RECORD OF TITLE FROM THE COUNTY
RECORDER IN THE COUNTY WHERE YOUR PROPERTY IS
LOCATED FOR [AMOUNT OF FEE FOR THE COPY OF A GRANT
DEED OR OTHER RECORD OF TITLE IN THAT COUNTY].”
(2) The disclosure specified in paragraph (1) shall be placed at the top
by an offeror of a grant deed copy service and shall be printed in 14-point
boldface type enclosed in a box formed by a heavy line.
(c) For purposes of this section, “grant deed copy service” means a service
offered by a person, firm, corporation, association, or any other business entity,
through a mailed solicitation to a property owner, to obtain, for compensation, a
copy of the property owner’s grant deed or other record of title.
Added Stats 2010 ch. 533 § 1 (AB 1373), effective January 1, 2011.
§ 17537.11. Misleading Coupon.

(a) It is unlawful for any person to offer a coupon that is in any manner
untrue or misleading.
(b) It is unlawful for any person to offer a coupon described as “free” or as
a “gift,” “prize,” or other similar term if (1) the recipient of the coupon is
required to pay money or buy any goods or services to obtain or use the coupon,
and (2) the person offering the coupon or anyone honoring the coupon made the
315
majority of his or her sales in the preceding year in connection with one or more
“free,” “gift,” “prize,” or similarly described coupons.
(c) For purposes of this section:
(1) “Coupon” includes any coupon, certificate, document, discount, or
similar matter that purports to entitle the user of the coupon to obtain goods
or services for free or for a special or reduced price.
(2) “Sale” includes lease or rent.
Added Stats 1999 ch 907 § 2 (AB 1231). Amended Stats 2000 ch 135 § 10 (AB 2539).
§ 17537.12. Citation of Section; Definitions; Procedures

in Advertising or Conducting a Live Musical
Performance or Production; Violations; Penalties
and Remedies.
(a) This section shall be known and may be cited as the Truth in Music
Advertising Act.
(b) As used in this section, the following terms have the following meanings
unless the context clearly indicates otherwise:
(1) “Performing group” means a vocal or instrumental group seeking to
use the name of another group that has previously released a commercial
sound recording under that name.
(2) “Person” means the performing group or its promoter, manager, or
agent. “Person” does not include the performance venue or its owners,
managers, or operators, unless the performance venue owns or produces the
performing group, or knew or should have known that the performing group
does not have a legal right to perform.
(3) “Recording group” means a vocal or instrumental group, at least one
of whose members has previously released a commercial sound recording
under that group’s name and in which the member or members have a legal
right by virtue of use or operation under the group name without having
abandoned the name or affiliation with the group.
(4) “Sound recording” means a work that results from the fixation on a
material object of a series of musical, spoken, or other sounds regardless of
the nature of the material object, such as a disk, tape, or other phonorecord,
in which the sounds are embodied.
(c) No person shall advertise or conduct a live musical performance or
production through the use of a false, deceptive, or misleading affiliation,
316
connection, or association between a performing group and a recording group
unless any of the following apply:
(1) The performing group is the authorized registrant and owner of a
federal service mark for the group registered in the United States Patent and
Trademark Office.
( 2) At least one member of the performing group was previously a
member of the recording group and has a legal right by virtue of use or
operation under the group name without having abandoned the name or
affiliation of the group.
( 3) The live musical performance or production is identified in all
advertising and promotion as a salute or tribute, and the name of the vocal
or instrumental group performing is not so closely related or similar to that
used by the recording group that it would tend to confuse or mislead the
public.
(4) The advertising does not relate to a live musical performance or
production taking place in this state.
( 5 ) The performance or production is expressly authorized by the
recording group.
(d)
(1) Any person who violates any of the provisions of this section shall
be subject to a civil penalty not to exceed two thousand five hundred dollars
($2,500) per violation, as provided in subdivision (a) of Section 17206. An
action for a civil penalty shall be brought by a public prosecutor as
provided in subdivision (a) of Section 17206 and shall be enforceable as a
civil judgment.
(2) Any person who violates any of the provisions of this section shall
be subject to the equitable remedies described in Chapter 5 (commencing
with Section 17200) of Part 2.
(3) Nothing in this section shall preclude prosecution of a violation of
this section under any other provision of law.
Added Stats 2007 ch. 395 § 1 (AB 702), effective January 1, 2008. Amended Stats 2009
ch. 140 § 20 (AB 1164), effective January 1, 2010.
§ 17537.15. Provider or Vendor of Floral or Ornamental

Products or Services; Misrepresenting Geographic
Location of Business.
317
(a) For purposes of this section, “floral or ornamental products or services”
means floral arrangements, cut flowers, floral bouquets, potted plants, balloons,
floral designs, and related products and services.
( b) For the purposes of this section, “local telephone number” means a
specific telephone number (area code and prefix) assigned for the purpose of
completing local calls between a calling party or station and any other party or
station within a designated exchange or all of its designated local calling areas.
The term “local telephone number” does not include long distance telephone
numbers or any toll-free telephone numbers listed in a local telephone directory.
(c)
(1) It is an infraction for a provider or vendor of floral or ornamental
products or services to misrepresent the geographic location of its business
by doing either of the following:
(A) Listing a local telephone number in any advertisement or listing,
unless the advertisement or listing identifies the true physical address,
including the city, of the provider’s or vendor’s business.
(B) Listing a fictitious business name or an assumed business name
in any advertisement or listing if both of the following criteria are met:
( i ) The name of the business misrepresents the provider’s or
vendor’s geographic location.
( i i ) The advertisement or listing does not identify the true
physical address, including the city and state, of the provider’s or
vendor’s business.
(2) Notwithstanding Sections 17534 and 17534.5, a violation of this
section is punishable, exclusively, by a fine not to exceed two hundred fifty
dollars ($250).
( d) This section does not create or impose any duty or obligation on a
person other than a vendor or provider described in subdivision (a).
(e) This section does not apply to any of the following:
( 1 ) A publisher of a telephone directory or other publication or a
provider of a directory assistance service publishing or providing
information about another business.
(2) An Internet Web site that aggregates and provides information about
other businesses.
( 3) An owner or publisher of a print advertising medium providing
information about other businesses.
318
(4) An Internet service provider.
(5) An Internet service that displays or distributes advertisements for
other businesses.
§ 17538. Seller’s Obligations When Mail Order Delivery

Is Delayed.
(a) It is unlawful in the sale or lease or offering for sale or lease of goods or
services, for any person conducting sales or leases by telephone, the Internet or
other electronic means of communication, mail order, or catalog in this state,
including, but not limited to, the offering for sale or lease on television, radio,
or the Internet, or by any other electronic means of communication or
telecommunications device, of goods or services that may be ordered by mail,
telephone, the Internet, or other electronic means of communication or
telecommunications device, or for any person advertising in connection with
those sales, leases, or advertisements a mailing address, telephone number, or
Internet or other electronic address, to accept payment from or for a buyer, for
the purchase or lease of goods or services ordered by mail, telephone, the
Internet, or other electronic means of communication or telecommunications
device, whether payment to the vendor is made directly, through the mail, by
means of a transfer of funds from an account of the buyer or any other person, or
by any other means, and then permit 30 days, unless otherwise conspicuously
stated in the offering or advertisement, or unless a shorter time is clearly
communicated by the person conducting the sale or lease, to elapse without
doing any one of the following things:
(1) Shipping, mailing, or providing the goods or services ordered.
(2) Mailing a full refund or, if payment was made by means of a transfer
from an account, (A) crediting the account in the full amount of the debit, or
(B) if a third party is the creditor, issuing a credit memorandum to the third
party, who shall promptly credit the account in the full amount of the debit.
(3) Sending the buyer a letter or other written notice (A) advising the
buyer of the duration of an expected delay expressed as a specific number of
days or weeks, or proposing the substitution of goods or services of
equivalent or superior quality, and (B) offering to make a full refund, in
accordance with paragraph (2), within one week if the buyer so requests.
The vendor shall provide to the buyer in that letter or written notice a toll-
free telephone number or other cost-free method to communicate the buyer’s
request for a full refund. If the vendor proposes to substitute goods or
services, the vendor shall describe the substitute goods or services in detail,
319
indicating fully how the substitute differs from the goods or services
ordered.
(4)
(A) Shipping, mailing, or providing substitute goods or services of
equivalent or superior quality, if the buyer is extended the opportunity to
return the substitute goods or services and the vendor promises to refund
to the buyer (i) the cost of returning the substitute goods or services and
(ii) any portion of the purchase price previously paid by the buyer.
(B) Except as provided in subparagraph (C), a notice to the buyer
shall accompany the mailing, shipping, or providing of the substitute
goods or services that informs the buyer of the substitution; describes
fully how the substitute differs from the goods or services ordered,
except that obvious nontechnical differences, such as color, need not be
described; and discloses the buyer’s right to reject the substitute goods
or services and obtain a full refund of the amount paid, plus the cost of
returning the substitute goods or services.
(C) The vendor may omit from the notice required by subparagraph
(B) a description of how the substitute goods or services differ from the
ordered goods or services if the notice otherwise complies with
subparagraph (B), and if all the following requirements are complied
with:
(i) The vendor maintains at least 100 retail outlets located in at
least 20 counties in this state that are open to the public regularly
during normal business hours where buyers can order catalog goods,
pick them up, and return them for refunds.
( i i ) The vendor maintains a toll-free telephone number and
provides to each buyer, at the time of the buyer’s call, a full
description of how substitute goods or services differ from ordered
goods or services. The toll-free telephone number shall operate and
be staffed at all times during which goods or services normally are
available for pick up from the vendor’s retail outlets.
(iii) If the buyer picks up substitute goods or services from the
vendor’s retail outlet, the notice required by subparagraph (B) as
modified by this subparagraph is placed on, or attached to, the
exterior of the package or wrapping containing the substitute, or is
handed to the buyer at the time the buyer picks up the substitute.
(iv) The notice contains a reference number or some other means
of identifying the ordered goods or services and the substitute goods
or services.
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(v) The notice contains the vendor’s toll-free telephone number
and instructions to the buyer that the buyer may call that number to
obtain a full description of how the substitute differs from the
ordered goods.
(b) For purposes of paragraphs (3) and (4) of subdivision (a), goods or
services shall be considered of “equivalent or superior quality” only if they are
(1) substantially similar to the goods or services ordered, (2) fit for the usual
purposes for which the goods or services ordered are used, and (3) normally
offered by the vendor at a price equal to or greater than the price of the goods or
services ordered.
(c) When a buyer makes an initial application for an open-end credit plan,
as defined in the Federal Consumer Credit Protection Act (15 U.S.C. Sec.
1602) at the same time the goods or services are ordered, and the goods or
services are to be purchased on credit, the person conducting the business shall
have 50 days, rather than 30 days, to perform the actions specified in this
section.
(d) A vendor conducting business through the Internet or any other electronic
means of communication shall do all of the following when the transaction
involves a buyer located in this state:
( 1) Before accepting any payment or processing any debit or credit
charge or funds transfer, the vendor shall disclose to the buyer in writing or
by electronic means of communication, such as e-mail or an on-screen
notice, the vendor’s return and refund policy, the legal name under which the
business is conducted and, except as provided in paragraph (3), the
complete street address from which the business is actually conducted.
(2) If the disclosure of the vendor’s legal name and address information
required by this subdivision is made by on-screen notice, all of the
following shall apply:
(A) The disclosure of the legal name and address information shall
appear on any of the following; (i) the first screen displayed when the
vendor’s electronic site is accessed, (ii) on the screen on which goods
or services are first offered, (iii) on the screen on which a buyer may
place the order for goods or services, (iv) on the screen on which the
buyer may enter payment information, such as a credit card account
number, or (v) for nonbrowser-based technologies, in a manner that
gives the user a reasonable opportunity to review that information. The
communication of that disclosure shall not be structured to be smaller or
less legible than the text of the offer of the goods or services.
(B) The disclosure of the legal name and address information shall
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be accompanied by an adjacent statement describing how the buyer may
receive the information at the buyer’s e-mail address. The vendor shall
provide the disclosure information to the buyer at the buyer’s e-mail
address within five days of receiving the buyer’s request.
(C) Until the vendor complies with subdivision (a) in connection
with all buyers of the vendor’s goods or services, the vendor shall make
available to a buyer and any person or entity who may enforce this
section pursuant to Section 17535 on-screen access to the information
required to be disclosed under this subdivision.
(3) The complete street address need not be disclosed as required by
paragraph (1) if the vendor utilizes a private mailbox receiving service and
all of the following conditions are met: (A) the vendor satisfies the
conditions described in paragraph (2) of subdivision (b) of Section
17538.5, (B) the vendor discloses the actual street address of the private
mailbox receiving service in the manner prescribed by this subdivision for
the disclosure of the vendor’s actual street address, and (C) the vendor and
the private mailbox receiving service comply with all of the requirements of
subdivisions (c) to (f), inclusive, of Section 17538.5.
(e) If a buyer is permitted to return goods or cancel a service that he or she
purchased or contracted for on or after January 1, 2003, the vendor shall, within
30 days of return of the goods in refundable condition or cancellation of the
service and of receipt of sufficient information to enable the vendor to make the
refund, including confirmation that the buyer’s payment for the purchase or
contract has been paid or cleared by the applicable financial institution, process
and send to the buyer any refund due to the buyer as a result of the return or
cancellation, or, if the buyer’s payment was made by means of a third-party
creditor, the vendor shall issue a credit memorandum to the third party, pursuant
t o 12 C.F.R. 226.12(e) , within seven business days and the third party shall
promptly credit the account in the full amount of the refund.
(f) As used in this section and Section 17538.3, the following words have
the following meanings:
(1) “Goods” means tangible chattels, including certificates or coupons
exchangeable for those goods, and including goods which, at the time of the
sale or subsequently, are to be so affixed to real property as to become a
part of that real property, whether or not severable therefrom.
(2) “Person” means an individual, partnership, corporation, association,
or other group, however organized.
( 3) “Buyer” means a person who seeks or acquires, by purchase or
lease, any goods or services for any purpose.
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( 4 ) “Services” means work, labor, and services, including services
furnished in connection with the sale or repair of goods.
( 5) “Vendor” means a person who, as described in subdivision (a),
vends, sells, leases, supplies, or ships goods or services, who conducts
sales or leases of goods or services, or who offers goods or services for
sale or lease. “Vendor” does not include a person responding to an
electronic agent in connection with providing goods or services to a buyer if
the aggregate amount of all transactions with the buyer does not exceed ten
dollars ($10).
( 6 ) “Internet” means the global information system that is logically
linked together by a globally unique address space based on the Internet
Protocol (JP), or its subsequent extensions, and that is able to support
communications using the Transmission Control Protocol/Internet Protocol
(TCP/IP) suite, or its subsequent extensions, or other IP-compatible
protocols, and that provides, uses, or makes accessible, either publicly or
privately, high level services layered on the communications and related
infrastructure described in this paragraph.
(7) “Electronic agent” means a computer program designed, selected, or
programmed to initiate or respond to electronic messages or performances
without review by an individual.
( g) Any violation of the provisions of this section is a misdemeanor
punishable by imprisonment in the county jail not exceeding six months, by a
fine not exceeding one thousand dollars ($1,000), or by both that imprisonment
and fine.
Stats 1986 ch 337 § 1; Stats 1988 ch 173 § 1, effective June 15, 1988; Stats 1996 ch 785 § 1
(AB 3320); Stats 1998 ch 485 § 27 (AB 2803); Stats 2002 ch 326 § 1 (SB 1872).
§ 17538.3. Exemptions From Restrictions on Mail

Order Sales.
The provisions of Section 17538 do not apply to any of the following,
except that subdivisions (d) and (e) of Section 17538 shall apply to
subdivisions (a), (b), (c), and (d) of this section:
(a) To instances in which all advertising for goods or services contains
a notice as to each item or service offered, which, in the case of printed
advertising, shall be in a type size at least as large as that indicating the
price, that a delay may be expected of a specified period. In those cases,
one of the events described in Section 17538 must occur no later than the
expiration of the period specified in the advertisement.
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(b) To goods or services, such as quarterly magazines, which by their
nature are not ready for use or consumption until a future date and for that
reason cannot be stocked at the time of order.
( c ) To installments other than the first of goods, such as magazine
subscriptions, ordered for serial delivery.
( d ) To any telecommunications goods and services sold by a
telecommunications company, except those telecommunications goods and
services purchased for use primarily for personal, family, or household
purposes.
(e) To financial services offered in the ordinary course of business by a
supervised bank, national banking association, bank holding company, a
state or federal savings and loan association, a state or federal credit union,
or a subsidiary or affiliate thereof, or an authorized industrial loan company,
a licensed personal property broker, a licensed consumer finance lender, a
licensed commercial finance lender, or a person licensed pursuant to
Division 4 (commencing with Section 10000).
(f) To any delay in delivery of goods or services caused by the United
States Postal Service, an act of God, or a labor strike by the vendor’s
employees.
Stats 1987 Ch 764 § 3; Stats 1992 ch 530 § 1 (AB 2516); Stats 2002 ch 326 § 2 (SB 1872).
§ 17538.35. Notice Requirements for Electronic Mail

Service Termination.
( a ) Unless otherwise permitted by law or contract, any provider of
electronic mail service shall provide each customer with notice at least 30 days
before permanently terminating the customer’s electronic mail address.
( b ) No contract for electronic mail service may permit termination of
service without cause with less than a 30-day notice. For purposes of this
subdivision, “termination of service without cause” means termination of
service at the unfettered discretion of the service provider without regard to any
conduct of the customer that violates the service provider’s terms of service or
acceptable use policy.
( c ) For purposes of this section, “provider” shall mean the entity that
controls the customer’s electronic mail address, and not the entity making the
underlying network or access available to the provider or the customer.
(d) No provider shall be liable under this section solely for a failure to
comply with this section in the event a customer’s electronic mail address is
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permanently terminated due to the action or inaction of an entity making the
underlying network or access available to the provider or the customer.
( e ) This section supersedes and preempts all rules, regulations, codes,
statutes, or ordinances of all cities, counties, cities and counties, municipalities,
and other local agencies regarding notice of electronic mail termination by
providers of electronic mail service.
(f) This section shall become inoperative on the date that a federal law or
regulation is enacted that regulates notice requirements in the event of
termination of electronic mail service.
Added Stats 2002 ch 783 § 1 (SB 772).

Stats 2002 ch 700 § 1 (AB 2944). Repealed Stats 2003 ch 487 § 2 (SB 186).
§ 17538.41. Transmission of Text Message

Advertisement to Cellular Phone or Pager Equipped
With Short Message Capability Prohibited.
(a)
(1) Except as provided in subdivision (b), (c), (d), or (e), no person,
entity conducting business, candidate, or political committee in this state
shall transmit, or cause to be transmitted, a text message advertisement to a
mobile telephony services handset, pager, or two-way messaging device
that is equipped with short message capability or any similar capability
allowing the transmission of text messages. A text message advertisement is
a message, the principal purpose of which is to promote the sale of goods or
services, or to promote a political purpose or objective, to the recipient,
and consisting of advertising material for the lease, sale, rental, gift offer, or
other disposition of any realty, goods, services, or extension of credit, or
advertising material for political purposes.
( 2 ) This section shall apply when a text message advertisement is
transmitted to a number assigned for mobile telephony service, pager
service, or two-way messaging service to a California resident.
(b) This section shall not apply to text messages transmitted at the direction
of a person or entity offering mobile telephony service, pager service, or two-
way messaging service if the subscriber is offered an option to not receive those
text messages.
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(c) This section shall not apply to text messages transmitted by a business,
candidate, or political committee that has an existing relationship with the
subscriber if the subscriber is offered an option not to receive text messages
from that business, candidate, or political committee.
(d) This section shall not apply to text messages transmitted by an affiliate
of a business that has an existing relationship with the subscriber, but only if the
subscriber has provided consent to the business with which he or she has that
relationship to receive text messages from affiliates of that business. “Affiliate”
means any company that controls, is controlled by, or is under common control
with, another company.
( e ) This section shall not apply to electronic mail messages that are
forwarded, without the knowledge of the sender, to a mobile telephony services
handset, pager, or two-way messaging device.
(f) Subdivision (a) shall not impose an obligation on a person or entity
offering mobile telephony service, pager service, or two-way messaging service
to control the transmission of a text message unless the message is transmitted at
the direction of that person or entity.
( g ) For purposes of this section, “mobile telephony service” means
commercially available interconnected mobile phone services that provide
access to the public switched telephone network (PSTN) via mobile
communication devices employing radiowave technology to transmit calls,
including cellular radiotelephone, broadband Personal Communications
Services (PCS), and digital Specialized Mobile Radio (SMR).
Added Stats 2002 ch 699 § 1 (AB 1769). Amended Stats 2005 ch 711 § 1 (AB 582),
(See casenotes)
§ 17538.43. Transmission of Unsolicited Advertisement

to Telephone Facsimile Machine Prohibited;
Definitions; Remedies; Identification Required;
Exceptions.
( a ) As used in this section, the following terms have the following
meanings:
( 1 ) “Telephone facsimile machine” means equipment that has the
capacity to do either or both of the following:
(A) Transcribe text or images, or both, from paper into an electronic
signal and to transmit that signal over a regular telephone line.
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(B) Transcribe text or images, or both, from an electronic signal
received over a regular telephone line onto paper.
( 2 ) “Unsolicited advertisement” means any material advertising the
commercial availability or quality of any property, goods, or services that is
transmitted to any person or entity without that person’s or entity’s prior
express invitation or permission. Prior express invitation or permission may
be obtained for a specific or unlimited number of advertisements and may
be obtained for a specific or unlimited period of time.
(b)
(1) It is unlawful for a person or entity, if either the person or entity or
the recipient is located within California, to use any telephone facsimile
machine, computer, or other device to send, or cause another person or
entity to use such a device to send, an unsolicited advertisement to a
telephone facsimile machine.
(2) In addition to any other remedy provided by law, including a remedy
provided by the Telephone Consumer Act ( 47 U.S.C. Sec. 227 and
following), a person or entity may bring an action for a violation of this
subdivision seeking the following relief:
(A) Injunctive relief against further violations.
(B) Actual damages or statutory damages of five hundred dollars
($500) per violation, whichever amount is greater.
(C) Both injunctive relief and damages as set forth in subparagraphs
(A) and (B). If the court finds that the defendant willfully or knowingly
violated this subdivision, the court may, in its discretion, increase the
amount of the award to an amount equal to not more than three times the
amount otherwise available under subparagraph (B).
(c) It is unlawful for a person or entity, if either the person or entity or the
recipient is located in California, to do either of the following:
(1) Initiate any communication using a telephone facsimile machine that
does not clearly mark, in a margin at the top or bottom of each transmitted
page or on the first page of each transmission, the date and time sent, an
identification of the business, other entity, or individual sending the
message, and the telephone number of the sending machine or of the
business, other entity, or individual.
(2) Use a computer or other electronic device to send any message via a
telephone facsimile machine unless it is clearly marked, in a margin at the
top or bottom of each transmitted page of the message or on the first page of
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the transmission, the date and time it is sent and the identification of the
business, other entity, or individual sending the message and the telephone
number of the sending machine or of the business, other entity, or individual.
(d) This section shall not apply to a facsimile sent by or on behalf of a
professional or trade association that is a tax-exempt nonprofit organization and
in furtherance of the association’s tax-exempt purpose to a member of the
association, provided that all of the following conditions are met:
( 1 ) The member voluntarily provided the association the facsimile
number to which the facsimile was sent.
(2) The facsimile is not primarily for the purpose of advertising the
commercial availability or quality of any property, goods, or services of
one or more third parties.
(3) The member who is sent the facsimile has not requested that the
association stop sending facsimiles for the purpose of advertising the
commercial availability or quality of any property, goods, or services of
one or more third parties.
Added Stats 2005 ch 667 § 1 (SB 833), effective January 1, 2006.
§ 17538.45. Use of Electronic Mail Service Provider’s

Equipment in Violation of Provider’s Policy on
Unsolicited Electronic Mail Advertisements; Action
by Service Provider; Actual Monetary Loss or
Liquidated Damages; Attorney’s Fees; Election of
Remedies.
(a) For purposes of this section, the following words have the following
meanings:
(1) “Electronic mail advertisement” means any electronic mail message,
the principal purpose of which is to promote, directly or indirectly, the sale
or other distribution of goods or services to the recipient.
(2) “Unsolicited electronic mail advertisement” means any electronic
mail advertisement that meets both of the following requirements:
(A) It is addressed to a recipient with whom the initiator does not
have an existing business or personal relationship.
(B) It is not sent at the request of or with the express consent of the
recipient.
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( 3 ) “Electronic mail service provider” means any business or
organization qualified to do business in California that provides registered
users the ability to send or receive electronic mail through equipment
located in this state and that is an intermediary in sending or receiving
electronic mail.
(4) “Initiation” of an unsolicited electronic mail advertisement refers to
the action by the initial sender of the electronic mail advertisement. It does
not refer to the actions of any intervening electronic mail service provider
that may handle or retransmit the electronic message.
(5) “Registered user” means any individual, corporation, or other entity
that maintains an electronic mail address with an electronic mail service
provider.
(b) No registered user of an electronic mail service provider shall use or
cause to be used that electronic mail service provider’s equipment located in
this state in violation of that electronic mail service provider’s policy
prohibiting or restricting the use of its service or equipment for the initiation of
unsolicited electronic mail advertisements.
(c) No individual, corporation, or other entity shall use or cause to be used,
by initiating an unsolicited electronic mail advertisement, an electronic mail
service provider’s equipment located in this state in violation of that electronic
mail service provider’s policy prohibiting or restricting the use of its equipment
to deliver unsolicited electronic mail advertisements to its registered users.
(d) An electronic mail service provider shall not be required to create a
policy prohibiting or restricting the use of its equipment for the initiation or
delivery of unsolicited electronic mail advertisements.
(e) Nothing in this section shall be construed to limit or restrict the rights of
an electronic mail service provider under Section 230(c)(1) of Title 47 of the
United States Code, any decision of an electronic mail service provider to
permit or to restrict access to or use of its system, or any exercise of its
editorial function.
(f)
(1) In addition to any other action available under law, any electronic
mail service provider whose policy on unsolicited electronic mail
advertisements is violated as provided in this section may bring a civil
action to recover the actual monetary loss suffered by that provider by
reason of that violation, or liquidated damages of fifty dollars ($50) for
each electronic mail message initiated or delivered in violation of this
section, up to a maximum of twenty-five thousand dollars ($25,000) per day,
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whichever amount is greater.
(2) In any action brought pursuant to paragraph (1), the court may award
reasonable attorney’s fees to a prevailing party.
(3)
(A) In any action brought pursuant to paragraph (1), the electronic
mail service provider shall be required to establish as an element of its
cause of action that prior to the alleged violation, the defendant had
actual notice of both of the following:
(i) The electronic mail service provider’s policy on unsolicited
electronic mail advertising.
( i i ) The fact that the defendant’s unsolicited electronic mail
advertisements would use or cause to be used the electronic mail
service provider’s equipment located in this state.
(B) In this regard, the Legislature finds that with rapid advances in
Internet technology, and electronic mail technology in particular, Internet
service providers are already experimenting with embedding policy
statements directly into the software running on the computers used to
provide electronic mail services in a manner that displays the policy
statements every time an electronic mail delivery is requested. While the
state of the technology does not support this finding at present, the
Legislature believes that, in a given case at some future date, a showing
that notice was supplied via electronic means between the sending and
receiving computers could be held to constitute actual notice to the
sender for purposes of this paragraph.
(4)
(A) An electronic mail service provider who has brought an action
against a party for a violation under Section 17529.8 shall not bring an
action against that party under this section for the same unsolicited
commercial electronic mail advertisement.
(B) An electronic mail service provider who has brought an action
against a party for a violation of this section shall not bring an action
against that party under Section 17529.8 for the same unsolicited
commercial electronic mail advertisement.
Added Stats 1998 ch 863 § 2 (AB 1629). Amended Stats 2003 ch 487 § 3 (SB 186);
Stats 2004 ch 183 § 15 (AB 3082).
Annotations
330
Cases
and Bus. & Prof. Code §§ 17529.4 and 17538.45, to which defendant demurred. The court
§ 17538.5. Disclosure of Business Address and Legal

Name.
( a ) It is unlawful in the sale or offering for sale of consumer goods or
services for any person conducting, any business in this state which utilizes a
post office box address, a private mailbox receiving service, or a street address
representing a site used for the receipt or delivery of mail or as a telephone
answering service, to fail to disclose the legal name under which business is
done and, except as provided in paragraph (2) of subdivision (b), the complete
street address from which business is actually conducted in all advertising and
promotional materials, including order blanks and forms. Any violation of the
provisions of this section is a misdemeanor punishable by imprisonment in the
county jail not exceeding six months, or by a fine not exceeding two thousand
five hundred dollars ($2,500), or by both.
(b)
(1) This section shall not apply to a person who sells the preponderance
of goods and services at retail from trade premises which are open to the
public regularly during normal business hours where the post office box or
telephone answering service is supportive of and ancillary to the sales made
or to any person who provides services pursuant to a license issued
pursuant to this code or any other provision of law by a state board or
agency or, except for a person conducting a mail order or catalog business,
by a city or county or city and county in this state, which has the person’s
current business street address or home address on record and which is
authorized to reveal that address to inquiring persons.
(2) If a person conducts a business described in subdivision (a) from
that person’s residence, the person is not required to disclose the residence
address if both of the following conditions are satisfied:
(A) The person’s current business street address or home address is
contained in a United States Postal Service (USPS) Form 1583 that is
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filed with the USPS.
(B) The person has signed an acknowledgement form substantially in
accordance with the provisions set forth in subdivision (f) which, among
other things, authorizes the commercial mail receiving agency to act as
that person’s agent for service of process.
(c) A commercial mail receiving agency (CMRA) shall not provide private
mailbox receiving service to any customer until it obtains from that customer at
least two pieces of identification regarding that customer and provides to that
customer an acknowledgment, as set forth in subdivision (f), which (1)
acknowledges the obligation to advise the CMRA of any change in address, (2)
authorizes the CMRA to act as an agent for service of process, and (3)
acknowledges the requirements of Sections 17200 and 17500, which prohibit
unfair competition and false advertising. The commercial mail receiving agency
shall thereafter maintain a copy of any United States Postal Service Form 1583
for each mailbox service customer, along with a copy of each of the two pieces
of identification used by the customer, for a period of two years after the
termination of service to that customer. Upon the request of the Department of
Consumer Affairs or any law enforcement agency conducting an investigation,
the commercial mail receiving agency shall make available to the Department of
Consumer Affairs or that law enforcement agency, for purposes of that
investigation and copying, its copy of the United States Postal Service Form
1583 and the two pieces of identification used by the customer.
(d)
(1) Every person receiving private mailbox receiving service from a
CMRA in this state shall be required to sign an agreement, along with a
USPS Form 1583, which authorizes the CMRA owner or operator to act as
agent for service of process for the mail receiving service customer. Every
CMRA owner or operator shall be required to accept service of process for
and on behalf of any of their mail receiving service customers, and for two
years after termination of any mail receiving service customer agreement.
Upon receipt of any process for any mailbox service customer, the CMRA
owner or operator shall (A) within 48 hours after receipt of any process,
place a copy of the documents or a notice that the documents were received
into the customer’s mailbox or other place where the customer usually
receives his or her mail, unless the mail receiving service for the customer
was previously terminated, and (B) within five days after receipt, send all
documents by first-class mail, to the last known home or personal address of
the mail receiving service customer. The CMRA shall obtain a certificate of
mailing in connection with the mailing of the documents. Service of process
upon the mail receiving service customer shall then be deemed perfected 10
days after the date of mailing.
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If the CMRA owner or operator has complied with the foregoing
requirements and provides to any party participating in a lawsuit
involving a mail receiving service customer a declaration of service by
mail, given under penalty of perjury along with a certificate of mailing,
the CMRA owner or operator shall have no further liability in
connection with acting as agent for service of process for its mail
receiving service customer.
(2) Upon complaint or inquiry concerning any CMRA mail receiving
service customer, the CMRA owner or operator shall inform the person
making the complaint or inquiry that the CMRA is an authorized agent for
service of process on the mail receiving service customer.
(3) Upon presentation of a certified copy of a judgment, the CMRA shall
disclose to the judgment creditor the last known address of any of its mail
receiving service customers against whom the judgment was obtained.
(e) An owner or operator of a CMRA who, acting in good faith, contacts a
governmental agency concerning suspected illegal or fraudulent activities
carried out by a mail receiving service customer shall have no liability for
claims filed by the customer arising out of that contact. No owner or operator of
a commercial mail receiving agency that maintains on file a copy of the United
States Postal Service Form 1583 for its private mailbox receiving service
customers and complies with subdivision (c) shall be liable for any illegal acts
of any mail receiving service customer based only on the fact that the owner or
operator of the CMRA provided mail receiving services to the customer.
(f) The following acknowledgement and notice, substantially in the form set
forth below, shall be delivered to each person obtaining private mailbox
receiving service at a CMRA:
“ACKNOWLEDGEMENT BY PRIVATE MAILBOX

SERVICE CUSTOMERS
This acknowledgement is required by Section 17538.5 of the Business and
Professions Code. Any person obtaining private mailbox receiving service
in the State of California must read and acknowledge receipt of the
following statement, which is to be kept on file at this CMRA and will be
made available, upon demand, to the Department of Consumer Affairs or
any law enforcement agency conducting an investigation.
By requesting and obtaining use of a private mailbox receiving service in
the State of California, I acknowledge that:
1. I am obligated to disclose my actual home address or place of
333
residence on a USPS Form 1583 or other form as may later be
developed and I further agree that I will provide prompt written notice
to this CMRA of any subsequent change in my home address or place of
residence.
2. By signing below, I irrevocably authorize this CMRA to act as my
agent for service of process to receive any legal documents that may be
served upon me. This authorization shall continue from the date of this
agreement until two years after my mail receiving service has been
terminated. I understand that this CMRA will (A) place a copy of the
documents or a notice that the documents were received into my mailbox
or other place where I usually receive my mail, unless my mail
receiving service has been terminated, and (B) send all documents by
first-class mail to the home or other address last known to the CMRA.
3. I further acknowledge that I understand that use of a private mailbox
receiving service for commercial purposes in the State of California
requires the user to comply with all applicable laws, including Section
17538.5 of the Business and Professions Code and laws prohibiting
unfair competition and false advertising as set forth in Sections 17200
and 17500 of the Business and Professions Code. Violation of these
laws may result in criminal or civil penalties or both. I understand that
the United States Postal Service Form 1583 that must be prepared for
each private mailbox receiving service customer shall be delivered to
the local United States Post Office and a copy of the form must be
retained by this CMRA and made available upon demand to the
Department of Consumer Affairs or any law enforcement agency
conducting an investigation. I hereby agree to accept and abide by the
foregoing requirements.
Date
Signature
Name Printed
Street: Address
City State Zip”
Added Stats 1972 ch 62 § 1. Amended Stats 1974 ch 808 § 3; Stats 1976 ch ll25 § 8;
Stats 1983 ch 248 § 1, ch 549 § l; Stats 1985 ch 1525 § l; Stats 1994 ch 684 § 2(AB 171).
§ 17538.6. Postdated Checks.

(a) It is unlawful for any person conducting business in this state to require
or request a consumer to issue a postdated check unless (1) the person accepting
334
the check advises the consumer in writing that the check may be cashed
immediately, notwithstanding the postdating, unless the consumer files a
postdating order with the consumer’s bank pursuant to Section 4401 of the
Commercial Code, and (2) either of the following occurs:
(A) Receipt of the advice is acknowledged by the consumer in writing.
(B) The advice is clearly printed on an invoice for goods or services
that is provided to the consumer at the same time that the check is solicited.
(b) This section shall not apply to any person who requires or requests a
consumer to issue a postdated check if the recipient of the check does not submit
the check for collection or cause it to be submitted for collection until on or
after its date.
(c) As used in this section:
(1) “Bank” means any person engaged in the business of banking and
includes, in addition to a commercial bank, a savings and loan association,
savings bank, or credit union.
(2) “Check” means a draft, other than a documentary draft, payable on
demand drawn on a bank, even though it is described by another term, such
as “share draft” or “negotiable order of withdrawal.”
Added Stats 1992 ch 914 § 1 (SB 833).
§ 17538.7. Consumer Credit Advertising; Required

Disclosures.
(a) It is unlawful for a seller to advertise any payment, number of payments,
or period of repayment for any goods, property, or services purchased through
an extension of consumer credit under an open-end credit plan accepted for
purchases by more than one seller unless the seller clearly and conspicuously
discloses all of the following;
(1) The cash price and the amount or percentage of a downpayment, if
any.
(2) The monthly or other periodic payment, the number of payments or
the period of repayment, the total amount of all payments, and whether the
monthly or other periodic payment is calculated on the assumption that the
purchaser has no outstanding balance due under the open-end credit plan, if
that is the case.
(3) The amount of the finance charge and any periodic rate that may be
applied expressed as an annual percentage rate as described under
335
subdivision (e). If the open-end credit plan provides for a variable periodic
rate, that fact shall be disclosed.
(4) Any minimum, fixed, transaction, activity, or similar charge and any
membership or participation fee that could be imposed.
(5) The name of the creditor, if not the seller.
(6) Whether the advertised terms are available to the purchaser only
after the creditor’s approval, if that is the case.
(b)
( 1 ) A catalog or other multiple-page advertisement that gives
information in a table or schedule in sufficient detail to permit determination
of the disclosures required by subdivision (a) shall be considered a single
advertisement if (A) the table or schedule is clearly and conspicuously set
forth, and (B) any statement of the amount of any payment, the number of
payments, or the period of repayment appearing anywhere else in the catalog
or advertisement clearly refers to the page on which the table or schedule
begins.
(2) A catalog or multiple-page advertisement complies with subdivision
(a) if the table or schedule includes all appropriate disclosures for a
representative scale of amounts up to the level of the more commonly sold
higher-priced property or services offered.
(c) It is unlawful for a seller to advertise any payment, number of payments,
or period of repayment for particular goods, property, or services purchased
through an extension of consumer credit under any open-end credit plan unless
the seller clearly and conspicuously discloses the cash price proximate to the
advertised payment, number of payments, or period of repayment.
(d) It is unlawful for a seller to advertise terms that actually are not or will
not be arranged or offered by the creditor.
(e)
( 1 ) For the purposes of this title, the terms “person,” “creditor,”
“consumer credit,” “open-end credit,” “cash price,” “downpayment,”
“finance charge,” “periodic rate,” and “annual percentage rate” have the
same meaning as used in Regulation Z.
( 2 ) The term “Regulation Z” shall mean any rule, regulation, or
interpretation promulgated by the Board of Governors of the Federal
Reserve System under the Federal Truth in Lending Act, ( Public Law 90-
321, as amended), and any interpretation or approval issued by an official
or employee of the Federal Reserve System duly authorized by the board
336
under the Truth in Lending Act, to issue those interpretations or approvals.
§ 17538.8. Advertisement of Discounted Transportation

With Required Purchase of Accommodations.
Any advertisement that offers free or discounted transportation or
certificates to obtain transportation and that requires the consumer to purchase
accommodations through or from a particular source, or any advertisement that
offers free or discounted accommodations or certificates to obtain
accommodations and that requires the consumer to purchase transportation
through or from a particular source, shall set forth in close proximity to each
reference to free or discounted transportation or accommodations, in a size and
prominence no less than the largest print in the reference, the total price that
shall be paid by the consumer for the combination of transportation and
accommodations. If the advertisement is oral, the total price shall immediately
precede or follow each description of the free or discounted transportation or
accommodations.
Added Stats 1994 ch 1123 § 1.5 (AB 918).
§ 17538.9. Standards for Prepaid Calling Cards and

Services.
(a) For the purposes of this section:
(1) “Ancillary charges” means all surcharges, taxes, fees, connection
charges, maintenance fees, monthly or other periodic fees, per-call access
fees, or other assessments or charges of any kind, however denominated,
that may be imposed in connection with the use of a card or services, other
than the per unit or per minute rate charged.
(2) “Cellular telephone services” means facilities-based, commercial
mobile telephone services.
(3) “Company” refers to any entity providing prepaid calling services to
the public using its own or a resold telecommunications network.
( 4 ) “Distributor” means any person who offers or sells a card or
services to a retail vendor or to any other person for ultimate resale to a
retail vendor.
(5) “Prepaid calling card” or “card” means any object containing an
access number and authorization code that enables a consumer to use
prepaid calling services. It does not include any object of that type used for
337
promotional purposes.
( 6 ) “Prepaid calling services” or “services” refers to any prepaid
telecommunications service that allows consumers to originate calls through
an access number and authorization code, whether manually or
electronically dialed.
(7) “Retail vendor” means any person who sells a card or service to a
consumer for use in making telephone calls.
(b) The following standards and requirements for consumer disclosure and
services shall apply to the advertising and sale of prepaid calling cards and
prepaid calling services:
(1) Any advertisement of the price, rate, or unit value in connection with
the sale of prepaid calling cards or services shall clearly and conspicuously
disclose all of the following:
(A) Any geographic limitation to the advertised price, rate, or unit
value.
( B ) All ancillary charges and the conditions under which each
applies. This disclosure shall be made prominently near the beginning of
the advertisement. In a written advertisement this disclosure shall
appear in table form in a box with the bold label, “Other Charges.” The
amount of each ancillary charge shall be identified in one column and
the conditions under which each applies shall be stated on the same line
in the column immediately to the right of the charge.
(2) The following information shall be legibly printed on the card:
(A) The name of the company.
(B) A toll-free customer service number.
( C ) A toll-free network access number, if required to access
service.
(D) The authorization code, if required to access service.
( E ) The expiration date or policy, if applicable, except where
paragraph (11) applies.
(3) The company shall print legibly on the card or packaging, so that it
may be read without having to open any packaging, and the retail vendor
shall make available clearly and conspicuously in a prominent area
immediately proximate to the point of sale of the prepaid calling card or
prepaid calling services the following information, which shall be current at
the time of printing and for as long as it is displayed:
338
(A) The value of the card and all ancillary charges.
( B) Ancillary charges for international calls to each country for
which the card may be used or, in lieu of disclosing ancillary charges
for each country, the highest ancillary charges for any international calls
applicable on that card and any additional or different prices, rates, or
unit values applicable to international usage of the prepaid calling card
or prepaid calling services.
(C) The minimum charge per call, such as a three-minute minimum
charge, if any.
(D) The definition of the term “unit,” if applicable.
(E) The billing decrement.
(F) The name of the company.
(G) The recharge policy, if any.
(H) The refund policy, if any.
(I) The expiration policy, if any.
( J ) The 24-hour customer service toll-free telephone number
required in paragraph (9).
(4) Before a customer has recharged a card or service, no company
shall provide fewer minutes than those stated, charge more than the rate
stated, or charge more for ancillary services than stated on the card or
packaging, or in an advertisement available to the public at the time the card
or service is purchased.
(5) Service may be recharged by the customer at a rate higher than the
rate at initial purchase or last recharge. However, the customer shall be
informed of any increased rates or charges prior to the customer agreeing to
pay for the recharge.
(6) If a language other than English is used on the card or packaging to
provide dialing instructions to place a call or to contact customer service,
the information required by paragraph (3) shall also be disclosed in that
language in the point of sale disclosure in the manner described in
paragraph (3).
( 7 ) If a language other than English is used in the advertising or
promotion of the card or prepaid calling services or is used on the card or
packaging other than for dialing instructions, the information required by
paragraph (3) shall also be disclosed in that language on the card or
packaging and in the point of sale disclosure in the manner described in
339
paragraph (3).
(8) A company shall provide a voice prompt, immediately after a caller
enters a personal identification number and destination number, that states
the number of minutes for that call if the entire remaining value of the card
or service were consumed in one continuous call to the dialed destination,
substantially in the following form:
“You have (insert number) minutes if used up in this call.”
(9) A company shall establish and maintain a toll-free customer service
telephone number that shall meet the following requirements:
(A) A live operator shall answer incoming calls to the telephone
number 24 hours a day, seven days a week.
(B) The telephone number shall have sufficient capacity and staffing
to accommodate a reasonably anticipated number of calls without
incurring a busy signal or undue wait. The company shall provide
customer service in each language used on a prepaid calling card or its
packaging and in the advertising or promotion of the prepaid calling
card or prepaid calling services.
( C ) The telephone number shall allow consumers to lodge
complaints and obtain information on all of the following:
(i) All rates and ancillary charges.
(ii) The company’s recharge, refund, and expiration policies.
(iii) The balance of use available in the consumer’s account, if
applicable.
( D) A company shall not impose any ancillary charge related to
obtaining customer service, including any charge related to connecting
with the customer service number or waiting to speak to a live operator.
A company offering prepaid cellular telephone services shall be deemed
to be in compliance with the requirements of this paragraph if, when a
request for information is made outside of normal business hours, that
company provides the information requested on the next business day.
(10) A company that issues prepaid calling cards or prepaid calling
services shall provide a refund to any purchaser of a prepaid calling card or
prepaid calling services if the network services associated with that card or
services fail to operate in a commercially reasonable manner. The refund
shall be in an amount not less than the value remaining on the card or in the
form of a replacement card, and shall be provided to the consumer within 30
days from the date of receipt of notification from the consumer that the card
340
has failed to operate in a commercially reasonable manner.
(11) Cards without a specific expiration date or policy printed on the
card, and with a balance of service remaining, shall be considered active
for a minimum of one year from the date of purchase, or if recharged, from
the date of the last recharge.
(12) In the case of prepaid calling cards or services utilized at a pay
telephone, the company may provide voice prompt notification of any
ancillary charges related to pay telephone usage, in lieu of providing notice
of those ancillary charges as required by paragraph (1) and by subparagraph
(A) of paragraph (3), provided that the company provides users of prepaid
calling cards or services with reasonable time to terminate the call after
notification of the ancillary charges related to pay telephone usage without
incurring any charge for the call.
(13) A company shall maintain access numbers with sufficient capacity
to accommodate a reasonably anticipated number of calls without incurring
a busy signal or undue delay.
(14) A company may not impose any ancillary charges that are not
disclosed as required by this section or that exceed the amount disclosed by
the company.
(15) A company may not impose any charges if the consumer is not
connected to the number called. For the purpose of this paragraph, the
customer shall not be considered connected to the number called if the
customer receives a busy signal or the call is unanswered.
(16) The value of the card and the amount of any ancillary charges, that
are required to be disclosed by paragraph (3), shall be expressed in the
same format. If the value of a card is expressed in minutes, the minutes shall
be identified as domestic or international and the identification shall be
printed on the same line or next line as the value of the card in minutes.
(17) No person shall offer or sell any prepaid calling card or prepaid
calling services that do not contain the information required to be disclosed
on the card or packaging as provided in paragraph (3).
(18) A distributor that sells directly to a retail vendor shall provide the
retail vendor with the current information required by paragraph (3) in a
form that may be displayed by the retail vendor as provided in paragraph
(3).
Added Stats 1998 ch 802 § 1 (AB 1994), operative July 1, 1999. Amended Stats 2002 ch
778 § 1 (AB 2244); Stats 2008 ch 739 § 1 (AB 2136), effective January 1, 2009.
341
§ 17539. Legislative Findings Regarding Contests
Involving Solicitations.
The Legislature finds that there is a compelling need for more complete
disclosure of rules and operation of contests in which money or other valuable
consideration may be solicited; that current methods of disclosure are
inadequate and create misunderstandings as to the true requirements for
participation and winning of prizes offered; that certain problems which have
arisen are peculiar to contests; that the provisions of Sections 17539.1 through
17539.3 are necessary to the public welfare and that the terms hereof shall be
interpreted so as to provide maximum disclosure to and fair treatment of
persons who may or do enter such contests.
§ 17539.1. Unfair Practices in Operation of Contests.

(a) The following unfair acts or practices undertaken by, or omissions of,
any person in the operation of any contest are prohibited:
( 1) Failing to clearly and conspicuously disclose, at the time of the
initial contest solicitation, at the time of each precontest promotional
solicitation and each time the payment of money is required to become or to
remain a contestant, the total number of contestants anticipated based on
prior experience and the percentages of contestants correctly solving each
puzzle used in the three most recently completed contests conducted by the
person. If the person has not operated or promoted three contests he shall
disclose for each prior contest if any, the information required by this
section.
(2) Failing to promptly send to each member of the public upon his
request, the actual number and percentage of contestants correctly solving
each puzzle or game in the contest most recently completed.
(3) Misrepresenting in any manner the odds of winning any prize.
(4) Misrepresenting in any manner, the rules, terms, or conditions of
participation in a contest.
( 5 ) Failing to clearly and conspicuously disclose with all contest
puzzles and games and with all promotional puzzles and games all of the
following;
( A ) The maximum number of puzzles or games which may be
necessary to complete the contest and determine winners.
(B) The maximum amount of money, including the maximum cost of
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any postage and handling fees, which a participant may be asked to pay
to win each of the contest prizes then offered.
(C) That future puzzles or games, if any, or tie breakers, if any, will
be significantly more difficult than the initial puzzle.
(D) The date or dates on or before which the contest will terminate
and upon which all prizes will be awarded.
(E) The method of determining prizewinners if a tie remains after the
last tie breaker puzzle is completed.
(F) All rules, regulations, terms, and conditions of the contest.
(6) Failing to clearly and conspicuously disclose the exact nature and
approximate value of the prizes when offered.
( 7) Failing to award and distribute all prizes of the value and type
represented.
( 8 ) Representing directly or by implication that the number of
participants has been significantly limited, or that any particular person has
been selected to win a prize unless such is the fact.
(9) Representing directly or by implication that any particular person
has won any money, prize, thing, or other value in a contest unless there has
been a real contest in which a meaningful percentage, which shall be at least
a majority, of the participants in such contests have failed to win a prize,
money, thing, or other value.
(10) Representing directly or by implication that any particular person
has won any money, prize, thing, or other value without disclosing the exact
nature and approximate value thereof.
(11) Using the word “lucky” to describe any number, ticket, coupon,
symbol, or other entry, or representing in any other manner directly or by
implication that any number, ticket, coupon, symbol, or other entry confers
or will confer an advantage upon the recipient that other recipients will not
have, that the recipient is more likely to win a prize than are others, or that
the number, ticket, coupon, symbol or other entry has some value that other
entries do not have.
(12) Failing to obtain the express written or oral consent of individuals
before their names are used for a promotional purpose in connection with a
mailing to a third person.
(13) Using or distributing simulated checks, currency, or any simulated
item of value unless there is clearly and conspicuously printed thereon the
343
words: SPECIMEN—NONNEGOTIABLE.
(14) Representing, directly or by implication, orally or in writing, that
any tie breaker puzzle may be entered upon the payment of money qualifying
the contestant for an extra cash or any other type prize or prizes unless:
(A) It is clearly and conspicuously disclosed that the payments are
optional and that contestants are not required to pay money, except for
reasonable postage and handling fees, to play for an extra cash or any
other type of prize or prizes; and
(B) Contestants are clearly and conspicuously given the opportunity
to indicate they wish to enter such phase of the contest for free, except
for reasonable postage and handling fees the amount of which shall not
exceed one dollar and fifty cents ($1.50) plus the actual cost of postage
and which shall be clearly and conspicuously disclosed at the time of
the initial contest solicitation and each time thereafter that the payment
of such fees is required. The contestants’ opportunity to indicate they
wish to enter for free shall be in immediate conjunction with and in a
like manner as the contestants’ opportunity to indicate they wish to play
for an extra prize.
(b) This section does not apply to an advertising plan or program that is
regulated by, and complies with, the requirements of Section 17537.1.
§ 17539.15. Representations by Solicitation Materials

Containing Sweepstakes Entries.
( a ) Solicitation materials containing sweepstakes entry materials or
solicitation materials selling information regarding sweepstakes shall not
represent, taking into account the context in which the representation is made,
including, without limitation, emphasis, print, size, color, location, and
presentation of the representation and any qualifying language, that a person is a
winner or has already won a prize or any particular prize unless that person has
in fact won a prize or any particular prize. If the representation is made on or
visible through the mailing envelope containing the sweepstakes materials, the
context in which the representation is to be considered, including any qualifying
language, shall be limited to what appears on, appears from, or is visible
through, the mailing envelope.
( b ) Solicitation materials containing sweepstakes entry materials or
solicitation materials selling information regarding sweepstakes shall include a
clear and conspicuous statement of the no-purchase-or-payment-necessary
message, in readily understandable terms, in the official rules included in those
344
solicitation materials and, if the official rules do not appear thereon, on the
entry-order device included in those solicitation materials. The no-purchase-or-
payment-necessary message included in the official rules shall be set out in a
separate paragraph in the official rules and be printed in capital letters in
contrasting typeface not smaller than the largest typeface used in the text of the
official rules.
( c ) Sweepstakes entries not accompanied by an order for products or
services shall not be subjected to any disability or disadvantage in the winner
selection process to which an entry accompanied by an order for products or
services would not be subject.
( d ) Solicitation materials containing sweepstakes entry materials or
represent that an entry in the promotional sweepstakes accompanied by an order
for products or services will be eligible to receive additional prizes or be more
likely to win than an entry not accompanied by an order for products or services
or that an entry not accompanied by an order for products or services will have
a reduced chance of winning a prize in the promotional sweepstakes.
( e ) Solicitation materials containing sweepstakes entry materials or
represent that a person has been specially selected in connection with a
sweepstakes unless it is true.
( f ) Solicitation materials containing sweepstakes entry materials or
represent that the person receiving the solicitation has received any special
treatment or personal attention from the sweepstakes sponsor or any officer,
employee, or agent of the sweepstakes sponsor unless the representation of
special treatment or personal attention is true.
( g ) Solicitation materials containing sweepstakes entry materials or
represent that a person is being notified a second or final time of the opportunity
to receive or compete for a prize, unless that representation is true.
( h ) Solicitation materials containing sweepstakes entry materials or
represent that a prize notice is urgent or otherwise convey an impression of
urgency by use of description, phrasing on a mailing envelope, or similar
method, unless there is a limited time period in which the recipient must take
some action to claim, or be eligible to receive, a prize, and the date by which
that action is required is clearly and conspicuously disclosed in the body of the
solicitation materials.
345
( i ) Solicitation materials containing sweepstakes entry materials or
solicitation materials selling information regarding sweepstakes shall not do
(1) Simulate or falsely represent that it is a document authorized, issued,
or approved by any court, official, or agency of the United States or any
state, or by any lawyer, law firm, or insurance or brokerage company.
( 2 ) Create a false impression as to its source, authorization, or
approval.
(j) The official rules for a sweepstakes shall disclose information about the
date or dates the final winner or winners will be determined.
(k) For purposes of this section:
(1) “No-purchase-or-payment-necessary message” means the following
statement or a statement substantially similar to the following statement:
“No purchase or payment of any kind is necessary to enter or win this
sweepstakes.”
( 2 ) “Official rules” means the formal printed statement, however
designated, of the rules for the promotional sweepstakes appearing in the
solicitation materials. The official rules shall be prominently identified and
all references thereto in any solicitation materials shall consistently use the
designation for the official rules that appears in those materials. Each
sweepstakes solicitation shall contain a copy of the official rules.
( 3 ) “Specially selected” means a representation that a person is a
winner, a finalist, in first place or tied for first place, or otherwise among a
limited group of persons with an enhanced likelihood of receiving a prize.
(l)
( 1) A sweepstakes sponsor may not charge a fee as a condition of
receiving a monetary distribution or obtaining information about a prize or
sweepstakes.
(2)
(A) For the purposes of this section, “sweepstakes sponsor” means
(i) A person or entity that operates or administers a sweepstakes
as defined in paragraph (12) of subdivision (a) of Section 17539.5.
(ii) A person or entity that offers, by means of a notice, a prize to
another person in conjunction with any real or purported
sweepstakes that requires or allows, or creates the impression of
346
requiring or allowing, the person to purchase any goods or services,
or pay any money, as a condition of receiving, or in conjunction with
allowing the person to receive, use, or obtain a prize or information
about a prize.
(B) A person or entity that merely furnishes a prize in connection
with a sweepstakes that is operated or administered by another person
or entity shall not be deemed to be a sweepstakes sponsor.
§ 17539.2. Duties of Person Conducting Contest.

Every person who conducts any contest shall:
(a) Clearly and conspicuously disclose on each entry blank the deadline
for submission of that entry.
(b) Refund all money or other consideration to contestants requesting
such refund in writing within one year of payment and who are unable to
participate in any aspect of any contest through no fault of the contestant.
( c ) At the conclusion of the contest send to all entrants upon their
request the names of all winners, the prize or prizes won by each, the
correct solution to each puzzle and the winning solutions to each puzzle (if
different from the correct solution).
(d) Maintain for no less than two years after all prizes are awarded all
the following:
(1) Copies of all contest solicitations and puzzles.
(2) All puzzles and correspondence sent by a contestant or copies or
records disclosing details thereof and records of replies thereto.
(3) Adequate records which disclose the names and addresses of all
contestants, the approximate date each contestant was sent each puzzle
or game, the number of prizes awarded, the method of selecting winners,
the names and addresses of the winners, and facts upon which all
representations or disclosures made in connection with the contest are
based and from which the validity of the representations or disclosures
can be determined.
§ 17539.3. Applicability and Construction of §§ 17539.1

and 17539.2; “Person” and “Contest” Defined.
347
(a) Sections 17539.1 and 17539.2 do not apply to a game conducted to
promote the sale of an employer’s product or service by his or her employees,
when those employees are the sole eligible participants.
(b) As used in Sections 17539.1 and 17539.2, “person” includes a firm,
corporation, or association, but does not include any charitable trust,
corporation, or other organization exempted from taxation under Section 2370ld
of the Revenue and Taxation Code or Section 501(c) of the Internal Revenue
Code.
(c) Nothing in Sections 17539 to 17539.2, inclusive, shall be construed to
permit any contest or any series of contests or any act or omission in connection
therewith that is prohibited by any other provision of law.
(d) Nothing in Section 17539.1 or 17539.2 shall be construed to hold any
newspaper publisher or radio or television broadcaster liable for publishing or
broadcasting any advertisement relating to a contest, unless that publisher or
broadcaster is the person conducting or holding that contest.
(e) As used in Sections 17539 to 17539.2, inclusive, “contest” includes any
game, contest, puzzle, scheme, or plan that holds out or offers to prospective
participants the opportunity to receive or compete for gifts, prizes, or gratuities
as determined by skill or any combination of chance and skill and that is, or in
whole or in part may be, conditioned upon the payment of consideration.
(f) Sections 17539 to 17539.2, inclusive, do not apply to the mailing or
otherwise sending of an application for admission, or a notification or token
evidencing the right of admission, to a contest, performance, sporting event, or
tournament of skill, speed, power, or endurance between, or the operation of the
contest, performance, sporting event, or tournament by, participants physically
present at that contest, performance, sporting event, or tournament.
Added Stats 1974 ch 1152 § 4. Amended Stats 2003 ch 185 § 1 (AB 1743); Stats 2006
ch 538 § 25 (SB 1852), effective January 1, 2007.
§ 17539.35. Contests Conditioned on Minimum Number

of Entries or Participants.
No person shall advertise, offer, or operate any contest, as defined in
subdivision (e) of Section 17539.3, in which any prize, including any money,
property, service, or other matter of value, may be awarded or transferred if the
opportunity to win that prize is conditioned on a minimum number of entries or
contest participants.
Added Stats 1994 ch 1074 § 1 (SB 861).
348
§ 17539.4. Advertisement for Loans Utilizing Real
Property as Collateral.
No person shall place an advertisement disseminated primarily in this state
for a loan which utilizes real property as collateral unless there is disclosed
within the printed text of that advertisement, or the oral text in the case of a
radio or television advertisement, the license under which the loan would be
made or arranged, the state regulatory entity supervising that type of loan
transaction or, in the case of unlicensed lending activity, a statement that the
loan is being made or arranged by an unlicensed party who is not operating
under the regulatory supervision of a state agency.
This section shall not apply to any bank or bank holding company, or to any
savings association or federal association as defined by Section 5102 of the
Financial Code, or to any industrial loan company or credit union, or to any
subsidiary or affiliate of these entities if the subsidiary or affiliate is not
separately licensed.
Added Stats 1991 ch 320 § 2 (AB 360). Amended Stats 1992 ch 864 § 2 (AB 2639).
§ 17539.5. Unlawful Acts Relating to Sale or

Encouragement of Use of Information-Access
Service; Disclosures; Sweepstakes; Application of
Section.
(a) For purposes of this section and Sections 17539.55 and 17539.6:
(1) “Broadcast” means the utilization of radio, television, home videos,
movie screens, telephones, or other medium, including the Internet, that does
not automatically provide the prospective consumer with a printed or
written document he or she can read at leisure.
(2) “Caller” means a telephone user or end user who calls or may call
an information-access service or who receives a telephonic solicitation that
results in the recipient being connected to an information-access service.
( 3 ) “Carrier” means any regional telephone operating company,
interexchange carrier, or local exchange telephone company that provides
telecommunications transmission services.
( 4 ) “Incentive” means any item or service of value, however
denominated, including, but not limited to, any prize, award, gift, or money,
or any coupon that can be used in whole or in part to obtain a product or
service.
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(5) “Information provider” means a person who advertises or sells an
information-access service and on whose behalf charges are billed.
(6) “Information-access service” means any telecommunications service
that permits individuals to access a telephone number, and for which the
caller is assessed, by virtue of placing or completing the call, a charge that
is greater than, or in addition to, the charge for the transmission of the call.
Information-access service includes, but is not limited to, telephone
numbers with the prefix 900 or 976.
( 7 ) “900 number” means any prefixed telephone number used for
information-access service and includes, but is not limited to, telephone
numbers with the prefix 900 or 976.
(8) “Prize” means any item of value given to winners in a sweepstakes
who have been selected on the basis of lot or chance.
(9) “Program” means the audio message that the caller hears or receives
upon placing or receiving a call and being connected to an information-
access service.
(10) “Sell an information service” means to attempt to cause a caller to
act in a manner that causes that caller to be charged for utilizing an
information-access service.
(11) “Solicitation” includes all forms of solicitation for information-
access services, including, but not limited to, mailings, advertisements in
newspapers and magazines, advertisements broadcast by radio or
television, advertisements contained in home videos or appearing on movie
screens, telephone, and advertisements transmitted over the Internet.
“Solicitation” does not include simple listings in telephone directories
provided those listings are not accompanied by any advertising text.
( 1 2 ) “Sweepstakes” means any procedure for the distribution of
anything of value by lot or by chance that is not unlawful under other
provisions of law including, but not limited to, the provisions of Section
320 of the Penal Code. Nothing contained in this section shall be deemed to
render lawful any activity that otherwise would violate Section 320 of the
Penal Code.
(b) It is unlawful for any person to engage in any of the following acts in
order to encourage any caller to utilize an information-access service:
(1) Soliciting callers by use of an automatic dialing device or a live or
recorded outbound telephone message.
( 2) Utilizing signals or tones provided directly or indirectly by the
350
information provider to access the information-access service.
(3) Requiring callers to call more than one 900 number or to require
calling the same 900 number more than one time in order to receive goods
or services represented in the initial solicitation.
(4) Utilizing a telephone number other than a 900 number from which a
caller can be automatically connected to the information-access service.
( 5 ) Soliciting callers to call a telephone number other than a 900
number, including, but not limited to, an 800 telephone number, when the
caller who calls that other number will be referred to a 900 number unless
all solicitations for the initial information-access program clearly and
conspicuously disclose that a referral will be made and the cost to the caller
for calling the 900 number to which the caller will be referred.
( 6 ) Soliciting callers to call a number other than a 900 number,
including, but not limited to, an 800 telephone number, when the caller who
calls that number will be asked to accept one or more collect calls unless
all solicitations clearly and conspicuously disclose that the caller will be
asked to accept one or more collect calls and the cost to the caller for
accepting the collect calls. The cost shall be described as cost per minute
and cost per hour.
( 7) Referring a caller from one 900 number to another 900 number
unless all solicitations for the initial information-access program clearly
and conspicuously disclose that a referral will be made and the cost to the
caller for calling the 900 number to which the caller will be referred.
(8) Advertising that the information-access service is free.
(9) Using any printing style, graphic, layout, text, color, or format which
states or implies that the solicitation originates from, or was issued by or on
behalf of a governmental agency, a public utility, a nonprofit organization,
an insurance company, a credit reporting agency, a collection company, or a
law firm unless the same is true.
(c) It is unlawful for any person to solicit or sell an information-access
service unless the following information is clearly and conspicuously disclosed
in all solicitations:
(1) An accurate description of the information-access service.
( 2 ) The name, address, and non-900 telephone number of the
information provider.
(3) The cost of the call, which shall be disclosed as follows:
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(A) If the call is billed at a fixed rate, the total cost of the call.
( B) If the call is billed on a usage-sensitive basis, the cost per
minute or other unit of time, and including:
(i) In broadcast solicitations, the average cost of the call.
(ii) In print solicitations, the average cost or length of the call,
except that print solicitations directed to persons in this state shall
disclose the average cost of the call.
( C ) Solicitations in which the length of the program cannot
reasonably be determined because the length of the program depends
upon the skill of, or the selections or responses made by, the caller,
shall be exempt from the cost disclosure provisions of this paragraph.
(D) Solicitations that are oral shall include a voice announcement of
the cost of the call in clear and understandable language that is clearly
audible and articulated at a volume equal to that used to announce the
900 number. The cost of the call shall be stated immediately prior to or
immediately after the 900 number is stated.
(E) Solicitations that are broadcast visually shall include, in clear,
visible, easily readable, and conspicuously presented letters and
numbers, set against a contrasting background, the cost of calling the 900
number. The visual disclosure of the cost of the call shall be displayed
directly above, below, or adjacent to the number to be called whenever
the number is displayed in the commercial. The visual disclosure of the
cost of the call shall be a distinct disclosure and shall not be combined
in the same paragraph with any other disclosure required to be made
pursuant to this section. The lettering of the visual disclosure shall be no
less than 18 scan lines high and shall be displayed for as long as the
number is displayed. Broadcast solicitations shall also include a voice
announcement of the cost of the call in clear and understandable
language that is clearly audible and articulated at a volume equal to that
used to announce the 900 number. The cost of the call shall be stated
immediately prior to or after the 900 number is stated.
(F) Solicitations that appear in print shall include, in clear, visible,
easily readable, and conspicuously presented letters and numbers, the
cost of calling the 900 number. The printed disclosure of the cost of the
call shall be displayed directly above, below, or adjacent to the number.
The lettering of the cost disclosure shall be in no less than 10-point type.
( 4) If the information-access service is aimed at or likely to be of
interest to minors, solicitations that appear in print shall contain a statement,
in at least the same size print as that used to disclose the 900 number, that
352
persons under the age of 18 years should obtain parental consent before
calling. If the solicitation is through a broadcast, this statement shall be of
the same audibility as that used to disclose the 900 number.
(d) It shall be unlawful for any person to solicit or sell an information-
access service in any manner related to a sweepstakes.
(e) Solicitations made to persons in this state offering the opportunity to
participate in a sweepstakes shall, with respect to each prize offered, set forth
clearly, conspicuously, and in easily readable letters the odds of receiving that
prize, described in whole Arabic numerals in a format such as: “1 chance in
100,000” or “1:100,000.” If the odds depend upon the number of entries and the
number of persons solicited is controlled by the sponsor of the promotion, the
solicitation shall set forth the reasonable expectation of entries. If the odds
depend upon the number of entries received and the number of persons solicited
is not controlled by the sponsor of the sweepstakes, a statement to the effect that
the odds depend on the number of entries received shall be sufficient. If more
than one prize is offered, the odds shall be separately stated for each prize. The
disclosure required to be made pursuant to this subdivision shall be made
immediately adjacent to the first identification of the prize to which it relates or
in a separate section entitled “Consumer Disclosure” or “Official Rules.” These
titles shall be printed in no less than 10-point boldface type. The consumer
disclosure section shall be clearly and conspicuously disclosed in the
solicitation. There shall be a statement referring the recipient of the solicitation
to the consumer disclosure section in the main text of the solicitation in close
proximity to the description of the prizes, and the odds shall be disclosed within
the top 25 percent of the consumer disclosure section. If the consumer
disclosure section does not appear on the same page as the statement referring
the recipient of the solicitation to this section, the statement shall indicate where
the consumer disclosure section is located. If the odds appear in the section
entitled “Consumer Disclosure” or “Official Rules,” there shall be a clear and
conspicuous statement in the main text of the solicitation in close proximity to
the description of the prizes that the odds to the recipient of obtaining the prize
or prizes will be found elsewhere, and the statement shall set forth where they
will be found. It is not a violation of this section to reference the official rules
and the odds in the same statement as long as the statement referencing the
official rules and the odds is in the main text of the solicitation in close
proximity to the description of the prizes. For example, a statement such as:
“See official rules (on (reference to location of rules if not on same page)) for
odds and other details” or a similar statement meets the requirements of this
provision. This provision shall not apply to broadcast solicitations for
sweepstakes in which the winners will be selected in a random drawing in
which the odds depend on the number of entries received, provided that those
solicitations shall disclose where the official rules are available and the official
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rules shall set forth the odds of winning in accordance with this subdivision.
(f) If any incentive is offered in a solicitation for an information-access
service, the solicitation shall clearly and conspicuously disclose all restrictions,
qualifications, and deadlines that must be complied with in order to obtain the
incentive being offered.
( g) No person soliciting callers for an information-access service shall
represent directly or by implication that the person being solicited is part of a
significantly limited group selected to receive an incentive, unless that is true
and the number of recipients who will be receiving the solicitation is clearly
and conspicuously set forth in the solicitation.
(h) It is unlawful for any person to solicit or sell an information-access
service to any person in the following manner:
(1) The solicitation offers to persons in this state who respond to the
solicitation by calling a 900 number any incentive that:
(A) Requires the recipient to purchase goods or services from the
information provider in order to utilize the incentive. However, this
subparagraph does not apply to offers where the incentive is a “cents-
off” coupon that is usable only for the purchase of the offeror’s own
brand name product or products, the total value of the “cents-off”
coupon offered is clearly and conspicuously disclosed in the offer, the
total value of the “cents-off” coupon does not exceed five dollars ($5),
the “cents-off” coupon is to be utilized to reduce the price of those
products at retail stores in the recipient’s area, and at least 60 percent of
the revenue per month of the offeror is derived from the sale of the
product or products being purchased without the use of the “cents-off”
coupons.
(B) Requires the recipient to purchase goods or services from any
third party in order to utilize the incentive unless:
(i) The fact that a purchase or payment is required in order to
utilize the incentive is disclosed in the solicitation.
(ii) A representative sample of the establishments at which the
incentive may be redeemed is disclosed in the solicitation.
(iii) If the incentive entitles the recipient to save money on the
purchase of goods or services, the incentive is described as a cents-
off, discount coupon, or similar term that clearly indicates that it is
redeemable only for savings on purchases of goods or services.
(2) The solicitation states or implies that the caller is likely to receive
one of the prizes offered, by representing in the solicitation that other named
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persons have already won the other prizes being offered in the solicitation
and that the recipient of the solicitation is therefore likely to receive the
prize that has not been won by the other persons named in the solicitation,
unless the recipient’s odds of receiving the remaining prize are clearly and
conspicuously disclosed in the solicitation in close proximity to the list of
the other named persons.
(i) Nothing contained in this section shall be deemed to render lawful any
activity that otherwise would violate Section 17537.
(j) No information-access service shall offer a game of skill in which the
cost of the call is billed on a usage-sensitive basis and in which answers to
multiple choice questions of increasing difficulty are required in order to win,
unless the solicitation clearly and conspicuously discloses the percentage of
contestants anticipated to answer all questions correctly based on prior
experience or, if the game is being operated for the first time, based on a good
faith estimate.
(k) This section does not apply to a regional telephone operating company,
interexchange carrier, or local telephone company operating in those capacities,
that in good faith telecommunicates an information-access program without
knowledge that the program or related advertising violates any provision of this
section, Section 17539.55, or Section 17539.6.
(l) Neither this section, Section 17539.55, nor Section 17539.6 applies to
the California State Lottery.
Stats 1995 ch 91 § 7 (SB 975); Stats 1998 ch 354 § 1 (SB 1476), ch 599 § 16 (SB 597).
§ 17539.55. Use of 900 Number for Sweepstakes;

Registration; Fee.
(a) It shall be unlawful to operate a sweepstakes in this state through the use
of a 900 number, unless the information provider registers with the Department
of Justice as provided in this section within 10 days after causing any
advertisement for the sweepstakes to be directed to any person in this state.
(b) The registration shall include the following information:
(1) Each 900 number to be used in the sweepstakes.
( 2 ) The name and address of the information provider including
corporate identity, if any, and the name and address for the information
provider’s agent for service of process within the state.
(3) A copy of the information provider’s audio text, prerecorded, or live
355
operator scripts.
(4) A copy of the official rules for the sweepstakes.
(5) For television, video, or any on-screen advertisements, a copy of the
storyboard and video recording.
(6) For radio advertisements, a copy of the script and audio recording.
(7) For print or electronic form transmitted over the Internet, a copy of
all advertisements.
(8) For direct mail solicitations, a copy of all principal solicitations.
(9) For telephone solicitations, a copy of the script.
(10) The names of the carriers that the information provider plans to
utilize to carry the 900 number calls.
(c) The information provider shall pay an annual registration fee of fifty
dollars ($50) for each 900 number used for sweepstakes purposes.
( d ) It shall be unlawful for any information provider that operates a
sweepstakes to make reference, in any contact with the public, to the fact that the
information provider is registered with the Department of Justice, as required
by this section, or in any other manner imply that that registration represents
approval of the sweepstakes by the Department of Justice.
Added Stats 1992 ch. 944 § 2 (AB 2746). Amended Stats 1993 ch. 628 § 2 (AB 851);
Stats 1998 ch. 599 § 17 (SB 597); Stats 2009 ch. 88 § 5 (AB 176), effective January 1,
2010.
§ 17539.6. Language of Advertisement Containing 900

Number.
Any broadcast or print advertisement or notice that contains a 900 number
shall be written or spoken in the same language as the language used in a
recorded message or by a live operator of the 900 number call.
Added Stats 1992 ch 944 § 3 (AB 2746).
CHAPTER 5
FICTITIOUS BUSINESS NAMES

[Added Stats 1970 ch 618 § 4, operative July 1, 1971.]
356
§ 17900. (First of Two; Inoperative January 1, 2014)
“Fictitious Business Name.”
(a)
( 1 ) The purpose of this section is to protect those dealing with
individuals or partnerships doing business under fictitious names, and it is
not intended to confer right or advantage on individuals or firms that fail to
comply with the law. The filing of a fictitious business name certificate is
designed to make available to the public, the identities of persons doing
business under the fictitious name.
(2) Nothing in this section shall be construed to impair or impede the
rebuttable presumption described in Section 14411.
357
(b) As used in this chapter, “fictitious business name” means:
(1) In the case of an individual, a name that does not include the surname
of the individual or a name that suggests the existence of additional owners,
as described in subdivision (c).
(2) In the case of a partnership or other association of persons, other
than a limited partnership that has filed a certificate of limited partnership
with the California Secretary of State pursuant to Section 15621 or
15902.01 of the Corporations Code, a foreign limited partnership that has
filed an application for registration with the California Secretary of State
pursuant to Section 15692 or 15909.02 of the Corporations Code, a
registered limited liability partnership that has filed a registration pursuant
to Section 15049 or 16953 of the Corporations Code, or a foreign limited
liability partnership that has filed an application for registration pursuant to
Section 15055 or 16959 of the Corporations Code, a name that does not
include the surname of each general partner or a name that suggests the
existence of additional owners, as described in subdivision (c) and in
Section 17901.
(3) In the case of a domestic or foreign corporation, any name other than
the corporate name stated in its articles of incorporation filed with the
California Secretary of State, in accordance with subdivision (a) of Section
17910.5.
(4) In the case of a limited partnership that has filed a certificate of
limited partnership with the California Secretary of State pursuant to
Section 15621 or 15902.01 of the Corporations Code and in the case of a
foreign limited partnership that has filed an application for registration with
the California Secretary of State pursuant to Section 15692 or 15902.02 of
the Corporations Code, any name other than the name of the limited
partnership as on file with the California Secretary of State.
(5) In the case of a limited liability company, any name other than the
name stated in its articles of organization and in the case of a foreign limited
liability company that has filed an application for registration with the
California Secretary of State pursuant to Section 17451 of the Corporations
Code, any name other than the name of the limited liability company as on
file with the California Secretary of State, in accordance with subdivision
(b) of Section 17910.5.
( c ) A name that suggests the existence of additional owners within the
meaning of subdivision (b) is one that includes such words as “Company,” “&
Company,” “& Son,” “& Sons,” “& Associates,” “Brothers,” and the like, but
not words that merely describe the business being conducted.
Added Stats 1970 ch 618 § 4, operative July 1, 1971. Amended Stats 1984 ch 103 § 15,
358
effective April 30, 1984, operative July 1, 1984; Stats 1994 ch 1200 § 2 (SB 469), effective
September 30, 1994; Stats 1995 ch 679 § 1 (SB 513), effective October 10, 1995; Stats
1996 ch 1003 § 1.1 (AB 583); Stats 2006 ch 495 § 3 (AB 339), effective January 1, 2007;
Stats 2007 ch 716 § 1 (AB 1670), effective January 1, 2008.
2013 Amendment:
Substituted “a married couple, by either party to the marriage” for “husband and wife, by
the husband or wife” in subd (b).

“Fictitious Business Name.”
(a)
( 1 ) The purpose of this section is to protect those dealing with
individuals or partnerships doing business under fictitious names, and it is
not intended to confer any right or advantage on individuals or firms that fail
to comply with the law. The filing of a fictitious business name certificate is
designed to make available to the public the identities of persons doing
business under the fictitious name.
(2) Nothing in this section shall be construed to impair or impede the
rebuttable presumption described in Section 14411.
(b) As used in this chapter, “fictitious business name” means:
(1) In the case of an individual, a name that does not include the surname
of the individual or a name that suggests the existence of additional owners,
as described in subdivision (c).
(2) In the case of a partnership or other association of persons, other
than a limited partnership that has filed a certificate of limited partnership
with the California Secretary of State pursuant to Section 15621 or
15902.01 of the Corporations Code, a foreign limited partnership that has
filed an application for registration with the California Secretary of State
pursuant to Section 15692 or 15909.02 of the Corporations Code, a
registered limited liability partnership that has filed a registration pursuant
to Section 15049 or 16953 of the Corporations Code, or a foreign limited
liability partnership that has filed an application for registration pursuant to
Section 15055 or 16959 of the Corporations Code, a name that does not
include the surname of each general partner or a name that suggests the
existence of additional owners, as described in subdivision (c) and in
Section 17901.
(3) In the case of a domestic or foreign corporation, any name other than
359
the corporate name stated in its articles of incorporation filed with the
California Secretary of State, in accordance with subdivision (a) of Section
17910.5.
(4) In the case of a limited partnership that has filed a certificate of
limited partnership with the California Secretary of State pursuant to
Section 15621 or 15902.01 of the Corporations Code and in the case of a
foreign limited partnership that has filed an application for registration with
the California Secretary of State pursuant to Section 15692 or 15902.02 of
the Corporations Code, any name other than the name of the limited
partnership as on file with the California Secretary of State.
(5) In the case of a limited liability company, any name other than the
name stated in its articles of organization and in the case of a foreign limited
liability company that has filed an application for registration with the
California Secretary of State pursuant to Section 17451 17708.02 of the
Corporations Code, any name other than the name of the limited liability
company as on file with the California Secretary of State, in accordance
with subdivision (b) of Section 17910.5.
( c ) A name that suggests the existence of additional owners within the
meaning of subdivision (b) is one that includes such words as “Company,” “&
Company,” “& Son,” “& Sons,” “& Associates,” “Brothers,” and the like, but
not words that merely describe the business being conducted.
effective April 30, 1984, operative July 1, 1984; Stats 1994 ch 1200 § 2 (SB 469), effective
September 30, 1994; Stats 1995 ch 679 § 1 (SB 513), effective October 10, 1995; Stats
1996 ch 1003 § 1.1 (AB 583); Stats 2006 ch 495 § 3 (AB 339), effective January 1, 2007;
Stats 2007 ch 716 § 1 (AB 1670), effective January 1, 2008; Stats 2012 ch 419 § 2 (SB
323), effective January 1, 2013, operative January 1, 2014.
Annotations
Cases
Opp v. St. Paul Fire & Marine Ins. Co. , 154 Cal. App. 4th 71, 64 Cal. Rptr. 3d 260
(2007). Opp was president of a corporation. On behalf of the corporation, he executed a
construction subcontract. The corporation did not have a contractor’s license, but Opp as an
individual was a licensed contractor, so he wrote his individual contractor’s license on the
contract. When the corporation sued for breach of contract, its claim was defeated because
the corporation had no license. Opp then amended the complaint to allege that he as an
individual was suing under the corporate name as his fictitious name. The court held that the
corporation was not a fictitious name, the corporation made the contract, not Opp as an
individual, and therefore he had no standing to sue.
360
§ 17901. Definition of “General Partner.”
As used in this chapter, “general partner” means:
(a) In the case of a partnership, a general partner.
(b) In the case of an unincorporated association other than a partnership,
a person interested in such business whose liability with respect to the
business is substantially the same as that of a general partner.
Leg.H. 1970 ch. 618, operative July 1, 1971.
§ 17901.5. Definition of “Manager.”

As used in this chapter, “manager” means a manager of a limited liability
company.
Leg.H. 1994 ch. 1200, effective September 30, 1994.

As used in this chapter, “person” includes individuals, limited liability
companies, partnerships and other associations, and corporations.
Leg.H. 1970 ch. 618, operative July 1, 1971, 1994 ch. 1200, effective September 30,
1994.
§ 17903. “Registrant.”
As used in this chapter, “registrant” means a person or entity who is filing
or has filed a fictitious business name statement, and who is the legal owner of
the business.
Added Stats 1970 ch 618 § 4, operative July 1, 1971. Amended Stats 2007 ch 716 § 2
(AB 1670), effective January 1, 2008.
§ 17910. Time for Filing Statement.

Every person who regularly transacts business in this state for profit under a
fictitious business name shall do all of the following:
(a) File a fictitious business name statement in accordance with this
chapter not later than 40 days from the time the registrant commences to
transact such business.
(b) File a new statement after any change in the facts, in accordance
with subdivision (b) of Section 17920.
( c ) File a new statement when refiling a fictitious business name
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statement.
Added Stats 1970 ch 618 § 4, operative July 1, 1971. Amended Stats 1979 ch 373 § 36;
Stats 2007 ch 716 § 3 (AB 1670), effective January 1, 2008.
§ 17910.5. Use of Corporation Designation by

Noncorporation Prohibited.
( a ) No person shall adopt any fictitious business name which includes
“Corporation,” “Corp.,” “Incorporated,” or “Inc.” unless that person is a
corporation organized pursuant to the laws of this state or some other
jurisdiction.
( b ) No person shall adopt any fictitious business name that includes
“Limited Liability Company” or “LLC” or “LC” unless that person is a limited
liability company organized pursuant to the laws of this state or some other
jurisdiction. A person is not prohibited from using the complete words
“Limited” or “Company” or their abbreviations in the person’s business name
as long as that use does not imply that the person is a limited liability company.
( c ) A county clerk shall not accept a fictitious business name statement
which would be in violation of this section.
Leg.H. 1979 ch. 756, 1994 ch. 1200, effective September 30, 1994, 2001 ch. 728.
§ 17911. Nonprofit Corporations.

This chapter does not apply to a nonprofit corporation or association,
including, but not limited to, organizations such as churches, labor unions,
fraternal and charitable organizations, foundations, and similar organizations.
§ 17912. Real Estate Investment Trusts Not Subject to

Chapter.
This chapter does not apply to a real estate investment trust as defined in
Section 23000 of the Corporations Code that has a statement on file, pursuant to
Section 18200 of the Corporations Code, designating an agent for service of
process or has qualified to do business under Chapter 21 (commencing with
Section 2100) of Division 1 of the Corporations Code.
Leg.H. 1970 ch. 618 § 4, operative July 1, 1971, 1975 ch. 682 § 1, operative January 1,
1977, 1977 ch. 235 § 1, 2004 ch. 178 (SB 1746).
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§ 17913. (First of Two; Repealed January 1, 2014)
Fictitious Business Name Statement; Form.
( a ) The fictitious business name statement shall contain all of the
information required by this subdivision and shall be substantially in the
following form:
FICTITIOUS BUSINESS NAME STATEMENT

The following person (persons) is (are) doing business as
*________________
at **________________:
***________________
________________
________________
________________
________________
This business is conducted by ****________________
The registrant commenced to transact business under the fictitious business
name or names listed above on
*****________________
I declare that all information in this statement is true and correct. (A registrant
who declares as true information which he or she knows to be false is guilty of a
crime.) crime).
Signed ________________
Statement filed with the County Clerk of ________________ County on
________________
NOTICE—IN ACCORDANCE WITH SUBDIVISION (a) OF SECTION
17920, A FICTITIOUS NAME STATEMENT GENERALLY EXPIRES AT
THE END OF FIVE YEARS FROM THE DATE ON WHICH IT WAS FILED
IN THE OFFICE OF THE COUNTY CLERK, EXCEPT, AS PROVIDED IN
SUBDIVISION (b) OF SECTION 17920, WHERE IT EXPIRES 40 DAYS
AFTER ANY CHANGE IN THE FACTS SET FORTH IN THE STATEMENT
PURSUANT TO SECTION 17913 OTHER THAN A CHANGE IN THE
RESIDENCE ADDRESS OF A REGISTERED OWNER. A NEW FICTITIOUS
BUSINESS NAME STATEMENT MUST BE FILED BEFORE THE
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EXPIRATION.
THE FILING OF THIS STATEMENT DOES NOT OF ITSELF AUTHORIZE
THE USE IN THIS STATE OF A FICTITIOUS BUSINESS NAME IN
VIOLATION OF THE RIGHTS OF ANOTHER UNDER FEDERAL, STATE,
OR COMMON LAW (SEE SECTION 14411 ET SEQ., BUSINESS AND
PROFESSIONS CODE).
(b) The statement shall contain the following information set forth in the
manner indicated in the form provided by subdivision (a):
( 1 ) Where the asterisk (*) appears in the form, insert the fictitious
business name or names. Only those businesses operated at the same
address and under the same ownership may be listed on one statement.
(2) Where the two asterisks (**) appear in the form: If the registrant has
a place of business in this state, insert the street address, and county, of his
or her principal place of business in this state. If the registrant has no place
of business in this state, insert the street address, and county, of his or her
principal place of business outside this state.
(3) Where the three asterisks (***) appear in the form: If the registrant is
an individual, insert his or her full name and residence address. If the
registrants are husband and wife, a married couple, insert the full name
and residence address of both the husband and the wife. parties to the
marriage. If the registrant is a general partnership, copartnership, joint
venture, limited liability partnership, or unincorporated association other
than a partnership, insert the full name and residence address of each
general partner. If the registrant is a limited partnership, insert the full name
and residence address of each general partner. If the registrant is a limited
liability company, insert the name and address of the limited liability
company, as set out in its articles of organization on file with the California
Secretary of State, and the state of organization. If the registrant is a trust,
insert the full name and residence address of each trustee. If the registrant is
a corporation, insert the name and address of the corporation, as set out in
its articles of incorporation on file with the California Secretary of State,
and the state of incorporation. If the registrants are state or local registered
domestic partners, insert the full name and residence address of each
domestic partner.
(4) Where the four asterisks (****) appear in the form, insert whichever
of the following best describes the nature of the business: (i) “an
individual,” (ii) “a general partnership,” (iii) “a limited partnership,” (iv)
“a limited liability company,” (v) “an unincorporated association other than
a partnership,” (vi) “a corporation,” (vii) “a trust,” (viii) “copartners,” (ix)
364
“husband and wife,” “married couple” (x) “joint venture,” (xi) “state or
local registered domestic partners,” or (xii) “a limited liability
partnership.”
(5) Where the five asterisks (*****) appear in the form, insert the date
on which the registrant first commenced to transact business under the
fictitious business name or names listed, if already transacting business
under that name or names. If the registrant has not yet commenced to transact
business under the fictitious business name or names listed, insert the
statement, “Not applicable.”
(c) The registrant shall declare that all of the information in the statement is
true and correct. A registrant who declares as true any material matter pursuant
to this section that he or she knows to be false is guilty of a misdemeanor.
(d) This section shall remain in effect only until January 1, 2014, and as
of that date is repealed, unless a later enacted statute, that is enacted before
January 1, 2014, deletes or extends that date.
Stats 1983 ch 581 § 1; Stats 1985 ch 1515 § 1; Stats 1987 ch 437 § 2, operative July 1,
1988; Stats 1989 ch 94 § 1, effective July 7, 1989; Stats 1994 ch 1200 § 6 (SB 469),
effective September 30, 1994; Stats 2001 ch 728 § 65 (SB 724); Stats 2007 ch 716 § 5 (AB
1670), effective January 1, 2008; Stats 2012 ch 368 § 1 (AB 1325), effective January 1,
2013, repealed January 1, 2014.

Fictitious Business Name Statement; Form.
( a ) The fictitious business name statement shall contain all of the
information required by this subdivision and shall be substantially in the
following form:
FICTITIOUS BUSINESS NAME STATEMENT

The following person (persons) is (are) doing business as
*________________
at **________________:
***________________
________________
________________
________________
365
________________
This business is conducted by ****________________
The registrant commenced to transact business under the fictitious business
name or names listed above on
*****________________
I declare that all information in this statement is true and correct. (A registrant
who declares as true any material matter pursuant to Section 17913 of the
Business and Professions Code that the registrant knows to be false is guilty of a
misdemeanor punishable by a fine not to exceed one thousand dollars ($1,000).)
Registrant signature ________________
Statement filed with the County Clerk of ________________ County on
________________
NOTICE—IN ACCORDANCE WITH SUBDIVISION (a) OF SECTION
17920, A FICTITIOUS NAME STATEMENT GENERALLY EXPIRES AT
THE END OF FIVE YEARS FROM THE DATE ON WHICH IT WAS FILED
IN THE OFFICE OF THE COUNTY CLERK, EXCEPT, AS PROVIDED IN
SUBDIVISION (b) OF SECTION 17920, WHERE IT EXPIRES 40 DAYS
AFTER ANY CHANGE IN THE FACTS SET FORTH IN THE STATEMENT
PURSUANT TO SECTION 17913 OTHER THAN A CHANGE IN THE
RESIDENCE ADDRESS OF A REGISTERED OWNER. A NEW FICTITIOUS
BUSINESS NAME STATEMENT MUST BE FILED BEFORE THE
EXPIRATION.
THE FILING OF THIS STATEMENT DOES NOT OF ITSELF AUTHORIZE
THE USE IN THIS STATE OF A FICTITIOUS BUSINESS NAME IN
VIOLATION OF THE RIGHTS OF ANOTHER UNDER FEDERAL, STATE,
OR COMMON LAW (SEE SECTION 14411 ET SEQ., BUSINESS AND
PROFESSIONS CODE).
(b) The statement shall contain the following information set forth in the
manner indicated in the form provided by subdivision (a):
( 1 ) Where the asterisk (*) appears in the form, insert the fictitious
business name or names. Only those businesses operated at the same
address and under the same ownership may be listed on one statement.
(2) Where the two asterisks (**) appear in the form: If the registrant has
a place of business in this state, insert the street address, and county, of his
or her principal place of business in this state. If the registrant has no place
of business in this state, insert the street address, and county, of his or her
principal place of business outside this state.
366
(3) Where the three asterisks (***) appear in the form: If the registrant is
an individual, insert his or her full name and residence address. If the
registrants are a married couple, insert the full name and residence address
of both parties to the marriage. If the registrant is a general partnership,
copartnership, joint venture, limited liability partnership, or unincorporated
association other than a partnership, insert the full name and residence
address of each general partner. If the registrant is a limited partnership,
insert the full name and residence address of each general partner. If the
registrant is a limited liability company, insert the name and address of the
limited liability company, as set out in its articles of organization on file
with the California Secretary of State, and the state of organization. If the
registrant is a trust, insert the full name and residence address of each
trustee. If the registrant is a corporation, insert the name and address of the
corporation, as set out in its articles of incorporation on file with the
California Secretary of State, and the state of incorporation. If the registrants
are state or local registered domestic partners, insert the full name and
residence address of each domestic partner.
(4) Where the four asterisks (****) appear in the form, insert whichever
of the following best describes the nature of the business: (i) “an
individual,” (ii) “a general partnership,” (iii) “a limited partnership,” (iv)
“a limited liability company,” (v) “an unincorporated association other than
a partnership,” (vi) “a corporation,” (vii) “a trust,” (viii) “copartners,” (ix)
“ a married couple,” (x) “joint venture,” (xi) “state or local registered
domestic partners,” or (xii) “a limited liability partnership.”
(5) Where the five asterisks (*****) appear in the form, insert the date
on which the registrant first commenced to transact business under the
fictitious business name or names listed, if already transacting business
under that name or names. If the registrant has not yet commenced to transact
business under the fictitious business name or names listed, insert the
statement, “Not applicable.”
(c) The registrant shall declare that all of the information in the statement is
true and correct. A registrant who declares as true any material matter pursuant
to this section that the registrant knows to be false is guilty of a misdemeanor
punishable by a fine not to exceed one thousand dollars ($1,000).
( d ) At the time of filing of the fictitious business name statement, the
registrant or agent filing on behalf of the registrant shall present personal
identification in the form of a California driver’s license or other government
identification acceptable to the county clerk to adequately determine the identity
of the registrant or agent filing on behalf of the registrant as provided in
subdivision (e) and the county clerk may require the registrant to complete and
sign an affidavit of identity statement. In the case of a registrant utilizing an
367
agent for submission of the registrant’s fictitious business name statement for
filing, the county clerk may also require the agent to complete and sign an
affidavit of identity statement declaring the registrant has authorized the agent to
submit the filing on behalf of the registrant.
(e) If the registrant is a corporation, a limited liability company, or a limited
liability partnership, an original certificate of status issued by the Secretary of
State certifying the current existence and good standing of that business entity
shall be deemed acceptable and shall be attached to a completed affidavit of
identity statement, if required by the county clerk, for purposes of subdivision
(d).
(f) The county clerk may require a registrant that mails a fictitious business
name statement to a county clerk’s office for filing to submit a completed and
notarized affidavit of identity statement. A registrant that is a corporation,
limited liability company, or limited liability partnership, if required by the
county clerk to submit an affidavit of identity statement, shall also submit an
original certificate of status issued by the Secretary of State certifying the
current existence and good standing of that business entity.
( g) A county clerk that chooses to establish procedures pursuant to this
section shall prescribe the form of affidavit of identity statement for filing by a
registrant or its agent in that county.
(h) This section shall become operative on January 1, 2014.
Added Stats 2012 ch 368 § 2 (AB 1325), effective January 1, 2013, operative January 1,
2014.
§ 17914. Signature.
The statement shall be signed as follows:
(a) If the registrant is an individual, by the individual.
(b) If the registrants are husband and wife, by the husband or wifea
married couple, by either party to the marriage.
(c) If the registrant is a general partnership, limited partnership, limited
liability partnership, copartnership, joint venture, or unincorporated
association other than a partnership, by a general partner.
( d) If the registrant is a limited liability company, by a manager or
officer.
(e) If the registrant is a trust, by a trustee.
(f) If the registrant is a corporation, by an officer.
368
(g) If the registrant is a state or local registered domestic partnership, by
one of the domestic partners.
(SB 469), effective September 30, 1994; Stats 2007 ch 716 § 6 (AB 1670), effective January
1, 2008; Stats 2013 ch 319 § 15 (SB 822), effective January 1, 2014.
2013 Amendment:
Substituted “a married couple, by either party to the marriage” for “husband and wife, by
the husband or wife” in subd (b).
§ 17915. Filing.
A fictitious business name statement shall be filed with the clerk of the
county in which the registrant has his or her principal place of business in this
state or, if the registrant has no place of business in this state, with the Clerk of
Sacramento County. This chapter does not preclude a person from filing a
fictitious business name statement in a county other than that where the principal
place of business is located, as long as the requirements of this section are also
met.
(AB 1670), effective January 1, 2008; Stats 2008 ch 179 § 24 (SB 1498), effective January
1, 2009.
§ 17916. (First of Two; Repealed January 1, 2014) What

(a) Presentation for filing of a fictitious business name statement, signed by
the registrant, and one copy, accompanied by a display of personal
identification in accordance with Section 17913, tender of the filing fee, and
acceptance of the statement by the county clerk constitute filing under this
chapter. The county clerk shall note on the copy the file number, the date of
filing the original, and the date of expiration and shall certify and deliver or
send the copy to the registrant.
(b) This section shall remain in effect only until January 1, 2014, and as
Stats 2012 ch 368 § 3 (AB 1325), effective January 1, 2013, repealed January 1, 2014.

What Constitutes Filing; Certification.
369
(a) Presentation for filing of an original fictitious business name statement
and one copy of the statement, with proper identification, accompanied by a
completed affidavit of identity statement, if required by the county clerk, and
other documents required in accordance with Section 17913, payment of the
filing fee, and acceptance of the statement by the county clerk constitute filing
under this chapter. The county clerk shall note on the copy the file number, the
date of filing the original, and the date of expiration and shall certify and deliver
the copy to the registrant or the registrant’s agent.
(b) This section shall become operative on January 1, 2014.
2014.
§ 17917. Publication; Filing Affidavit of Publication.

(a) Within 30 days after a fictitious business name statement has been filed
pursuant to this chapter, the registrant shall cause a statement in the form
prescribed by subdivision (a) of Section 17913 to be published pursuant to
Section 6064 of the Government Code in a newspaper of general circulation in
the county where the fictitious business name statement was filed or, if there is
no such newspaper in that county, in a newspaper of general circulation in an
adjoining county. If the registrant does not have a place of business in this state,
the notice shall be published in a newspaper of general circulation in
Sacramento County.
(b) Subject to the requirements of subdivision (a), the newspaper selected
for the publication of the statement should be one that circulates in the area
where the business is to be conducted.
(c) If a refiling is required because the prior statement has expired, the
refiling need not be published unless there has been a change in the information
required in the expired statement, provided the refiling is filed within 40 days of
the date the statement expired.
(d) An affidavit showing the publication of the statement shall be filed with
the county clerk where the fictitious business name statement was filed within
30 days after the completion of the publication.
(SB 724); Stats 2007 ch 716 § 8 (AB 1670), effective January 1, 2008.
§ 17918. No Actions to Be Brought on Contract Until

Statement Filed and Published.
No person transacting business under the fictitious business name contrary
370
to the provisions of this chapter, or his assignee, may maintain any action upon
or on account of any contract made, or transaction had, in the fictitious business
name in any court of this state until the fictitious business name statement has
been executed, filed, and published as required by this chapter. For the purposes
of this section, the failure to comply with subdivision (b) of Section 17917 does
not constitute transacting business contrary to the provisions of this chapter.
Bus. & Prof. Code § 17918 provides that no person transacting business under a
fictitious name in violation of the fictitious business name chapter (Chapter 5) may maintain
any action upon or on account of any contract made or transaction had in the fictitious name.
Most practitioners do not realize the power of this section. The Law Revision Commission
comments under this section, and the cases interpreting it, do not indicate whether the person
in violation of the fictitious name registration requirements may retroactively cure by
complying with this statute. Therefore, any transactions involving the use of the fictitious
business name probably may not be sued upon until the user of the fictitious business name is
in compliance with this chapter by registering his or her fictitious business name. An action
brought by a person who is in violation of this section may be dismissed by the court for
failure to comply because the section indicates that no right of action exists.
Annotations
Cases
American Alternative Energy Partners II v. Windridge, Inc. , (1996) 42 Cal. App. 4th
551, 49 Cal. Rptr. 2d 686. The appellate court made two observations: a limited partnership
was not precluded from filing an action prior to the filing of a statement listing the business
under the fictitious business name; and the statute did not apply to tort actions nor prohibit
the maintenance of a suit.
§ 17919. Validity of Filing After Bankruptcy, Death,

Sale.
( a ) A fictitious business name statement may be executed, filed, and
published by the trustee in bankruptcy at any time after bankruptcy where a
failure to comply with the provisions of this chapter would otherwise preclude
the maintenance of an action to recover any sums due to the debtor or bankruptcy
estate or the partnership of which the debtor or bankruptcy estate was a member.
( b ) A fictitious business name statement may be executed, filed, and
published by the conservator, executor, or administrator at any time after the
appointment of a conservator for or death of any individual or partner where a
failure to comply with the provisions of this chapter would otherwise preclude
371
the maintenance of an action to recover any sums due the conservatee or
deceased person or the partnership of which he or she was a member.
( c ) A fictitious business name statement may be executed, filed, and
published by an assignee or purchaser of the business at any time after the
assignment or sale where a failure to comply with the provisions of this chapter
would otherwise preclude the maintenance of an action to recover any sums due
to the assignee or purchaser by reason of the assignment or sale.
(d) The fictitious business name statement referred to in this section shall be
in substantially the same form as prescribed in Section 17913, except:
(1) The person or persons who were doing business under the fictitious
business name shall be stated as such person or persons existed (i)
immediately prior to the bankruptcy, conservatorship, or death or the
assignment or sale of the business or (ii) at the time they ceased to do
business under the fictitious business name, whichever is the earlier time.
(2) The statement shall include the following additional sentence: “This
statement has been executed pursuant to Section 17919 of the Business and
Professions Code.”
(3) The person executing the statement shall (i) sign the statement on
behalf of the person or persons formerly doing business under the fictitious
business name, (ii) state his or her full name and the street address of his or
her place of business or, if he or she has none, of his or her residence, and
(iii) indicate whether he or she is a trustee in bankruptcy, conservator,
executor, or administrator or assignee or purchaser of the business.
Added Stats 1970 ch. 618 § 4, operative July 1, 1971. Amended Stats 1979 ch. 730 §
2.5, operative January 1, 1981; Stats 2009 ch. 500 § 6 (AB 1059), effective January 1, 2010.
§ 17920. Expiration of Statement.

( a ) Unless the statement expires earlier under subdivision (b) or (c), a
fictitious business name statement expires five years from the date it was filed
in the office of the county clerk.
( b ) Except as provided in Section 17923, a fictitious business name
statement expires 40 days after any change in the facts set forth in the statement
pursuant to Section 17913, except that a change in the residence address of an
individual, general partner, or trustee does not cause the statement to expire.
(c) A fictitious business name statement expires when the registrant files a
statement of abandonment of the fictitious business name described in the
statement.
Leg.H. 1970 ch. 618, operative July 1, 1971, 1988 ch. 501.
372
§ 17921. Notice of Date of Expiration.
Notice of the date of expiration shall be on the fictitious business name
statement form.

(a) Upon ceasing to transact business in this state under a fictitious business
name that was filed in the previous five years, a person who has filed a
fictitious business name statement shall file a statement of abandonment of use
of fictitious business name. The statement shall be executed in the same manner
as a fictitious business name statement and shall be filed with the county clerk of
the county in which the person has filed his or her fictitious business name
statement. The statement shall be published in the same manner as a fictitious
business name statement and an affidavit showing its publication shall be filed
with the county clerk after the completion of publication.
(b) The statement shall include:
(1) The name being abandoned and the street address of the principal
place of business.
(2) The date on which the fictitious business name statement relating to
the fictitious business name being abandoned was filed, the file number, and
the county where filed.
(3) In the case of an individual, the full name and residence address of
the individual.
(4) In the case of a husband and wife married couple, the full name and
residence address of both the husband and the wife parties to the
marriage.
( 5 ) In the case of a general partnership, a limited partnership,
copartners, a limited liability partnership, a joint venture, or an
unincorporated association other than a partnership, the full names and
residence addresses of all of the general partners.
(6) In the case of a corporation, the name and address of the corporation
as set forth in its articles of incorporation on file with the California
Secretary of State.
(7) In the case of a trust, the full name and residence address of each of
the trustees.
373
(8) In the case of a limited liability company, the name and address of
the limited liability company as set forth in its articles of organization on
file with the California Secretary of State.
(9) In the case of state or local registered domestic partners, the full
name and residence address of each domestic partner.
(c) This section shall remain in effect only until January 1, 2014, and as
(AB 1670), effective January 1, 2008; Stats 2012 ch 368 § 5 (AB 1325), effective January 1,
2013, repealed January 1, 2014.

(a) Upon ceasing to transact business in this state under a fictitious business
name that was filed in the previous five years, a registrant who has filed a
fictitious business name statement shall file a statement of abandonment of use
of fictitious business name. The statement of abandonment shall be executed in
the same manner as a fictitious business name statement, excluding the
requirements of subdivisions (d), (e), and (f) of Section 17913 and shall be
filed with the county clerk of the county in which the registrant has filed the
fictitious business name statement. The statement shall be published in the same
manner as a fictitious business name statement and an affidavit showing its
publication shall be filed with the county clerk after the completion of
publication.
(1) The name being abandoned and the street address of the principal
place of business.
(2) The date on which the fictitious business name statement relating to
the fictitious business name being abandoned was filed, the file number, and
the county where filed.
(3) In the case of an individual, the full name and residence address of
the individual.
(4) In the case of a married couple, the full name and residence address
of both parties to the marriage.
( 5 ) In the case of a general partnership, a limited partnership,
copartners, a limited liability partnership, a joint venture, or an
374
unincorporated association other than a partnership, the full names and
residence addresses of all of the general partners.
(6) In the case of a corporation, the name and address of the corporation
as set forth in its articles of incorporation on file with the California
Secretary of State.
(7) In the case of a trust, the full name and residence address of each of
the trustees.
(8) In the case of a limited liability company, the name and address of
the limited liability company as set forth in its articles of organization on
file with the California Secretary of State.
(9) In the case of state or local registered domestic partners, the full
name and residence address of each domestic partner.
(c) This section shall become operative on January 1, 2014.
2014.

(a) Any person who is a general partner in a partnership that is or has been
regularly transacting business under a fictitious business name may, upon
withdrawing as a general partner, file a statement of withdrawal from the
partnership operating under a fictitious business name. The statement of
withdrawal shall be executed by the person filing the statement in the same
manner as a fictitious business name statement and shall be filed with the county
clerk of the county where the partnership filed its fictitious business name
statement.
(1) The fictitious business name of the partnership.
(2) The date on which the fictitious business name statement for the
partnership was filed, the file number, and the county where filed.
(3) The street address of its principal place of business in this state or,
if it has no place of business in this state, the street address of its principal
place of business outside this state, if any.
(4) The full names and residence addresses of the person or persons
withdrawing as partners.
( c ) The statement of withdrawal from the partnership operating under a
375
fictitious business name shall be published in the same manner as the fictitious
business name statement and an affidavit showing the publication of the
statement shall be filed with the county clerk after the completion of the
publication.
(d) The withdrawal of a general partner does not cause a fictitious business
name statement to expire if the withdrawing partner files a statement of
withdrawal meeting the requirements of this section.
(e) This section shall remain in effect only until January 1, 2014, and as
(SB 724); Stats 2007 ch 716 § 10 (AB 1670), effective January 1, 2008; Stats 2012 ch 368 §
7 (AB 1325), effective January 1, 2013, repealed January 1, 2014.

(a) Any registrant who is a general partner in a partnership that is or has
been regularly transacting business under a fictitious business name may, upon
withdrawing as a general partner, file a statement of withdrawal from the
partnership operating under a fictitious business name. The statement of
withdrawal shall be executed by the registrant filing the statement in the same
manner as a fictitious business name statement, excluding the requirements of
subdivisions (d), (e), and (f) of Section 17913, and shall be filed with the
county clerk of the county where the partnership filed its fictitious business
name statement.
(1) The fictitious business name of the partnership.
(2) The date on which the fictitious business name statement for the
partnership was filed, the file number, and the county where filed.
(3) The street address of its principal place of business in this state or,
if it has no place of business in this state, the street address of its principal
place of business outside this state, if any.
( 4 ) The full names and residence addresses of the registrant or
registrants withdrawing as partners.
( c ) The statement of withdrawal from the partnership operating under a
fictitious business name shall be published in the same manner as the fictitious
business name statement and an affidavit showing the publication of the
376
statement shall be filed with the county clerk after the completion of the
publication.
(d) The withdrawal of a general partner does not cause a fictitious business
name statement to expire if the withdrawing partner files a statement of
withdrawal meeting the requirements of this section.
(e) This section shall become operative on January 1, 2014.
2014.
§ 17924. Forms to Be Furnished by County Clerk.

( a ) The county clerk shall furnish without charge a form satisfying the
requirements of subdivision (a) of Section 17913. The form prepared by the
county clerk, or the material provided by him with the form, shall include
statements substantially as follows:
( 1) “Your fictitious business name statement must be published in a
newspaper once a week for four successive weeks and an affidavit of
publication filed with the county clerk when publication has been
accomplished. The statement should be published in a newspaper of general
circulation in the county where the principal place of business is located.
The statement should be published in such county in a newspaper that
circulates in the area where the business is to be conducted (Business and
Professions Code Section 17917).”
(2) “Any person who executes, files, or publishes any fictitious business
name statement, knowing that such statement is false, in whole or in part, is
guilty of a misdemeanor and upon conviction thereof shall be fined not to
exceed one thousand dollars ($1,000) (Business and Professions Code
Section 17930).” These statements do not constitute a part of the fictitious
business name statement and are not required to be published pursuant to
Section 17917.
( b ) The county clerk may furnish without charge forms meeting the
requirements for a statement of abandonment of use of a fictitious business name
and a statement of withdrawal from partnership operating under a fictitious
business name.
Leg.H. Added Stats. 1970 ch. 618 § 4, operative July 1, 1971, 2004 ch. 118 (SB 1165).
§ 17925. Indices Concerning Fictitious Business Names

Maintained by County Clerk.
(a) The county clerk shall maintain one or more indices which permit the
377
determination of at least the following information:
(1) Whether any business using a specific fictitious business name has
on file a fictitious business name statement setting forth such name and, if so,
the file number of the statement.
(2) Whether any individual, general partner, or corporation is listed in
any fictitious business name statement on file and, if so, the file number of
the statement.
(3) Whether a statement of abandonment of use of a specific business
name is on file and, if so, the file number of the statement of abandonment.
( 4) Whether a statement of withdrawal from a partnership operating
under fictitious business name is on file and, if so, the file number of the
statement of withdrawal.
(b) Four years after a fictitious business name statement has expired, the
county clerk may delete the information concerning that statement from the
index, including any references to statements of abandonment of use, statements
of withdrawal of partnerships, or any other references related to a fictitious
business name statement which is being deleted from the index.
§ 17926. Fees; “Statement.”

(a) As used in this section, “statement” means a fictitious business name
statement, a statement of abandonment of use of fictitious business name, or a
statement of withdrawal from partnership operating under fictitious business
name.
(b) For a fee of two dollars ($2), the county clerk shall provide any person
who so requests a certified copy of any statement on file in his or her office.
(c) A copy of a statement, when certified as provided in subdivision (b),
establishes a rebuttable presumption of all of the following:
(1) The existence of the original statement.
(2) The execution of the statement by the person by whom it purports to
have been executed.
(3) The truth of the information required by Sections 17913, 17922, or
17923 that is contained in the statement.
( d ) The presumptions established by subdivision (c) are presumptions
affecting the burden of producing evidence.
378
(e) All of the provisions of this section are subject to Section 54985 of the
Government Code.
§ 17927. (First of Two; Repealed January 1, 2014) File

Copy; Marking and Dating; Period of Retention.
(a) The county clerk shall mark each fictitious business name statement with
a file number and the date of filing and shall retain the original statement for his
or her file. He or she may destroy or otherwise dispose of the statement,
including proof of publication and any other references related to the fictitious
business name statement, four years after the statement expires.
(b) The county clerk shall mark each statement of abandonment of use of
fictitious business name or statement of withdrawal from partnership operating
under fictitious business name with a file number and the date of filing. He or
she may destroy or otherwise dispose of the statement at the same time the
fictitious business name statement to which it relates is destroyed pursuant to
subdivision (a).
(c) In lieu of retaining the original statement on file, the county clerk may
retain a copy of the statement in accordance with Section 26205.1 of the
Government Code.
(d) This section shall remain in effect only until January 1, 2014, and as
Stats 2007 ch 716 § 12 (AB 1670), effective January 1, 2008; Stats 2012 ch 368 § 9 (AB
1325), effective January 1, 2013, repealed January 1, 2014.

File Copy; Marking and Dating; Period of
Retention.
(a) The county clerk shall mark each fictitious business name statement with
a file number and the date of filing and shall retain the original statement for his
or her file. He or she may destroy or otherwise dispose of the statement,
including proof of publication, affidavit of identity statement, the additional
documents required by subdivisions (d), (e), and (f) of Section 17913, and any
other references related to the fictitious business name statement, four years
after the statement expires.
379
(b) The county clerk shall mark each statement of abandonment of use of
fictitious business name or statement of withdrawal from partnership operating
under fictitious business name with a file number and the date of filing. He or
she may destroy or otherwise dispose of the statement at the same time the
fictitious business name statement to which it relates is destroyed pursuant to
subdivision (a).
(c) In lieu of retaining the original statement, proof of publication, affidavit
of identity statement, and additional documents that may be required pursuant to
subdivisions (d), (e), and (f) of Section 17913, and any other documents
pertaining to the fictitious business statement on file, the county clerk may retain
a copy of the statement in accordance with Section 26205.1 of the Government
Code.
(d) This section shall become operative on January 1, 2014.
Added Stats 2012 ch 368 § 10 (AB 1325), effective January 1, 2013, operative January
1, 2014.
§ 17928. Summaries or Compilations of Filings; County

Clerk to Provide Same; Fee.
(a) Upon prepayment of the fee established pursuant to subdivision (b), the
county clerk may furnish to any person who so requests daily or less frequent
summaries or compilations of filings under this chapter.
(b) The fee for furnishing information under this section shall be fixed by the
county clerk with the approval of the county board of supervisors and shall be
sufficient to pay at least the actual cost of furnishing such information.
§ 17929. (First of Two; Repealed January 1, 2014) Filing

Fees; Cost Covered by Fees.
( a ) The fee for filing a fictitious business name statement is ten dollars
($10) for the first fictitious business name and owner and two dollars ($2) for
each additional fictitious business name or owner filed on the same statement
and doing business at the same location. This fee covers the cost of filing and
indexing the statement (and any affidavit of publication), the cost of furnishing
one certified copy of the statement to the person filing the statement, and the cost
for notifying registrants of the pending expiration of their fictitious business
name statement.
( b) The fee for filing a statement of abandonment of use of a fictitious
business name is five dollars ($5). This fee covers the cost of filing and
380
indexing the statement, the cost of any affidavit of publication, and the cost of
furnishing one certified copy of the statement to the person filing the statement.
(c) The fee for filing a statement of withdrawal from partnership operating
under a fictitious business name is five dollars ($5). This fee covers the cost of
filing and indexing the statement, the cost of any affidavit of publication, and the
cost of furnishing one certified copy of the statement to the person filing the
statement.
(d) All of the provisions of this section are subject to Section 54985 of the
Government Code.
(e) If the notice of pending expiration, as described in subdivision (a), is
returned to the county clerk by the United States Postal Service as
undeliverable, the county clerk is not required to retain the returned notice of
pending expiration.
(f) This section shall remain in effect only until January 1, 2014, and as
Stats 1981 ch 96 § 1; Stats 1983 ch 581 § 4; Stats 2007 ch 716 § 13 (AB 1670), effective
January 1, 2008; Stats 2008 ch 179 § 25 (SB 1498), effective January 1, 2009; Stats 2009 ch
458 § 2 (AB 620), effective January 1, 2010; Stats 2012 ch 368 § 11 (AB 1325), effective
January 1, 2013, repealed January 1, 2014.

Filing Fees; Cost Covered by Fees.
( a ) The fee for filing a fictitious business name statement is ten dollars
($10) for the first fictitious business name and owner and two dollars ($2) for
each additional fictitious business name or owner filed on the same statement
and doing business at the same location. This fee covers the cost of filing and
indexing the statement (and any affidavit of publication), the cost of furnishing
one certified copy of the statement to the registrant filing the statement,
acceptance, verification, and maintenance of the affidavit of identity statement
and other documents or actions that may be required pursuant to subdivisions
(d), (e), and (f) of Section 17913, and the cost for notifying registrants of the
pending expiration of their fictitious business name statement.
( b) The fee for filing a statement of abandonment of use of a fictitious
business name is five dollars ($5). This fee covers the cost of filing and
indexing the statement, the cost of any affidavit of publication, and the cost of
furnishing one certified copy of the statement to the person filing the statement.
381
(c) The fee for filing a statement of withdrawal from partnership operating
under a fictitious business name is five dollars ($5). This fee covers the cost of
filing and indexing the statement, the cost of any affidavit of publication, and the
cost of furnishing one certified copy of the statement to the registrant filing the
statement.
(d) All of the provisions of this section are subject to Section 54985 of the
Government Code.
(e) If the notice of pending expiration, as described in subdivision (a), is
returned to the county clerk by the United States Postal Service as
undeliverable, the county clerk is not required to retain the returned notice of
pending expiration.
(f) This section shall become operative on January 1, 2014.
Added Stats 2012 ch 368 § 12 (AB 1325), effective January 1, 2013, operative January
1, 2014.
§ 17930. Execution, Filing, or Publishing False

Statement a Misdemeanor; Penalty.
Any person who executes, files, or publishes any statement under this
chapter, knowing that such statement is false, in whole or in part, shall be guilty
of a misdemeanor and upon conviction thereof shall be punished by a fine not to
exceed one thousand dollars ($1,000).
Leg.H. 1970 ch. 618, operative July 1, 1971, 1983 ch. 1092, effective September 27,
1983, operative January 1, 1984.
DIVISION 8
SPECIAL BUSINESS REGULATIONS

CHAPTER 5.5
FRANCHISE RELATIONS
ARTICLE 1
382
Definitions
§ 20000. California Franchise Relations Act; Short

Title.
This chapter shall be known and may be referred to as the California
Franchise Relations Act.
Leg.H. 1980 ch. 1355, effective October 1, 1980, operative January 1, 1981.
Businesses that wish to terminate or refuse to renew distributorships or dealerships for
trademarked goods should consider whether the Franchise Relations Act will protect the
distributor or dealer. Franchisors may be obligated to repurchase the franchisee’s inventory
if they fail to comply with the Act’s requirements for termination or nonrenewal.
In any actions relating to a trademark license, the licensee should consider defenses and
counterclaims based on violations of the Franchise Investment Act (Corp. Code §§ 31000–
31516), the Franchise Relations Act (Bus. & Prof. Code §§ 20000–20999.4), and the Seller
Assisted Marketing Act (Civ. Code §§ 1812.200–1812.221).
§ 20001. Definition of “Franchise.”

As used in this chapter, “franchise” means a contract or agreement, either
expressed or implied, whether oral or written, between two or more persons by
which:
(a) A franchisee is granted the right to engage in the business of offering,
selling or distributing goods or services under a marketing plan or system
prescribed in substantial part by a franchisor; and
(b) The operation of the franchisee’s business pursuant to that plan or
system is substantially associated with the franchisor’s trademark, service
mark, trade name, logotype, advertising, or other commercial symbol
designating the franchisor or its affiliate; and
(c) The franchisee is required to pay, directly or indirectly, a franchise
fee.
(d) “Franchise” does not include any of the following:
(1) Any franchise governed by the Petroleum Marketing Practices
Act (P.L. 95-297).
(2) Lease departments, licenses, or concessions at or with a general
merchandise retail establishment where the lease department, licensee,
or concessionaire is incidental and ancillary to the general commercial
383
operation of the retail establishment. Sales of a lease department,
license, or concessionaire are incidental and ancillary to the general
commercial operation of the retail establishment if they amount to less
than 10 percent of the establishment’s sales.
(3) A nonprofit organization operated on a cooperative basis by and
for independent retailers which wholesales goods and services
primarily to its member retailers and in which all of the following is
applicable:
( A ) Control and ownership of each member is substantially
equal.
(B) Membership is limited to those who will use the services
furnished by the organization.
(C) Transfer of ownership is prohibited or limited.
(D) Capital investment receives no return.
(E) Substantially equal benefits pass to the members on the basis
of patronage of the organization.
( F ) Members are not personally liable for obligations of the
organization in the absence of a direct undertaking or authorization
by them.
(G) Services of the organization are furnished primarily for the
use of the members.
(H) Each member and prospective member is provided with an
offering circular which complies with the specifications of Section
31111 of the Corporations Code.
(I) No part of the receipts, income, or profit of the organization
are paid to any profitmaking entity, except for arms-length payments
for necessary goods and services and members are not required to
purchase goods or services from any designated profitmaking entity.
( J ) The nonprofit organization is subject to an action for
rescission or damages under Section 3343.7 of the Civil Code if the
organization fraudulently induced the plaintiff to join the
organization.
Leg.H. 1980 ch. 1355, effective October 1, 1980, operative January 1, 1981, 1989 ch.
1380.
Annotations
384
Cases
Thueson v. U-Haul International Inc., 144 Cal. App. 4th 664, 50 Cal. Rptr. 3d 669
(2006). A contract whereby plaintiff acted as a local agent for U-Haul for renting vehicles to
customers was not a franchise agreement because there was no specific fee for the right to
enter into business. The fees and expenses identified by plaintiff (such as fees for a
telephone line and computer terminal) were ordinary business expenses, not disguised
franchise fees.
§ 20002. Definition of “Franchisee.”

A “franchisee” is a person to whom a franchise is granted.
§ 20003. Definition of “Franchisor.”

A “franchisor” is a person who grants or has granted a franchise.
§ 20004. Definition of “Area Franchise.”

“Area franchise” means any contract or agreement between a franchisor and
a subfranchisor whereby the subfranchisor is granted the right, for consideration
given in whole or in part for such right, to sell or negotiate the sale of franchises
in the name or on behalf of the franchisor.
§ 20005. Definition of “Subfranchisor.”

A “subfranchisor” is a person to whom an area franchise is granted.
§ 20006. Definition of “Franchise” Includes “Area

Franchise.”
“Franchise” includes “area franchise.”
§ 20007. Definition of “Franchise Fee”; Exclusions

from Definition.
“Franchise fee” means any fee or charge that a franchisee or subfranchisor
385
is required to pay or agrees to pay for the right to enter into a business under a
franchise agreement, including, but not limited to, any payment for goods and
services. However, the following shall not be considered the payment of a
franchise fee:
( a ) The purchase or agreement to purchase goods at a bona fide
wholesale price if no obligation is imposed upon the purchaser to purchase
or pay for a quantity of goods in excess of that which a reasonable
businessperson normally would purchase by way of a starting inventory or
supply or to maintain a going inventory or supply.
(b) The payment of a reasonable service charge to the issuer of a credit
card by an establishment accepting or honoring that credit card.
( c ) Amounts paid to a trading stamp company under Chapter 3
(commencing with Section 17750) of Part 3 of Division 7 by a person
issuing trading stamps in connection with the retail sale of merchandise or
service.
(d) The payment, directly or indirectly, of a franchise fee which, on an
annual basis, does not exceed the sum of one hundred dollars ($100).
( e ) The payment of a sum of not exceeding one thousand dollars
($1,000) annually on account of the purchase price or rental of fixtures,
equipment, or other tangible property to be utilized in, and necessary for, the
operation of the franchised business, if the price or rental so charged does
not exceed the cost which would be incurred by the franchisee acquiring the
item or items from other persons or in the open market.
Leg.H. Added Stats. 1980 ch. 1355 § 1, effective October 1, 1980, operative January 1,
1981, 2002 ch. 664.

“Person” means an individual, a corporation, a partnership, a limited
liability company, a joint venture, an association, a joint stock company, a trust
or an unincorporated organization.
1010.
§ 20009. Prima Facie Evidence Concerning Whether

Agreement Constitutes a “Franchise”; Burden of
Proving an Exemption or Exception.
The regulations, releases, guidelines and interpretive opinions of the
386
Commissioner of Corporations under the Franchise Investment Law (Division 5
(commencing with Section 31000) of Title 4 of the Corporations Code)
regarding whether or not an agreement constitutes a “franchise” within the
meaning of that law shall be prima facie evidence of the scope and extent of
coverage of the definition of “franchise” under this chapter; provided, however,
the burden of proving an exemption or an exception from a definition is upon the
person claiming it.
§ 20010. Waiver of Compliance with Law Void.

Any condition, stipulation or provision purporting to bind any person to
waive compliance with any provision of this law is contrary to public policy
and void.
Annotations
Cases
1-800-Got Junk? LLC v. Superior Court, 189 Cal. App. 4th 500, 116 Cal. Rptr. 3d 923
(2010). In this action a California franchisee sued a Canadian franchisor for wrongful
termination of the franchise agreement. The franchise agreement contained a Washington
choice of law provision. In a role reversal, the franchisor argued that the Washington choice
of law provision is valid and the franchisee argued that it is not. The reason for this unusual
situation was that Washington law was more favorable than California law. The court held that
Washington choice of law provision is valid and enforceable.
ARTICLE 2
Jurisdiction
§ 20015. Franchises to Which Provisions of Chapter Are

Applicable.
The provisions of this chapter apply to any franchise where either the
franchisee is domiciled in this state or the franchised business is or has been
operated in this state.
ARTICLE 3
387
Termination
§ 20020. Termination of Franchise Prior to Expiration

of Term; Good Cause Required; Notice of
Noncompliance and Cure.
Except as otherwise provided by this chapter, no franchisor may terminate a
franchise prior to the expiration of its term, except for good cause. Good cause
shall include, but not be limited to, the failure of the franchisee to comply with
any lawful requirement of the franchise agreement after being given notice
thereof and a reasonable opportunity, which in no event need be more than 30
days, to cure the failure.
§ 20021. Termination Without Opportunity to Cure.

If during the period in which the franchise is in effect, there occurs any of the
following events which is relevant to the franchise, immediate notice of
termination without an opportunity to cure, shall be deemed reasonable:
(a) The franchisee or the business to which the franchise relates has
been the subject of an order for relief in bankruptcy, judicially determined
to be insolvent, all or a substantial part of the assets thereof are assigned to
or for the benefit of any creditor, or the franchisee admits his or her inability
to pay his or her debts as they come due;
( b ) The franchisee abandons the franchise by failing to operate the
business for five consecutive days during which the franchisee is required to
operate the business under the terms of the franchise, or any shorter period
after which it is not unreasonable under the facts and circumstances for the
franchisor to conclude that the franchisee does not intend to continue to
operate the franchise, unless such failure to operate is due to fire, flood,
earthquake or other similar causes beyond the franchisee’s control;
( c ) The franchisor and franchisee agree in writing to terminate the
franchise;
(d) The franchisee makes any material misrepresentations relating to the
acquisition of the franchise business or the franchisee engages in conduct
which reflects materially and unfavorably upon the operation and reputation
of the franchise business or system;
(e) The franchisee fails, for a period of 10 days after notification of
388
noncompliance, to comply with any federal, state or local law or regulation
applicable to the operation of the franchise;
(f) The franchisee, after curing any failure in accordance with Section
20020 engages in the same noncompliance whether or not such
noncompliance is corrected after notice;
( g ) The franchisee repeatedly fails to comply with one or more
requirements of the franchise, whether or not corrected after notice;
(h) The franchised business or business premises of the franchise are
seized, taken over, or foreclosed by a government official in the exercise of
his or her duties, or seized, taken over, or foreclosed by a creditor,
lienholder or lessor, provided that a final judgment against the franchisee
remains unsatisfied for 30 days (unless a supersedeas or other appeal bond
has been filed); or a levy of execution has been made upon the license
granted by the franchise agreement or upon any property used in the
franchised business, and it is not discharged within five days of such levy;
( i ) The franchisee is convicted of a felony or any other criminal
misconduct which is relevant to the operation of the franchise;
(j) The franchisee fails to pay any franchise fees or other amounts due to
the franchisor or its affiliate within five days after receiving written notice
that such fees are overdue; or
( k) The franchisor makes a reasonable determination that continued
operation of the franchise by the franchisee will result in an imminent
danger to public health or safety.
Added Stats 1980 ch. 1355 § 1, effective October 1, 1980, operative January 1, 1981.
Amended Stats 2009 ch. 500 § 7 (AB 1059), effective January 1, 2010.
ARTICLE 4
Nonrenewal
§ 20025. Requirement of Notice of Intention Not to

Renew Franchise; Other Conditions to Refuse
Renewal.
No franchisor may fail to renew a franchise unless such franchisor provides
the franchisee at least 180 days prior written notice of its intention not to renew;
and
389
( a ) During the 180 days prior to expiration of the franchise the
franchisor permits the franchisee to sell his business to a purchaser meeting
the franchisor’s then current requirements for granting new franchises, or if
the franchisor is not granting a significant number of new franchises, the then
current requirements for granting renewal franchises; or
(b)
(1) The refusal to renew is not for the purpose of converting the
franchisee’s business premises to operation by employees or agents of
the franchisor for such franchisor’s own account, provided, that nothing
in this paragraph shall prohibit a franchisor from exercising a right of
first refusal to purchase the franchisee’s business; and
(2) Upon expiration of the franchise, the franchisor agrees not to
seek to enforce any covenant of the nonrenewed franchisee not to
compete with the franchisor or franchisees of the franchisor; or
( c ) Termination would be permitted pursuant to Section 20020 or
20021; or
(d) The franchisee and the franchisor agree not to renew the franchise;
or
(e) The franchisor withdraws from distributing its products or services
through franchises in the geographic market served by the franchisee,
provided that:
(1) Upon expiration of the franchise, the franchisor agrees not to
seek to enforce any covenant of the nonrenewed franchisee not to
compete with the franchisor or franchisees of the franchisor; and
(2) The failure to renew is not for the purpose of converting the
business conducted by the franchisee pursuant to the franchise agreement
to operation by employees or agents of the franchisor for such
franchisor’s own account; and
(3) Where the franchisor determines to sell, transfer, or assign its
interest in a marketing premises occupied by a franchisee whose
franchise agreement is not renewed pursuant to this paragraph:
(A) The franchisor, during the 180-day period after giving notice
offers such franchisee a right of first refusal of at least 30 days’
duration of a bona fide offer, made by another to purchase such
franchisor’s interest in such premises; or
( B) In the case of the sale, transfer, or assignment to another
person of the franchisor’s interest in one or more other controlled
390
marketing premises, such other person in good faith offers the
franchisee a franchise on substantially the same terms and conditions
currently being offered by such other person to other franchisees; or
( f ) The franchisor and the franchisee fail to agree to changes or
additions to the terms and conditions of the franchise agreement, if such
changes or additions would result in renewal of the franchise agreement on
substantially the same terms and conditions on which the franchisor is then
customarily granting renewal franchises, or if the franchisor is not then
granting a significant number of renewal franchises, the terms and conditions
on which the franchisor is then customarily granting original franchises. The
franchisor may give the franchisee written notice of a date which is at least
30 days from the date of such notice, on or before which a proposed written
agreement of the terms and conditions of the renewal franchise shall be
accepted in writing by the franchisee. Such notice, when given not less than
180 days before the end of the franchise term, may state that in the event of
failure of such acceptance by the franchisee, the notice shall be deemed a
notice of intention not to renew at the end of the franchise term.
§ 20026. Extension of Current Franchise Term to

Satisfy Time of Notice of Nonrenewal.
Nothing in Section 20025 shall prohibit a franchisor from offering or
agreeing before expiration of the current franchise term to extend the term of the
franchise for a limited period in order to satisfy the time of notice of
nonrenewal requirement of that section.
ARTICLE 4.4
Transfers
§ 20027. Right of Surviving Spouse, Heirs, or Estate of

Deceased Franchisee to Own Franchise.
( a ) No franchisor shall deny the surviving spouse, heirs, or estate of a
deceased franchisee or the majority shareholder of the franchisee the
opportunity to participate in the ownership of the franchise under a valid
franchise agreement for a reasonable time after the death of the franchisee or
majority shareholder of the franchisee. During that time the surviving spouse,
391
heirs, or estate of the deceased shall either satisfy all of the then current
qualifications for a purchaser of a franchise or sell, transfer, or assign the
franchise to a person who satisfies the franchisor’s then current standards for
new franchisees. The rights granted pursuant to this section shall be granted
subject to the surviving spouse, heirs or estate of the deceased maintaining all
standards and obligations of the franchise.
(b) Nothing in subdivision (a) shall prohibit a franchisor from exercising the
right of first refusal to purchase a franchise after receipt of a bona fide offer to
purchase the franchise by a proposed purchaser of the franchise.
(c) This article shall not apply to any agreement or contract in effect prior to
January 1, 1984, except an agreement or contract of an indefinite duration. This
section shall not apply to any bequest or intestate succession that took effect
prior to January 1, 1984.
Leg.H. 1983 ch. 374.
ARTICLE 5
Notices
§ 20030. Notices of Termination or Renewal; Method of

Delivery and Contents.
All notices of termination or nonrenewal required by this chapter:
(a) Shall be in writing;
( b) Shall be posted by registered, certified or other receipted mail,
delivered by telegram or personally delivered to the franchisee; and
( c ) Shall contain a statement of intent to terminate or not renew the
franchise:
(1) Together with the reasons therefor, and
( 2 ) The effective date of such termination or nonrenewal or
expiration.
ARTICLE 6
392
Offers to Repurchase Inventory
§ 20035. Offer to Repurchase Inventory Required When

Franchisor Terminates or Fails to Renew in
Violation of Chapter; Inventory to Be Repurchased;
Price of Same.
In the event a franchisor terminates or fails to renew a franchise other than
in accordance with the provisions of this chapter, the franchisor shall offer to
repurchase from the franchisee the franchisee’s resalable current inventory
meeting the franchisor’s present standards that is required by the franchise
agreement or commercial practice and held for use or sale in the franchised
business at the lower of the fair wholesale market value or the price paid by the
franchisee. The franchisor shall not be liable for offering to purchase
personalized items which have no value to the franchisor in the business which
it franchises.
§ 20036. Offset Against Repurchase of Sums Owed to

Franchisor.
The franchisor may offset against any repurchase offer made pursuant to
Section 20035 any sums owed the franchisor or its subsidiaries by the
franchisee pursuant to the franchise or any ancillary agreement.
§ 20037. Right of Franchisee to Sue.

Except as expressly provided herein, nothing in this article shall abrogate
the right of a franchisee to sue under any other law.
ARTICLE 7
Arbitration
§ 20040. Agreement to Binding Arbitration;

Requirements.
393
Nothing contained in this chapter shall limit the right of a franchisor and
franchisee to agree before or after a dispute has arisen to binding arbitration of
claims under this chapter, provided that:
( a ) The standards applied in such arbitration are not less than the
requirements specified in this chapter; and
(b) The arbitrator or arbitrators employed in such arbitration are chosen
from a list of impartial arbitrators supplied by the American Arbitration
Association or other impartial person.
Annotations
Cases
Nagrampa v. MailCoups, Inc., 469 F.3d 1257 (9th Cir. 2006) . In this en banc decision
the Ninth Circuit held that a challenge only to the arbitration clause contained in a franchise
agreement on the grounds of unconscionability is an issue to be decided by the judge, and is
not an issue for the arbitrator. In contrast, a challenge to the entire agreement as being
unconscionable is for the arbitrator to decide.
ARTICLE 8
Venue of Disputes
§ 20040.5. Prohibition Against Out-of-State Venue

Restriction in Franchise Agreement.
A provision in a franchise agreement restricting venue to a forum outside
this state is void with respect to any claim arising under or relating to a
franchise agreement involving a franchise business operating within this state.
Leg.H. 1994 ch. 1277.
Annotations
Cases
Bradley v. Harris Research Inc., 275 F.3d 884 (9th Cir. 2001) . This statute which
purports to invalidate a forum selection clause calling for venue in a forum outside of
California is preempted by the Federal Arbitration Act. Accordingly, a franchise agreement
requiring arbitration outside California is valid and enforceable.
394
ARTICLE 9
Miscellaneous Provisions
§ 20041. Franchisees Subject to Chapter.

The provisions of this chapter shall apply only to franchises granted or
renewed on or after January 1, 1981 or to franchises of an indefinite duration
which may be terminated by the franchisee or franchisor without cause.
545.
§ 20042. Motor Vehicle Franchises.

The provisions of this chapter shall not apply to franchises governed by the
provisions of Article 4 (commencing with Section 3060) of Chapter 6 of
Division 2 of the Vehicle Code which contain the sole remedies for the matters
contained therein.
§ 20043. Severability of Invalid Provisions of Chapter.

If any provision of this chapter or the application thereof to any person or
circumstances is held invalid, such invalidity shall not affect other provisions or
applications of the chapter which can be given effect without the invalid
provision or application, and to this end the provisions of the chapter are
severable.
CHAPTER 7.5
FRANCHISES
§ 20999. Petroleum Franchise Definitions.
For purposes of this chapter, the following terms shall have the following
meanings:
(a) “Franchise” means any contract between a refiner and a distributor,
395
between a refiner and a retailer, between a distributor and another
distributor, or between a distributor and a retailer, under which a refiner or
distributor authorizes or permits a retailer or distributor to use, in
connection with the sale, consignment, or distribution of gasoline, diesel,
gasohol, or aviation fuel, a trademark which is owned or controlled by such
refiner or by a refiner which supplies fuel to the distributor which
authorizes or permits such use. The term “franchise” includes the following:
(1) Any contract under which a retailer or distributor is authorized
or permitted to occupy leased marketing premises, which premises are
to be employed in connection with the sale, consignment, or distribution
of fuel under a trademark which is owned or controlled by such refiner
or by a refiner which supplies fuel to the distributor which authorizes or
permits such occupancy.
(2) Any contract pertaining to the supply of fuel which is to be sold,
consigned, or distributed under a trademark owned or controlled by a
refiner, or under a contract which has existed continuously since May
15, 1973, and pursuant to which, on May 15, 1973, fuel was sold,
consigned, or distributed under a trademark owned and controlled on
such date by a refiner.
( 3 ) The unexpired portion of any franchise, as defined by the
preceding provisions of this paragraph, which is transferred or assigned
as authorized by the provisions of such franchise or by any applicable
provision of state law which permits such transfer or assignment without
regard to any provision of the franchise.
( b ) “Franchise relationship” means the respective fuel marketing or
distribution obligations and responsibilities of a franchisor and a franchisee
which result from the marketing of fuel under a franchise.
( c ) “Franchisor” means a refiner or distributor who authorizes or
permits, under a franchise, a retailer or distributor to use a trademark in
connection with the sale, consignment, or distribution of fuel.
(d) “Franchisee” means a retailer or distributor who is authorized or
permitted, under a franchise, to use a trademark in connection with the sale,
consignment, or distribution of fuel.
(e) “Refiner” means any person engaged in the refining of crude oil to
produce fuel, and includes any affiliate of such person.
( f ) “Distributor” means any person, including any affiliate of such
person, who either purchases fuel for sale, consignment, or distribution to
another, or receives fuel on consignment for consignment or distribution to
396
his or her own fuel accounts or to accounts of his or her supplier, but shall
not include a person who is an employee of, or merely serves as a common
carrier providing transportation service for, such supplier.
( g) “Retailer” means any person who purchases fuel for sale to the
general public for ultimate consumption.
(h) “Marketing premises” means, in the case of any franchise, premises
which, under such franchise, are to be employed by the franchisee in
( i ) “Leased marketing premises” means marketing premises owned,
leased, or in any way controlled by a franchisor and which the franchisee is
authorized or permitted, under the franchise, to employ in connection with
the sale, consignment, or distribution of fuel.
( j ) “Contract” means any oral or written agreement. For supply
purposes, delivery levels during the same month of the previous year shall
be prima facie evidence of an agreement to deliver such levels.
(k) “Trademark” means any trademark, trade name, service mark, or
other identifying symbol or name.
(l) “Fuel” means gasoline, diesel, gasohol, or aviation fuel.
( m) “Failure” does not include any failure for a cause beyond the
reasonable control of either the franchise relationship or the franchisee.
( n) “Fail to renew” and “nonrenewal” mean, with respect to any
franchise relationship, a failure to reinstate, continue, or extend the franchise
relationship at any of the following times:
(1) At the conclusion of the term, or on the expiration date, stated in
the relevant franchise.
(2) At any time, in the case of the relevant franchise which does not
state a term of duration or an expiration date.
(3) Following a termination, on or after the effective date of this act,
of the relevant franchise which was entered into prior to the effective
date of this act and has not been renewed after that date.
( o ) “Affiliate” means any person who, other than by means of a
franchise, controls, is controlled by, or is under common control with, any
other person.
(p) “Relevant geographic market area” includes this state or a standard
metropolitan statistical area within this state which has been established by
the United States Office of Management and Budget.
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(q) “Termination” includes cancellation.
Leg.H. 1981 ch. 90 § 2.
§ 20999.1. Termination, Cancellation, or Refusal to

Renew Franchise Without Good Cause Not
Permitted.
Notwithstanding the terms of any franchise, no franchisor shall terminate,
cancel, or fail to or refuse to renew any existing franchise without good cause.
As used in this section good cause is limited to the following:
(a) The gasoline dealer or petroleum distributor failed to comply with
essential and reasonable requirements of the franchise agreement;
(b) The gasoline dealer or petroleum distributor failed to act in good
faith in carrying out the terms of the franchise; or
(c) The franchisor is withdrawing from the marketing location at which
the franchise of a gasoline dealer is located, provided that the franchisor
pays the gasoline dealer the current wholesale market value for all
qualifying equipment and supplies purchased by the gasoline dealer from the
franchisor or affiliate of the franchisor. This subdivision shall only apply to
those gasoline dealer franchises which are entered into or renewed on or
after January 1, 1979. As used in this subdivision, “qualifying equipment
and supplies” means all equipment and supplies purchased by the gasoline
dealer from the franchisor or an affiliate of the franchisor which is free and
clear of all liens, security interests and other encumbrances, valued on a
first-in, first-out basis, evidenced by receipted invoices, and is (i) in first-
class and resalable condition, (ii) in the original packages or containers and
(iii) bears the original labels and trademarks, and (iv) the goods display no
evidence of deterioration. This subdivision shall not be construed to create
any priority over any other debt between the parties to the franchise arising
from the same franchise agreement.
(d) For other legitimate business reasons (except that a termination, or
cancellation of a franchise for the purpose of enabling the petroleum
distributor or manufacturer to assume operation of the distributor’s or
gasoline dealer’s business shall not be considered to be a legitimate
business reason unless the gasoline dealer or distributor is paid reasonable
compensation for the value of his franchise, including a reasonable amount
for goodwill).
Leg.H. 1975 ch. 640, 1978 ch. 707, 1981 ch. 90.
398
§ 20999.2. Accompaniment of Dealers by Counsel at
Meetings.
No petroleum distributor shall deny to any gasoline dealer or prospective
gasoline dealer the right to be accompanied by counsel or a personal
representative to any meeting held between the parties for the purpose of
negotiating the terms of a franchise.
Leg.H. 1978 ch. 706.
§ 20999.25. Leased Marketing Premises; Franchisee’s

First Refusal Rights; Sale to Franchisee of
Improvements.
(a) In the case of leased marketing premises as to which the franchisor owns
a fee interest, the franchisor shall not sell, transfer, or assign to another person
the franchisor’s interest in the premises unless the franchisor has first either
made a bona fide offer to sell, transfer, or assign to the franchisee the
franchisor’s interest in the premises, other than signs displaying the franchisor’s
insignia and any other trademarked, servicemarked, copyrighted or patented
items of the franchisor, or, if applicable, offered to the franchisee a right of first
refusal of any bona fide offer acceptable to the franchisor made by another to
purchase the franchisor’s interest in the premises.
(b) In the case of leased marketing premises which the franchisor leases
from a third party, following notice by the franchisor to the franchisee of
termination or nonrenewal of the franchise by reason of the expiration of the
franchisor’s underlying lease from the third party, the franchisor shall, upon
request by the franchisee and subject to the franchisee purchasing or leasing the
premises from the third party prior to the date of termination or nonrenewal of
the franchise set forth in the notice, make a bona fide offer to sell to the
franchisee any interest the franchisor may have in the improvements on the
premises, other than signs displaying the franchisor’s insignia and any other
trademarked, servicemarked, copyrighted or patented items of the franchisor, at
a price not to exceed the fair market value of the improvements or the book
value, whichever is greater, or, if applicable, offer the franchisee a right of first
refusal of any bona fide offer acceptable to the franchisor made by another to
purchase the franchisor’s interest in the improvements. For the purposes of this
subdivision, “book value” means actual cost less actual depreciation taken.
( c ) Nothing in this section shall be deemed to require a franchisor to
continue an existing franchise agreement or to renew a franchise relationship if
not otherwise required by federal law.
399
( d) For the purposes of this section, the following terms shall have the
following meanings:
(1) “Marketing premises” means, in the case of any franchise, premises
connection with the sale, consignment, or distribution of motor fuel.
( 2 ) “Leased marketing premises” means marketing premises owned,
the sale, consignment, or distribution of motor fuel.
Leg.H. 1981 ch. 512, 1985 ch. 442.
Annotations
Cases
Abrahim & Sons Enterprises v. Equilon Enterprises, LLC, 292 F.3d 958 (9th Cir.
2002). Under § 20999.25 an oil company franchisor cannot sell franchised premises without
giving the franchisee a right of first refusal. Shell and Texaco formed Equilon as a limited
liability company which is owned and controlled by them. When Shell and Texaco transferred
several gasoline stations to Equilon they triggered the right of first refusal. Therefore they
were obligated to offer the gasoline stations to their franchisees.
Forty-Niner Truck Plaza, Inc. v. Union Oil Co. (1997) 58 Cal. App. 4th 1261, 68 Cal.
Rptr. 2d 532, rehearing denied, review denied. Section 20999.25 was upheld as constitutional
against a challenge that it was an unconstitutional taking or was unconstitutionally overbroad.
Further, the court held that the right of first refusal applied to an individual site which was
included in a sale transaction covering many sites.
§ 20999.3. Suit for Injunctive Relief for Violation of

Chapter; Damages; Costs; Limitation of Actions.
(a) Any person who violates any provision of this chapter may be sued in
the superior court in the county in which the defendant resides or where a
franchise affected by the violation does business, for temporary and permanent
injunctive relief and for damages, if any, and the costs of suit.
(b) No action shall be maintained to enforce any liability created under any
provision of this chapter unless brought before the expiration of two years after
the violation upon which it is based or the expiration of one year after the
discovery by the plaintiff of the facts constituting such violation, whichever
occurs first.
Leg.H. 1978 ch. 707, 1981 ch. 512.
400
§ 20999.4. Notification to Governor of Withdrawal from
Marketing in Area.
At such time as a franchisor intends to withdraw from the marketing of fuel
through retail and distribution outlets in the relevant geographic market area,
prompt notification, together with a plan describing the schedule and conditions
of the withdrawal, shall be provided by the franchisor to the Governor.
Leg.H. 1981 ch. 90.
CHAPTER 12
PRECIOUS METAL MARKING

ARTICLE 1
General Provisions
§ 22100. Construction of Precious Metal Marking

Chapter.
Unless the context otherwise requires, the general provisions set forth in this
article govern the construction of this chapter.
Leg.H. 1941 ch. 316.
§ 22101. Definition of “Article.”

“Article” means any article of merchandise, and includes each and every
portion of any such article whether or not such portion is separable or is a
distinct part thereof.
Leg.H. 1941 ch. 316.
§ 22102. Definition of “Mark.”

“Mark” means any mark, sign, device, imprint, stamp or brand applied to
any article or to any tag, card, paper, label, box, carton, container, holder,
package cover or wrapping attached to, used in conjunction with or to inclose
any article, or to any bill, bill of sale, invoice, statement, letter, circular,
advertisement, notice, memorandum or other writing or printing concerning any
401
article.
Leg.H. 1941 ch. 316.
§ 22103. Definition of “Apply.”

“Apply,” “applies” or “applied” mean imprint, emboss or engrave on the
article itself and not otherwise.
Leg.H. 1941 ch. 316, 1943 ch. 919.

“Person” includes a firm, partnership, association, limited liability
company, and corporation.
Leg.H. 1941 ch. 316, 1994 ch. 1010.
ARTICLE 2
The Platinum Group
§ 22120. Platinum Group Metals Subject to Article.

The provisions of this article shall apply exclusively to the following metals
and to the alloys of each:
(a) Platinum
(b) Iridium
(c) Palladium
(d) Ruthenium
(e) Rhodium
(f) Osmium.
Leg.H. 1941 ch. 316.

“Quality mark” is any mark describing, identifying or referring to or
appearing or seeming or purporting to indicate, describe, identify or refer to the
partial or total presence or existence of, or the quality of, or the percentage of,
or the purity of, or the number of parts of platinum, iridium, palladium,
402
ruthenium, rhodium or osmium in any article.
Leg.H. 1941 ch. 316.
§ 22122. Application of Quality Marks to Articles;

Legibility of Marks.
No more than one quality mark shall be applied to any article and such
quality mark shall be applied to such article in only one place thereof, except as
otherwise in this article specifically permitted. Each quality mark shall be
legible, clear and distinct.
Leg.H. 1941 ch. 316.
§ 22123. Quality Mark Does Not Apply to Mechanisms,

Works or Movements.
If an article is composed of mechanism, works or movements and of a case
or cover containing the mechanism, works or movements, a quality mark applied
to the article shall not apply to the mechanism, works or movements.
Leg.H. 1941 ch. 316.
§ 22124. Quality Mark Does Not Apply to Springs,

Winding Bars, Etc.
A quality mark applied to any article shall not apply to springs, winding
bars, sleeves, crown cores, mechanical joint-pins, screws, rivets, dustbands,
detachable movement rims, hat-pin stems, bracelet or necklace snap tongues.
Leg.H. 1941 ch. 316.
§ 22125. Quality Mark Does Not Apply to Pin Tongues,

Joints, Catches, Etc.
If a quality mark is applied to an article in accordance with the provisions
of subdivision (e) of Section 22128, it shall not apply to pin tongues, joints,
catches, lapel button backs and posts to which they are attached, scarf-pin
stems, hat-pin sockets, shirt-stud backs, vest-button backs and any screw backs,
if such parts are made of the same quality of gold as that used in the balance of
the article.
Leg.H. 1941 ch. 316.
§ 22126. Trademark Required to Be Applied to Article
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With Quality Mark; Marking With Identification
Numerals.
If a quality mark is printed, stamped or branded on any article itself, the
person so applying such mark shall also apply a trade-mark duly applied for or
registered to him under the laws of the United States. If the person so applying
such quality mark is the manufacturer of the article and has sold or contracted to
sell such article to a jobber, wholesale or retail dealer regularly engaged in the
business of buying and selling similar articles, this section shall be deemed to
be complied with if a trade-mark duly registered under the laws of the United
States to such jobber, wholesale or retail dealer is applied to such article. A
manufacturer of an article may also mark on the article, in addition to the marks
herein specifically required, numerals intended to identify the article or the
design or pattern used in such article if such numerals do not appear or purport
to be a part of the quality mark and are not calculated to mislead or deceive any
person into believing that they are a part of the quality mark.
Leg.H. 1941 ch. 316.
§ 22127. Parts or Percentages Defined by Weight.

Wherever in this article provision is made for marking the number of parts
or percentage of metals in any article such number or percentage shall refer to
weight and not to volume, thickness or any other standard of measurement.
Leg.H. 1941 ch. 316.
§ 22128. Standards for Application of Quality Mark to

Article.
No quality mark shall be applied to any article except in accordance with
the following provisions of this section:
( a ) An article consisting of at least 985/1000ths parts of platinum,
iridium, palladium, ruthenium, rhodium, or osmium, where solder is not
used and at least 950/1000ths parts of said metal or metals where solder is
used, may be marked “platinum”; provided, that the total of the
aforementioned metals other than pure platinum shall amount to no more than
50/1000ths parts of the contents of the entire article.
( b ) An article consisting of at least 985/1000ths parts of platinum,
iridium, palladium, ruthenium, or osmium, where solder is not used and at
least 950/1000ths parts of the said metal or metals where solder is used;
and provided further, that at least 750/1000ths parts of said article are pure
platinum, may be marked “platinum”; provided immediately preceding the
404
mark “platinum” there is marked the name or abbreviation of either iridium,
palladium, ruthenium, rhodium, or osmium, whichever of said metals
predominates; and provided further, that such predominating other metal
must be more than 50/1000ths parts of the entire article.
( c ) An article consisting of at least 985/1000ths parts of platinum,
iridium, palladium, ruthenium, rhodium, or osmium, where solder is not
used and at least 950/1000ths parts of said metals where solder is used;
provided, more than 500/1000ths parts of said article consists of pure
platinum, may be marked with the word “platinum”; provided, that said
word is immediately preceded by a decimal fraction in one-thousandths
showing the platinum content of the entire article; and further provided, that
said mark “platinum” be followed by the name or abbreviation as herein
allowed, of such one or more of the following metals, to wit: iridium,
palladium, ruthenium, rhodium, or osmium, that may be present in the article
in quantity of more than 50/1000ths parts of the entire article. The name of
such other metal or metals other than platinum, however, shall each be
immediately preceded by a decimal fraction in one-thousandths showing the
content of such other metal or metals in proportion to the entire article, as
for example, 600 plat., 350 pall., or 500 plat., 200 pall., 150 ruth., 100
rhod.
(d) An article consisting of 950/1000ths parts of the following metals:
Platinum, iridium, palladium, ruthenium, rhodium, or osmium with less than
500/1000ths parts of the entire article consisting of pure platinum, may be
marked with the name iridium, palladium, ruthenium, rhodium, or osmium,
whichever predominates in the said article, but in no event with the mark
“platinum”; provided, however, that the quantity of such metal other than
platinum so marked, must be marked in decimal thousandths; and provided
further, that the name of such metal other than platinum so used must be
spelled out in full irrespective of any other provisions of this article to the
contrary.
(e) An article composed of platinum and gold which resembles, appears
or purports to be platinum, may be marked with a carat mark and the
platinum mark; provided:
1. The platinum in such article shall be at least 985/1000ths parts
pure platinum; and
2 . The fineness of the gold in such article shall be correctly
described by the carat mark of said gold; and
3. The percentage of platinum in such article shall be no less than 5
per cent in weight of the total weight of the article. The mark shall be so
applied that the carat mark shall immediately precede the platinum mark,
405
as for example, “14 K & Plat.,” “18 K & Plat.,” as the case may be. If
the percentage of platinum exceeds 5 per cent, the quality mark may also
include a declaration of the percentage of platinum, as for example, “18
K & 1⁄1 Plat.,” or “14 K & ⅛ Plat.,” or as the case may be.
(f) An article composed of platinum and any other material or metal not
resembling, appearing or purporting to be platinum, may be marked with the
word “platinum”; provided, all parts or portions of such article resembling
or appearing or purporting to be platinum, or reasonably purporting to be
described as platinum by said quality mark, shall be at least 985/1000ths
parts pure platinum.
Leg.H. 1941 ch. 316.
§ 22129. Abbreviations of Platinum Metal Names.

Abbreviations. Whenever provided for in this article, and except as
specifically excepted in paragraph (d) of Section 22128:
(a) The word “platinum” may be applied by spelling it out in full or by
the abbreviation “plat.”
(b) The word “iridium” may be applied by spelling it out in full or by
the abbreviation “irid.”
(c) The word “palladium” may be applied by spelling it out in full or by
the abbreviation “pall.”
(d) The word “ruthenium” may be applied by spelling it out in full or by
the abbreviation “ruth.”
(e) The word “rhodium” may be applied by spelling it out in full or by
the abbreviation “rhod.” and
(f) The word “osmium” may be applied by spelling it out in full or by
the abbreviation “osmi.”
Leg.H. 1941 ch. 316.
§ 22130. Assay Certificate as Prima Facie Proof

Concerning Assay.
In any action relating to the enforcement of any provision of this article, a
certificate duly issued by an assay office of the Treasury Department of the
United States, certifying the weight of any article, or any part thereof, or of the
kind, weight, quality, fineness or quantity of any ingredient thereof, shall be
receivable in evidence as constituting prima facie proof of the matter or matters
406
so certified.
Leg.H. 1941 ch. 316.
§ 22131. Prima Facie Proof of Time of Manufacture of

Article After Effective Date of Law.
In any action relating to the enforcement of any provision of this article,
proof that an article has been marked in violation of the provisions of this
article shall be deemed to be prima facie proof that such article was
manufactured after this article became effective.
Leg.H. 1941 ch. 316.
§ 22132. Penalty for Violations; Defense of Exportation.

Any person or any officer, director, employee or agent of any person who
makes, sells, or offers to sell, or dispose of, or has in his possession, with intent
to sell or dispose of any article to which is applied any quality mark which does
not conform to all of the provisions of this article, or from which is omitted any
mark required by the provisions of this article, shall be guilty of a misdemeanor.
It shall be a defense to any prosecution under this article for the defendant to
prove that the said article was manufactured and marked with the intention of
and for purposes of exportation from the United States and that the said article
was either actually exported from the United States to a foreign country within
six months after the date of manufacture thereof with the bona fide intention of
being sold in the said country and of not being reimported; or that it was
delivered within six months after date of manufacture thereof, to a person whose
exclusive customary business is the exportation of such articles from the United
States.
Leg.H. 1941 ch. 316.
ARTICLE 3
Gold
§ 22175. Application of Article to Gold and Its Alloys.

The provisions of this article shall apply exclusively to gold and to its
alloys.
Leg.H. 1941 ch. 319.
407
As used in this article “quality mark” means any mark indicating or
purporting to indicate that any article is composed of gold or of any of its alloys
or indicating or purporting to indicate the quality, fineness, quantity, weight or
kind of gold or its alloys in an article.
Leg.H. 1941 ch. 319.
§ 22177. Quality Marks Must Comply With Provisions

of Article.
A quality mark need not be applied to any article, but if a quality mark is
applied to any article it shall be applied in accordance with the provisions of
this article.
Leg.H. 1941 ch. 319.
§ 22178. Quality Mark to Indicate Gold Content.

A quality mark applied to any article shall indicate the number of twenty-
fourth parts by weight of pure gold or its alloy contained in the article.
Leg.H. 1941 ch. 319.
§ 22179. Permitted Tolerance for Indicated Fineness.

The variation between the actual fineness of the gold or its alloy contained
in any article and that indicated by the quality mark applied to such article shall
not exceed the tolerances for fineness prescribed for articles made of gold and
its alloys which are to be moved in interstate commerce by that act of the United
States Government entitled “An act forbidding the importation, exportation or
carriage in interstate commerce of falsely or spuriously stamped articles of
merchandise made of gold or silver or their alloys, or for other purposes,”
approved June 13, 1906 (34 Stats. 260; 15 U.S.C. Secs. 294–300, inclusive).
Leg.H. 1941 ch. 319.
§ 22180. Requirement to Apply Trademark With

Quality Mark.
Any person who applies or causes any quality mark to be applied to any
article which is made in whole or in part of gold or of any of its alloys shall
also apply a trade-mark duly applied for or registered to him under the laws of
the United States or of this State to such article. If the person so applying such
mark is the manufacturer of the article and has sold or contracted to sell such
408
article to a jobber, wholesale or retail dealer regularly engaged in the business
of buying and selling similar articles, this section shall be deemed to be
complied with if a trade-mark duly registered under the laws of the United
States or of this State to such jobber, wholesale or retail dealer is applied to
such article.
Leg.H. 1941 ch. 319.
§ 22181. Penalty for Nonconforming Marks.

Any person or any officer, director, employee or agent of any person who
makes, sells or offers to sell or dispose of, or has in his possession with intent
to sell or dispose of, any article to which is applied any quality mark which
does not conform to all the provisions of this article or from which is omitted
any mark required by the provisions of this article is guilty of a misdemeanor.
Leg.H. 1941 ch. 319.
CHAPTER 17
INVENTION DEVELOPMENT SERVICES

CONTRACTS
ARTICLE 1
General Provisions
§ 22370. Legislative Findings Concerning Invention

Development Services Contracts; Purpose of
Chapter.
(a) The Legislature finds that there are in the State of California members of
the general public who have ideas or inventions that they believe have
substantial commercial value but which members of the general public do not
have the resources or expertise necessary to develop, manufacture 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 or
marketing ideas or inventions, from manufacturing or marketing products, from
409
publishing literary works or from owning, operating or controlling commercial
enterprises; that there is a significant number of persons who have realized that
inventors are willing to expend substantial sums for services represented to
result in the development, manufacture, promotion, sale 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 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 in connection with invention
development services, sales practices and business methods which have worked
a fraud, deceit, imposition, and financial hardship upon 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 upon the
economy and well-being of this state and its local communities; and that the
provisions of this chapter relating to such 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 and 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 such services as an adjunct to the traditional
commercial enterprises in which they engage as a livelihood.
Leg.H. 1975 ch. 967.
In spite of Bus. & Prof. Code §§ 22370–22395, California inventors continue to be
taken for a ride by some unscrupulous invention development corporations. Often a strong
letter by an attorney arguing “no consideration” can at least free the inventor from any future
obligation to pay. However, recovering any money paid by the inventor is an uphill battle.
410
In an attempt to avoid the requirements of Bus. & Prof. Code §§ 22370–22395, some
invention development companies have had California inventors meet the representative of
the development company in Las Vegas, Nevada. Attorneys should advise their clients that if
any invention development company is attempting to skirt California law by such an action,
this may not be the appropriate invention development company with which to deal.
§ 22371. Definitions Used in Chapter.

As used in this chapter, the following words have the following meanings:
( a ) “Contract for invention development services” shall include a
contract by which an invention developer undertakes to develop or promote
an invention for a customer.
( b) “Customer” shall include any person, firm, corporation, or other
entity that is solicited by, inquires about or seeks the services of, or enters
into a contract for invention development services with an invention
developer, except (1) any department or agency of the federal, state, or local
government, (2) any charitable, scientific, educational, religious, or other
organization qualified under Section 501(c)(3) or described in Section
170(b)(1)(a) of the Internal Revenue Code of 1954, as amended, and (3) any
person, firm, corporation, or other entity regularly engaged in a trade,
business, or profession which has either a net worth of one hundred
thousand dollars ($100,000) or more or gross receipts from any source of
fifty thousand dollars ($50,000) or more during the calendar year in which
any contract for invention development services is signed.
(c) “Invention” shall mean (1) an invention, (2) an idea, (3) a concept,
or (4) any combination thereof.
(d) “Invention developer” shall mean any person, firm, corporation, or
association, and the agents, employees, or representatives of such person,
firm, corporation, or association that develops or promotes or offers to
develop or promote an invention, except (1) any department or agency of the
federal, state, or local government, (2) any charitable, scientific,
educational, religious, or other organization qualified under Section 501(c)
(3) or described in Section 170(b)(1)(a) of the Internal Revenue Code of
1954, as amended, (3) any person, firm, corporation, association, or other
entity whose gross receipts from contracts for invention development
services, as defined in subdivision (a) of Section 22371, do not exceed 10
percent of its gross receipts from all sources during the fiscal year
preceding the year in which any contract for invention development services
is signed, or (4) any person, firm, corporation, association or other entity
that does not charge a fee for invention development services. For the
purposes of this paragraph, “fee” shall include any payment made by the
411
customer to such entity including reimbursements for expenditures made or
costs incurred by such entity but shall not include any payment made from a
portion of the income received by a customer by virtue of invention
development services performed by such entity.
( e ) “Invention development services” shall include acts required or
promised to be performed, or actually performed, or both, by an invention
developer for a customer.
Leg.H. 1975 ch. 967.
ARTICLE 2
General Regulatory Provisions
§ 22372. Requirements for Contract to Be in Writing;

Copy to Be Given to Customer; Subsequent
Contracts.
(a) Every contract for invention development services shall be in writing
and shall be subject to the provisions of this chapter. A copy of the written
contract shall be given to the customer at the time he signs the contract.
(b) If one or more subsequent contracts are contemplated by the invention
developer in connection with an invention, or if the invention developer
contemplates performance of services in connection with an invention in more
than one phase with the performance of each phase covered in one or more
subsequent contracts, the invention developer shall so state in a writing and
shall supply to the customer such writing together with a copy of such contract
or a written summary of the general terms of each and every such subsequent
contract, including the amount of any fees or other consideration required from
the customer, at the time the customer signs the first contract.
Leg.H. 1975 ch. 967.
§ 22373. Cancellation of Contract; Notice of

Cancellation; Required Statement of Right of
Cancellation.
(a) Notwithstanding any contractual provision to the contrary, the invention
developer and the customer shall each have the right to cancel a contract for
invention development services for any reason at any time within seven days of
412
the date the invention developer and the customer sign the contract. Cancellation
shall be effected by written notice mailed or delivered to the invention
developer or the customer. If said notice is mailed, it must be postmarked by
midnight of the last day of the cancellation period. If the notice is delivered, it
must be delivered by the end of the invention developer’s normal business day.
Within five business days after receipt of such notice of cancellation by the
customer, the invention developer shall return to the customer, by mail, all
moneys paid and all materials provided by the customer.
(b) The provisions of subdivision (a) shall apply to every contract executed
between an invention developer and a customer. Each such contract shall
contain the following statement in 10-point boldface type immediately above the
place at which the customer signs the contract: “The seven-day period during
which you may cancel this contract for any reason by mailing or delivering
written notice to the invention developer will expire on ________________
(Last date to mail or deliver notice)
If you choose to mail your notice, it must be placed in the United States mail
properly addressed first-class postage prepaid and postmarked before midnight
of this date. If you choose to deliver your notice to the invention developer
directly, it must be delivered to him by the end of his normal business day on
this date. The invention developer also has the right to cancel this contract by
notice similarly mailed or delivered.”
Leg.H. 1975 ch. 967.
§ 22374. Required Notices on Cover Sheet of Contract.

Each and every contract for invention development services shall carry a
distinctive and conspicuous cover sheet with the following notice (and no other)
imprinted thereon in boldface type of not less than 10-point size: “The following
disclosures are required by law: “You have the right to cancel this contract for
any reason at any time within seven days from the date you and the invention
developer sign the contract and you receive a fully executed copy of it. To
exercise this option you need only mail or deliver to this invention developer
written notice of your cancellation. The method and time for notification is set
forth in this contract immediately above the place for your signature. Upon
cancellation, the invention developer must return by mail, within five business
days, all money paid and all materials provided by you. “Your potential patent
rights may be adversely affected by any attempt to commercialize your idea or
invention before a patent application covering it is filed. Nonconfidential
disclosures of your idea or invention may also trigger certain statutory deadlines
for filing a patent application in the United States and would prevent you from
obtaining valid patent rights in countries whose law provides that patent
applications must be filed before there is a public disclosure. “This contract
413
between you and the invention developer is regulated by law. The invention
developer is not qualified or permitted to advise you whether protection of your
idea or invention is available under the patent, copyright or trademark laws of
the United States or any other law. This contract does not provide any patent,
copyright or trademark protection for your idea or invention. If your idea or
invention is patentable, copyrightable or subject to trademark protection, or
infringes an existing valid patent, copyright or trademark or a patent, copyright
or trademark for which application has been made, your failure to inquire into
these matters may affect your rights to your idea or invention.”
Leg.H. 1975 ch. 967, 1983 ch. 332.
§ 22375. Interest of Developer in Title to Invention

Prohibited; Exceptions.
No invention developer shall acquire any interest, partial or whole, in the
title to the customer’s invention, unless the invention developer contracts to
manufacture the invention and acquires such interest for such purpose at or about
the time the contract for manufacture is executed. Nothing in this section shall be
construed to prohibit an invention developer from contracting with a customer to
receive a portion of any proceeds accruing to the customer as a result of
performance of invention development services by the invention developer.
Leg.H. 1975 ch. 967.
§ 22376. Third Party Rights and Defenses May Not Be

Cut Off by Contract.
No contract for invention development services shall require or entail the
execution of any note or series of notes by the customer which, when separately
negotiated, will cut off as to third parties any right of action or defense which
the customer may have against the invention developer.
Leg.H. 1975 ch. 967.
§ 22377. Assignee of Developer’s Rights Subject to

Equities and Defenses of Customer.
Any assignee of the invention developer’s rights is subject to all equities
and defenses of the customer against the invention developer existing in favor of
the customer at the time of the assignment.
Leg.H. 1975 ch. 967.
§ 22378. Quarterly Statement of Services.

414
With respect to each and every contract for invention development services,
the invention developer shall deliver to the customer, at the address specified in
the contract at quarterly intervals throughout the term of the contract, a written
statement of the services performed to date; provided, however, the first such
statement need not be delivered until 180 days after the contract is executed.
Leg.H. 1975 ch. 967.
ARTICLE 3
Mandatory Contract Terms
§ 22379. Required Contents of Contract; Type Size.

Every contract for invention development services shall set forth in at least
10-point boldface type, or equivalent size if handwritten, all of the following:
(a) The terms and conditions of payment required by Section 22373.
( b ) A full and detailed description of the acts or services that the
invention developer undertakes to perform for the customer. To the extent
that the description of acts or services affords the invention developer
discretion to decide what acts or services are to be performed by the
invention developer, the invention developer shall exercise that discretion
to promote the best interests of the customer.
(c) A statement whether the invention developer undertakes to construct
one or more prototypes, models, or devices embodying the customer’s
invention.
(d) A statement whether the invention developer undertakes to sell or
distribute one or more prototypes, models, or devices embodying the
customer’s invention.
(e) The name of the person or firm contracting to perform the invention
development services, the name under which said person or firm is doing or
has done business as an invention developer, and the name of any parent,
subsidiary or affiliated company that may engage in performing the invention
development services.
(f) The invention developer’s principal business address and the name
and address of its agent in the State of California authorized to receive
service of process.
(g) The business form of the invention developer, whether corporate,
415
partnership, or otherwise.
(h) A statement of the fee charged, a statement that a portion of the fee
charged will be paid as a commission or other similar payment, if in fact it
is intended to be so paid, to a person inducing, directly or indirectly, a
customer to contract for the services of the invention developer, which
statement shall specify the names of the person or persons receiving said
payment; and a statement of the approximate portion of the fee charged, if
any, that will be expended for services relating to patent matters.
(i) A statement that the invention developer does not intend to expend
more for the invention development services than the fee charged the
customer, if, in fact, it does not, and if it does, a statement of the estimated
expenditures of the invention developer in excess of the fee received from
the customer.
( j ) If any oral or written representation of estimated or projected
customer earnings is made, a statement of such estimation or projection and
the data upon which it is based.
( k ) A single statement setting forth both (1) the total number of
customers who have contracted with the invention developer provided,
however, that the number need not reflect those customers who have
contracted within the last 30 days, and (2) the number of customers that have
received, by virtue of the invention developer’s performance of invention
development services, an amount of money in excess of the amount of money
paid by such customers to the invention developer.
(l) A statement that the invention developer is required to maintain all
records and correspondence relating to performance of the invention
development services for that customer for a period not less than three years
after expiration of the term of the contract for invention development
services.
( m ) The name and address of the custodian of all records and
correspondence relating to the performance of the invention development
services.
( n) A statement that the records and correspondence required to be
maintained by subdivision (m) above will be made available to the
customer or his representative for review and copying at the customer’s
expense on the invention developer’s premises during normal business
hours upon seven days’ written notice, said time period to begin from the
date the notice is placed in the United States mail properly addressed first-
class postage prepaid.
416
( o) A statement of the expected date of completion of the invention
development services.
( p ) A statement as follows: “Your potential patent rights may be
adversely affected by any attempt to commercialize your idea or invention
before a patent application covering it is filed. Nonconfidential disclosures
of your idea or invention may also trigger certain statutory deadlines for
filing a patent application in the United States and would prevent you from
applications must be filed before there is a public disclosure. “This contract
between you and the invention developer is regulated by law. The invention
developer is not qualified or permitted to advise you whether protection of
your idea or invention is available under the patent, copyright or trademark
laws of the United States or any other law. This contract does not provide
any patent, copyright or trademark protection for your idea or invention. If
your idea or invention is patentable, copyrightable or subject to trademark
protection, or infringes an existing valid patent, copyright or trademark or a
patent, copyright or trademark for which application has been made, your
failure to inquire into these matters may affect your rights to your idea or
invention.”
Leg.H. 1975 ch. 967, 1983 ch. 332.
ARTICLE 4
Disclosures Made Prior to Contract
§ 22380. Disclosure of Fee in Advertisements.

Every invention developer who charges a fee or requires any consideration
for his invention development services must clearly and conspicuously disclose
such fact in every advertisement of such services.
Leg.H. 1975 ch. 967.
§ 22381. Required Disclosures to Potential Customers.

In the first oral communication with a customer or in the first written
response to an inquiry by a customer other than an oral communication or
written response, the primary purpose of which is to arrange an appointment
with the invention developer for presentation of his or her invention
development services, the invention developer shall cause the following written
disclosures to be made and given to each customer at the time of the disclosure:
417
( a ) A statement of the fee charged, if known, or a statement of the
approximate range of fees charged; a statement that a portion of the fee
charged will be paid as a commission or other similar payment, if in fact it
is intended to be so paid, to a person inducing, directly or indirectly, a
customer to contract for the services of the invention developer; and a
statement of the approximate portion of the fee charged, if any, that will be
expended for services relating to patent matters.
(b) A statement that the invention developer does not intend to expend
more for the invention development services than the fee charged the
customer, if, in fact, it does not, and if it does, a statement of the estimated
expenditures of the invention developer in excess of the fee received from
the customer.
( c ) A single statement setting forth both (1) the total number of
customers who have contracted with the invention developer; however, the
number need not reflect those customers who have contracted within the last
30 days; and (2) the number of customers that have received by virtue of the
invention developer’s performance of invention development services an
amount of money in excess of the amount of money paid by those customers
to the invention developer.
( d ) A statement as follows: “Your potential patent rights may be
adversely affected by any attempt to commercialize your idea or invention
before a patent application covering it is filed. Nonconfidential disclosures
of your idea or invention may also trigger certain statutory deadlines for
filing a patent application in the United States and would prevent you from
applications must be filed before there is a public disclosure. Any contract
for invention development services between you and our firm will be
regulated by law. Our firm is not qualified or permitted to advise you
whether protection of your idea or invention is available under the patent,
copyright or trademark laws of the United States or any other law. The
contract does not provide any patent, copyright or trademark protection for
your idea or invention. If your idea or invention is patentable, copyrightable
or subject to trademark protection, or infringes an existing valid patent,
copyright or trademark or a patent, copyright or trademark for which
application has been made, your failure to inquire into these matters may
affect your rights to your idea or invention.”
Leg.H. 1975 ch. 967, 1982 ch. 534, 1983 ch. 332.
ARTICLE 4.5
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Remedies and Enforcement
§ 22382. Chapter Not Exclusive; Other Laws

Applicable.
The provisions of this chapter are not exclusive and do not relieve the
parties or the contract subject thereto from compliance with all other applicable
provisions of law.
Leg.H. 1975 ch. 967.
§ 22383. Noncomplying Contracts Void; Exception.

Any contract for invention development services which does not comply
with the applicable provisions of this chapter shall be void and unenforceable
as contrary to public policy, provided that no contract shall be void and
unenforceable if the invention developer proves that noncompliance was
unintentional and resulted from a bona fide error notwithstanding the use of
reasonable procedures adopted to avoid any such errors and makes an
appropriate correction.
Leg.H. 1975 ch. 967.
§ 22384. False, Fraudulent, or Misleading

Representations Inducing Reliance: Contract Void.
Any contract for invention development services entered into in reliance
upon any willful and false, fraudulent, or misleading representation by the
invention developer shall be void and unenforceable.
Leg.H. 1975 ch. 967.
§ 22385. Waiver by Customer of Provisions of Chapter

Void.
Any waiver by the customer of the provisions of this chapter shall be
deemed contrary to public policy and shall be void and unenforceable.
Leg.H. 1975 ch. 967.
§ 22386. Civil Action for Damages Caused to Customer.

Any person who has been injured by a violation of this chapter by an
invention developer, or by any false or fraudulent statement, representation, or
omission of material fact by an invention developer, or by failure of an
419
invention developer to make all the disclosures required by Section 22379, may
bring a civil action against the invention developer for the greater of the
following amounts:
(1) Three thousand dollars ($3,000).
(2) Three times the amount of the actual damages, if any, sustained by
the plaintiff.
In addition to the greater of the preceding amounts, the court may award
reasonable attorney’s fees to the plaintiff.
Leg.H. 1975 ch. 967.
§ 22387. Penalty for Willful Violations; Actions to

Restrain Violations; Persons Who Can Bring
Actions; Duty to Bring Same.
Any invention developer who willfully violates any provision of this
chapter, or willfully enters an invention development contract which omits any
duty or disclosure required by this chapter, is guilty of a misdemeanor. Any
superior court of this state shall have jurisdiction in equity to restrain and enjoin
the violation of any of the provisions of this chapter relating to invention
development services and contracts therefor. The duty to institute actions for
violation of such provisions of this chapter, including equity proceedings to
restrain and enjoin such violations, is hereby vested in the Attorney General,
district attorneys, county counsels, and city attorneys. The Attorney General, any
district attorney, or city attorney may prosecute misdemeanor actions or institute
equity proceedings or both. This section shall not be deemed to prohibit the
enforcement by any person of any right provided by this or any other law.
Leg.H. 1975 ch. 967.
§ 22388. Penalty for Failure to Disclose.

Failure to make the disclosure required by Article 4 (commencing with
Section 22380) shall render any contract subsequently entered into between the
customer and the invention developer voidable by the customer.
Leg.H. 1975 ch. 967.
ARTICLE 5
Financial Requirements
420
§ 22389. Bond Filed by Invention Developers; Amount
of Bond.
Every invention developer rendering or offering to render invention
development services in this state shall maintain a bond issued by a surety
company admitted to do business in this state. The principal sum of the bond
shall be 5 percent of the invention developer’s gross income from the invention
development business in this state during the invention developer’s last fiscal
year, except that the principal sum of the bond shall not be less than twenty-five
thousand dollars ($25,000) in the first or any subsequent year of operations. A
copy of such bond shall be filed with the Secretary of State prior to the time the
invention developer first commences business in this state. The invention
developer shall have 90 days after the end of each fiscal year within which to
change the bond as may be necessary to conform to the requirements of this
section.
Leg.H. 1975 ch. 967.
§ 22390. Beneficiary of Bond.

The bond required by Section 22389 shall be in favor of the State of
California for the benefit of any person who, after entering into a contract for
invention development services with an invention developer is damaged by
fraud or dishonesty or failure to provide the services of the invention developer
in performance of the contract.
Leg.H. 1975 ch. 967, 1982 ch. 517.
§ 22391. Claim Against Deposit Made in Lieu of Bond;

Requirements; Payment of Claim; Retention of Cash
Deposit for 2 Years; Return of Deposit.
(a) When a deposit has been made in lieu of a bond pursuant to Section
995.710 of the Code of Civil Procedure, the person asserting a claim against the
deposit shall, in lieu of Section 996.430 of the Code of Civil Procedure,
establish the claim by furnishing evidence to the Secretary of State of a money
judgment entered by a court together with evidence that the claimant is a person
described in Section 22390.
(b) When a person has established the claim with the Secretary of State, the
Secretary of State shall review and approve the claim and enter the date of
approval thereon. The claim shall be designated an “approved claim.”
( c ) When the first claim against a particular deposit account has been
approved, it shall not be paid until the expiration of a period of 240 days after
421
the date of its approval by the Secretary of State. Subsequent claims that are
approved by the Secretary of State within the same 240-day period shall
similarly not be paid until the expiration of the 240-day period. Upon the
expiration of the 240-day period, the Secretary of State shall pay all approved
claims from that 240-day period in full unless the deposit is insufficient, in
which case each approved claim shall be paid a pro rata share of the deposit.
(d) When the Secretary of State approves the first claim against a particular
deposit account after the expiration of a 240-day period, the date of approval of
that claim shall begin a new 240-day period to which subdivision (c) shall
apply with respect to the amount remaining in the deposit account.
(e) After a deposit account is exhausted, no further claims shall be paid by
the Secretary of State. Claimants who have had their claims paid in full or in
part pursuant to subdivisions (c) and (d) shall not be required to return funds
received from the deposit for the benefit of other claimants.
(f) When a deposit has been made in lieu of a bond, the amount of the
deposit shall not be subject to attachment, garnishment, or execution with
respect to an action or judgment against the invention developer, other than as to
an amount no longer needed or required for the purpose of this chapter which
would otherwise be returned to the invention developer by the Secretary of
State.
(g) The Secretary of State shall retain a cash deposit for two years from the
date the Secretary of State receives written notification from the assignor of the
deposit that the assignor has ceased to engage in the business of an invention
developer or has filed a bond pursuant to Section 22389, provided that there are
no outstanding claims against the deposit. The written notice shall include all of
the following: (1) name, address, and telephone number of the assignor; (2)
name, address, and telephone number of the bank at which the deposit is
located; (3) account number of the deposit; and (4) a statement whether the
assignor is ceasing to engage in the business of an invention developer or has
filed a bond with the Secretary of State. The Secretary of State shall forward an
acknowledgment of receipt of the written notification to the assignor at the
address indicated therein, specifying the date of receipt of the written notice and
anticipated date of release of the deposit.
( h) This section shall apply to all deposits retained by the Secretary of
State.
(i) A judge of a superior court may order the return of the deposit prior to
the expiration of two years upon evidence satisfactory to the judge that there are
no outstanding claims against the deposit or order the Secretary of State to retain
the deposit for a sufficient period beyond the two years specified in subdivision
422
(g) to resolve outstanding claims against the deposit.
Leg.H. 1984 ch. 545, 1996 ch. 633, 1998 ch. 829, 2002 ch. 784.
§ 22391.1. Enforcement of Provisions; Filing Fee.

( a ) The Secretary of State shall enforce the provisions of this title that
govern the filing and maintenance of bonds and deposits in lieu of bonds.
(b) The Secretary of State shall charge and collect a filing fee not to exceed
the cost of filing the bond or the deposit in lieu of a bond pursuant to Section
995.710 of the Code of Civil Procedure.
Leg.H. 1996 ch. 633.
ARTICLE 6
§ 22392. Invention Developers to Maintain Records and

Correspondence.
Every invention developer shall maintain all records and correspondence
relating to performance of each invention development service contract for a
period of not less than three years after expiration of the term of each such
contract.
Leg.H. 1975 ch. 967.
§ 22393. No Reference in Advertisements to

Compliance With Act Permitted.
No invention developer shall make, or authorize the making of, any
reference to compliance by it with this act in any advertisement.
Leg.H. 1975 ch. 967.
§ 22394. Severability of Invalid Provisions.

If any provision of this act or the application thereof to any person or
circumstances is held unconstitutional, the remainder of the chapter and the
application of such provision to other persons and circumstances shall not be
affected thereby.
Leg.H. 1975 ch. 967, 1982 ch. 466.
423
§ 22395. Requirement for Invention Developer to
Maintain Confidentiality of Customer Disclosures;
Exceptions to Same; Waiver by Customer.
An invention developer shall maintain as confidential all disclosures made
to it by a customer seeking invention development services, except:
(a) Information which at the time of disclosure is in the public domain.
( b ) Information which, after disclosure, becomes part of the public
domain by publication or otherwise, independently of any act or omission
by the invention developer.
( c ) Information which the invention developer can establish by
competent proof was in its possession at the time of disclosure by the
customer, and was not acquired, directly or indirectly, from the customer.
( d) Information which the invention developer receives from a third
party; provided, however, that such information was not obtained in
confidence by said third party, directly or indirectly, from the customer.
This duty of confidentiality includes the taking of reasonable steps by the
invention developer to prevent disclosure of confidential information to
third parties. This confidential relationship cannot be waived by a customer
without an express written waiver by the customer of the invention
developer’s obligation of confidentiality, and no waiver shall be entered
into until after the disclosures described in Section 22381 have been made.
Leg.H. 1983 ch. 332.
DIVISION 9
ALCOHOLIC BEVERAGES
CHAPTER 13
LABELS AND CONTAINERS

ARTICLE 2
424
Beer
§ 25200. Label; Contents; Refilled containers.

(a) All beer sold in this State state shall have a label affixed to the package
or container thereof, containing the brand and type of beer, upon which shall
appear the true and correct name and address of the manufacturer of the beer,
and also the true and correct name of the bottler of the beer if other than the
manufacturer.
(b) N o A manufacturer, importer, or wholesaler of beer shall not use a
container or carton as a package or container of a beer other than such the beer
as is manufactured by the manufacturer whose name or brand of beer appears
upon the container or carton, or use as a package or container of a beer a
container or carton which bears the name of a manufacturer of beer or the brand
of any beer other than those of the manufacturer of the beer contained in the
container or carton.
(c) A beer manufacturer that refills any container supplied by a
consumer shall affix a label that complies with this section on the
container prior to its resale to the consumer. Any information concerning
any beer previously packaged in the container, including, but not limited to,
information regarding the manufacturer and bottler of the beer, or any
associated brands or trademarks, shall be removed or completely obscured
in a manner not readily removable by the consumer prior to the resale of
the container to the consumer. This subdivision does not authorize a beer
manufacturer to refill a container supplied by a consumer with a capacity
of five liquid gallons or more.
Added Stats 1953 ch 152 § 1. Amended Stats 2013 ch 686 § 2 (AB 647), effective
January 1, 2014.
2013 Amendment:
(1) Added subdivision designations (a) and (b); (2) amended subd (a) by (a) substituting
“state” for “State”; and (b) adding “containing the brand and type of beer,”; (3) amended subd
(b) by (a) substituting “A manufacturer, importer” for “No manufacturer, importer”; (b)
adding “not” after “of beer shall”; and (c) substituting “the beer” for “such beer”; and (4)
added subd (c).
§ 25203. Brand Names; Filing.

Every manufacturer or bottler of beer in this State or elsewhere whose beer
is sold within the State shall file with the department the brand name or names
under which he sells or labels his draught beer sold in the State.
425
Leg.H. 1953 ch. 152, 1955 ch. 447.
ARTICLE 3
Wine
§ 25236. “California Central Coast Counties Dry

Wine.”
Only dry wine produced entirely from grapes grown within the Counties of
Sonoma, Napa, Mendocino, Lake, Santa Clara, Santa Cruz, Alameda, San
Benito, Solano, San Luis Obispo, Contra Costa, Monterey, and Marin may be
labeled with the words “California central coast counties dry wine.” It is
unlawful to label any other wine with a label containing the words “California
central coast counties dry wine.” The department may seize wine labeled in
violation of this section, regardless of where found and may dispose of the wine
pursuant to Section 25355.
Leg.H. 1953 ch. 152, 1955 ch. 447, 1990 ch. 135.
§ 25237. False Representations of Origin.

It is unlawful to make any representation that a wine is produced entirely
from grapes grown in the counties mentioned in Section 25236 unless the
representation is true. This section applies to representations made on labels,
advertising matter, letterheads, invoices, tags, signs, business cards, and all
other representations of any kind whether oral, written, or printed.
Leg.H. 1953 ch. 152.
§ 25238. Records of Wine Growers or Bottlers.

Every wine grower or bottler of wine of any kind within the counties
specified in Section 25236 shall keep a record of all wine not produced by him
and obtained and used by him for any purpose. The record shall show the date
the wine is obtained, the amount thereof, the source from which obtained, the
kind or type of wine, and, in detail, the purpose or purposes for which it is used.
Each wine grower or bottler of wine shall keep a complete record showing the
total amount of wine produced by him, or bottled by him, made entirely from
grapes grown within the counties mentioned in Section 25236.
Leg.H. 1953 ch. 152.
426
§ 25239. Counterfeit Wine Labels.
Every person who, with intent to defraud, either falsely makes, alters,
forges, or counterfeits the label for any wine or uses the label or bottle of any
wine belonging to another, without his or her consent, is guilty of a
misdemeanor. The department may seize wine labeled in violation of this
section, regardless of where found and may dispose of the wine pursuant to
Section 25355.
Leg.H. 1958 ch. 458, 1990 ch. 135.
§ 25240. “Napa Valley” wine label; Designation.

( a ) Any wine labeled with a viticultural area appellation of origin
established pursuant to Part 9 (commencing with Section 9.1) of Title 27 of the
Code of Federal Regulations, other than the viticultural area “Napa Valley,” and
which is located entirely within a county of the 29th class, shall bear the
designation “Napa Valley” on the label in direct conjunction therewith in a type
size not smaller than 1mm less than that of the viticultural area designation
provided neither designation is smaller than 2mm on containers of more than
187ml or smaller than 1mm on containers of 187ml or less. This requirement
shall apply to all wines bottled on or after January 1, 1990.
(b) The department may suspend or revoke the license of any person who
violates this section.
(c) This section shall not apply to any wine labeled with a viticultural area
appellation of origin established pursuant to Part 9 (commencing with Section
9.1) of Title 27 of the Code of Federal Regulations when the name of the
appellation includes the term “Napa Valley.”
January 1, 2008.
§ 25241. “Napa” Label on Wine.

(a)
(1) The Legislature finds and declares that for more than a century, Napa
Valley and Napa County have been widely recognized for producing grapes
and wine of the highest quality. Both consumers and the wine industry
understand the name Napa County and the viticultural area appellations of
origin contained within Napa County (collectively “Napa appellations”) as
denoting that the wine was created with the distinctive grapes grown in
Napa County.
( 2) The Legislature finds, however, that certain producers are using
427
Napa appellations on labels, on packaging materials, and in advertising for
wines that are not made from grapes grown in Napa County, and that
consumers are confused and deceived by these practices.
( 3 ) The Legislature further finds that legislation is necessary to
eliminate these misleading practices. It is the intent of the Legislature to
assure consumers that the wines produced or sold in the state with brand
names, packaging materials, or advertising referring to Napa appellations in
fact qualify for the Napa County appellation of origin.
( b ) No wine produced, bottled, labeled, offered for sale or sold in
California shall use, in a brand name or otherwise, on any label, packaging
material, or advertising, any of the names of viticultural significance listed in
subdivision (c), unless that wine qualifies under Section 4.25a of Title 27 of the
Code of Federal Regulations for the appellation of origin Napa County and
includes on the label, packaging material, and advertising that appellation or a
viticultural area appellation of origin that is located entirely within Napa
County, subject to compliance with Section 25240. Notwithstanding the above,
this subdivision shall not grant any labeling, packaging, or advertising rights that
are prohibited under federal law or regulations.
(c) The following are names of viticultural significance for purposes of this
section:
(1) Napa.
(2) Any viticultural area appellation of origin established pursuant to
Part 9 (commencing with Section 9.1) of Title 27 of the Code of Federal
Regulations that is located entirely within Napa County.
(3) Any similar name to those in paragraph (1) or (2) that is likely to
cause confusion as to the origin of the wine.
( d ) The appellation of origin required by this section shall meet the
legibility and size-of-type requirements set forth in either Section 4.38 or
Section 4.63 of Title 27 of the Code of Federal Regulations, whichever is
applicable.
(e) Notwithstanding subdivision (b), any name of viticultural significance
may appear either as part of the address required by Sections 4.35 and 4.62 of
Title 27 of the Code of Federal Regulations, if it is also the post office address
of the bottling or producing winery or of the permittee responsible for the
advertising, or as part of any factual, nonmisleading statement as to the history
or location of the winery.
(f) The department may suspend or revoke the license of any person who
produces or bottles wine who violates this section. Following notice of
428
violation to the person in possession of the wine and a hearing to be held within
15 days thereafter, if requested by any interested party within five days
following the notice, the department may seize wine labeled or packaged in
violation of this section regardless of where found, and may dispose of the wine
upon order of the department. From the time of notice until the departmental
determination, the wine shall not be sold or transferred.
(g) This section applies only to wine which is produced, bottled, or labeled
after January 1, 2001.
Leg.H. 2000 ch. 831.
Annotations
Cases
Bronco Wine Company v. Jolly, 129 Cal. App. 4th 988, 29 Cal. Rptr. 3d 462 (2005) .
Bronco challenged the application of section 25241 to its wine labels for “Napa Ridge,”
“Napa Creek Winery,” and “Rutherford Vintners” under the commerce clause and the takings
clause when applied to wine sold in interstate commerce. Bronco obtained these brand labels
from prior owners that used grapes from Napa. Bronco uses these labels on wines made from
grapes that come from outside of Napa. Federal labeling requirements allow the use of the
“Napa” related terms under a grandfather clause, but California’s statute does not. Bronco’s
challenges failed. California has a legitimate interest in protecting the reputation of its wine-
growing regions, the statute operates even-handedly with respect to both intrastate and
interstate sales, and federal law permits state laws to impose stricter labeling requirements.
Bronco Wine Co. v. Jolly , 33 Cal. 4th 943, 17 Cal. Rptr. 3d 180 (2004). In a unanimous
opinion, the California Supreme Court reversed the court of appeal’s opinion (See annotation
for Bronco Wine Co. v. Espinoza below), and held that § 25241 is not preempted by federal
law.
Bronco Wine Co. v. Espinoza, 104 Cal. App. 4th 598, 128 Cal. Rptr. 2d 320 (2002)
review granted. The court of appeal held that section 25241 is preempted by federal law and
therefore the statute is invalid. The California Supreme Court granted review of this decision.
§ 25242. Restrictions on Sale of Wine Using Name of

Sonoma in Labeling, Packaging or Advertising.
(a)
( 1) The Legislature finds and declares that for more than a century,
certain California counties have been widely recognized for producing
grapes and wine of the highest quality. Both consumers and the wine
industry associate the names of those counties with the distinctive wine
produced from grapes grown within those counties. If producers were to use
the names of these counties on labels, for packaging materials, and in
429
advertising for wines that are not made from grapes grown in the designated
counties, consumers may be confused or deceived by these practices.
(2) It is the intent of the Legislature to assure consumers that the wines
produced or sold in the state with brand names, packaging materials, or
advertising that mention or refer to these California counties, in fact
accurately reflect the origin of the grapes used to make the referenced wine.
(b)
( 1) No wine produced, bottled, labeled, offered for sale or sold in
California shall use, in a brand name or otherwise, on any label, packaging
material, or advertising, the name of viticultural significance listed in
subdivision (c), unless that wine qualifies under Section 4.25 of Title 27 of
the Code of Federal Regulations for an appellation of origin that is either
Sonoma County or a viticultural area lying entirely within Sonoma County
and includes that appellation of origin on the label, packaging material, and
advertising for the wine.
(2) Notwithstanding paragraph (1), this subdivision shall not grant any
labeling, packaging, or advertising rights that are prohibited under federal
law or regulations.
(c) The following name is of viticultural significance for purposes of this
section:
(1) Sonoma.
(2) Any similar name to that in paragraph (1) that is likely to cause
confusion as to the origin of the wine.
( d ) The appellation of origin required by this section shall meet the
legibility and size-of-type requirements set forth in either Section 4.38 or
Section 4.63 of Title 27 of the Code of Federal Regulations, whichever is
applicable.
(e) Notwithstanding subdivision (b), any name of viticultural significance
may appear either as part of the address required by Sections 4.35 and 4.62 of
Title 27 of the Code of Federal Regulations, if it is also the post office address
of the bottling or producing winery or of the permittee responsible for the
advertising, or as part of any factual, nonmisleading statement as to the history
or location of the winery.
(f) The department may suspend or revoke the license of any person who
produces or bottles wine who violates this section. Following notice of
violation to the person in possession of the wine and a hearing to be held within
15 days thereafter, if requested by any interested party within five days
430
following the notice, the department may seize wine labeled or packaged in
violation of this section regardless of where found, and may dispose of the wine
upon order of the department. From the time of notice until the departmental
determination, the wine shall not be sold or transferred.
(g) This section applies only to wine which is produced, bottled, or labeled
after December 31, 2008.
(h) This section does not pertain to the use of a brand name, or otherwise,
which was the name of the winery owner as established prior to 1950.
§ 25243. Application of Restrictions on Use of a Name

of Viticultural Significance to Multicounty
Appellation.
No provision of this article shall preclude a wine from using, on any label,
packaging material, or advertising, either (a) a truthful, nonmisleading
appellation of origin that complies with Section 4.25(c) of Title 27 of the Code
of Federal Regulations governing multicounty appellations, or (b) a truthful,
nonmisleading statement as to the geographic location of the wine’s stated
appellation or appellations of origin which is located in not more than two
counties, for which the wine qualifies under applicable federal law, or both the
appellation of origin and the statement of geographic location; provided that the
label, packaging material, or advertising contains no other use of a name of
viticultural significance, in a brand name or otherwise, that is prohibited by
Section 25241 or 25242.
§ 25244. “Paso Robles” Wine Label; Designation;

Exception.
Code of Federal Regulations that is located entirely within the “Paso Robles”
viticultural area shall bear the designation “Paso Robles” on the label in direct
conjunction therewith in a type size not smaller than 1 mm less than that of said
viticultural area designation, provided neither designation is smaller than 2mm
on containers of more than 187ml or smaller than 1mm on containers of 187ml
or less.
431
appellation includes the term “Paso Robles.”
(d) This section applies only to wine that is bottled on or after January 1,
2008.
§ 25245. “Lodi” Wine Label; Violation; Exception.

Code of Federal Regulations that is located entirely within the “Lodi”
viticultural area shall bear the designation “Lodi” on the label in direct
conjunction therewith in a type size not smaller than 1mm less than that of said
viticultural area designation, provided neither designation is smaller than 2mm
on containers of more than 187ml or smaller than 1mm on containers of 187ml
or less.
appellation includes the term “Lodi.”
(d) This section applies only to wine that is bottled on or after January 1,
2009.
§ 25246. “Sonoma County” Wine Label; Violation;

Exception.
( a ) Any wine labeled with an American Viticultural Area established
pursuant to Part 9 (commencing with Section 9.1) of Title 27 of the Code of
Federal Regulations, that is located entirely within a county of the 19th class,
shall bear the designation “Sonoma County” on the label in a type size not
smaller than two millimeters on containers of more than 187 milliliters or
smaller than one millimeter on containers of 187 milliliters or less.
432
appellation includes the term “Sonoma County.”
(d) This section shall apply to wines bottled on or after January 1, 2014.

SYNOPSIS
Contents
DIVISION 1 PERSONS
PART 2.9 California Fair Dealership Law
§ 81. Definitions.
§ 82. Purposes.
§ 86. Recovery of Reasonable Attorney’s Fees and Taxable Court Costs.
DIVISION 2 PROPERTY
PART 1 Property in General
TITLE 1 NATURE OF PROPERTY
§ 663. Personalty.
TITLE 2 OWNERSHIP
CHAPTER 1 OWNERS
CHAPTER 2 MODIFICATIONS OF OWNERSHIP
ARTICLE 1 Interests in Property
433
§ 683.2. Severance of Joint Tenant’s Interest Without Consent;
Severance by Written Declaration.
§ 686. Common Interest Created by Mode of Acquisition.
ARTICLE 2 Conditions of Ownership
PART 3 Personal or Movable Property
TITLE 2 PARTICULAR KINDS OF PERSONAL PROPERTY
CHAPTER 3 PRODUCTS OF THE MIND
§ 985. Letters and Private Writings—Title—Publication.
§ 988. Reservation of Ownership Rights in Reproduced, Displayed, or
Performed Work of Art.
§ 989. Injunctive Relief to Preserve or Restore Integrity of Fine Art Work.
DIVISION 3 OBLIGATIONS
PART 3 Obligations Imposed By Law
§ 1710.1. Sale of Property With Manufacturer’s Nameplate, Serial Number, Etc.,
Removed, Defaced, Covered, Altered, or Destroyed.
§ 1717. Action on Contract—Recovery of Attorney’s Fees.
PART 4 Obligations Arising From Particular Transactions
TITLE 1 CONSIGNMENT OF FINE ART
434
TITLE 1.1A AUTOGRAPHED SPORTS MEMORABILIA
§ 1739.7. Sale of Autographed Sports Memorabilia; Certificate of Authenticity
Required; Civil Penalty.
TITLE 1.2 SALE OF FINE PRINTS
CHAPTER 2 FULL DISCLOSURE IN THE SALE OF FINE PRINTS
§ 1742. Informational Details Required to Be Published in Catalogue,
Prospectus, or Circular.
§ 1742.6. Charitable Organizations as Exempt From Disclosure
Requirements.
§ 1744.7. Information Disclosed as Part of Basis of Bargain and as Creating
Express Warranty.
CHAPTER 3 REMEDIES AND PENALTIES
§ 1745. Liability of Offeror or Seller—Amount Recoverable—Limitation
Period for Action.
§ 1745.5. Injunctive Relief; Who May Bring Action; Civil Penalties.
TITLE 1.7 CONSUMER WARRANTIES
CHAPTER 4 GREY MARKET GOODS
TITLE 2.7 CONTRACTS FOR SELLER ASSISTED MARKETING PLANS
§ 1812.203. Filing of Disclosure Statements With Attorney General; Stop
Orders.
§ 1812.204. Restriction on Representations Allowed in Sale or Lease.
§ 1812.205. Written Disclosure to Be Given to Potential Purchaser on Initial
Contact.
§ 1812.207. Contract to Be Written—Copies to Purchaser.
§ 1812.209. Contents of Contract—Procedure for Cancellation.
435
§ 1812.212. Reference to Seller’s Compliance With This Title Prohibited.
§ 1812.214. Designated Agent for Service—Procedure for Service—Procedure
for Bond, Trust Account, or Escrow Account.
§ 1812.221. Establishment and Payment of Claims Against Deposit—Deposit
Not Subject to Attachment, Garnishment, or Execution.
TITLE 4 LOAN
CHAPTER 1.5 LOANS TO MUSEUMS FOR INDEFINITE OR LONG TERMS
§ 1899.5. Notice of Intent to Preserve Interest in Property—Form.
§ 1899.6. Conditions Under Which Museum May Dispose of Loaned
Property.
§ 1899.7. Injury to or Loss of Property on Loan—Published Notice.
§ 1899.8. Limitation on Action Against Museum for Loss.
§ 1899.9. Museum’s Notice to Terminate Indefinite Loan.
TITLE 8 INVOLUNTARY TRUSTS
§ 2223. Creation of Involuntary Trust—Wrongful Detention.
§ 2224. Creation of Involuntary Trust—Mistake or Wrongful Act.
§ 2225. Proceeds or Profits From Sale of Felon’s Story to Be Placed in
Involuntary Trust—Definitions and Procedures.
TITLE 10 RECORDING ARTIST CONTRACTS
§ 2501. Right of Royalty Recipient to Audit Records of Royalty Reporting
Party; Confidential Information.
DIVISION 4 GENERAL PROVISIONS
PART 1 Relief
TITLE 2 COMPENSATORY RELIEF
CHAPTER 1 DAMAGES IN GENERAL
ARTICLE 3 Exemplary Damages
§ 3294. Punitive Damages for Homicide, Oppression, Fraud, or Malice.
CHAPTER 2 MEASURE OF DAMAGES
436
ARTICLE 3 Penal Damages
§ 3344. Use of Another’s Name, Voice, Signature, Photograph, or
Likeness in Advertising or Soliciting Without Prior Consent.
TITLE 3 SPECIFIC AND PREVENTIVE RELIEF
CHAPTER 2 SPECIFIC RELIEF
ARTICLE 3 Specific Performance of Obligations
§ 3390. Contracts Not Subject to Specific Performance.
CHAPTER 3 PREVENTIVE RELIEF
TITLE 4 UNIFORM SINGLE PUBLICATION ACT
TITLE 5 UNIFORM TRADE SECRETS ACT
§ 3426. How Cited.
§ 3426.3. Misappropriation—Recovery of Damages for Loss.
PART 3 Nuisance
TITLE 4 MOTION PICTURES
§ 3505. Exhibition of Motion Picture Showing Intentional Killing or Cruelty to
Animal or Human Is Nuisance.
§ 3506. Action by District Attorney or Attorney General to Enjoin Nuisance—
Independent Evidence Required.
§ 3507. Trial on Merits—Only Permanent Injunction May Be Granted—Appeal.
§ 3507.4. Distributor and Producer Liable to Exhibitor for Damages—Duty to
Assist in Defense—Contract of Exhibition Not Enforceable.
§ 3508.1. Willful Misstatement of Exempt Status of Picture as Misdemeanor.
437
DIVISION 1
PERSONS
PART 2.9
California Fair Dealership Law

This part may be cited as the California Fair Dealership Law.
Leg.H. 1980 ch. 914.
§ 81. Definitions.
As used in this part:
( a ) “Person” means a natural person, partnership, joint venture,
corporation, limited liability company, or other entity.
( b ) “Dealership” means a contract or agreement, either express or
implied, whether oral or written, between two or more persons, by which a
person is granted the right to sell or distribute goods or services, or to use a
trade name, trademark, service mark, logotype, or advertising or other
commercial symbol, in which there is a community of interest in the
business of offering, selling, or distributing goods or services at wholesale,
or at retail, by lease, agreement, or otherwise.
(c) “Grantor” means a person who sells, leases, or otherwise transfers a
dealership.
( d ) “Community of interest” means a continuing financial interest
between the grantor and grantee in either the operation of the dealership or
the marketing of goods or services.
(e) “Dealer” means a person who is a grantee of a dealership situated in
this state.
(f) “Grant” means a sale, lease, or transfer of any kind.
Leg.H. 1980 ch. 914, 1994 ch. 1010.
438
§ 82. Purposes.
This part shall be liberally construed and applied to promote its underlying
purposes and policies, which are as follows:
( a ) The prohibition of discrimination based upon any characteristic
listed or defined in subdivision (b) or (e) of Section 51 in the granting, sale,
transfer, bequest, termination, and nonrenewal of dealerships.
( b) The requirements of this part shall not be varied by contract or
agreement and any portion of a contract or agreement purporting to do so is
void and unenforceable.
January 1, 2008.

On or after January 1, 1981, no grantor, directly or indirectly, shall refuse to
grant a dealership to any person because of any characteristic listed or defined
in subdivision (b) or (e) of Section 51.
January 1, 2008.

On or after January 1, 1981, no grantor, directly or indirectly, may
terminate, cancel, or refuse to renew a dealership agreement with a dealer
because of any characteristic listed or defined in subdivision (b) or (e) of
Section 51.
January 1, 2008.

On or after January 1, 1981, no grantor or dealer, directly or indirectly,
shall refuse to make or to consent to an assignment, sale, transfer, or bequest of
a dealership to any person, or to the intestate succession to the dealership by any
person, because of any characteristic listed or defined in subdivision (b) or (e)
of Section 51. This section shall not be construed to create any right in a dealer
to assign, sell, transfer, or bequeath a dealership where the right did not exist
prior to January 1, 1981.
January 1, 2008.
439
§ 86. Recovery of Reasonable Attorney’s Fees and
Taxable Court Costs.
The prevailing party in any action based on a violation of the provisions of
this part shall be entitled to recover reasonable attorney’s fees and taxable court
costs.
Leg.H. 1980 ch. 914.
The Legislature clearly contemplated and encouraged private suits against discrimination
in granting dealerships by providing for an award of reasonable attorneys’ fees and costs to
the prevailing party. Note, however, that this provision could act in favor of defendants in
suits that are not well-founded.
DIVISION 2
PROPERTY
PART 1
Property in General
TITLE 1
NATURE OF PROPERTY
The ownership of a thing is the right of one or more persons to possess and
use it to the exclusion of others. In this code, the thing of which there may [be]
ownership is called property.
Leg.H. 1872.
Civ. Code §§ 654, 655, 657, 663, 669, 671, 678–692, and 707–711 are the provisions
of California’s basic definitional property laws that are specifically relevant to intellectual
440
property. These sections establish that intellectual property may be exclusively possessed (in
other words, owned) by one or more persons (the owners); that intellectual property is
“personal” or movable property; that it must have an owner; that it may be taken, held, and
disposed of by any person, citizen or alien in California; that it may have absolute or qualified
ownership; that it has all the other general attributes of property, such as being subject to
ownership, jointly, in common, or in partnership; and that it may not be subject to conditions
restraining alienation that are “repugnant to the interest created.”
Annotations
Cases
United States v. Stonehill, 83 Fed.3d 1156 (9th Cir. 1996) (Cal. Civ. Code §§ 654,
663). The Ninth Circuit found that a lawsuit against a town is a chose in action and explained
that California courts have consistently construed Civil Code §§ 654 and 653 relating to
property to include a lawsuit as a chose in action. Thus, such a chose in action is subject to a
federal tax lien.

There may be ownership of all inanimate things which are capable of
appropriation or of manual delivery; of all domestic animals; of all obligations;
of such products of labor or skill as the composition of an author, the good-will
of a business, trademarks and signs, and of rights created or granted by statute.
Leg.H. 1872.
441
The right to use a trademark cannot be transferred “in gross,” that is, apart from the
goodwill to which it pertains. Assignments of trademarks, in order to be effective and not
endanger the vitality of the trademark, should recite that the goodwill represented by the
trademark is being assigned as well as the right to use the trademark.
See also Consultant’s Comments to Civ. Code § 654.
Annotations
Cases
G. S. Rasmussen & Assoc. v. Kalitta Flying Service (9th Cir. 1992) 958 F.2d 896 . The
Ninth Circuit overruled a district court finding that plaintiff did not have a protectable
property interest in Supplemental Type Certificate (STC) issued by the Federal Aviation
Administration (FAA) as part of its multistep certification process for airplane design and
production. The nature of the property right in the STC is that it helps secure a government
privilege to do something that otherwise would be forbidden. The Ninth Circuit looked to
state law in determining if a property right exists, specifically to Civ. Code § 655 and
California cases determining property interests, and found that three criteria must be met
before a property right will be recognized under California law: (1) there must be an interest
capable of precise definition; (2) the interest must be capable of exclusive possession or
control; and (3) the putative owner must have established a legitimate claim to exclusivity.
The interest in the STC to obtain a government privilege easily meets these criteria and is a
property right under California law; that protection is not preempted by federal law.

Property is either:
1. Real or immovable; or,
2. Personal or movable.
Leg.H. 1872.
See Consultant’s Comments to Civ. Code § 654.
§ 663. Personalty.
Every kind of property that is not real is personal.
Leg.H. 1872.
442
TITLE 2
OWNERSHIP
CHAPTER 1
OWNERS
All property has an owner, whether that owner is the state, and the property
public, or the owner an individual, and the property private. The state may also
hold property as a private proprietor.
Leg.H. 1872.

Any person, whether citizen or alien, may take, hold, and dispose of
property, real or personal, within this state.
Leg.H. 1872, 1874 p. 219.
CHAPTER 2
MODIFICATIONS OF OWNERSHIP
ARTICLE 1
443
Interests in Property

The ownership of property is either:
1. Absolute; or,
2. Qualified.
Leg.H. 1872.

The ownership of property is absolute when a single person has the absolute
dominion over it, and may use it or dispose of it according to his pleasure,
subject only to general laws.
Leg.H. 1872.

The ownership of property is qualified:
1. When it is shared with one or more persons;
2. When the time of enjoyment is deferred or limited;
3. When the use is restricted.
Leg.H. 1872.

The ownership of property by a single person is designated as a sole or
444
several ownership.
Leg.H. 1872.

The ownership of property by several persons is either:
1. Of joint interests;
2. Of partnership interests;
3. Of interests in common;
4. Of community interest of husband and wife.
Leg.H. 1872.

(a) Community property of a husband and wife, when expressly declared in
the transfer document to be community property with right of survivorship, and
which may be accepted in writing on the face of the document by a statement
signed or initialed by the grantees, shall, upon the death of one of the spouses,
pass to the survivor, without administration, pursuant to the terms of the
instrument, subject to the same procedures, as property held in joint tenancy.
Prior to the death of either spouse, the right of survivorship may be terminated
pursuant to the same procedures by which a joint tenancy may be severed. Part I
(commencing with Section 5000) of Division 5 of the Probate Code and Chapter
2 (commencing with Section 13540), Chapter 3 (commencing with Section
13550) and Chapter 3.5 (commencing with Section 13560) of Part 2 of Division
8 of the Probate Code apply to this property.
(b) This section does not apply to a joint account in a financial institution to
which Part 2 (commencing with Section 5100) of Division 5 of the Probate
Code applies.
(c) This section shall become operative on July 1, 2001, and shall apply to
instruments created on or after that date.
Leg.H. 2000 ch. 645.
445
(a) A joint interest is one owned by two or more persons in equal shares, by
a title created by a single will or transfer, when expressly declared in the will
or transfer to be a joint tenancy, or by transfer from a sole owner to himself or
herself and others, or from tenants in common or joint tenants to themselves or
some of them, or to themselves or any of them and others, or from a husband and
wife, when holding title as community property or otherwise to themselves or to
themselves and others or to one of them and to another or others, when expressly
declared in the transfer to be a joint tenancy, or when granted or devised to
executors or trustees as joint tenants. A joint tenancy in personal property may
be created by a written transfer, instrument, or agreement.
(b) Provisions of this section do not apply to a joint account in a financial
institution if Part 2 (commencing with Section 5100) of Division 5 of the
Probate Code applies to such account.
Leg.H. 1872, 1931 ch. 1051, 1935 ch. 234, 1955 ch. 178, 1983 ch. 92, operative July
1, 1984, 1989 ch. 397, operative July 1, 1990, 1990 ch. 79, operative July 1, 1991.

No contract or other arrangement made after the effective date of this section
between any person, firm, or corporation engaged in the business of renting
safe-deposit boxes and the renter or renters of a safe-deposit box, shall create a
joint tenancy in or otherwise establish ownership in any of the contents of such
safe-deposit box. Any such contract or other arrangement purporting so to do
shall be to such extent void and of no effect.
Leg.H. 1949 ch. 1597.
§ 683.2. Severance of Joint Tenant’s Interest Without

Consent; Severance by Written Declaration.
(a) Subject to the limitations and requirements of this section, in addition to
any other means by which a joint tenancy may be severed, a joint tenant may
sever a joint tenancy in real property as to the joint tenant’s interest without the
joinder or consent of the other joint tenants by any of the following means:
(1) Execution and delivery of a deed that conveys legal title to the joint
tenant’s interest to a third person, whether or not pursuant to an agreement
that requires the third person to reconvey legal title to the joint tenant.
446
(2) Execution of a written instrument that evidences the intent to sever
the joint tenancy, including a deed that names the joint tenant as transferee,
or of a written declaration that, as to the interest of the joint tenant, the joint
tenancy is severed.
(b) Nothing in this section authorizes severance of a joint tenancy contrary
to a written agreement of the joint tenants, but a severance contrary to a written
agreement does not defeat the rights of a purchaser or encumbrancer for value in
good faith and without knowledge of the written agreement.
(c) Severance of a joint tenancy of record by deed, written declaration, or
other written instrument pursuant to subdivision (a) is not effective to terminate
the right of survivorship of the other joint tenants as to the severing joint tenant’s
interest unless one of the following requirements is satisfied:
( 1 ) Before the death of the severing joint tenant, the deed, written
declaration, or other written instrument effecting the severance is recorded
in the county where the real property is located.
(2) The deed, written declaration, or other written instrument effecting
the severance is executed and acknowledged before a notary public by the
severing joint tenant not earlier than three days before the death of that joint
tenant and is recorded in the county where the real property is located not
later than seven days after the death of the severing joint tenant.
(d) Nothing in subdivision (c) limits the manner or effect of:
(1) A written instrument executed by all the joint tenants that severs the
joint tenancy.
(2) A severance made by or pursuant to a written agreement of all the
joint tenants.
(3) A deed from a joint tenant to another joint tenant.
(e) Subdivisions (a) and (b) apply to all joint tenancies in real property,
whether the joint tenancy was created before, on, or after January 1, 1985,
except that in the case of the death of a joint tenant before January 1, 1985, the
validity of a severance under subdivisions (a) and (b) is determined by the law
in effect at the time of death. Subdivisions (c) and (d) do not apply to or affect a
severance made before January 1, 1986, of a joint tenancy.
Leg.H. 1984 ch. 519, 1985 ch. 157.

A partnership interest is one owned by several persons, in partnership, for
partnership purposes.
447
Leg.H. 1872.

An interest in common is one owned by several persons, not in joint
ownership or partnership.
Leg.H. 1872.
§ 686. Common Interest Created by Mode of

Acquisition.
Every interest created in favor of several persons in their own right is an
interest in common, unless acquired by them in partnership, for partnership
purposes, or unless declared in its creation to be a joint interest, as provided in
section six hundred and eighty-three, or unless acquired as community property.
Leg.H. 1872.

Community property is property that is community property under Part 2
(commencing with Section 760) of Division 4 of the Family Code.
Leg.H. 1872, 1992 ch. 163, operative January 1, 1994.

In respect to the time of enjoyment, an interest in property is either:
1. Present or future; and,
448
2. Perpetual or limited.
Leg.H. 1872.

A present interest entitles the owner to the immediate possession of the
property.
Leg.H. 1872.

A future interest entitles the owner to the possession of the property only at
a future period.
Leg.H. 1872.

A perpetual interest has a duration equal to that of the property.
Leg.H. 1872.

A limited interest has a duration less than that of the property.
Leg.H. 1872.
449
ARTICLE 2
Conditions of Ownership

The time when the enjoyment of property is to begin or end may be
determined by computation, or be made to depend on events. In the latter case,
the enjoyment is said to be upon condition.
Leg.H. 1872.

Conditions are precedent or subsequent. The former fix the beginning, the
latter the ending, of the right.
Leg.H. 1872.

If a condition precedent requires the performance of an act wrong of itself,
the instrument containing it is so far void, and the right cannot exist. If it requires
the performance of an act not wrong of itself, but otherwise unlawful, the
instrument takes effect and the condition is void.
Leg.H. 1872.

Conditions imposing restraints upon marriage, except upon the marriage of a
minor, are void; but this does not affect limitations where the intent was not to
forbid marriage, but only to give the use until marriage.
450
Leg.H. 1872, 1874 p. 218.

Conditions restraining alienation, when repugnant to the interest created, are
void.
Leg.H. 1872.
PART 3
Personal or Movable Property

TITLE 2
PARTICULAR KINDS OF PERSONAL

PROPERTY
CHAPTER 3
PRODUCTS OF THE MIND

(a)
(1) The author of any original work of authorship that is not fixed in any
tangible medium of expression has an exclusive ownership in the
representation or expression thereof as against all persons except one who
originally and independently creates the same or similar work. A work shall
451
be considered not fixed when it is not embodied in a tangible medium of
expression or when its embodiment in a tangible medium of expression is
not sufficiently permanent or stable to permit it to be perceived, reproduced,
or otherwise communicated for a period of more than transitory duration,
either directly or with the aid of a machine or device.
(2) The author of an original work of authorship consisting of a sound
recording initially fixed prior to February 15, 1972, has an exclusive
ownership therein until February 15, 2047, as against all persons except one
who independently makes or duplicates another sound recording that does
not directly or indirectly recapture the actual sounds fixed in such prior
sound recording, but consists entirely of an independent fixation of other
sounds, even though such sounds imitate or simulate the sounds contained in
the prior sound recording.
(b) The inventor or proprietor of any invention or design, with or without
delineation, or other graphical representation, has an exclusive ownership
therein, and in the representation or expression thereof, which continues so long
as the invention or design and the representations or expressions thereof made
by him remain in his possession.
Leg.H. 1872, 1947 ch. 1107, 1949 ch. 921, 1982 ch. 574.
These statutes, inter alia, protect works of authorship that are not yet “fixed in any
tangible medium of expression” or are otherwise not subject to the federal copyright law.
See also Consultant’s Comments to Penal Code § 653h.
Annotations
Cases
Maljack Prod., Inc. v. Good Times Home Video Corp., (9th Cir. 1996) 81 F.3d 881. The
Ninth Circuit held that Civ. Code § 980’s protection of sound recordings does not apply to
motion picture soundtracks. The court reasoned that if section 980 purported to protect
soundtracks, then it would be preempted by federal copyright law.
Trenton v. Infinity Broadcasting Corp., et al. (C.D. Cal. 1994) 865 F. Supp. 1416,
U.S.P.Q. 2nd 1161. The court determined that federal law, rather than Civil Code § 980(a)(1),
is applicable to a radio program format since the program format was fixed in a tangible form
by simultaneous recording.
Lone Ranger Television, Inc. v. Program Radio Corporation (9th Cir. 1984) 740 F.2d
718, 725, 223 U.S.P.Q. 112 . Plaintiff sued radio announcer for unlicensed leasing of their
“Lone Ranger” radio programs to radio stations. Court of Appeals held that under Civ. Code §
980(a)(2), Lone Ranger, owner of the radio program scripts and tapes, has an intangible
452
property interest in the performances on tape from the time of their recording.
Klekas v. EMI Films, Inc. (1984) 150 Cal. App. 3d 1102, 1108–1109, 1110–1111, 198
Cal. Rptr. 296. Author of an unpublished novel, who had sent his manuscript to various
publishers and film companies, sued the writers and producers of the movie, “The Deer
Hunter,” and the publisher of the movie novelization for unauthorized use of his novel. Court
of Appeal held that the film distribution and publication of the novelization were preempted
by the Copyright Act because they occurred after January 1, 1978, the effective date of the
Act, but that the state trial court did have jurisdiction over the writing of the screenplay
because that occurred in 1976 or 1977.

(a) Unless otherwise agreed, an original work of authorship not fixed in any
tangible medium of expression and in the creation of which several persons are
jointly concerned, is owned by them in equal proportion.
(b) Unless otherwise agreed, an invention or design in the production of
which several persons are jointly concerned is owned by them as follows:
(1) If the invention or design is single, in equal proportions.
(2) If it is not single, in proportion to the contribution of each.
Leg.H. 1872, 1947 ch. 1107, 1949 ch. 921, 1982 ch. 574.
Annotations
See the annotations to Civ. Code § 980.

(a) The owner of any rights in any original works of authorship not fixed in
any tangible medium of expression may transfer the ownership therein.
( b ) The owner of any invention or design, or of any representation or
expression thereof, may transfer his or her proprietary interest in it.
(c) Notwithstanding any other provision in this section, whenever a work of
fine art is transferred, whether by sale or on commission or otherwise, by or on
behalf of the artist who created it, or that artist’s heir, legatee, or personal
representative, the right of reproduction thereof is reserved to such artist or such
heir, legatee, or personal representative until it passes into the public domain by
act or operation of law, unless that right is expressly transferred by a document
in writing in which reference is made to the specific right of reproduction,
453
signed by the owner of the rights conveyed or that person’s duly authorized
agent. If the transfer is pursuant to an employment relationship, the right of
reproduction is transferred to the employer, unless it is expressly reserved in
writing. If the transfer is pursuant to a legacy or inheritance, the right of
reproduction is transferred to the legatee or heir, unless it is expressly reserved
by will or codicil. Nothing contained herein, however, shall be construed to
prohibit the fair use of such work of fine art.
(d) As used in subdivision (c):
(1) “Fine art” means any work of visual art, including but not limited to,
a drawing, painting, sculpture, mosaic, or photograph, a work of
calligraphy, a work of graphic art (including an etching, lithograph, offset
print, silk screen, or a work of graphic art of like nature), crafts (including
crafts in clay, textile, fiber, wood, metal, plastic, and like materials), or
mixed media (including a collage, assemblage, or any combination of the
foregoing art media).
(2) “Artist” means the creator of a work of fine art.
( 3 ) “Right of reproduction”, at the present state of commerce and
technology shall be interpreted as including, but shall not be limited to, the
following: reproduction of works of fine art as prints suitable for framing;
facsimile casts of sculpture; reproductions used for greeting cards;
reproductions in general books and magazines not devoted primarily to art,
and in newspapers in other than art or news sections, when such
reproductions in books, magazines, and newspapers are used for purposes
similar to those of material for which the publishers customarily pay; art
films; television, except from stations operated for educational purposes, or
on programs for educational purposes from all stations; and reproductions
used in any form of advertising, including magazines, calendars,
newspapers, posters, billboards, films or television.
(e) The amendments to this section made at the 1975–76 Regular Session
shall only apply to transfers made on or after January 1, 1976.
Leg.H. 1872, 1947 ch. 1107, 1949 ch. 921, 1975 ch. 952, 1982 ch. 574.
Consultant’ Comments
Annotations
454
If the owner of any invention or design intentionally makes it public, a copy
or reproduction may be made public by any person, without responsibility to the
owner, so far as the law of this state is concerned.
Leg.H. 1872, 1947 ch. 1107, 1949 ch. 921, 1982 ch. 574.
Annotations

If the owner of an invention or design does not make it public, any other
person subsequently and originally producing the same thing has the same right
therein as the prior inventor, which is exclusive to the same extent against all
persons except the prior inventor, or those claiming under him.
Leg.H. 1949 ch. 921.
Annotations
§ 985. Letters and Private Writings—Title—

Publication.
Letters and other private communications in writing belong to the person to
whom they are addressed and delivered; but they cannot be published against
the will of the writer, except by authority of law.
Leg.H. 1872.
Annotations

(a) Whenever a work of fine art is sold and the seller resides in California
or the sale takes place in California, the seller or the seller’s agent shall pay to
the artist of such work of fine art or to such artist’s agent 5 percent of the amount
of such sale. The right of the artist to receive an amount equal to 5 percent of the
amount of such sale may be waived only by a contract in writing providing for
an amount in excess of 5 percent of the amount of such sale. An artist may assign
455
the right to collect the royalty payment provided by this section to another
individual or entity. However, the assignment shall not have the effect of
creating a waiver prohibited by this subdivision.
(1) When a work of fine art is sold at an auction or by a gallery, dealer,
broker, museum, or other person acting as the agent for the seller the agent
shall withhold 5 percent of the amount of the sale, locate the artist and pay
the artist.
(2) If the seller or agent is unable to locate and pay the artist within 90
days, an amount equal to 5 percent of the amount of the sale shall be
transferred to the Arts Council.
(3) If a seller or the seller’s agent fails to pay an artist the amount equal
to 5 percent of the sale of a work of fine art by the artist or fails to transfer
such amount to the Arts Council, the artist may bring an action for damages
within three years after the date of sale or one year after the discovery of the
sale, whichever is longer. The prevailing party in any action brought under
this paragraph shall be entitled to reasonable attorney fees, in an amount as
determined by the court.
(4) Moneys received by the council pursuant to this section shall be
deposited in an account in the Special Deposit Fund in the State Treasury.
(5) The Arts Council shall attempt to locate any artist for whom money
is received pursuant to this section. If the council is unable to locate the
artist and the artist does not file a written claim for the money received by
the council within seven years of the date of sale of the work of fine art, the
right of the artist terminates and such money shall be transferred to the
council for use in acquiring fine art pursuant to the Art in Public Buildings
program set forth in Chapter 2.1 (commencing with Section 15813) of Part
10b of Division 3 of Title 2, of the Government Code.
(6) Any amounts of money held by any seller or agent for the payment of
artists pursuant to this section shall be exempt from enforcement of a money
judgment by the creditors of the seller or agent.
(7) Upon the death of an artist, the rights and duties created under this
section shall inure to his or her heirs, legatees, or personal representative,
until the 20th anniversary of the death of the artist. The provisions of this
paragraph shall be applicable only with respect to an artist who dies after
January 1, 1983.
(b) Subdivision (a) shall not apply to any of the following:
(1) To the initial sale of a work of fine art where legal title to such work
at the time of such initial sale is vested in the artist thereof.
456
(2) To the resale of a work of fine art for a gross sales price of less than
one thousand dollars ($1,000).
(3) Except as provided in paragraph (7) of subdivision (a), to a resale
after the death of such artist.
(4) To the resale of the work of fine art for a gross sales price less than
the purchase price paid by the seller.
(5) To a transfer of a work of fine art which is exchanged for one or
more works of fine art or for a combination of cash, other property, and one
or more works of fine art where the fair market value of the property
exchanged is less than one thousand dollars ($1,000).
(6) To the resale of a work of fine art by an art dealer to a purchaser
within 10 years of the initial sale of the work of fine art by the artist to an art
dealer, provided all intervening resales are between art dealers.
(7) To a sale of a work of stained glass artistry where the work has been
permanently attached to real property and is sold as part of the sale of the
real property to which it is attached.
(c) For purposes of this section, the following terms have the following
meanings:
(1) “Artist” means the person who creates a work of fine art and who, at
the time of resale, is a citizen of the United States, or a resident of the state
who has resided in the state for a minimum of two years.
(2) “Fine art” means an original painting, sculpture, or drawing, or an
original work of art in glass.
( 3 ) “Art dealer” means a person who is actively and principally
engaged in or conducting the business of selling works of fine art for which
business such person validly holds a sales tax permit.
(d) This section shall become operative on January 1, 1977, and shall apply
to works of fine art created before and after its operative date.
(e) If any provision of this section or the application thereof to any person
or circumstance is held invalid for any reason, such invalidity shall not affect
any other provisions or applications of this section which can be effected,
without the invalid provision or application, and to this end the provisions of
this section are severable.
( f) The amendments to this section enacted during the 1981–82 Regular
Session of the Legislature shall apply to transfers of works of fine art, when
created before or after January 1, 1983, that occur on or after that date.
Leg.H. 1976 ch. 1228, 1982 ch. 497, operative July 1, 1983, chs. 1601, 1609 § 1.5.
457
Leg.H. 1976 ch. 1228, 1982 ch. 497, operative July 1, 1983, chs. 1601, 1609 § 1.5.
This statute is not preempted by federal copyright law because it regulates resales of the
physical embodiments of the artworks and not the copyrights in those artworks. It provides
that the creator of a work of fine art must receive 5 percent of the value of the work when it
is resold, unless the resale price is less than $1,000 or it is less than the price to the seller.
This statute applies when the sale takes place in California or the seller resides in
California. If the statute were effective, sellers would be encouraged to consummate the sale
outside the state (to the detriment of California galleries) or to engage in sham sales for a
lesser-than-paid-for price to confederates outside California who would then sell the work
for the real price. However, the only real penalty for noncompliance is a civil suit for
damages by the artist.
Annotations
Cases
Morseburg v. Balyon (9th Cir. [Cal.] 1980); cert. denied, 449 U.S. 983, 101 S.Ct. 399
(1980). An art dealer challenged the constitutionality of Civ. Code § 986. The Court of
Appeals held that Civ. Code § 986 is not unconstitutional in that it is not preempted under the
1909 Copyright Act, does not violate due process, and does not violate the contracts clause.
Articles
Levy, Artists’ Moral Rights, L.A. Law., March, 1988, at 11.
Drum, Artists’ Rights, L.A. Law., July/August, 1985, at 10.
Petrovich, Artists’ Statutory Droit Moral in California: A Critical Appraisal, 15 Loy.
L.A. L. Rev. 29 (1981).
Ashley, A Critical Comment on California’s Droit de Suite, Civil Code Section 986,
29 Hastings. L.J. 249 (1977).

(a) The Legislature hereby finds and declares that the physical alteration or
destruction of fine art, which is an expression of the artist’s personality, is
detrimental to the artist’s reputation, and artists therefore have an interest in
protecting their works of fine art against any alteration or destruction; and that
there is also a public interest in preserving the integrity of cultural and artistic
creations.
(b) As used in this section:
(1) “Artist” means the individual or individuals who create a work of
fine art.
458
original work of art in glass, of recognized quality, but shall not include
work prepared under contract for commercial use by its purchaser.
( 3 ) “Person” means an individual, partnership, corporation, limited
liability company, association or other group, however organized.
(4) “Frame” means to prepare, or cause to be prepared, a work of fine
art for display in a manner customarily considered to be appropriate for a
work of fine art in the particular medium.
(5) “Restore” means to return, or cause to be returned, a deteriorated or
damaged work of fine art as nearly as is feasible to its original state or
condition, in accordance with prevailing standards.
(6) “Conserve” means to preserve, or cause to be preserved, a work of
fine art by retarding or preventing deterioration or damage through
appropriate treatment in accordance with prevailing standards in order to
maintain the structural integrity to the fullest extent possible in an
unchanging state.
( 7) “Commercial use” means fine art created under a work-for-hire
arrangement for use in advertising, magazines, newspapers, or other print
and electronic media.
(c)
(1) No person, except an artist who owns and possesses a work of fine
art which the artist has created, shall intentionally commit, or authorize the
intentional commission of, any physical defacement, mutilation, alteration,
or destruction of a work of fine art.
(2) In addition to the prohibitions contained in paragraph (1), no person
who frames, conserves, or restores a work of fine art shall commit, or
authorize the commission of, any physical defacement, mutilation, alteration,
or destruction of a work of fine art by any act constituting gross negligence.
For purposes of this section, the term “gross negligence” shall mean the
exercise of so slight a degree of care as to justify the belief that there was an
indifference to the particular work of fine art.
(d) The artist shall retain at all times the right to claim authorship, or, for a
just and valid reason, to disclaim authorship of his or her work of fine art.
(e) To effectuate the rights created by this section, the artist may commence
an action to recover or obtain any of the following:
(1) Injunctive relief.
459
(2) Actual damages.
(3) Punitive damages. In the event that punitive damages are awarded,
the court shall, in its discretion, select an organization or organizations
engaged in charitable or educational activities involving the fine arts in
California to receive any punitive damages.
(4) Reasonable attorneys’ and expert witness fees.
(5) Any other relief which the court deems proper.
(f) In determining whether a work of fine art is of recognized quality, the
trier of fact shall rely on the opinions of artists, art dealers, collectors of fine
art, curators of art museums, and other persons involved with the creation or
marketing of fine art.
(g) The rights and duties created under this section:
(1) Shall, with respect to the artist, or if any artist is deceased, his or
her heir, beneficiary, devisee, or personal representative, exist until the 50th
anniversary of the death of the artist.
(2) Shall exist in addition to any other rights and duties which may now
or in the future be applicable.
(3) Except as provided in paragraph (1) of subdivision (h), may not be
waived except by an instrument in writing expressly so providing which is
signed by the artist.
(h)
(1) If a work of fine art cannot be removed from a building without
substantial physical defacement, mutilation, alteration, or destruction of the
work, the rights and duties created under this section, unless expressly
reserved by an instrument in writing signed by the owner of the building,
containing a legal description of the property and properly recorded, shall
be deemed waived. The instrument, if properly recorded, shall be binding
on subsequent owners of the building.
(2) If the owner of a building wishes to remove a work of fine art which
is a part of the building but which can be removed from the building without
substantial harm to the fine art, and in the course of or after removal, the
owner intends to cause or allow the fine art to suffer physical defacement,
mutilation, alteration, or destruction, the rights and duties created under this
section shall apply unless the owner has diligently attempted without
success to notify the artist, or, if the artist is deceased, his or her heir,
beneficiary, devisee, or personal representative, in writing of his or her
intended action affecting the work of fine art, or unless he or she did
460
provide notice and that person failed within 90 days either to remove the
work or to pay for its removal. If the work is removed at the expense of the
artist, his or her heir, beneficiary, devisee, or personal representative, title
to the fine art shall pass to that person.
(3) If a work of fine art can be removed from a building scheduled for
demolition without substantial physical defacement, mutilation, alteration,
or destruction of the work, and the owner of the building has notified the
owner of the work of fine art of the scheduled demolition or the owner of
the building is the owner of the work of fine art, and the owner of the work
of fine art elects not to remove the work of fine art, the rights and duties
created under this section shall apply, unless the owner of the building has
diligently attempted without success to notify the artist, or, if the artist is
deceased, his or her heir, beneficiary, devisee, or personal representative,
in writing of the intended action affecting the work of fine art, or unless he
or she did provide notice and that person failed within 90 days either to
remove the work or to pay for its removal. If the work is removed at the
expense of the artist, his or her heir, beneficiary, devisee, or personal
representative, title to the fine art shall pass to that person.
( 4 ) Nothing in this subdivision shall affect the rights of authorship
created in subdivision (d) of this section.
(i) No action may be maintained to enforce any liability under this section
unless brought within three years of the act complained of or one year after
discovery of the act, whichever is longer.
(j) This section shall become operative on January 1, 1980, and shall apply
to claims based on proscribed acts occurring on or after that date to works of
fine art whenever created.
(k) If any provision of this section or the application thereof to any person
or circumstance is held invalid for any reason, the invalidity shall not affect any
other provisions or applications of this section which can be effected without
the invalid provision or application, and to this end the provisions of this
section are severable.
Leg.H. 1979 ch. 409, 1982 ch. 1517 § 1, 1609 § 2.5, 1989 ch. 482, 1994 ch. 1010.
1989 Note: It is the intent of the Legislature that the amendment to Section 987 of the
Civil Code made by this act shall not apply to a work of fine art that is a part of a building for
which a demolition permit has been issued prior to the effective date of this act. Stats. 1989
ch. 987 § 2.
1979 Note: This act shall be known and may be cited as “The California Art Preservation
Act.” Stats. 1979 ch. 409 § 2.
461
This statute protects some of the “moral rights” of artists, namely the interest of the
artist in preserving artworks of certain “quality.” However, the statute has been partially
preempted by federal law in the Visual Artists Rights Act of 1990 ( 17 U.S.C. § 106A, which
provides similar “moral rights.” Federal preemption is limited to equivalent rights, and does
not preempt the “post-mortem” rights in the statute. To the extent that sections 987–989
provide rights that are not equivalent to the rights in 17 U.S.C. § 106A, they are not
preempted. See 17 U.S.C. § 301(f).
Annotations
Cases
Botello v. Shell Oil Co. (2d Dist. 1991) 229 Cal. App. 3d 1130, 280 Cal. Rptr. 535, 19
U.S.P.Q. 2d 1674. A large mural painted on the wall of a service station is a “painting” within
the meaning of Civ. Code § 987, and therefore cannot be destroyed without first making an
effort to notify the artist so that the artist can be given the opportunity to remove the art at
his or her expense.
Articles
Comment, “Tilted” Justice: Site-Specific Art and Moral Rights After U.S. Adherence
to the Berne Convention, 77 Cal. L. Rev. 1431 (1989).
§ 988. Reservation of Ownership Rights in Reproduced,

Displayed, or Performed Work of Art.
(a) For the purpose of this section:
(1) The term “artist” means the creator of a work of art.
(2) The term “work of art” means any work of visual or graphic art of
any media including, but not limited to, a painting, print, drawing, sculpture,
craft, photograph, or film.
( b ) Whenever an exclusive or nonexclusive conveyance of any right to
reproduce, prepare derivative works based on, distribute copies of, publicly
perform, or publicly display a work of art is made by or on behalf of the artist
who created it or the owner at the time of the conveyance, ownership of the
physical work of art shall remain with and be reserved to the artist or owner, as
the case may be, unless such right of ownership is expressly transferred by an
instrument, note, memorandum, or other writing, signed by the artist, the owner,
or their duly authorized agent.
462
( c ) Whenever an exclusive or nonexclusive conveyance of any right to
reproduce, prepare derivative works based on, distribute copies of, publicly
perform, or publicly display a work of art is made by or on behalf of the artist
who created it or the owner at the time of the conveyance, any ambiguity with
respect to the nature or extent of the rights conveyed shall be resolved in favor
of the reservation of rights by the artist or owner, unless in any given case the
federal copyright law provides to the contrary.
Leg.H. 1982 ch. 1319.
Annotations
Cases
Chamberlain v. Cocola Associates (9th Cir. 1992) 958 F.2d 282, 23 U.S.P.Q. 2d 1153 .
In a case of first impression, the Ninth Circuit considered whether Civ. Code § 988 requires
a signed writing for enforceability of any transfer of ownership of a work of art, and
concluded that Civ. Code § 988 was not intended to create a statute of frauds requiring a
writing for any sale of a work of art in California. The legislative history and federal
copyright law supported the court’s position that the writing requirement was established for
situations in which the parties transfer reproduction rights, and not for a sale or loan of the
object itself. The most reasonable interpretation of Civ. Code § 988 is that when there is an
express written conveyance of one or more of the five enumerated rights of 17 U.S.C. § 106,
there can be no transfer of ownership unless that transfer is in writing.
§ 989. Injunctive Relief to Preserve or Restore Integrity

of Fine Art Work.
(a) The Legislature hereby finds and declares that there is a public interest
in preserving the integrity of cultural and artistic creations.
(b) As used in this section:
original work of art in glass, of recognized quality, and of substantial public
interest.
( 2) “Organization” means a public or private not-for-profit entity or
association, in existence at least three years at the time an action is filed
pursuant to this section, a major purpose of which is to stage, display, or
otherwise present works of art to the public or to promote the interests of
the arts or artists.
(3) “Cost of removal” includes reasonable costs, if any, for the repair of
damage to the real property caused by the removal of the work of fine art.
463
(c) An organization acting in the public interest may commence an action for
injunctive relief to preserve or restore the integrity of a work of fine art from
acts prohibited by subdivision (c) of Section 987.
(d) In determining whether a work of fine art is of recognized quality and of
substantial public interest the trier of fact shall rely on the opinions of those
described in subdivision (f) of Section 987.
(e)
(1) If a work of fine art cannot be removed from real property without
substantial physical defacement, mutilation, alteration, or destruction of such
work, no action to preserve the integrity of the work of fine art may be
brought under this section. However, if an organization offers some
evidence giving rise to a reasonable likelihood that a work of art can be
removed from the real property without substantial physical defacement,
mutilation, alteration, or destruction of the work, and is prepared to pay the
cost of removal of the work, it may bring a legal action for a determination
of this issue. In that action the organization shall be entitled to injunctive
relief to preserve the integrity of the work of fine art, but shall also have the
burden of proof. The action shall commence within 30 days after filing. No
action may be brought under this paragraph if the organization’s interest in
preserving the work of art is in conflict with an instrument described in
paragraph (1) of subdivision (h) of Section 987.
(2) If the owner of the real property wishes to remove a work of fine art
which is part of the real property, but which can be removed from the real
property without substantial harm to such fine art, and in the course of or
after removal, the owner intends to cause or allow the fine art to suffer
physical defacement, mutilation, alteration, or destruction the owner shall
do the following:
(A) If the artist or artist’s heir, legatee, or personal representative
fails to take action to remove the work of fine art after the notice
provided by paragraph (2) of subdivision (h) of Section 987, the owner
shall provide 30 days’ notice of his or her intended action affecting the
work of art. The written notice shall be a display advertisement in a
newspaper of general circulation in the area where the fine art is
located. The notice required by this paragraph may run concurrently
with the notice required by subdivision (h) of Section 987.
(i) If within the 30-day period an organization agrees to remove
the work of fine art and pay the cost of removal of the work, the
payment and removal shall occur within 90 days of the first day of
the 30-day notice.
464
(ii) If the work is removed at the expense of an organization, title
to the fine art shall pass to that organization.
(B) If an organization does not agree to remove the work of fine art
within the 30-day period or fails to remove and pay the cost of removal
of the work of fine art within the 90-day period the owner may take the
intended action affecting the work of fine art.
(f) To effectuate the rights created by this section, the court may do the
following:
( 1 ) Award reasonable attorney’s and expert witness fees to the
prevailing party, in an amount as determined by the court.
(2) Require the organization to post a bond in a reasonable amount as
determined by the court.
(g) No action may be maintained under this section unless brought within
three years of the act complained of or one year after discovery of such act,
whichever is longer.
(h) This section shall become operative on January 1, 1983, and shall apply
to claims based on acts occurring on or after that date to works of fine art,
whenever created.
(i) If any provision of this section or the application thereof to any person or
applications of this section which can be given effect without the invalid
provision or application, and to this end the provisions of this section are
severable.
Leg.H. 1982 ch. 1517 § 4.
Annotations
DIVISION 3
OBLIGATIONS
PART 3
465
Obligations Imposed By Law

A deceit, within the meaning of the last section, is either:
1. The suggestion, as a fact, of that which is not true, by one who does
not believe it to be true;
2. The assertion, as a fact, of that which is not true, by one who has no
reasonable ground for believing it to be true;
3. The suppression of a fact, by one who is bound to disclose it, or who
gives information of other facts which are likely to mislead for want of
communication of that fact; or,
4. A promise, made without any intention of performing it.
Leg.H. 1872.
Annotations
Cases
Kovich v. Paseo Del Mar Homeowner’s Assoc. , (1996) 41 Cal. App. 4th 863, 48 Cal.
Rptr. 2d 758. The Court of Appeal rejected appellant’s argument that it had set forth
actionable fraud. To impose “liability under this section on a party alleged to be guilty of
nondisclosure or fraudulent concealment of certain facts, it is necessary to show the party is
under a legal duty to disclose them.” The court found that absent a duty to disclose, there can
be no cause of action for fraud and concealment of facts under § 1710.
McCulloch v. Ford Dealers Advertising Assn. (4th Dist. 1991) 234 Cal. App. 3d 1385,
286 Cal. Rptr. 223. The winner of an automobile race sued the association whose logo
appeared on the race’s promotional materials for negligent misrepresentation in promising a
$1 million first prize. The association claimed that it had no duty to investigate the truth of
the matters set forth in the materials on which its logo appeared. In deciding the case in favor
of the association, the court focused on four factors:
(1) The association had made no affirmative statements that it had investigated the
truth of the claim made in the promotional material;
(2) The association took no affirmative part in making the false statements;
( 3 ) The false statements in the promotional materials were clearly identified as
having been made by someone other than the association; and
(4) An aura of legitimacy given to the race by the participation of a nationally known
sponsor such as the association was not sufficient to holding the association as guarantor
of the truth of false statements made by the organizers of the race.
466
§ 1710.1. Sale of Property With Manufacturer’s
Nameplate, Serial Number, Etc., Removed, Defaced,
Covered, Altered, or Destroyed.
Any person who, with intent to defraud, sells or disposes of a radio, piano,
phonograph, sewing machine, washing machine, typewriter, adding machine,
comptometer, bicycle, firearm, safe, vacuum cleaner, dictaphone, watch, watch
movement, watchcase, or any other mechanical or electrical device, appliance,
contrivance, material, piece of apparatus or equipment, from which the
manufacturer’s nameplate, serial number or any other distinguishing number or
identification mark has been removed, defaced, covered, altered or destroyed,
is civilly liable to the manufacturer in the sum of five hundred dollars ($500)
per transaction and civilly liable to the purchaser for treble the actual damages
sustained by the purchaser. This section does not apply to those cases or
instances where any of the changes or alterations enumerated in this section
have been customarily made or done as an established practice in the ordinary
and regular conduct of business by the original manufacturer or his duly
appointed direct representative or under specific authorization from the original
manufacturer.
Leg.H. 1971 ch. 1713.
§ 1717. Action on Contract—Recovery of Attorney’s

Fees.
(a) In any action on a contract, where the contract specifically provides that
attorney’s fees and costs, which are incurred to enforce that contract, shall be
awarded either to one of the parties or to the prevailing party, then the party
who is determined to be the party prevailing on the contract, whether he or she
is the party specified in the contract or not, shall be entitled to reasonable
attorney’s fees in addition to other costs. Where a contract provides for
attorney’s fees, as set forth above, that provision shall be construed as applying
to the entire contract, unless each party was represented by counsel in the
negotiation and execution of the contract, and the fact of that representation is
specified in the contract. Reasonable attorney’s fees shall be fixed by the court,
and shall be an element of the costs of suit. Attorney’s fees provided for by this
section shall not be subject to waiver by the parties to any contract which is
entered into after the effective date of this section. Any provision in any such
contract which provides for a waiver of attorney’s fees is void.
(b)
(1) The court, upon notice and motion by a party, shall determine who is
the party prevailing on the contract for purposes of this section, whether or
467
not the suit proceeds to final judgment. Except as provided in paragraph (2),
the party prevailing on the contract shall be the party who recovered a
greater relief in the action on the contract. The court may also determine that
there is no party prevailing on the contract for purposes of this section.
( 2 ) Where an action has been voluntarily dismissed or dismissed
pursuant to a settlement of the case, there shall be no party prevailing on the
contract for purposes of this section. Where the defendant alleges in his or
her answer that he or she tendered to the plaintiff the full amount to which he
or she was entitled, and thereupon deposits in court for the plaintiff, the
amount so tendered, and the allegation is found to be true, then the defendant
is deemed to be a party prevailing on the contract within the meaning of this
section. Where a deposit has been made pursuant to this section, the court
shall, on the application of any party to the action, order the deposit to be
invested in an insured, interest-bearing account. Interest on the amount shall
be allocated to the parties in the same proportion as the original funds are
allocated.
(c) In an action which seeks relief in addition to that based on a contract, if
the party prevailing on the contract has damages awarded against it on causes of
action not on the contract, the amounts awarded to the party prevailing on the
contract under this section shall be deducted from any damages awarded in
favor of the party who did not prevail on the contract. If the amount awarded
under this section exceeds the amount of damages awarded the party not
prevailing on the contract, the net amount shall be awarded the party prevailing
on the contract and judgment may be entered in favor of the party prevailing on
the contract for that net amount.
Leg.H. 1968 ch. 266, 1981 ch. 888, 1983 ch. 1073, 1986 chs. 377, 785, 1987 ch.
1080.
The potential application of § 1717 continues to confound practitioners. The basic
premise of the statute is simple enough: when a contract provides that one party will recover
its attorney’s fees in the event of litigation (a unilateral clause), § 1717 converts that
provision into a bilateral (reciprocal) clause by which the prevailing party will be entitled to
attorney’s fees, even if the contract specifies otherwise. The application of § 1717 to an
attorney’s fee clause which is already reciprocal poses some difficulties. This issue was
addressed by the California Supreme Court in Santisas v. Goodin (1998) 17 Cal. 4th 599, 71
Cal. Rptr. 2d 830, 951 P.2d 399 (see annotation below), in which a sharply divided court held
that § 1717 applies to a reciprocal provision (and thereby potentially overrides some of the
contractual terms). Other recurring issues under § 1717 involve the attempt by courts to
harmonize this section with conflicting cost statutes, e.g., Code Civ. Proc. § 1032;
determining who prevails when neither party achieves complete victory; allocating attorney’s
fees between those incurred with respect to a claim “on a contract” and those with respect to
other claims; deciding what is a “reasonable” fee, and so on.
468
Several cases address the interplay between Civil Code § 1717 and Code of Civil
Procedure § 998. CCP § 998 operates to shift the recovery of costs when, for example, a
defendant makes a compromise offer under that statute and the plaintiff fails to obtain a more
favorable judgment. Because attorneys fees under section 1717 are recoverable as costs, a
successful defendant’s recovery under section 998 may include attorney’s fees. Also,
whereas expert witness fees are not recoverable as part of attorney’s fees under § 1717 (see
Carwash of America v. Windswept Ventures No. 1 discussed in Annotations below), they
may be recovered under § 998. Also, when a § 998 offer is silent as to attorney’s fees, and
that offer is accepted, the offeree may then also recover attorney’s fees as the prevailing
party. Therefore, parties should be mindful of the potential application of CCP § 998 in a
case where attorney’s fees will be claimed. The interplay of these two statutes is a factor in
several of the cases in the annotations including: Carver v. Chevron U.S.A., Inc., 97 Cal.
App. 4th 132, 118 Cal. Rptr. 2d 569 (2002) ; Wong v. Thrifty Corp., 97 Cal. App. 4th 261,
118 Cal. Rptr. 2d 276 (2002) ; Berkla v. Corel Corp., 290 F.3d 983, 62 U.S.P.Q.2d 1821
(9th Cir. 2002) [concerning analogous FRCP 68 offer]; Ritzenthaler v. Fireside Thrift Co.,
93 Cal. App. 4th 986, 113 Cal. Rptr. 2d 579 (2001) ; and Scott Co. of California v. Blount,
Inc., 20 Cal. 4th 1103, 86 Cal. Rptr. 2d 614 (1999).
Annotations
Cases
In re Tobacco Cases I, 216 Cal. App. 4th 570, 156 Cal. Rptr. 3d 755 (2013). The People
recovered a little more than $2.9 million in attorney’s fees under a contractual provision in a
consent decree based on enforcement of the prohibition on use of “cartoons” in advertising.
R.J. Reynolds challenged both the entitlement to the fees and the amount thereof on various
grounds, including that the People had failed to achieve its primary objective, and that rates
should have been based on fees charged in the local forum (San Diego) rather than the
People’s Bay Area offices. The award and amount were upheld on appeal. Among other things
the fact that Reynolds had employed a “scorched earth” strategy justified the relatively high
fee award. Also, the amount of fees charged by Reynolds’ attorneys (which exceeded the
amount of the fee award) was probative on the issue of the amount of reasonable fees.
Kandy Kiss of California Inc. v. Tex-Ellent Inc. , 209 Cal. App. 4th 604, 146 Cal. Rptr.
3d 899 (2012) (Editorial Note: Depublished 2013 Cal. LEXIS 456 (Cal. Jan. 16, 2013).
Both parties were sued in federal for copyright infringement because they made garments
using a copyrighted fabric design that Tex-Ellent provided to Kandy Kiss. After the federal
case was concluded Kandy Kiss sued for breach of warranty based on provisions in the
agreement that it would be held harmless from claims of copyright infringement. The trial
court dismissed the case on the ground that it lacked subject matter jurisdiction because the
case arose under the Copyright Act as to which federal courts have exclusive jurisdiction.
(Editor’s note. This appears to be erroneous as the claim for indemnity or breach of warranty
arises from contract, but this issue was not raised on appeal.) The appellate court affirmed an
award of attorney’s fees to Tex-Ellent as a prevailing party.
Zintel Holdings LLC v. McLean, 209 Cal. App. 4th 431, 147 Cal. Rptr. 3d 157 (2012).
McLean and her son Huth had been tenants of rent-controlled apartments for many years
paying a combined $200 per month for two units. After changes in ownership the new
landlord, Zintel, sought to increase the rent or invalidate the rental agreement. McLean
469
cross-complained for elder abuse and breach of the covenant of quiet enjoyment. Ultimately
the court granted summary judgments dismissing the complaint and the cross-complaint so
that neither side recovered anything. The trial court decided there was no prevailing party for
attorney’s fees. The appellate court affirmed as to McLean because she did not have a
complete victory, but reversed as to Huth, who won a complete victory as to the complaint
and did not have a cross-complaint. The matter was remanded to the trial court to exercise its
discretion in apportioning attorney’s fees to Huth.
Cullen v. Corwin, 206 Cal. App. 4th 1074, 142 Cal. Rptr. 3d 419 (2012). Failure to
consent to requested mediation pursuant to standard clause in real estate sales contract after
commencement of suit barred recovery of attorney’s fees by prevailing defendant.
Frog Creek Partners LLC v. Vance Brown, Inc. , 206 Cal. App. 4th 515, 141 Cal. Rptr.
3d 834 (2012). This case pertains to a construction contract. There were several intermediate
proceedings: first a petition to compel arbitration that was denied. The denial was affirmed
on appeal. There was a second petition to compel arbitration that was again denied, but that
was reversed on appeal. The contractor (Brown) prevailed in the arbitration. The trial court
awarded Brown its prearbitration fees and postarbitration fees, but denied Brown its fees in
connection with the first failed petition to compel arbitration and instead awarded the
homeowner (Frog Creek) its attorney’s fees for having successfully defeated the first
petition for arbitration. On appeal the court held there can be only one prevailing party, and
the trial court erred in considering Frog Creek to have been a prevailing party with respect to
the interim petition to compel arbitration. The award to Frog Creek was reversed and the
matter was remanded to the trial court to determine the fees to be awarded to Brown with
respect to the first arbitration petition and also as the prevailing party on the appeal.
Walker v. Ticor Title Co. of California , 204 Cal. App. 4th 363, 138 Cal. Rptr. 3d 820
(2012). ‘Nineteen plaintiffs sued Ticor and numerous other defendants alleging that they
fraudulently conspired to induce them to refinance real estate loans. Plaintiffs prevailed
against some of the defendants but failed against Ticor, which was the escrow company
handling the transactions. Ticor was awarded attorneys fees by the trial court, but in fixing the
amount of the fees the court took into account the financial condition of the plaintiffs and
also awarded pro rata shares against each plaintiff rather than making them jointly and
severally liable. Ticor challenged both of these aspects of the fee award. The appellate court
held it was within the court’s discretion to apportion the fees rather than make the award joint
and several, but it was improper to take into account the financial condition of the plaintiffs.
De La Cuesta v. Benham, 193 Cal. App. 4th 1287, 123 Cal. Rptr. 3d 453 (2011) . A
landlord sued a tenant for unlawful detainer. The tenant claimed she owed nothing because
there were leaks in the building. At trial, the landlord won and recovered about 70% of the
amount claimed. The trial court held there was no prevailing party and refused to award
attorney’s fees. This was error. The plaintiff was entitled to attorney’s fees because of a clear
lopsided victory.
In re Tobacco Cases I , 193 Cal. App. 4th 1591, 124 Cal. Rptr. 3d 352 (2011) . The
People sought to enforce a consent decree prohibiting the use of cartoons in advertising. The
decree contained an attorney’s fee clause. The court held that the decree was contractual in
nature so Section 1717 applied. The trial court awarded fees to the People because there had
been a minor violation of the decree and the People had prevailed on a “significant issue.”
The court of appeal reversed and remanded because the results were mixed and the correct
standard under 1717 (as opposed to certain statutory attorney’s fee awards) is whether the
470
People had obtained the “greater relief” in the action.
CDF Firefighters v. Maldonado , 200 Cal. App. 4th 158, 132 Cal. Rptr. 3d 544 (2011) .
A union sued former members to recover fines that the union had assessed against them.
Eventually, it was determined that the greater fine of about $22,000.00 was invalid, and the
union then dismissed its remaining claim for a fine of $743. The trial court held there was no
prevailing party because of the voluntary dismissal. The appellate court reversed because the
former member had prevailed on one claim and the dismissal of the remaining claim did not
alter his status as prevailing party on the first claim.
Cargill, Inc. v. Souza , 201 Cal. App. 4th 962, 134 Cal. Rptr. 3d 39 (2011) . Cargill sued
as an alleged third party beneficiary under a contract with an attorney’s fee clause. Souza
prevailed but the trial court did not award fees in Souza’s favor because Cargill was not a
signatory. The appellate court reversed. When an alleged third party beneficiary would have
been entitled to fees had it prevailed, then the successful defendant is entitled to fees.
PNEC Corp. v. Meyer, 190 Cal. App. 4th 66, 188 Cal. Rptr. 3d 730 (2010) . In this
action an individual defendant alleged to be liable on a guaranty with an attorney’s fee clause
successfully obtained dismissal on the ground of inconvenient forum under Code of Civil
Procedure section 418.10(a)(2). The award of attorney’s fees to the defendant was upheld on
appeal even though the dismissal was without prejudice and there had been no adjudication on
the merits.
Hyduke’s Valley Motors v. Lobel Financial Corp. , 189 Cal. App. 4th 430, 117 Cal.
Rptr. 3d 19 (2010). Hyduke’s sold cars to another dealer which in turn sold them to
consumers. Each sale contract from the second dealer to the consumers contained an
attorney’s fee provision. The second dealer went bankrupt. Hyduke’s then sued the finance
companies to whom the second dealer had assigned the contracts and recovered under
theories, inter alia, of breach of contract, fraud, and conversion. Claiming to be a third-party
beneficiary of the consumer contracts (which had attorney’s fee clauses), Hyduke’s sought
attorney’s fees. The court held that Hyduke’s did not recover under those contracts and was
not a third-party beneficiary of them. Therefore, Hyduke’s was not entitled to attorney’s fees.
Lockton v. O’Rourke, 184 Cal. App. 4th 1051, 109 Cal. Rptr. 3d 392 (2010) . Attorneys
successfully demurred to a complaint for legal malpractice on the ground that it was barred
by the statute of limitations. The law firm and individual attorney defendants were
represented by attorneys at their firm. The trial court had denied attorney’s fees. On appeal,
the court interpreted the retainer agreement as broadly covering claims related to the
attorney-client relationship, including malpractice. In addition, the agreement contained a
clause that the law firm would be compensated for the time spent by its attorneys at their
customary rates. Therefore, the attorney defendants were entitled to attorney’s fees.
Silver Creek, LLC v. BlackRock Realty Advisors, Inc. , 173 Cal. App. 4th 1533, 93 Cal.
Rptr. 3d 864 (2009). This was an action for declaratory relief regarding a real estate contract.
The vendor sought a declaration that it had validly terminated the contract. The trial court
ruled that the contract was validly terminated but also awarded refund to the buyer of its
deposit. The trial court ruled there was no prevailing party under section 1717. The appellate
court reversed and held the vendor was entitled to attorney’s fees. The court held: “Although
a trial court has broad discretion to determine the prevailing party in a mixed result case, its
discretion is not unlimited. The record indisputably shows that Silver Creek obtained the
greater relief on the contract. Accordingly, the trial court abused its discretion by finding
neither party achieved greater relief on the contract and denying Silver Creek its attorney’s
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fees.”
Wood v. Santa Monica Escrow Co., 176 Cal. App. 4th 802, 97 Cal. Rptr. 3d 909 (2009).
The original case was for alleged elder abuse. In a prior appeal defendant, who was the
prevailing party below because plaintiff dismissed with prejudice, sought attorney’s fees
under a contractual provision. Fees were denied to the defendant in the prior appeal on the
theory that an award under section 1717 would frustrate legislative policy in Welfare &
Institutions Code § 15657.5, which allows fees only to a prevailing plaintiff, and does not
have a reciprocal fee provision for a prevailing defendant. In this appeal, plaintiff sought
attorney’s fees under the same contractual provision on the theory that plaintiff prevailed on
the prior appeal. Plaintiff’s claim was rejected. The prevailing party is the party who prevailed
at the trial court.
Marina Glencoe, L.P. v. Neue Sentimental Film AG , 168 Cal. App. 4th 874, 85 Cal.
Rptr. 3d 800 (2008). Plaintiff voluntarily dismissed the action with prejudice after trial had
commenced and defendant’s motion for judgment under Code of Civil Procedure § 631.8
was pending. Defendant is not entitled to fees because pursuant to section 1717(b)(2),
voluntary dismissal of the action means there is no prevailing party. Defendant’s alternate
theory that fees should be awarded under Code of Civil Procedure § 998 based on plaintiff’s
failure to accept its settlement offer also failed because the offer was not open for the length
of time required by section 998.
Lange v. Schilling, 163 Cal. App. 4th 1412, 78 Cal. Rptr. 3d 356 (2008) . This is a
dispute over a real estate purchase. The parties used the standard California residential
purchase agreement which imposes as a condition to recovery of attorney’s fees that the
parties first attempt to mediate the dispute. Plaintiff sued without first mediating. After
plaintiff won a modest verdict at trial, the court granted his attorney’s fees motion, accepting
his justification for not mediating, ostensibly that he could not locate the sellers. The
appellate court reversed. Failure to mediate first precludes the right to attorney’s fees.
Carr Business Enterprises, Inc. v. City of Chowchilla, 166 Cal. App. 4th 14, 82 Cal.
Rptr. 3d 128 (2008). A standard indemnity clause in a contract providing that one party will
indemnify the other against expenses including attorney’s fees does not support an award
under Civ. Code § 1717.
Pueblo Radiology Medical Group, Inc. v. Gerlach, 163 Cal. App. 4th 826, 77 Cal. Rptr.
3d 880 (2008). Pueblo sued Vitascan for breach of contract and also sued two individuals on
an alter ego theory. The trial court ruled that the individuals were not alter egos of the
corporation, dismissed them from the suit, and awarded them attorney’s fees under the
contract. Pueblo argued this was premature because there has been no determination whether
the contract was breached. The appellate court affirmed. This is a final determination in favor
of the individuals who, therefore, are prevailing parties. They are entitled to attorney’s fees
because if Pueblo had succeeded on its alter ego theory, Pueblo could have recovered
attorney’s fees from them.
Steiner v. Thexton, 163 Cal. App. 4th 359, 77 Cal. Rptr. 3d 632 (2008) . Plaintiffs sued
for specific performance of an alleged contract for the sale of real property. At a bench trial,
the court determined the contract was not a sales contract but only an unenforceable option
due to lack of consideration. Defendant, therefore, prevailed and was entitled to attorney’s
fees. Fees requested were a little more than $100,000, but the court awarded about $85,000.
The fee request was not accompanied by time records, but was based on an attorney’s
472
declaration summarizing the work done, the hours spent by various attorneys and assistants,
and their hourly rates. The fee award was affirmed.
Profit Concepts Management, Inc. v. Griffith , 162 Cal. App. 4th 950, 76 Cal. Rptr. 3d
396 (2008). Defendant’s motion to quash for lack of personal jurisdiction was granted
without prejudice, of course, to the plaintiff’s right to sue in another forum. Nevertheless,
defendant is the prevailing party in this action entitled to recover attorney’s fees even though
the merits of the underlying dispute have not been decided.
Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC, 162 Cal. App. 4th 858, 76 Cal.
Rptr. 3d 325 (2008). The court rejects the argument that a prevailing defendant can recover
fees if the plaintiff had alleged entitlement to fees on a contract action. A prevailing party
must show that the opposing party actually would have been entitled to fees if he had won.
This turns on an interpretation of the actual contract language. Here, the clause was not broad
enough to encompass a third party claim. (Compare Loduca v. Polyzos annotated below.)
EnPalm, LLC v. Teitler , 162 Cal. App. 4th 770, 75 Cal. Rptr. 3d 902 (2008) . A buyer
under a real estate contract sued the seller. At a bench trial, the seller prevailed. The seller
moved for attorney’s fees requesting an award of $116,000, but failed to include timesheets
or a calculation based on time spent. The court used its own familiarity with the case to
establish a lodestar figure of $50,000, but then reduced the award to only $5,000 because the
conduct of the seller, including false testimony, lack of cooperation, and the like, led the
judge to believe the entire matter could easily have been resolved had the seller been
cooperative at the outset. Thus, its fees were not reasonably incurred. The Court of Appeals
affirmed, explaining that the trial court has broad discretion in determining what is a
reasonable fee.
Zagami, Inc. v. James A. Crone, Inc. , 160 Cal. App. 4th 1083, 74 Cal. Rptr. 3d 235
(2008). An ambiguous verdict regarding damages for breach of contract required a retrial to
recalculate the damages. Consequently, the prevailing party determination for purposes of
awarding attorney’s fees must wait until the damages are recalculated.
Exarhos v. Exarhos, 159 Cal. App. 4th 898, 72 Cal. Rptr. 3d 409 (2008) . The grandson
of a deceased depositor sued the decedent’s bank under the deposit agreement and for
negligence. The Bank’s demurrer was sustained. On appeal, the grandson alleged that
attorney’s fees to the bank should be paid by the estate, not by himself. The court held,
however, that he sued as successor in interest and not as a representative of the estate.
Therefore, fees are properly awarded against him individually.
Otay River Constructors v. San Diego Expressway , 158 Cal. App. 4th 796, 70 Cal.
Rptr. 3d 434 (2008). The parties had multiple contracts. One contract required arbitration.
The other permitted litigation. The contractor petitioned to compel arbitration of a dispute
under the contract arguing that it was encompassed by the arbitration clause in the other
contract. This argument failed and the motion to compel arbitration was denied. The opponent
is entitled to recover attorney’s fees for successfully defeating the motion even though the
merits of the dispute remain to be resolved.
Mitchell Land & Improvement Co. v. Ristorante Ferrantelli, Inc. , 158 Cal. App. 4th
479, 70 Cal. Rptr. 3d 9 (2007). This unlawful detainer action was based on alleged violations
of a lease. The landlord voluntarily dismissed the action. The tenant filed a motion for
attorney’s fees. The tenant’s claim is barred by Civ. Code § 1717(b)(2) which does not allow
fees when the action has been voluntarily dismissed. (Compare Drybread v. Chipain
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Chiropractic Corp. annotated below).
Cruz v. Ayromloo , 155 Cal. App. 4th 1270, 66 Cal. Rptr. 3d 725 (2007) . Thirty-two
tenants sued their former landlord for forcible detainer, wrongful eviction, and related claims
which resulted from defendant’s refusal to allow them to return to their apartments after the
City of Los Angeles had evacuated them because the building was unsafe. Four of the tenants
had written leases with an attorney’s fees clause. After the tenants prevailed and received
damages of $29,819 per unit, the four tenants with written leases moved for attorney’s fees.
The trial court ultimately awarded about $124,000 in fees after reducing the request of about
$413,000 for various factors. The landlord challenged the amount of fees as excessive. The
award was affirmed.
Loduca v. Polyzos, 153 Cal. App. 4th 334, 62 Cal. Rptr. 3d 780 (2007) . A prevailing
nonsignatory third party beneficiary was entitled to attorney’s fees under a subcontract
because the clause was broad enough to cover the claim. The key point in this case is that the
prevailing party can recover on his claim only if the opposing party could have recovered
under the contract if the opponent had prevailed.
Brittalia Ventures v. Stuke Nursery Co., Inc. , 153 Cal. App. 4th 17, 62 Cal. Rptr. 3d
467 (2007). The prevailing party who sued to enforce a contract without an attorney’s fees
clause could not rely on a different contract unsuccessfully asserted by the defendant as a
defense to the claim. Accordingly, the trial court’s award of attorney’s fees was reversed.
Drybread v. Chipain Chiropractic Corp. , 151 Cal. App. 4th 1063, 60 Cal. Rptr. 3d 580
(2007). This unlawful detainer action was based on an alleged holdover after termination of a
sublease. Therefore, unlike Mitchell Land (see annotation above), this is not an action on a
contract. Accordingly, Civ. Code § 1717(b)(2) does not apply, and defendant is entitled to an
award of attorney’s fees after a voluntary dismissal.
Butler-Rupp v. Lourdeaux, 154 Cal. App. 4th 918, 65 Cal. Rptr. 3d 242 (2007) . After a
first appeal, where the appellate court had ordered the parties to bear their own costs on
appeal, the trial court awarded the successful appellant attorney’s fees, including fees
incurred on the first appeal. The losing party argued on the second appeal that the trial court
lacked jurisdiction to award fees for the first appeal because the appellate court had ordered
the parties to bear their own costs on that appeal. Affirming the trial court, the appellate court
held that its order that the parties could not recover “costs” on appeal, did not apply to
attorney’s fees. Adding insult to injury, the appellate court awarded respondent costs on the
second appeal and ruled that the trial court could now decide the attorney’s fees that
respondent can recover for the second appeal.
Yoo v. Jho , 147 Cal. App. 4th 1249, 55 Cal. Rptr. 3d 243 (2007) . Defendant sold a
boutique clothing business to plaintiff. A significant portion of the store’s sales were for
counterfeit goods. Buyer knew this at the time of purchase. Because this transaction involved
illegality, the court should leave the parties where it found them and not award any relief to
either party. This meant the buyer’s rescission and fraud claims failed. At the same time, even
though a successful defendant normally recovers attorney’s fees when the contract contains
any attorney’s fee clause (as was the case here), the illegality taints that part of the contract
as well, so the “prevailing” defendant could not recover attorney’s fees
Colony Hill v. Ghamaty, 143 Cal. App. 4th 1156, 50 Cal. Rptr. 3d 247 (2006) .
Defendant appealed from a judgment, but he did not appeal from the post-judgment award of
attorney’s fees. Because the judgment was silent about attorney’s fees, the defendant had to
474
file an appeal from the fee order. Because he did not do so, the appellate court lacks
jurisdiction to review the fee award.
Kangarlou v. Progressive Title Co. Inc., 128 Cal. App. 4th 1174, 27 Cal. Rptr. 3d 754
(2005). This was an action by a buyer of real estate against the escrow agent for breach of
fiduciary duty. The plaintiff prevailed but was denied attorney’s fees. The escrow instructions
contained an attorney’s fee clause that entitled the escrow to recover attorney’s fees if the
buyer failed to pay escrow fees. The presence of this clause entitled the plaintiff to recover
her attorney’s fees.
Arias v. Katella Townhouse Homeowners Assoc. Inc., 127 Cal. App. 4th 847, 26 Cal.
Rptr. 3d 113 (2005) . This case relates to the interplay between § 1717 and Code of Civil
Procedure § 998. The plaintiff recovered a judgment against the Homeowner’s Association
with respect to its failure to maintain common areas. The Association made a § 998 offer of
judgment. After the offer, the Association agreed to pay for many of the plaintiff’s costs and
paid a substantial sum to her before trial. As a result she recovered a judgment less than the §
998 offer. Therefore the Association argued it was the prevailing party, not the plaintiff. The
plaintiff successfully recovered attorney’s fees, however, because the money paid prior to
trial was added to the judgment and thus plaintiff did obtain a more favorable judgment than
the § 998 offer.
Hsu v. Semiconductor Systems Inc., 126 Cal. App. 4th 1330, 25 Cal. Rptr. 3d 82 . Costs
and expert witness fees were not recoverable under a contractual provision for the award of
“all fees, costs and expenses.” Such costs can not be included as an element of attorney’s
fees, and the court expressly disavowed its prior holding to that effect in Bussey v. Affleck,
225 Cal. App. 3d 1162 (1990).
ABF Capital v. Grove Properties, 126 Cal. App. 4th 204, 23 Cal. Rptr. 3d 803 (2005) .
This action in California was based on a New York contract with a New York choice of law
provision. The contract had a unilateral attorney’s fee clause. New York does not have a
provision similar to § 1717. Nonetheless, the court applied conflicts of law analysis and held
§ 1717 applied to make the clause reciprocal.
Baldwin Builders v. Coast Plastering Corp., 125 Cal. App. 4th 1339, 24 Cal. Rptr. 3d 9
(2005). An express attorney’s fee clause in an indemnity agreement held subject to the
reciprocity provisions of § 1717.
Persson v. Smart Inventions Inc., 125 Cal. App. 4th 1141, 23 Cal. Rptr. 3d 335 (2005) .
An award of attorney’s fees is not limited by the amount of fees due under a contingency
agreement.
Frei v. Davey, 124 Cal. App. 4th 1506, 22 Cal. Rptr. 3d 429 . A provision in a contract
that a party who refuses to mediate a dispute may not thereafter recover attorney’s fees even
if he is the prevailing party is valid and enforceable.
Gil v. Mansano, 121 Cal. App. 4th 739, 17 Cal. Rptr. 3d 420 (2004) . A fraud action was
defeated by the affirmative defense of a release agreement. The release included a provision
that in any action to enforce the release, the prevailing party was entitled to attorney’s fees.
In a 2-1 decision, the appellate court reversed the award of attorney’s fees to the successful
defendant because the action was for fraud, not an action to enforce the release.
Hasler v. Howard, 120 Cal. App. 4th 1023, 16 Cal. Rptr. 3d 217 (2004) . Plaintiff listed
his house for sale with a real estate broker. The listing agreement contained an attorney’s fee
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clause. The plaintiff sued the broker for fraud, breach of fiduciary duty and breach of duty to
disclose because of failure to disclose that the broker represented the buyer and encouraged
the seller to accept an offer from the buyer that the plaintiff contended was below the fair
value of the property. The plaintiff did not seek a return of the commission in the complaint.
At a settlement conference, he offered to settle the case if the broker would pay him the
amount of the broker’s commission. Later, he voluntarily dismissed. The broker sought a
prevailing party determination and her attorney’s fees, and offered into evidence the
settlement proposal that plaintiff had made to settle the case for the amount of the
commission. She was awarded costs, but denied fees because the fee provision in the listing
agreement did not apply to the tort actions. She proffered evidence of the settlement offer to
show that the case did in fact involve the commission. The broker was unsuccessful for
several reasons, including the rule that settlement offers are inadmissible, and that the
attorneys fee clause in this case was not broad enough to cover the claims in the case.
Carver v. Chevron U.S.A. Inc., 119 Cal. App. 4th 498, 14 Cal. Rptr. 3d 467 (2004) .
Chevron successfully defended claims including antitrust, breach of contract, fraud and
deceit. The contracts contained an attorney fee clause. The Cartwright Act, however, does not
allow a prevailing defendant to recover attorney’s fees. Therefore, fees incurred in defending
the Cartwright Act claim or which overlap the Cartwright Act and the contract claim must be
excluded from the fees awarded under the contract.
Port of Stockton v. Western Bulk Carrier KS, 371 F.3d 1119 (9th Cir. 2004) . The Port
was the prevailing defendant in an action which contained an attorney’s fee clause, but the
Port did not claim its attorney’s fees in that action. Instead, approximately two years later the
Port filed a separate action seeking fees. This tactic failed because the Port should have
sought its attorney’s fees as an element of costs in the earlier action.
Blackburn v. Charnley, 117 Cal. App. 4th 758, 11 Cal. Rptr. 3d 885 (2004) . This action
involves the attorney’s fee clause in a California Association of Realtor’s (CAR) form. The
CAR form includes an attorney’s fee clause, but also imposes a precondition that the parties
first employ mediation. There is an exception, however, if an action is filed to permit the
recording of a lis pendens. That exception applied here.
Parrott v. Mooring Townhomes Assn. Inc., 112 Cal. App. 4th 873, 6 Cal. Rptr. 3d 116
(2003). This was an action under Civil Code § 1354 relating to home owner association
CC&R’s. The plaintiff voluntarily dismissed and the Homeowner’s Association was awarded
attorney’s fees. The plaintiff argued that no fees should be awarded because under 1717(b)(2)
no fees can be recovered when a case is voluntarily dismissed. 1717 did not apply to this
case, however, because this was not an action on a contract but an action under section 1354.
Thompson v. Miller, 112 Cal. App. 4th 327, 4 Cal. Rptr. 3d 905 (2003) . Dissatisfied
private investors in a corporation sold their shares to a majority shareholder. They signed a
share purchase agreement stating that they did not rely on representations of the majority
shareholder. The share purchase agreement contained an attorney’s fee provision for fees to
be awarded to the prevailing party in the event of a “dispute under the agreement.” Later, when
the corporation became successful and the stock value soared, they sued for fraud, breach of
fiduciary duty and elder abuse. The defendant relied on the share purchase agreement as a
defense. Defendant prevailed, but the trial court refused to allow attorney’s fees because the
plaintiffs did not sue for breach of contract, but for torts. The appellate court reversed and
held that the attorney’s fee provision applied and the prevailing defendant was entitled to
recover attorney’s fees. Thus, in some cases use of a contract as a defense in a tort action can
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give rise to recovery of attorney’s fees under a provision in the contract.
M. Perez Co. Inc. v. Base Camp Condominiums Assn. No. One, 111 Cal. App. 4th 456,
3 Cal. Rptr. 3d 563 (2003). In a three-party dispute involving a construction contract and
subcontract, the question of who prevailed and which contract applied was somewhat
complex. Each party had claimed the right to attorney’s fees in the various complaint and
cross-complaints, but in order for the prevailing party to recover such fees, it must be able to
point to a clause which reasonably can be construed as an attorney’s fees clause. Here, no
one recovered fees.
Hayward v. Ventura Volvo, 108 Cal. App. 4th 509, 133 Cal. Rptr. 2d 514 (2003) .
Although this case was decided under Civil Code § 1780 (part of the CLRA) and not 1717,
potentially its reasoning could apply under 1717 as well. Here, the prevailing plaintiff had a
contingency fee agreement with his attorney limiting the fees to a percentage of the recovery
(which would have totaled about $12,000 in fees), but was awarded reasonable attorney’s fees
of $98,000. The defendant argued that the fees should have been limited to the amount that
the attorney was entitled to under the contingency fee agreement. The appellate court,
however, affirmed the trial court and held that contingency fee agreement did not limit the
amount of the reasonable fees which could be awarded.
Leamon v. Krajkiewcz, 107 Cal. App. 4th 424, 132 Cal. Rptr. 2d 362 (2003). This action
concerned the enforceability of a real estate contract for the sale of a home. The jury
determined that the contract was not valid. The prevailing plaintiffs sought attorney’s fees.
Their request was denied because the real estate contract included a provision that before
litigating the parties were to mediate the dispute and the right to attorney’s fees was
dependent on first pursuing mediation. The court affirmed, and held that the failure to comply
with the contractual condition of seeking mediation precluded an award of attorney’s fees.
Topanga and Victory Partners v. Toghia, 103 Cal. App. 4th 775, 127 Cal. Rptr. 2d 104
(2002). In a case involving both contract and noncontract claims the plaintiffs settled with all
defendants at the outset of the trial except Toghia and then dismissed the complaint against
him. He sought attorney’s fees for the noncontract claims and the trial court awarded fees in
reliance on Santisas v. Goodin, 17 Cal. 4th 599 (1998), which held that under 1717(b)(2) a
voluntary dismissal bars fees on the contract claims but the fees may be recovered on the
noncontract claims based on the applicable contractual provision for fees. The appellate
court reversed because there was no provision here which could provide for fees to Toghia.
Walker v. Countrywide Home Loans Inc., 98 Cal. App. 4th 1158, 121 Cal. Rptr. 2d 79
(2002). This action challenged Countrywide’s practice of charging defaulting borrowers for
inspection fees, based on drive-by inspections of properties where the borrower is in default.
The plaintiff alleged these fees are disguised late fees. The court held these charges are
neither unlawful, unfair, nor deceptive, and affirmed summary judgment in favor of the
defendant. Countrywide sought attorney’s fees based on a provision in the deed of trust. The
court held that this action was fundamentally an action under the UCL, not an action on a
contract, and therefore attorney’s fees were not recoverable by the successful defendant.
First Security Bank of California v. Paquet, 98 Cal. App. 4th 468, 119 Cal. Rptr. 2d
787 (2002). Plaintiffs in a shareholder derivative suit successfully demurred to a cross-
complaint against them and were awarded attorney’s fees. This was an appealable final
judgment notwithstanding the pendency of the original complaint because they were
proceeding on the complaint in a representative capacity, and they were sued on the cross-
complaint as individuals. The attorney fee award was affirmed.
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Carver v. Chevron U.S.A., Inc., 97 Cal. App. 4th 132, 118 Cal. Rptr. 2d 569 (2002) . The
defendant prevailed in this action against claims for breach of its dealer lease agreements,
fraud and violation of the Cartwright Act. Consequently, the defendant was awarded fees and
costs in excess of $6 million. The appellate court concluded that there are competing policy
interests with respect to attorney’s fees under section 1717 as contrasted with the Cartwright
Act. Whereas section 1717 creates a reciprocal right, under the Cartwright Act a prevailing
plaintiff may recover attorney’s fees, but the statute does not afford such a right to a
prevailing defendant. Accordingly, it was error for the trial court to include fees related to
defense of the antitrust (Cartwright) claims in the fee award. The clause was broad enough,
however, to include the other tort (fraud) claims. Thus, it is necessary to carve out the fees
associated with the claims covered by section 1717 from those which are not.
Carwash of America v. Windswept Ventures No. 1, 97 Cal. App. 4th 540, 118 Cal. Rptr.
2d 536 (2002). The prevailing defendant in this action sought recovery under a contractual
provision of its attorney’s fees of about $200,000 plus expert witness fees of about $73,000.
The defendant was awarded about $180,000 for its attorney’s fees but was denied recovery of
expert witness fees. The defendant argued that the contractual provision should also include
expert witness fees. The court disagreed. If a defendant or a plaintiff contends that a contract
entitles it to recover its expert witness fees, it must plead and prove an entitlement thereto.
Attorney’s fees may be recovered as an item of costs (and therefore need not be pleaded), but
except for statutory provisions not applicable in this case, expert witness fees cannot.
Silver v. Boatwright Home Inspection Inc., 97 Cal. App. 4th 443, 118 Cal. Rptr. 2d 475
(2002). The plaintiffs in this action settled with some of the defendants and voluntarily
dismissed Boatwright while Boatwright’s motion for summary judgment was pending.
Because the plaintiffs achieved their litigation objective through settlements with other
defendants, Boatwright was not considered to be a prevailing party, and could not recover its
fees.
Wong v. Thrifty Corp., 97 Cal. App. 4th 261, 118 Cal. Rptr. 2d 276 (2002) . The
attorney’s fee clause in this case stated that fees would be recoverable when it was
“determined” that a party was in default of the lease. When a lessee sued, defendant made a
compromise offer under CCP § 998, which was silent as to attorney’s fees. The plaintiff
accepted the offer and then moved for attorney’s fees. The trial court denied fees, apparently
adopting the defendant’s reasoning that liability had not been “determined” because this was a
compromise judgment. The appellate court reversed. There could be no salient distinction
between a compromise judgment under § 998 and a judgment after trial. This is a
straightforward application of section 1717—it was an action on a contract; the plaintiff
recovered monetary relief; therefore he prevailed under § 1717. To the extent that the lease
provision is supposed to have altered that calculus it was void, viz., “Language in the attorney
fee provision that conflicts with the prevailing party definition is void.”
Berkla v. Corel Corp., 290 F.3d 983, 62 U.S.P.Q.2d 1821 (9th Cir. 2002) . In this action
for breach of confidence relating to a non-disclosure agreement, the salient factor on the
attorney’s fees issue was that the plaintiff recovered only a tiny fraction of the amount
claimed. He sought over $1 million, and was awarded about $23,000. Because the prevailing
party determination is influenced by equitable considerations, it was appropriate here to deny
attorney’s fees.
Ritzenthaler v. Fireside Thrift Co. , 93 Cal. App. 4th 986, 113 Cal. Rptr. 2d 579 (2001) .
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This case concerns the interplay between Section 1717 and Code of Civil Procedure § 998.
The defendant made a 998 offer to allow judgment against it for $2001. The 998 offer was
silent as to attorneys’ fees. The plaintiffs accepted it and thereafter recovered $12,800 in
attorneys’ fees under Section 1717. The trial court’s decision was affirmed on appeal. In
order to avoid such a result, when a party makes an offer under Section 998 it would be
prudent to include a provision that each party is to bear its own costs and attorneys’ fees.
Acree v. General Motors Acceptance Corp. , 92 Cal. App. 4th 385, 112 Cal. Rptr. 2d 99
(2001). This was a class action against GMAC for breach of contract and other claims
involving the method by which GMAC computed refunds of property damage insurance
premiums. In calculating refunds or credits GMAC used an accelerated method whereby a
disproportionate amount of the premium is allocated to the beginning of the policy period. In
contrast with a pro rata method, the GMAC method resulted in smaller refunds and credits.
A jury decided that GMAC breached the contract by using the accelerated method to compute
unearned premium refunds, and awarded damages of $1.8 million. Later the trial court
awarded plaintiffs prejudgment interest and attorneys’ fees of $3.6 million. GMAC argued
that fees were improperly awarded in part because only a fraction of the class members (and
only one of the four named plaintiffs) were actually awarded contract damages. Therefore,
argued GMAC, it was actually the prevailing party with respect to the majority of class
members. In rejecting this argument, the Appellate Court approved the trial court’s decision
that it was “entirely appropriate to look at the results obtained by the class as a collective
group.” GMAC also failed on alternative arguments regarding the specific theories of
contract breach and the calculation of fees. In short, despite the fact that GMAC defeated
some of the theories and claims asserted against it, the class plaintiffs remained the
prevailing parties as a whole.
AJIDA Technologies Inc., v. Roos Instruments Inc. , 87 Cal. App. 4th 534, 104 Cal. Rptr.
2d 686 (2001). This case involves a joint marketing and development agreement and an
arbitration award. The arbitration award required appellant to pay specified damages,
attorneys’ fees, royalties, and other payments, and required appellant to continue
development of the relevant technology, and to make royalty payments for an additional five
year period. The award also gave each party certain audit rights and finally ruled that the
arbitration and attorneys’ fees provision of the underlying agreement would also apply to any
future disputes arising out of the arbitration award itself. The arbitration award was confirmed
by the trial court including the clauses retaining arbitration and attorneys’ fees clauses for
future disputes. The sole issue on appeal was whether the trial court erred in refusing to
delete the future dispute arbitration and attorneys’ fees clauses. In affirming the trial court,
the appellate court expressly held “that a party’s contractual duty to arbitrate disputes may
survive termination of the agreement giving rise to that duty.” Finally, the attorneys’ fee
clause also survived and respondent was entitled to attorneys’ fees on the appeal as well. The
amount of the attorneys’ fees were to be determined by the trial court. This is somewhat
anomalous in that this would seem to give the trial court a task that should have gone to the
arbitrators. The appellate court noted that remand to the arbitrators was not possible because
the panel was no longer constituted and by statute the arbitrator’s jurisdiction had terminated.
By contrast, the trial court retains jurisdiction under Code of Civil Procedure § 1292.6.
Gilbert v. Master Washer & Stamping Co. , 87 Cal. App. 4th 212, 104 Cal. Rptr. 2d 461
(2001). In this somewhat complex case, the attorneys’ fee issue was whether a plaintiff, who
happened to be an attorney suing for a breach of contract with an attorneys’ fee provision,
could recover attorneys’ fees when he was represented by his own law firm. The trial court
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had refused an award of attorneys’ fees based on the reasoning in Trope v. Katz , 11 Cal. 4th
274 (1995). Trope held that an attorney who chooses to litigate in propria persona, rather
than retaining another attorney to represent him, could not recover attorneys’ fees under
Section 1717. The appellate court distinguished Trope, and recognized a distinction between
a lawyer’s personal interests and those of the law firm. Thus, the attorney was entitled to
recover his fees.
Jackson v. Homeowners Association Monte Vista Estates-East , 93 Cal. App. 4th 773,
113 Cal. Rptr. 2d 363 (2001) . This case holds that a settlement agreement which provides
that the lawsuit is to be dismissed, but reserves to the trial court the issue of determining
attorneys’ fees, is enforceable and that the trial court can award attorneys’ fees to the
plaintiff in such a case. The defendants on appeal argued that 1717(b)(2) precludes attorneys’
fees in this situation. That subsection provides: “Where an action has been voluntarily
dismissed or dismissed pursuant to a settlement of the case, there shall be no party prevailing
on the contract for purposes of this section.” Despite that subsection, the parties can agree to
a settlement reserving to the trial court the authority to decide whether either party is a
prevailing party entitled to attorneys’ fees.
Del Cerro Mobile Estates v. Proffer , 87 Cal. App. 4th 943, 105 Cal. Rptr. 2d. 5 (2001) .
This lawsuit involved a claim for breach of a written rental agreement in a mobilehome park
for alleged violations of various provisions of the park’s rules and regulations. Also, the
complaint alleged a public nuisance under the Mobile Home Residency law and sought
attorneys’ fees both by contract and by statute. Eventually the mobilehome park voluntarily
dismissed the complaint, and the defendant recovered her attorneys’ fees. On appeal the
mobilehome park argued that either fees should not have been awarded or the Superior Court
should have allocated the fees between the separate causes of action. The Appellate Court
held that no fees could be recovered on the contractual cause of action because section 1717
denies attorneys’ fees when the plaintiff voluntarily dismisses. The defendant was entitled to
attorneys’ fees on the nuisance cause of action, however, because Civil Code § 798.85 of the
Mobilehome Residency law independently provides attorneys’ fees to a prevailing defendant
where the litigation is dismissed. Furthermore, no allocation was required because the two
causes of action arose from a common core of operative facts. Finally, the respondent was
also entitled to attorneys’ fees on appeal.
PLCM Group, Inc. v. Drexler (2000) 22 Cal. 4th 1084, 95 Cal. Rptr. 2d 198. The
California Supreme Court affirmed the decision of the court of appeal (see below) that the
prevailing party may recover attorney’s fees for services by its in-house counsel.
Sessions Payroll Management Inc. v. Noble Construction Co. (2000) 84 Cal. App. 4th
671, 101 Cal. Rptr. 2d 127. The Second District held that a prevailing defendant was not
entitled to attorney’s fees in an action brought by an alleged third party beneficiary of a
contract with an attorney’s fee clause. In the consultant’s opinion, this decision was wrongly
decided. The plaintiff alleged it was a third party beneficiary of a contract and therefore
entitled to recover damages and attorney’s fees under that contract. Defendant’s demurrer
was sustained, essentially because the contract contained specific language that defeated the
claim, i.e., there were no third party beneficiaries under the contract. The trial court awarded
the prevailing defendant its attorney’s fees. In reversing, the appellate court pointed to the
contract language which defeated the plaintiff’s substantive claim and reasoned that because
the nonsignatory plaintiff could not have recovered fees, the prevailing defendant was not
entitled to them either. The fallacy in the court’s reasoning is that it based the attorney’s fees
claim on a review of the substantive merit of the plaintiff’s claim, i.e., plaintiff could not
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recover attorney’s fees because its third party beneficiary claim itself was doomed by the
contract language. The appropriate analysis should begin with the question if the plaintiff had
prevailed on its theory, would plaintiff have recovered fees? In this case, if the plaintiff
proved it had enforceable rights under the contract (which both the appellate and trial court
held it could not do), it should also have been entitled to fees (as it alleged). Therefore, the
prevailing defendant, who prevailed on the theory that the plaintiff had no rights at all under
the contract, should have recovered its fees.
Pacific Custom Pools, Inc. v. Turner Construction Co. (2000) 79 Cal. App. 4th 1254,
94 Cal. Rptr. 2d 756. The trial court’s denial of attorney’s fees to Turner was reversed. The
contractual provision stated that attorney’s fees would be recovered in a suit against the
subcontractor. Because the suit here was commenced by the subcontractor, the trial court
reasoned that the clause did not apply. In reversing, the appellate court explained that the
reciprocal nature of § 1717 means that the prevailing party is entitled to recover fees
regardless of which party commenced the action.
First Nationwide Bank v. Mountain Cascade, Inc. (2000) 77 Cal. App. 4th 871, 92 Cal.
Rptr. 2d 145. Under an attorney’s fee clause, the trial court awarded the prevailing party its
attorney’s fees and also expert witness fees. The appellate court reversed with respect to the
expert witness fees. The court held that expert witness fees are not included within a clause
providing for recovery of attorney’s fees and costs. In order to recover expert witness fees
the prevailing party must either be entitled under an express statutory provision (such as CCP
§ 1033.5(a)(8) or CCP § 998) or under an express contractual provision which must be
pleaded and proved. (Accord: Steiny and Company, Inc. v. California Electric Supply
(2000) 79 Cal. App. 4th 285, 93 Cal. Rptr. 2d 920.)
Scott Co. of California v. Blount, Inc. (1999) 20 Cal. 4th 1103, 86 Cal. Rptr. 2d 614 .
The interplay between Civil Code § 1717 and Code of Civil Procedure § 998 resulted in a
defendant’s net recovery against a plaintiff who obtained a judgment on a contract claim
which was less than the offer of judgment the defendant had made under § 998. A
subcontractor on a construction project sued the general contractor for breach of contract
claiming cost overruns caused by the general contractor. The subcontract contained a
unilateral attorney’s fee provision in favor of the general contractor. The subcontractor
claimed damages over $2 million. Defendant general contractor made a § 998 offer of
judgment of $900,000. Plaintiff countered at $1.5 million. The eventual judgment was in
favor of plaintiff subcontractor for $442,000. Under § 1717, the unilateral attorney’s fee
clause was made reciprocal. Although plaintiff recovered only about 20% of its claim, it was
the prevailing party and so was entitled to its costs and attorney fees incurred up to the time
of the § 998 offer (which totaled about $226,000). But, plaintiff was not entitled to any fees
or costs incurred after the § 998 offer because it failed to obtain a more favorable judgment.
Conversely, defendant was entitled to recover its costs and attorney’s fees (which are an
element of costs under § 1717 and Code Civ. Proc. § 1032) from the time of its § 998 offer.
Defendant also was awarded its expert witness fees (under § 998). Defendant’s post-offer
costs and fees (which combined exceeded $880,000) exceeded the judgment plus plaintiff’s
pre-offer costs and fees. As a result, after offsetting the defendant’s entitlement to costs and
fees, the “victorious” plaintiff suffered a net loss of more than $200,000. Although this case
represents a state law contractual attorney’s fee recovery, similar reasoning might apply
whenever attorney’s fees are considered an element of costs. In such a case a “victorious”
plaintiff who fails to obtain a more favorable judgment than was offered by a defendant under
§ 998 or the federal counterpart, Fed. Rules Civ. Proc. 68, might be obligated to pay the
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defendant’s post-offer costs including the defendant’s post-offer attorney’s fees.
Santisas v. Goodin (1998) 17 Cal. 4th599, 71 Cal. Rptr. 2d 830, 951 P.2d 399 . In a 4-3
decision, the California Supreme Court resolved conflicts among the appellate courts
concerning the effect of § 1717 when a plaintiff sues for both contract and tort theories
involving a contract with a broadly worded reciprocal attorney’s fees clause, and then
voluntarily dismisses the action. A broadly worded clause entitles a prevailing party to
recover fees relative to tort as well as contract claims. The problem is that § 1717 states
there can be no prevailing party when the plaintiff voluntarily dismisses, whereas a defendant
generally is entitled to recover costs in that situation under Code Civ. Proc. § 1032.
Arguably (and this was the dissenters’ view) § 1717 should have no application at all
when the contract contains an even-handed reciprocal attorney’s fee provision. Therefore,
under Code Civ. Proc. § 1032, the voluntarily dismissed defendant should recover attorney’s
fees as part of his costs in defending all claims covered by the contractual clause, i.e., both
contract and tort claims. The majority held, however, that § 1717 governs all attorney’s fee
clauses, whether unilateral or reciprocal, for breach of contract claims, but not the tort
claims. Because § 1717 applies only with respect to the contract claims, there is no
prevailing party on the contract claims (when plaintiff voluntarily dismisses), but the
defendant is a prevailing party on the tort claims. As a result the defendant is entitled to
recover attorney fees in defense of the tort claims as an element of his costs.
In reaching its conclusion the Supreme Court disapproved conflicting appellate
decisions Jue v. Patton, 33 Cal. App. 4th 456, 39 Cal. Rptr. 2d 364 , Ryder v. Peterson, 51
Cal. App. 4th 1056, 59 Cal. Rptr. 2d 562 , Honey Baked Hams, Inc. v. Dickens, 37 Cal. App.
4th 421, 43 Cal. Rptr. 2d 595, and Sweat v. Hollister, 37 Cal. App. 4th 603, 43 Cal. Rptr. 2d
399.
PLCM Group, Inc. v. Drexler (1999) 72 Cal. App. 4th 693, 84 Cal. Rptr. 2d 905 . In this
case the court allowed the prevailing party to recover attorney’s fees for services by its in-
house counsel.
Southern Pacific Thrift & Loan Assn. v. Savings Assn. Mortgage Co. (1999) 70 Cal.
App. 4th 634, 82 Cal. Rptr. 2d 874. An indemnification provision whereby one party agrees
to indemnify the other against costs, including attorney’s fees, is not the same as an attorney
fee clause. Therefore, § 1717 does not apply to a unilateral indemnity clause.
Moore v. Liu (1999) 69 Cal. App. 4th 745, 81 Cal. Rptr. 2d 807 , as modified, rehearing
denied. A successful appeal which reverses summary judgment does not render the appellant
a prevailing party entitled to attorney’s fees under § 1717. That determination must await the
outcome of the case.
Sears v. Baccaglio (1998) 60 Cal. App. 4th 1136 . Trial court has broad discretion to
determine which party prevailed in order to award attorney fees, which will not be disturbed
by the appellate court absent abuse of discretion. As a result, there may be no prevailing
party, or the court may determine a party prevailed even though that party did not obtain a net
monetary recovery in his favor, if he in fact prevailed with respect to a contested issue.
Hedging Concepts, Inc. v. First Alliance Mortgage Co., (1996) 41 Cal. App. 4th 1410,
49 Cal. Rptr. 2d 191. The appellate court found that under Civ. Code § 1717, a prevailing
party is entitled to attorney’s fees even when it wins on the grounds that a contract is
inapplicable, invalid, unenforceable or non-existent, so long as the party pursuing the lawsuit
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would have been entitled to attorney’s fees had it prevailed. (citing Rainier Nat’l Bank v.
Bodily, (1991) 232 Cal.App.3d 83, 282 Cal.Rptr. 926).
Arntz Contracting Company v. St. Paul Flyer and Marine Insurance Company, (1996)
47 Cal. App. 4th 464, 54 Cal. Rptr. 2d 888 . The Court of Appeal addressed two issues
concerning California Civil Code § 1717. First, the court remanded the action because
multiple, independent contracts, each of which provided for attorney’s fees, were at issue.
The appellate court found that the trial court misunderstood its obligation to determine the
prevailing party under each contract rather than in the entire action. Whether a party obtained
a higher net recovery in the lawsuit is irrelevant in determining which party prevailed on the
particular action in the contract. Second, the court rejected an assertion that recovery of
litigation expenses (i.e., costs) beyond statutory costs is not a reciprocal right. The court
found that § 1717(a)’s language, “provides attorney’s fees and costs … shall be awarded
either to one of the parties or to the prevailing party,” is an express reference that makes
contractual provisions reciprocal as to both fees and costs. The court noted that “any other
interpretation would render the costs reference surplusage.”
Foothill Properties v. Lyon/Copley Corona Assoc. , (1996) 46 Cal. App. 4th 1542, 54
Cal. Rptr. 2d 488. The Court of Appeal affirmed the trial court’s award of attorney’s fees to a
developer prevailing against the owner’s suit for breach of real estate option contract, despite
finding that the developer breached a provision. The developer breached a provision by failing
to turn over documents at the end of the option. The court noted that the lack of damage to
the owners from the delay in turning over documents and the trial court’s failure to afford any
affirmative relief to the owner on this issue render the award of attorney’s fees appropriate.
The court rejected the argument that a party must have obtained affirmative relief, not merely
successfully defend the lawsuit, to prevail. The court explained that this was not the standard.
Snyder v. Marcus & Millichap , (1996) 46 Cal. App. 4th 1099, 54 Cal. Rptr. 2d 268 . A
real estate agent who prevailed on a partial appeal challenging punitive and emotional distress
damages was not a prevailing party entitled to receive attorney’s fees. The plaintiff in the
action received net compensatory damages. In sum, the Court of Appeal noted that a success
in the partial appeal did not constitute the status of “prevailing party” in the lawsuit.
Kelley v. Bredelis , (1996) 45 Cal. App. 4th 1819, 53 Cal. Rptr. 2d 536 . The Court of
Appeal found that a dismissal filed after a judicial arbitration award carries with it the
consequences of paying previously awarded attorney’s fees under § 1717. The plaintiffs, after
an unfavorable award at a judicial arbitration, requested a trial de novo. The plaintiffs
subsequently voluntary dismissed the action with prejudice. The trial court vacated the
dismissal and reinstated the arbitration award. The court entered judgment against the
plaintiffs pursuant to the award. The Court of Appeal found that the trial court’s vacating of
the voluntary dismissal did not preclude the arbitrator’s award of attorney’s fees under Civil
Code § 1717.
In the alternative, the court reasoned that the broader freedom to contract rights exists
under the Code of Civil Procedure § 1021 to permit recovery of attorney’s fees for the
defendant. The court explained that a party in tort litigation seeking recovery of attorney’s
fees authorized by contract exercises his right under Code of Civil Procedure § 1021. Even if
§ 1717 prohibited recovery, the court need not rely on that provision in this instance because
the breach essentially was founded on tortious conduct.
Abdallah v. United Savings Bank, (1996) 43 Cal. App. 4th 1101, 51 Cal. Rptr. 2d 286 .
The Court of Appeal rejected an argument that pursuant to Civil Code § 1717 the prevailing
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party could only recover attorney’s fees as they relate to a contract action and not on tort and
RICO causes of action. The court explained that when the various claims are inexplicably
intertwined, it is impracticable if not impossible to separate. Nonapportionment is
appropriate in this instance.
The court also found that Abdallah’s status as a nonsignatory was irrelevant to whether he
was liable for attorney’s fees. The court stated that “since it is undisputed that Fred Abdallah
would have been entitled to fees if he had been a prevailing party, there is no question that he
is liable for fees to the losing party.”
Mustachio v. Great Western Bank , 48 Cal. App. 4th 1145, 56 Cal. Rptr. 2d 33 (1996)
(Cal.Civ. Code § 1717). The appellate court held that while plaintiff’s claim for punitive
damages were rejected on appeal, she was ultimately awarded damages in excess of $200,000
for breach of contract and conversion claims and thus could be considered a prevailing party
on the contract under § 1717. The appellate court affirmed the trial court’s discretion in
awarding plaintiff’s attorney’s fees secured in connection with the appeal.
Curry v. Moody, 40 Cal. App. 4th 1547, 48 Cal. Rptr. 2d 627 (1995) . The court struck
the award of attorney’s fees because, under § 1717, a reciprocal remedy for a non-signatory
defendant is available only if the plaintiff would be entitled to attorney’s fees should he
prevail. The court noted that “because the Curry’s are not entitled to attorney’s fees against
the Moody group, the Moody group cannot claim the entitlement to attorney’s fees against
the Curry’s under Civil Code § 1717.”
Trope v. Katz (1995) 11 Cal. 4th 274, 45 Cal. Rptr. 2d 241, 902 P.2d 259 . The Supreme
Court of California held that an attorney who chooses to litigate in propria persona rather
than retain another attorney to litigate an action to enforce a contract which contains attorney
fee provisions, and therefore does not pay for or become liable to pay consideration in
exchange for legal representation, cannot recover reasonable attorney fees even though such
fees are provided for by contract or statute. This is because Civil Code § 1717 applies only to
contracts specifically providing that the attorney fees “which are incurred to enforce that
contract” shall be award to one of the parties or to the prevailing party. To “incur” a fee, is to
“become liable” for it, i.e., to become obligated to pay it. It follows that an attorney litigating
in propria persona cannot be said to “incur” compensation for his time and his lost business
opportunities. As such, the court held that any litigant who chooses to represent himself in an
action to which § 1717 applies assumes the risk that he may be required to pay his opponent’s
attorney fees if he does not prevail, even though he will not be compensated for his own time
and effort regardless of result.
Garfield Bank v. Folb (1994) 25 Cal. App. 4th 1804, 31 Cal. Rptr. 2d 239 . The court of
appeal held that fees for services of in-house counsel fees are recoverable under Civ. Code §
1717 if counsel was actively engaged in the preparation of the case for trial. The court
reasoned that disallowing fees for in-house counsel would provide a windfall for the losing
party and that there is no reason to distinguish the lost opportunities by the in-house counsel
to utilize his time in another productive manner from actual expenditures on outside counsel.
Milman v. Shukhat (1994) 22 Cal. App. 4th 538, 27 Cal. Rptr. 2d 526 . The court of
appeal held that since Civ. Code § 1717 authorizes award of attorney fees to a prevailing
party in “any action on a contract,” it was applicable to a declaratory relief action in which the
defendants prevailed because their signatures on purported contracts were forged. The court
reasoned that the action “involved” a contract and that the plaintiffs would have been entitled
484
to recover attorney fees under the contract had they prevailed. Therefore, the defendants
were entitled to attorney fees even though they prevailed by successfully arguing
nonexistence of the contract.
Texas Commerce Bank-El Paso v. Garamendi (1994) 28 Cal. App. 4th 1234, 34 Cal.
Rptr. 2d 155. The court held that although a trial court has considerable discretion in fixing
the amount of attorney fees awarded to a prevailing party in an action on contract, the court
may not completely deny attorney fees where the contract calls for their payment. Further,
although the trial court has discretion to fix the amount of costs, it cannot completely deny
them to a prevailing party in an action on a contract which provides for award of “court
costs.”
Palmer v. Shawback (1993) 17 Cal. App. 4th 296, 21 Cal. Rptr. 2d 575 . Prevailing
defendants in a breach of contract and fraud action were entitled to an award of attorney fees
under a provision of a real estate purchase agreement that stated that a prevailing party “shall”
be awarded attorney fees by the trial court in any action instituted by the parties to the
agreement. Therefore, under the terms of the agreement, the trial court did not have
discretion to decline to make any award at all.
Bankes v. Lucas (1992) 9 Cal. App. 4th 365, 11 Cal. Rptr. 2d 723 . Although a prevailing
party at trial may not be the prevailing party after an appeal, a motion for attorney fees is not
premature despite the filing of a notice of appeal. The filing of a notice of appeal does not
deprive the trial court of jurisdiction to award attorney fees as costs following trial.
PART 4
Obligations Arising From Particular Transactions

TITLE 1
CONSIGNMENT OF FINE ART

CHAPTER 1
DEFINITIONS
As used in this title:
(a) “Artist” means the person who creates a work of fine art or, if that
485
person is deceased, that person’s heir, legatee, or personal representative.
(b) “Fine art” means a painting, sculpture, drawing, work of graphic art
(including an etching, lithograph, offset print, silk screen, or a work of
graphic art of like nature), a work of calligraphy, or a work in mixed media
(including a collage, assemblage, or any combination of the foregoing art
media).
( c ) “Art dealer” means a person engaged in the business of selling
works of fine art, other than a person exclusively engaged in the business of
selling goods at public auction.
( d ) “Person” means an individual, partnership, corporation, limited
liability company, association or other group, however organized.
(e) “Consignment” means that no title to, estate in, or right to possession
of, fine art, superior to that of the consignor shall vest in the consignee,
notwithstanding the consignee’s power or authority to transfer and convey to
a third person all of the right, title and interest of the consignor in and to
such fine art.
Leg.H. 1975 ch. 953, 1994 ch. 1010.
CHAPTER 2
GENERAL PROVISIONS
Notwithstanding any custom, practice or usage of the trade to the contrary,
whenever an artist delivers or causes to be delivered a work of fine art of the
artist’s own creation to an art dealer in this state for the purpose of exhibition or
sale, or both, on a commission, fee or other basis of compensation, the delivery
to and acceptance of such work of fine art by the art dealer shall constitute a
consignment, unless the delivery to the art dealer is pursuant to an outright sale
for which the artist receives or has received full compensation for the work of
fine art upon delivery.
Leg.H. 1975 ch. 953.

A consignment of a work of fine art shall result in all of the following:
(a) The art dealer, after delivery of the work of fine art, shall constitute
486
an agent of the artist for the purpose of sale or exhibition of the consigned
work of fine art within the State of California.
(b) The work of fine art shall constitute property held in trust by the
consignee for the benefit of the consignor, and shall not be subject to claim
by a creditor of the consignee.
(c) The consignee shall be responsible for the loss of, or damage to, the
work of fine art.
(d) The proceeds from the sale of the work of fine art shall constitute
funds held in trust by the consignee for the benefit of the consignor. Such
proceeds shall first be applied to pay any balance due to the consignor,
unless the consignor expressly agrees otherwise in writing.
Leg.H. 1975 ch. 953.

A work of fine art received as a consignment shall remain trust property,
notwithstanding the subsequent purchase thereof by the consignee directly or
indirectly for the consignee’s own account until the price is paid in full to the
consignor. If such work is thereafter resold to a bona fide purchaser before the
consignor has been paid in full, the proceeds of the resale received by the
consignee shall constitute funds held in trust for the benefit of the consignor to
the extent necessary to pay any balance still due to the consignor and such
trusteeship shall continue until the fiduciary obligation of the consignee with
respect to such transaction is discharged in full.
Leg.H. 1975 ch. 953.

Any provision of a contract or agreement whereby the consignor waives any
provision of this title is void.
Leg.H. 1975 ch. 953.

This title shall not apply to a written contract executed prior to the effective
date of this title, unless either the parties agree by mutual written consent that
this title shall apply or such contract is extended or renewed after the effective
date of this title. The provisions of this title shall prevail over any conflicting or
inconsistent provisions of the Commercial Code affecting the subject matter of
this title.
Leg.H. 1975 ch. 953.
487
TITLE 1.1A
AUTOGRAPHED SPORTS MEMORABILIA

§ 1739.7. Sale of Autographed Sports Memorabilia;
Certificate of Authenticity Required; Civil Penalty.
(a) As used in this section:
(1) “Autographed” means bearing the actual signature of a personality
signed by that individual’s own hand.
(2) “Collectible” means an autographed sports item, including, but not
limited to, a photograph, book, ticket, plaque, sports program, trading card,
item of sports equipment or clothing, or other sports memorabilia sold or
offered for sale in or from this state by a dealer to a consumer for five
dollars ($5) or more.
(3) “Consumer” means any natural person who purchases a collectible
from a dealer for personal, family, or household purposes. “Consumer” also
includes a prospective purchaser meeting these criteria.
( 4 ) “Dealer” means a person who is in the business of selling or
offering for sale collectibles in or from this state, exclusively or
nonexclusively, or a person who by his or her occupation holds himself or
herself out as having knowledge or skill peculiar to collectibles, or to whom
that knowledge or skill may be attributed by his or her employment of an
agent or other intermediary that by his or her occupation holds himself or
herself out as having that knowledge or skill. “Dealer” includes an
auctioneer who sells collectibles at a public auction, and also includes
persons who are consignors or representatives or agents of auctioneers.
“Dealer” includes a person engaged in a mail order, telephone order, or
cable television business for the sale of collectibles.
(5) “Description” means any of the following:
(A) Any representation in writing, including, but not limited to, a
representation in an advertisement, brochure, catalog, flyer, invoice,
sign, or other commercial or promotional material.
(B) Any oral representation.
(C) Any representation included in a radio or television broadcast to
the public in or from this state.
488
( 6 ) “Limited edition” means any collectible that meets all of the
following requirements:
(A) A company has produced a specific quantity of a collectible and
placed it on the open market.
( B ) The producer of the collectible has posted a notice, at its
primary place of business, that it will provide any consumer, upon
request, with a copy of a notice that states the exact number of a
collectible produced in that series of limited editions.
( C) The producer makes available, upon request of a consumer,
evidence that the electronic encoding, films, molds, or plates used to
create the collectible have been destroyed after the specified number of
collectibles have been produced.
(D) The sequence number of the collectible and the number of the
total quantity produced in the limited edition are printed on the
collectible.
(7) “Mint condition” means any collectible sold on the open market or
through a private transaction that meets all of the following requirements:
(A) The item has never been circulated, used, or worn.
(B) The item exhibits little or no sign of aging or degradation caused
by oxidation or exposure to sunlight as a result of its display.
(C) The item is otherwise free from creases, blemishes, or marks.
( 8 ) “Promoter” means a person who arranges, holds, organizes, or
presents a trade show featuring collectibles, autograph signings, or both.
(9) “Person” means any natural person, partnership, corporation, limited
liability company, company, trust, association, or other entity, however
organized.
( b ) Whenever a dealer, in selling or offering to sell to a consumer a
collectible in or from this state, provides a description of that collectible as
being autographed, the dealer shall furnish a certificate of authenticity to the
consumer at the time of sale. The certificate of authenticity shall be in writing,
shall be signed by the dealer or his or her authorized agent, and shall specify the
date of sale. The certificate of authenticity shall be in at least 10-point boldface
type and shall contain the dealer’s true legal name and street address. The
dealer shall retain a copy of the certificate of authenticity for not less than seven
years. Each certificate of authenticity shall do all of the following:
( 1 ) Describe the collectible and specify the name of the sports
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personality who autographed it.
(2) Either specify the purchase price and date of sale or be accompanied
by a separate invoice setting forth that information.
(3) Contain an express warranty, which shall be conclusively presumed
to be part of the bargain, of the authenticity of the collectible. This warranty
shall not be negated or limited by reason of the lack of words such as
“warranty” or “guarantee” or because the dealer does not have a specific
intent or authorization to make the warranty or because any statement
relevant to the collectible is or purports to be, or is capable of being,
merely the dealer’s opinion.
(4) Specify whether the collectible is offered as one of a limited edition
and, if so, specify (A) how the collectible and edition are numbered and (B)
the size of the edition and the size of any prior or anticipated future edition,
if known. If the size of the edition and the size of any prior or anticipated
future edition is not known, the certificate shall contain an explicit statement
to that effect.
(5) Indicate whether the dealer is surety bonded or is otherwise insured
to protect the consumer against errors and omissions of the dealer and, if
bonded or insured, provide proof thereof.
(6) Indicate the last four digits of the dealer’s resale certificate number
from the State Board of Equalization.
(7) Indicate whether the item was autographed in the presence of the
dealer and specify the date and location of, and the name of a witness to, the
autograph signing.
(8) Indicate whether the item was obtained or purchased from a third
party. If so, indicate the name and address of this third party.
( 9 ) Include an identifying serial number that corresponds to an
identifying number printed on the collectible item, if any. The serial number
shall also be printed on the sales receipt. If the sales receipt is printed
electronically, the dealer may manually write the serial number on the
receipt.
( c ) No dealer shall represent an item as a collectible if it was not
autographed by the sports personality in his or her own hand.
(d) No dealer shall display or offer for sale a collectible in this state unless,
at the location where the collectible is offered for sale and in close proximity to
the collectible merchandise, there is a conspicuous sign that reads as follows:
“SALE OF AUTOGRAPHED SPORTS MEMORABILIA: AS REQUIRED BY
490
LAW, A DEALER WHO SELLS TO A CONSUMER ANY SPORTS
MEMORABILIA DESCRIBED AS BEING AUTOGRAPHED MUST
PROVIDE A WRITTEN CERTIFICATE OF AUTHENTICITY AT THE TIME
OF SALE. THIS DEALER MAY BE SURETY BONDED OR OTHERWISE
INSURED TO ENSURE THE AUTHENTICITY OF ANY COLLECTIBLE
SOLD BY THIS DEALER.”
(e) Any dealer engaged in a mail-order or telephone-order business for the
sale of collectibles in or from this state:
(1) Shall include the disclosure specified in subdivision (d), in type of
conspicuous size, in any written advertisement relating to a collectible.
( 2 ) Shall include in each television advertisement relating to a
collectible the following written on-screen message, which shall be
prominently displayed, easily readable, and clearly visible for no less than
five seconds, and which shall be repeated for five seconds once during each
four-minute segment of the advertisement following the initial four minutes:
“A written certificate of authenticity is provided with each autographed
collectible, as required by law. This dealer may be surety bonded or
otherwise insured to ensure the authenticity of any collectible sold by this
dealer.”
(3) Shall include as part of the oral message of each radio advertisement
for a collectible the disclosure specified in subdivision (d).
(f) No dealer shall display or offer for sale a collectible in this state at any
trade show or similar event primarily featuring sales of collectibles or other
sports memorabilia that offers onsite admission ticket sales unless, at each
onsite location where admission tickets are sold, there is prominently displayed
a specimen example of a certificate of authenticity.
(g) Any consumer injured by the failure of a dealer to provide a certificate
of authenticity containing the information required by this section, or by a
dealer’s furnishing of a certificate of authenticity that is false, shall be entitled
to recover, in addition to actual damages, a civil penalty in an amount equal to
10 times actual damages, plus court costs, reasonable attorney’s fees, interest,
and expert witness fees, if applicable, incurred by the consumer in the action.
The court, in its discretion, may award additional damages based on the
egregiousness of the dealer’s conduct. The remedy specified in this section is in
addition to, and not in lieu of, any other remedy that may be provided by law.
(h) No person shall represent himself or herself as a dealer in this state
unless he or she possesses a valid resale certificate number from the State
Board of Equalization.
491
(i) A dealer may be surety bonded or otherwise insured for purposes of
indemnification against errors and omissions arising from the authentication,
sale, or resale of collectibles.
( j ) Whenever a promoter arranges or organizes a trade show featuring
collectibles and autograph signings, the promoter shall notify, in writing, any
dealer who has agreed to purchase or rent space in this trade show what the
promoter will do if any laws of this state are violated, including the fact that
law enforcement officials will be contacted when those laws are violated. This
notice shall be delivered to the dealer, at his or her registered place of business,
at the time the agreement to purchase space in the trade show is made. The
following language shall be included in each notice:
“As a vendor at this collectibles trade show, you are a professional
representative of this hobby. As a result, you will be required to follow the
laws of this state, including laws regarding the sale and display of collectibles,
as defined in Section 1739.7 of the Civil Code, forged and counterfeit
collectibles and autographs, and mint and limited edition collectibles. If you do
not obey the laws, you may be evicted from this trade show, be reported to law
enforcement, and be held liable for a civil penalty of 10 times the amount of
damages.”
Leg.H. 1992 ch. 656, 1994 ch. 1010, 1995 ch. 360, 1998 ch. 494, 1999 ch. 83.
Annotations
Cases
Gentry v. Ebay, Inc., 99 Cal. App. 4th 816, 121 Cal. Rptr. 2d 703 (2002) . Ebay held not
responsible for sales of forged certificates of authenticity of autographed sports
memorabilia. Among other things, Ebay is not the dealer of the goods and the claims against
Ebay are preempted by 47 U.S.C. § 230, which immunizes Internet service providers from
claims attempting to equate service providers to publishers, and the like.
Upper Deck Authenticated, Ltd. v. CPG Direct (S.D. Cal 1997) 971 F. Supp. 1337.
Under the ASM statute, sports collectibles dealers must satisfy the facial requirements of the
statute, and have a reasonable basis in fact for believing that an item of autographed sports
memorabilia is authentic (a stricter warranty requirement than that imposed by the UCC’s
express warranty provision, California Com. Code § 2313).
TITLE 1.2
SALE OF FINE PRINTS
492
CHAPTER 1
GENERAL PROVISIONS
(a) “Fine art multiple” or “multiple” for the purposes of this title means
any fine print, photograph (positive or negative), sculpture cast, collage, or
similar art object produced in more than one copy. Pages or sheets taken
from books and magazines and offered for sale or sold as art objects shall
be included, but books and magazines shall be excluded.
(b) “Fine print” or “print” means a multiple produced by, but not limited
to, engraving, etching, woodcutting, lithography, and serigraphy, and means
multiples produced or developed from photographic negatives, or any
combination thereof.
(c) “Master” is used in lieu of and has the same meaning as a printing
plate, stone, block, screen, photographic negative, or mold or other process
as to a sculpture, which contains an image used to produce fine art objects
in multiples.
(d) “Artist” means the person who created the image which is contained
in, or constitutes, the master or conceived of, and approved the image which
is contained in, or constitutes, the master.
(e) Whether a multiple is “signed” or “unsigned” as these terms are used
in this title relating to prints and photographs, depends upon whether or not
the multiple was autographed by the artist’s own hand, and not by
mechanical means, after the multiple was produced, irrespective of whether
it was signed or unsigned in the plate.
( f ) “Impression” means each individual fine art multiple made by
printing, stamping, casting, or any other process.
( g) “Art dealer” means a person who is in the business of dealing,
exclusively or nonexclusively, in the fine art multiples to which this title is
applicable, or a person who by his or her occupation holds himself or
herself out as having knowledge or skill peculiar to these works, or to
whom that knowledge or skill may be attributed by his or her employment of
an agent or other intermediary who by his or her occupation holds himself or
493
herself out as having that knowledge or skill. The term “art dealer” includes
an auctioneer who sells these works at public auction, but excludes persons,
not otherwise defined or treated as art dealers herein, who are consignors or
principals of auctioneers.
(h) “Limited edition” means fine art multiples produced from a master,
all of which are the same image and bear numbers or other markings to
denote the limited production thereof to a stated maximum number of
multiples, or are otherwise held out as limited to a maximum number of
multiples.
( i ) “Proofs” means multiples which are the same as, and which are
produced from the same master as, the multiples in a limited edition, but
which, whether so designated or not, are set aside from and are in addition
to the limited edition to which they relate.
(j) “Certificate of authenticity” means a written or printed description of
the multiple which is to be sold, exchanged, or consigned by an art dealer.
Every certificate shall contain the following statement: “This is to certify
that all information and the statements contained herein are true and
correct.”
( k) “Person” means an individual, partnership, corporation, limited
liability company, association, or other entity, however organized.
Leg.H. 1970 ch. 1223, operative July 1, 1971, 1982 ch. 1320, 1988 ch. 819, 1994 ch.
1010.

This title shall apply to any fine art multiple when offered for sale or sold at
wholesale or retail for one hundred dollars ($100) or more, exclusive of any
frame.
CHAPTER 2
FULL DISCLOSURE IN THE SALE OF

FINE PRINTS
§ 1742. Informational Details Required to Be Published
in Catalogue, Prospectus, or Circular.
494
(a) An art dealer shall not sell or consign a multiple into or from this state
unless a certificate of authenticity is furnished to the purchaser or consignee, at
his or her request, or in any event prior to a sale or consignment, which sets
forth as to each multiple, the descriptive information required by Section 1744
for any period. If a prospective purchaser so requests, the certificate shall be
transmitted to him or her prior to the payment or placing of an order for a
multiple. If payment is made by a purchaser prior to delivery of such a multiple,
this certificate shall be supplied at the time of or prior to delivery. With respect
to auctions, this information may be furnished in catalogues or other written
materials which are made readily available for consultation and purchase prior
to sale, provided that a bill of sale, receipt, or invoice describing the
transaction is then provided which makes reference to the catalogue and lot
number in which this information is supplied. Information supplied pursuant to
this subdivision shall be clearly, specifically and distinctly addressed to each of
the items listed in Section 1744 unless the required data is not applicable. This
section is applicable to transactions by and between art dealers and others
considered to be art dealers for the purposes of this title.
(b) An art dealer shall not cause a catalogue, prospectus, flyer, or other
written material or advertisement to be distributed in, into, or from this state
which solicits a direct sale, by inviting transmittal of payment for a specific
multiple, unless it clearly sets forth, in close physical proximity to the place in
such material where the multiple is described, the descriptive information
required by Section 1744 for any time period. In lieu of this required
information, the written material or advertising may set forth the material
contained in the following quoted passage, or the passage itself, if the art dealer
then supplies the required information prior to or with delivery of the multiple.
The nonobservance of the terms within the following passage shall constitute a
violation of this title: “California law provides for disclosure in writing of
information concerning certain fine prints, photographs, and sculptures prior to
effecting a sale of them. This law requires disclosure of such matters as the
identity of the artist, the artist’s signature, the medium, whether the multiple is a
reproduction, the time when the multiple was produced, use of the plate which
produced the multiple, and the number of multiples in a “limited edition.” If a
prospective purchaser so requests, the information shall be transmitted to him or
her prior to payment, or the placing of an order for a multiple. If payment is
made by a purchaser prior to delivery of the multiple, this information will be
supplied at the time of or prior to delivery, in which case the purchaser is
entitled to a refund if, for reasons related to matter contained in such
information, he or she returns the multiple in the condition in which received,
within 30 days of receiving it. In addition, if after payment and delivery, it is
ascertained that the information provided is incorrect, the purchaser may be
entitled to certain remedies, including refund upon return of the multiple in the
495
condition in which received.” This requirement is not applicable to general
written material or advertising which does not constitute an offer to effect a
specific sale.
(c) In each place of business in the state where an art dealer is regularly
engaged in sales of multiples, the art dealer shall post in a conspicuous place, a
sign which, in a legible format, contains the information included in the
following passage: “California law provides for the disclosure in writing of
certain information concerning prints, photographs, and sculpture casts. This
information is available to you, and you may request to receive it prior to
purchase.”
(d) If an art dealer offering multiples by means of a catalogue, prospectus,
flyer or other written material or advertisement distributed in, into or from this
state disclaims knowledge as to any relevant detail referred to in Section 1744,
he or she shall so state specifically and categorically with regard to each such
detail to the end that the purchaser shall be enabled to judge the degree of
uniqueness or scarcity of each multiple contained in the edition so offered.
Describing the edition as an edition of “reproductions” eliminates the need to
furnish further informational details unless the edition was allegedly published
in a signed, numbered, or limited edition, or any combination thereof, in which
case all of the informational details are required to be furnished.
( e ) Whenever an artist sells or consigns a multiple of his or her own
creation or conception, the artist shall disclose the information required by
Section 1744, but an artist shall not otherwise be regarded as an art dealer.
Leg.H. 1970 ch. 1223, operative July 1, 1971, 1982 ch. 1320, 1988 ch. 819.
§ 1742.6. Charitable Organizations as Exempt From

Disclosure Requirements.
Any charitable organization which conducts a sale or auction of fine art
multiples shall be exempt from the disclosure requirements of this title if it posts
in a conspicuous place, at the site of the sale or auction, a disclaimer of any
knowledge of the information specified in Section 1744, and includes such a
disclaimer in a catalogue, if any, distributed by the organization with respect to
the sale or auction of fine art multiples. If a charitable organization uses or
employs an art dealer to conduct a sale or auction of fine art multiples, the art
dealer shall be subject to all disclosure requirements otherwise required of an
art dealer under this title.
Leg.H. 1982 ch. 1320.
496
(a) Except as provided in subdivisions (c), (d), (e), and otherwise in this
title, a certificate of authenticity containing the following informational details
shall be required to be supplied in all transactions covered by subdivisions (a),
(b), and (e) of Section 1742:
(1) The name of the artist.
(2) If the artist’s name appears on the multiple, a statement whether the
multiple was signed by the artist. If the multiple was not signed by the artist,
a statement of the source of the artist’s name on the multiple, such as
whether the artist placed his signature on the multiple or on the master,
whether his name was stamped or estate stamped on the multiple or on the
master, or was from some other source or in some other manner placed on
the multiple or on the master.
( 3) A description of the medium or process, and where pertinent to
photographic processes, the material used in producing the multiple, such as
whether the multiple was produced through the etching, engraving,
lithographic, serigraphic, or a particular method or material used in
photographic developing processes. If an established term, in accordance
with the usage of the trade, cannot be employed accurately to describe the
medium or process, a brief, clear description shall be made.
(4) If the multiple or the image on or in the master constitutes, as to
prints and photographs, a photomechanical or photographic type of
reproduction, or as to sculptures a surmoulage or other form of reproduction
of sculpture cases, of an image produced in a different medium, for a
purpose other than the creation of the multiple being described, a statement
of this information and the respective mediums.
( 5) If paragraph (4) is applicable, and the multiple is not signed, a
statement whether the artist authorized or approved in writing the multiple
or the edition of which the multiple being described is one.
(6) If the purported artist was deceased at the time the master was made
which produced the multiple, this shall be stated.
(7) If the multiple is a “posthumous” multiple, that is, if the master was
created during the life of the artist but the multiple was produced after the
artist’s death, this shall be stated.
(8) If the multiple was made from a master which produced a prior
limited edition, or from a master which constitutes or was made from a
reproduction or surmoulage of a prior multiple or the master which
produced the prior limited edition, this shall be stated as shall the total
number of multiples, including proofs, of all other editions produced from
497
that master.
(9) As to multiples produced after 1949, the year, or approximate year,
the multiple was produced shall be stated. As to multiples produced prior to
1950, state the year, approximate year or period when the master was made
which produced the multiple and when the particular multiple being
described was produced. The requirements of this subdivision shall be
satisfied when the year stated is approximately accurate.
(10) Whether the edition is being offered as a limited edition, and if so:
(i) the authorized maximum number of signed or numbered impressions, or
both, in the edition; (ii) the authorized maximum number of unsigned or
unnumbered impressions, or both, in the edition; (iii) the authorized
maximum number of artist’s, publisher’s or other proofs, if any, outside of
the regular edition; and (iv) the total size of the edition.
(11) Whether or not the master has been destroyed, effaced, altered,
defaced, or canceled after the current edition.
(b) If the multiple is part of a limited edition, and was printed after January
1, 1983, the statement of the size of the limited edition, as stated pursuant to
paragraph (10) of subdivision (a) of Section 1744 shall also constitute an
express warranty that no additional multiples of the same image, including
proofs, have been produced in this or in any other limited edition.
(c) If the multiple was produced in the period from 1950 to the effective
date of this section, the information required to be supplied need not include the
information required by paragraphs (5) and (8) of subdivision (a).
( d) If the multiple was produced in the period from 1900 to 1949, the
information required to be supplied need only consist of the information
required by paragraphs (1), (2), (3), and (9) of subdivision (a).
(e) If the multiple was produced before the year 1900, the information to be
supplied need only consist of the information required by paragraphs (1), (3),
and (9) of subdivision (a).
Leg.H. 1982 ch. 1320, 1988 ch. 819.
§ 1744.7. Information Disclosed as Part of Basis of

Bargain and as Creating Express Warranty.
Whenever an art dealer furnishes the name of the artist pursuant to Section
1744 for any time period after 1949, and otherwise furnishes information
required by any of the subdivisions of Section 1744 for any time period, as to
transactions including offers, sales, or consignments made to other than art
dealers, and to other art dealers, such information shall be a part of the basis of
498
the bargain and shall create express warranties as to the information provided.
Such warranties shall not be negated or limited because the art dealer in the
written instrument did not use formal words such as “warrant” or “guarantee” or
because the art dealer did not have a specific intention or authorization to make
a warranty or because any required statement is, or purports to be, or is capable
of being merely the seller’s opinion. The existence of a basis in fact for
information warranted by virtue of this subdivision shall not be a defense in an
action to enforce such warranty. However, with respect to photographs and
sculptures produced prior to 1950, and other multiples produced prior to 1900,
as to information required by paragraphs (3), (4), (5), and (6) of subdivision (a)
of Section 1744, the art dealer shall be deemed to have satisfied this section if a
reasonable basis in fact existed for the information provided. When information
is not supplied as to any subdivision or paragraph of Section 1744 because not
applicable, this shall constitute the express warranty that the paragraph is not
applicable. Whenever an art dealer disclaims knowledge as to a particular item
about which information is required, such disclaimer shall be ineffective unless
clearly, specifically, and categorically stated as to the particular item and
contained in the physical context of other language setting forth the required
information as to a specific multiple.
Leg.H. 1982 ch. 1320.

(a) An artist or art dealer who consigns a multiple to an art dealer for the
purpose of effecting a sale of the multiple, shall have no liability to a purchaser
under this article if the consignor, as to the consignee, has complied with the
provisions of this title.
( b ) When an art dealer has agreed to sell a multiple on behalf of a
consignor, who is not an art dealer, or an artist has not consigned a multiple to
an art dealer but the art dealer has agreed to act as the agent for an artist for the
purpose of supplying the information required by this title, the art dealer shall
incur the liabilities of other art dealers prescribed by this title, as to a
purchaser.
Leg.H. 1982 ch. 1320.
CHAPTER 3
REMEDIES AND PENALTIES
499
§ 1745. Liability of Offeror or Seller—Amount
Recoverable—Limitation Period for Action.
( a ) An art dealer, including a dealer consignee, who offers or sells a
multiple in, into or from this state without providing the certificate of
authenticity required in Sections 1742 and 1744 of this title for any time period,
or who provides information which is mistaken, erroneous or untrue, except for
harmless errors, such as typographical errors, shall be liable to the purchaser of
the multiple. The art dealer’s liability shall consist of the consideration paid by
the purchaser for the multiple, with interest at the legal rate thereon, upon the
return of the multiple in the condition in which received by the purchaser.
( b ) In any case in which an art dealer, including a dealer consignee,
willfully offers or sells a multiple in violation of this title, the person
purchasing such multiple may recover from the art dealer, including a dealer
consignee, who offers or sells such multiple an amount equal to three times the
amount required under subdivision (a).
(c) No action shall be maintained to enforce any liability under this section
unless brought within one year after discovery of the violation upon which it is
based and in no event more than three years after the multiple was sold.
(d) In any action to enforce any provision of this title, the court may allow
the prevailing purchaser the costs of the action together with reasonable
attorneys’ and expert witnesses’ fees. In the event, however, the court
determines that an action to enforce was brought in bad faith, it may allow such
expenses to the seller as it deems appropriate.
(e) These remedies shall not bar or be deemed inconsistent with a claim for
damages or with the exercise of additional remedies otherwise available to the
purchaser.
(f) In any proceeding in which an art dealer relies upon a disclaimer of
knowledge as to any relevant information set forth in Section 1744 for any time
period, such disclaimer shall be effective unless the claimant is able to establish
that the art dealer failed to make reasonable inquiries, according to the custom
and usage of the trade, to ascertain the relevant information or that such relevant
information would have been ascertained as a result of such reasonable
inquiries.
Leg.H. 1970 ch. 1223, operative July 1, 1971, 1982 ch. 1320, 1988 ch. 819.
Annotations
Cases
500
Grogan-Beall v. Ferdinand Roten Galleries, Inc. (1st Dist. 1982) 133 Cal. App. 3d
969, 978–979, 184 Cal. Rptr. 411 . For a purchaser to recover three times the cost of an art
print, tender of the print is required. Even though the legislature has not expressly repeated
the tender requirement in the penalty section, Civ. Code § 1745 requires a tender in order to
recover for any violation.
Pelletier v. Eisenberg (4th Dist. 1986) 177 Cal. App. 3d 558, 566–567, 223 Cal. Rptr.
84. An artist consigned paintings to an art gallery, which were lost in a fire. The court held
that the most accurate measure of damages was the fair market value of the paintings, and not
the wholesale value. The art gallery was not entitled to a commission, even though the artist
had signed an agreement to pay a commission if the paintings were sold.
Articles
Darraby, Art Fraud and the Farr Act, L.A. Law., October, 1989, at 28.
§ 1745.5. Injunctive Relief; Who May Bring Action;

Civil Penalties.
(a) Any person performing or proposing to perform an act in violation of
this title within this state may be enjoined in any court of competent jurisdiction.
(b) Actions for injunction pursuant to this title may be prosecuted by the
following persons:
(1) The Attorney General.
(2) Any district attorney.
(3) Any city attorney.
(4) With the consent of the district attorney, a city prosecutor in any city
or city and county having a full-time city prosecutor in the name of the
people of the State of California upon their own complaint, or upon the
complaint of any board, officer, person, corporation, or association.
(5) Any person acting in his or her own interests, or in the interests of
the members of a corporation or association, or in the interests of the
general public.
(c) Any person who violates any provision of this title may also be liable
for a civil penalty not to exceed one thousand dollars ($1,000) for each
violation, which may be assessed and recovered in a civil action brought in the
name of the people of the State of California by the Attorney General or by any
district attorney or any city attorney, and, with the consent of the district
attorney, by a city prosecutor in any city or city and county having a full-time
city prosecutor in any court of competent jurisdiction. If the action is brought by
the Attorney General, one-half of the penalty collected shall be paid to the
501
treasurer of the county in which the judgment was entered, and one-half to the
General Fund. If brought by a district attorney, the penalty collected shall be
paid to the treasurer of the county in which the judgment was entered. If brought
by a city attorney or city prosecutor, one-half of the penalty collected shall be
paid to the treasurer of the city in which the judgment was entered, and one-half
to the treasurer of the county in which the judgment was entered.
(d) Any person who violates any provision of this title may also be liable
for a civil penalty surcharge not to exceed one thousand dollars ($1,000) for
each violation which shall be assessed and recovered in the manner provided in
subdivision (c). Any penalty surcharge collected shall be applied to the costs of
enforcing this title by the prosecuting officer.
Leg.H. 1982 ch. 1320, 1988 ch. 819.
TITLE 1.7
CONSUMER WARRANTIES
CHAPTER 4
GREY MARKET GOODS

(a) As used in this chapter, the term “grey market goods” means consumer
goods bearing a trademark and normally accompanied by an express written
warranty valid in the United States of America which are imported into the
United States through channels other than the manufacturer’s authorized United
States distributor and which are not accompanied by the manufacturer’s express
written warranty valid in the United States.
(b) As used in this chapter, the term “sale” includes a lease of more than
four months.
Leg.H. 1986 ch. 1497.
In the past, “grey market” goods could be imported if the foreign seller had a certain
relationship with the owner of the U.S. trademark. See generally K Mart Corp. v. Cartier,
Inc. (1988) 486 U.S. 281, 108 S.Ct. 1811, 100 L.Ed.2d 313. Trademark owners are now on
502
stronger footing to stop the importation of grey market goods. In Gamut Trading Company
v. USITC (Fed. Cir. 1999) 200 F.3d 775 , the Federal Circuit upheld an order by the
International Trade Commission barring the importation of grey market goods based on
material differences, and approved a low threshold of materiality, making it easier for U.S.
trademark owners to thwart the importation of such goods. U.S. Customs has adopted
regulations which provide for interdiction of such goods if there is a “material difference”
between the imported goods and those available on the domestic market. See 19 CFR §
133.23. These regulations, however, allow the foreign seller to import such goods if they
bear a conspicuous label designed to remain on the product or its packaging until the first
point of sale to a retail consumer with specified language clearly showing that the goods are
not authorized by the U.S. trademark owner.
The California statutes require retailers to give notice to consumers of some of the
disadvantages of grey market goods which are often mentioned in arguments for forbidding
importation. Thus, assuming for example that goods are allowed to be imported by U.S.
Customs regulations because the goods bear the requisite labels, once the goods are offered
by retailers, the retailers have additional notice requirements specified in § 1797.81. A
violation is explicitly declared by § 1797.86 to be an unfair business practice under Business
& Professions Code § 17200 subject to the remedies of that statutory scheme.
Annotations
Cases
Transgo, Inc. v. Ajac Transmission Parts Corp. (9th Cir. 1985) 768 F.2d 1001 , 225
U.S.P.Q. (BNA) 458.
Articles
Comment, The Gray Market: A Call for Greater Protection of Consumers and
Trademark Owners, 12 U. Pa. J. Int’l Bus. L. 457 (1991).
Hoffman, California’s New Law on “Grey Market” Goods, New Matter, Spring, 1987,
at 5.

(a) Every retail seller who offers grey market goods for sale shall post a
conspicuous sign at the product’s point of display and affix to the product or its
package a conspicuous ticket, label, or tag disclosing any or all of the
following, whichever is applicable:
( 1 ) The item is not covered by a manufacturer’s express written
warranty valid in the United States (however, any implied warranty
provided by law still exists).
(2) The item is not compatible with United States electrical currents.
(3) The item is not compatible with United States broadcast frequencies.
503
( 4 ) Replacement parts are not available through the manufacturer’s
United States distributors.
(5) Compatible accessories are not available through the manufacturer’s
United States distributors.
(6) The item is not accompanied by instructions in English.
(7) The item is not eligible for a manufacturer’s rebate.
(8) Any other incompatibility or nonconformity with relevant domestic
standards known to the seller.
(b) The disclosure described in paragraph (1) of subdivision (a) shall not
be required to be made by a retail seller with respect to grey market goods that
are accompanied by an express written warranty provided by the retail seller,
provided that each of the following conditions is satisfied:
(1) The protections and other benefits that are provided to the buyer by
the express written warranty provided by the retail seller are equal to or
better than the protections and other benefits that are provided to buyers in
the United States of America by the manufacturer’s express written warranty
that normally accompanies the goods.
(2) The express written warranty conforms to the requirements of the
Song-Beverly Consumer Warranty Act, (Chapter 1 (commencing with
Section 1790)), including, but not limited to, the warranty disclosure
standards specified in Section 1793.1, and the standards applicable to
service and repair facilities specified in Section 1793.2.
(3) The retail seller has posted a conspicuous sign at the product’s point
of sale or display, or has affixed to the product or its package a conspicuous
ticket, label, or tag that informs prospective buyers that copies of all of the
warranties applicable to the products offered for sale by the retail seller are
available to prospective buyers for inspection upon request.
( 4 ) The retail seller has complied with the provisions on presale
availability of written warranties set forth in the regulations of the Federal
Trade Commission adopted pursuant to the federal Magnuson-Moss
Warranty-Federal Trade Commission Improvement Act (see 15 U.S.C.A.
Sec. 2302(b)(1)(A) and 16 C.F.R. 702.1 et seq.).
(c) Nothing in subdivision (b) shall affect the obligations of a retail seller to
make the disclosures, if any, required by any other paragraph of subdivision (a).
Leg.H. 1986 ch. 1497.
504
See Consultant’s Comments to Civ. Code § 1797.8.
Annotations
See the annotations to Civ. Code § 1797.8.

Every retail dealer who offers for sale grey market goods shall be required
to disclose in any advertisement of those goods the disclosures required by
Section 1797.81. The disclosure shall be made in a type of conspicuous size.
Leg.H. 1986 ch. 1497.
Annotations
In making the disclosures prescribed by this chapter, the retail seller may
use reasonably equivalent language if necessary or appropriate to achieve a
clearer, or more accurate, disclosure.
Leg.H. 1986 ch. 1497.
Annotations

Nothing in this chapter shall be construed to authorize any sale of goods
which is specifically prohibited by a federal or state statute or a regulation or
local ordinance or regulation, or to relieve the seller of any responsibility for
bringing the goods into compliance with any applicable federal or state statute
or regulation or local ordinance or regulation.
Leg.H. 1986 ch. 1497.
505
Annotations

Any retail seller who violates this chapter shall be liable to the buyer who
returns the product for a refund, or credit on credit purchases, if the product
purchased has not been used in a manner inconsistent with any printed
instructions provided by the seller.
Leg.H. 1986 ch. 1497.
Annotations

Any violation of this chapter constitutes unfair competition under Section
17200 of the Business and Professions Code, grounds for rescission under
Section 1689 of this code, and an unfair method of competition or deceptive
practice under Section 1770 of this code.
Leg.H. 1986 ch. 1497.
Annotations
TITLE 2.7
506
CONTRACTS FOR SELLER ASSISTED
MARKETING PLANS
(a) The Legislature finds and declares that the widespread sale of seller
assisted marketing plans, often connected with the sale of vending machines,
racks or work-at-home paraphernalia, has created numerous problems in
California for purchasers which are inimical to good business practice. Often
purchasers of seller assisted marketing plans are individuals inexperienced in
business matters who use their life savings to purchase the seller assisted
marketing plan in the hope that they will earn enough money in addition to
retirement income or salary to become or remain self-sufficient. Many
purchasers are the elderly who are seeking a way to supplement their fixed
incomes. The initial payment is usually in the form of a purchase of overpriced
equipment or products. California purchasers have suffered substantial losses
when they have failed to receive full and complete information regarding the
seller assisted marketing plan, the amount of money they can reasonably expect
to earn, and the previous experience of the seller assisted marketing plan seller.
Seller assisted marketing plan sellers have a significant impact upon the
economy and well-being of this state and its local communities. The provisions
of this title relating to seller assisted marketing plans are necessary for the
public welfare.
(b) It is the intent of this title to provide each prospective seller assisted
marketing plan purchaser with the information necessary to make an intelligent
decision regarding seller assisted marketing plans being offered; to safeguard
the public against deceit and financial hardship; to insure, foster and encourage
competition and fair dealing in the sale of seller assisted marketing plans by
requiring adequate disclosure; to prohibit representations that tend to mislead;
and to prohibit or restrict unfair contract terms. This title shall be construed
liberally in order to achieve the foregoing purposes.
Leg.H. 1978 ch. 876.
507
For the purposes of this title, the following definitions shall apply:
(a) “Seller assisted marketing plan” means any sale or lease or offer to
sell or lease any product, equipment, supplies, or services that requires a
total initial payment exceeding five hundred dollars ($500), but requires an
initial cash payment of less than fifty thousand dollars ($50,000), that will
aid a purchaser or will be used by or on behalf of the purchaser in
connection with or incidental to beginning, maintaining, or operating a
business when the seller assisted marketing plan seller has advertised or in
any other manner solicited the purchase or lease of the seller assisted
marketing plan and done any of the following acts:
(1) Represented that the purchaser will earn, is likely to earn, or can
earn an amount in excess of the initial payment paid by the purchaser for
participation in the seller assisted marketing plan.
(2) Represented that there is a market for the product, equipment,
supplies, or services, or any product marketed by the user of the
product, equipment, supplies, or services sold or leased or offered for
sale or lease to the purchaser by the seller, or anything, be it tangible or
intangible, made, produced, fabricated, grown, bred, modified, or
developed by the purchaser using, in whole or in part, the product,
supplies, equipment, or services that were sold or leased or offered for
sale or lease to the purchaser by the seller assisted marketing plan
seller.
(3) Represented that the seller will buy back or is likely to buy back
any product made, produced, fabricated, grown, or bred by the
purchaser using, in whole or in part, the product, supplies, equipment, or
services that were initially sold or leased or offered for sale or lease to
the purchaser by the seller assisted marketing plan seller.
(b) A “seller assisted marketing plan” shall not include:
(1) A security, as defined in the Corporate Securities Law of 1968
(Division 1 (commencing with Section 25000) of Title 4 of the
Corporations Code), that has been qualified for sale by the Department
of Corporations, or is exempt under Chapter 1 (commencing with
Section 25100) of Part 2 of Division 1 of Title 4 of the Corporations
Code from the necessity to qualify.
(2) A franchise defined by the Franchise Investment Law (Division 5
(commencing with Section 31000) of Title 4 of the Corporations Code)
that is registered with the Department of Corporations or is exempt
under Chapter 1 (commencing with Section 31100) of Part 2 of Division
5 of Title 4 of the Corporations Code from the necessity of registering.
508
(3) Any transaction in which either the seller or purchaser or the
lessor or lessee is licensed pursuant to and the transaction is governed
by the Real Estate Law, Division 4 (commencing with Section 10000) of
the Business and Professions Code.
(4) A license granted by a general merchandise retailer that allows
the licensee to sell goods, equipment, supplies, products, or services to
the general public under the retailer’s trademark, trade name, or service
mark if all of the following criteria are satisfied:
(A) The general merchandise retailer has been doing business in
this state continually for five years prior to the granting of the
license.
( B ) The general merchandise retailer sells diverse kinds of
goods, equipment, supplies, products, or services.
(C) The general merchandise retailer also sells the same goods,
equipment, supplies, products, or services directly to the general
public.
( D ) During the previous 12 months the general merchandise
retailer’s direct sales of the same goods, equipment, supplies,
products, or services to the public account for at least 50 percent of
its yearly sales of these goods, equipment, supplies, products, or
services made under the retailer’s trademark, trade name, or service
mark.
( 5 ) A newspaper distribution system distributing newspapers as
defined in Section 6362 of the Revenue and Taxation Code.
(6) A sale or lease to an existing or beginning business enterprise
that also sells or leases equipment, products, supplies, or performs
services that are not supplied by the seller and that the purchaser does
not utilize with the equipment, products, supplies, or services of the
seller, if the equipment, products, supplies, or services not supplied by
the seller account for more than 25 percent of the purchaser’s gross
sales.
(7) The sale in the entirety of an “ongoing business.” For purposes
of this paragraph, an “ongoing business” means a business that for at
least six months previous to the sale has been operated from a particular
specific location, has been open for business to the general public, and
has had all equipment and supplies necessary for operating the business
located at that location. The sale shall be of the entire “ongoing
business” and not merely a portion of the ongoing business.
509
(8) A sale or lease or offer to sell or lease to a purchaser (A) who
has for a period of at least six months previously bought products,
supplies, services, or equipment that were sold under the same
trademark or trade name or that were produced by the seller and, (B)
who has received on resale of the product, supplies, services, or
equipment an amount that is at least equal to the amount of the initial
payment.
(9) The renewal or extension of an existing seller assisted marketing
plan contract.
(10) A product distributorship that meets each of the following
requirements:
(A) The seller sells products to the purchaser for resale by the
purchaser, and it is reasonably contemplated that substantially all of
the purchaser’s sales of the product will be at wholesale.
(B) The agreement between the parties does not require that the
purchaser pay the seller, or any person associated with the seller, a
fee or any other payment for the right to enter into the agreement, and
does not require the purchaser to buy a minimum or specified
quantity of the products, or to buy products for a minimum or
specified period of time. For purposes of this paragraph, a “person
associated with the seller” means a person, including an individual
or a business entity, controlling, controlled by, or under the same
control as the seller.
( C ) The seller is a corporation, partnership, limited liability
company, joint venture, or any other business entity.
(D) The seller has a net worth of at least ten million dollars
($10,000,000) according to audited financial statements of the seller
done during the 18 months preceding the date of the initial sale of
products to the purchaser. Net worth may be determined on a
consolidated basis if the seller is a subsidiary of another business
entity that is permitted by generally accepted accounting standards to
prepare financial statements on a consolidated basis and that
business entity absolutely and irrevocably agrees in writing to
guarantee the seller’s obligations to the purchaser. The seller’s net
worth shall be verified by a certification to the Attorney General
from an independent certified public accountant that the audited
financial statement reflects a net worth of at least ten million dollars
($10,000,000). This certification shall be provided within 30 days
following receipt of a written request from the Attorney General.
510
(E) The seller grants the purchaser a license to use a trademark
that is registered under federal law.
( F ) It is not an agreement or arrangement encouraging a
distributor to recruit others to participate in the program and
compensating the distributor for recruiting others into the program or
for sales made by others recruited into the program.
(c) “Person” includes an individual, corporation, partnership, limited
liability company, joint venture, or any business entity.
(d) “Seller” means a person who sells or leases or offers to sell or lease
a seller assisted marketing plan and who meets either of the following
conditions:
(1) Has sold or leased or represents or implies that the seller has
sold or leased, whether in California or elsewhere, at least five seller
assisted marketing plans within 24 months prior to a solicitation.
(2) Intends or represents or implies that the seller intends to sell or
lease, whether in California or elsewhere, at least five seller assisted
marketing plans within 12 months following a solicitation. For purposes
of this title, the seller is the person to whom the purchaser becomes
contractually obligated. A “seller” does not include a licensed real
estate broker or salesman who engages in the sale or lease of a
“business opportunity” as that term is used in Sections 10000 to 10030,
inclusive, of the Business and Professions Code, or elsewhere in
Chapter 1 (commencing with Section 10000), Chapter 2 (commencing
with Section 10050), or Chapter 6 (commencing with Section 10450) of
Part 1 of Division 4 of the Business and Professions Code.
(e) “Purchaser” means a person who is solicited to become obligated or
does become obligated on a seller assisted marketing plan contract.
( f) “Equipment” includes machines, all electrical devices, video or
audio devices, molds, display racks, vending machines, coin operated game
machines, machines that dispense products, and display units of all kinds.
(g) “Supplies” includes any and all materials used to produce, grow,
breed, fabricate, modify, develop, or make any product or item.
( h) “Product” includes any tangible chattel, including food or living
animals, that the purchaser intends to:
(1) Sell or lease.
(2) Use to perform a service.
511
(3) Resell or attempt to resell to the seller assisted marketing plan
seller.
(4) Provide or attempt to provide to the seller assisted marketing
plan seller or to any other person whom the seller suggests the purchaser
contact so that the seller assisted marketing plan seller or that other
person may assist, either directly or indirectly, the purchaser in
distributing, selling, leasing, or otherwise disposing of the product.
(i) “Services” includes any assistance, guidance, direction, work, labor,
or services provided by the seller to initiate or maintain or assist in the
initiation or maintenance of a business.
(j) “Seller assisted marketing plan contract” or “contract” means any
contract or agreement that obligates a purchaser to a seller.
(k) “Initial payment” means the total amount a purchaser is obligated to
pay to the seller under the terms of the seller assisted marketing plan
contract prior to or at the time of delivery of the equipment, supplies,
products, or services or within six months of the purchaser commencing
operation of the seller assisted marketing plan. If the contract sets forth a
specific total sale price for purchase of the seller assisted marketing plan
which total price is to be paid partially as a downpayment and then in
specific monthly payments, the “initial payment” means the entire total sale
price.
(l ) “Initial cash payment” or “downpayment” means that portion of the
initial payment that the purchaser is obligated to pay to the seller prior to or
at the time of delivery of equipment, supplies, products, or services. It does
not include any amount financed by or for which financing is to be obtained
by the seller, or financing that the seller assists in obtaining.
(m) “Buy-back” or “secured investment” means any representation that
implies in any manner that the purchaser’s initial payment is protected from
loss. These terms include a representation or implication of any of the
following:
(1) That the seller may repurchase either all or part of what it sold to
the purchaser.
(2) That the seller may at some future time pay the purchaser the
difference between what has been earned and the initial payment.
(3) That the seller may in the ordinary course buy from the purchaser
items made, produced, fabricated, grown, bred, modified, or developed
by the purchaser using, in whole or in part, the product, supplies,
equipment, or services that were initially sold or leased to the purchaser
512
by the seller.
(4) That the seller or a person to whom the seller will refer the
purchaser may in the ordinary course sell, lease, or distribute the items
the purchaser has for sale or lease.
Leg.H. 1978 ch. 876, 1980 ch. 567, 1981 ch. 258, 1989 ch. 1021, 1990 ch. 216, 1994
ch. 1010, 2000 ch. 413.
Annotations
Cases
People ex rel. Brown v. iMergent, Inc., 170 Cal. App. 4th 333, 87 Cal. Rptr. 3d 844
(2009). The definition of a seller assisted marketing plan is not unconstitutionally vague.

(a) An offer to sell or offer to lease a seller assisted marketing plan shall
occur in this state whenever:
(1) The offer to sell or offer to lease is made in this state;
(2) The purchaser resides in this state at the time of the offer; or
(3) The offer to sell or offer to lease either originates from this state or
is directed by the seller or lessor to this state and received at the place to
which it is directed.
(b) A sale or lease of a seller assisted marketing plan shall occur in this
state whenever:
(1) The offer to sell or offer to lease is accepted in this state;
(2) The purchaser resides in this state at the time of the sale; or
(3) The acceptance is communicated to a seller situated in this state.
Leg.H. 1978 ch. 876.
§ 1812.203. Filing of Disclosure Statements With

Attorney General; Stop Orders.
513
(a) The seller of any seller assisted marketing plan shall pay an annual fee
in the amount of one hundred dollars ($100) and annually file with the Attorney
General a copy of the disclosure statements required under Sections 1812.205
and 1812.206, as well as a list of the names and resident addresses of those
individuals who sell the seller assisted marketing plan on behalf of the seller.
The first filing shall be made at least 30 days prior to placing any advertisement
or making any other representations to prospective purchasers. The first filing
shall not be deemed to be effective until a notice of filing has been issued by the
Attorney General. The seller may not make any advertisement or other
representation to prospective purchasers until a notice of filing has been issued
by the Attorney General. The disclosure statements on file shall be updated
through a new filing and payment of a fee in the amount of thirty dollars ($30),
whenever material changes occur during the year following the annual filing and
the updated filing shall include all disclosure statements required by Sections
1812.205 and 1812.206 and a list of the names and resident addresses of all
current salespersons and all salespersons who have acted on behalf of the seller
since the previous filing, whether the annual filing or an updated filing,
indicating which salespersons are still active and which no longer act on behalf
of the seller. Each seller of a seller assisted marketing plan shall file the annual
renewal filing, whether or not any update filings have been made, at least 10
days before one year has elapsed from the date of the notice of filing issued by
the Attorney General, and at least 10 days before the same date every year
thereafter. The annual renewal filing shall include all disclosure statements
required by Sections 1812.205 and 1812.206 and a list of the names and
addresses of the residences of all current salespersons and all salespersons who
have acted on behalf of the seller since the previous filing (whether the annual
filing or an updated filing), indicating which salespersons are still active and
which no longer act on behalf of the seller. The annual renewal filing fee shall
be one hundred dollars ($100). If an annual renewal filing is not filed as
required, the previous filing shall be deemed to have lapsed and the seller shall
be prohibited from placing any seller assisted marketing plan advertisements or
making any other representations to prospective purchasers of seller assisted
marketing plan until a new annual filing is made and a new notice of filing has
been issued by the Attorney General.
(b) The Attorney General may send by certified mail to the address set forth
in the seller assisted marketing plan filing an intent to issue a stop order denying
the effectiveness of or suspending or revoking the effectiveness of any filing if
he or she finds the following:
(1) That there has been a failure to comply with any of the provisions of
this title.
(2) That the offer or sale of the seller assisted marketing plan would
514
constitute a misrepresentation to, or deceit of, or fraud on, the purchaser.
(3) That any person identified in the filing has been convicted of an
offense under paragraph (1) of subdivision (b) of Section 1812.206, or is
subject to an order or has had a civil judgment entered against him or her as
described in paragraphs (2) and (3) of subdivision (b) of Section 1812.206,
and the involvement of that person in the sale or management of the seller
assisted marketing plan creates an unreasonable risk to prospective
purchasers.
(c) The notice referred to shall include facts supporting a suspension or
revocation. If the seller assisted marketing plan does not submit to the Attorney
General, under penalties of perjury signed by an owner or officer of the seller
assisted marketing plan, within 10 days of receipt of the intent to issue a stop
order, a refutation of each and every supporting fact set forth in the notice, and
each fact not refuted shall be deemed, for purposes of issuance of the order, an
admission that the fact is true. If, in the opinion of the Attorney General, and
based upon supporting facts not refuted by the seller assisted marketing plan, the
plan is offered to the public without compliance with this title, the Attorney
General may order the seller to desist and refrain from the further sale or
attempted sale of the seller assisted marketing plan unless and until a notice of
filing has been issued pursuant to this section. Until that time, the registration
shall be void. The order shall be in effect until and unless the seller assisted
marketing plan files a proceeding in superior court pursuant to Section 1085 or
1094.5 of the Code of Civil Procedure or seeks other judicial relief and serves
a copy of the proceeding upon the Attorney General.
Leg.H. 1978 ch. 876, 1989 ch. 1021, 1990 ch. 1491, 1998 ch. 595.
Annotations
Cases
People v. Mott (2d Dist. 1983) 140 Cal. App. 3d 394, 399 fn. 1, 189 Cal. Rptr. 589 .
Gives example of a seller assisted marketing plan for which disclosure statements must be
filed and provided to potential buyers.
§ 1812.204. Restriction on Representations Allowed in

Sale or Lease.
In selling, leasing, or offering to sell or lease a seller assisted marketing
plan in this state, sellers shall not:
( a ) Use the phrase “buy-back” or “secured investment” or similar
phrase orally or in writing when soliciting, offering, leasing, or selling a
515
seller assisted marketing plan if the “security” is the value of the equipment,
supplies, products or services supplied by the seller to the purchaser.
( b ) Use the phrase “buy-back” or “secured investment” or similar
phrase orally or in writing when soliciting, offering, leasing, or selling a
seller assisted marketing plan unless there are no restrictions or
qualifications whatsoever preventing or limiting a purchaser from being
able to invoke the “buy-back” or “secured” portion of the seller assisted
marketing plan contract at any time the purchaser desires during the one-year
period following the contract date. Upon invocation of the “buy-back” or
“security” provision, the minimum amount a purchaser shall be entitled to
have returned to him is the full amount of his initial payment, less the amount
actually received by him from the operation of the seller assisted marketing
plan. The “amount actually received” means either the amount the purchaser
actually obtained from the seller for any product resold to the seller or the
amount of money the purchaser received for use of the purchaser’s product,
equipment, supplies or services, less any amount: (1) the purchaser has paid
the owner or manager of the location at which the purchaser’s products,
equipment, supplies or services are placed; and (2) the purchaser has paid
to obtain other items needed in order to sell, make, produce, fabricate,
grow, breed, modify, or develop the item which the seller assisted
marketing plan purchaser intends to sell, lease, distribute, or otherwise
dispose of.
( c ) Represent that a purchaser’s initial payment is “secured” in any
manner or to any degree or that the seller provides a “buy-back”
arrangement unless the seller has, in conformity with subdivision (b) of
Section 1812.214, either obtained a surety bond issued by a surety company
admitted to do business in this state or established a trust account at a
federally insured bank or savings and loan association located in this state.
(d) Represent that the seller assisted marketing plan provides income or
earning potential of any kind unless the seller has data to substantiate the
claims of income or earning potential and discloses this data to the
purchaser at the time the claim is made, if made in person, or if made
through written or telephonic communication, at the first in-person
communication thereafter and, when disclosed, the data is left with the
purchaser. A mathematical computation of the number of sales multiplied by
the amount of profit per sale to reach a projected income figure is not
sufficient data to substantiate an income or earning potential claim. Income
or earning potential claims cannot be made or implied at all unless they are
based on the experience of at least 10 purchasers from the seller assisted
marketing plan being offered. The data left by the seller must, at a minimum,
disclose:
516
(1) The length of time the seller has been selling the particular seller
assisted marketing plan being offered;
(2) The number of purchasers from the seller known to the seller to
have made at least the same sales, income or profits as those
represented; and
( 3) The percentage the number represents of the total number of
purchasers from the seller.
(e) Use the trademark, service mark, trade name, logotype, advertising
or other commercial symbol of any business which does not either control
the ownership interest in the seller or accept responsibility for all
representations made by the seller in regard to the seller assisted marketing
plan, unless the nature of the seller’s relationship to such other business
entity is set forth immediately adjacent to and in type size equal to or larger
than that used to depict the commercial symbol of such other business. If a
member of a trade association, the seller may use the logo or registration
mark of the trade association in advertisements and materials without regard
to this subdivision.
(f) Place or cause to be placed any advertisement for a seller assisted
marketing plan which does not include the actual business name of the
seller, and if it differs, the name under which the seller assisted marketing
plan is operated and the street address of the principal place of business of
the seller.
Leg.H. 1978 ch. 876, 1981 ch. 258.
§ 1812.205. Written Disclosure to Be Given to Potential

Purchaser on Initial Contact.
At the first in-person communication with a potential purchaser or in the
first written response to an inquiry by a potential purchaser, whichever occurs
first wherein the seller assisted marketing plan is described, the seller or his or
her representative shall provide the prospective purchaser a written document,
the cover sheet of which is entitled in at least 16-point boldface capital letters
“DISCLOSURE REQUIRED BY CALIFORNIA LAW.” Under the title shall
appear in boldface of at least 10-point type, the statement: “The State of
California has not reviewed and does not approve, recommend, endorse or
sponsor any seller assisted marketing plan. The information contained in this
disclosure has not been checked by the state. If you have any questions about
this purchase, see an attorney or other financial adviser before you sign a
contract or agreement.” Nothing shall appear on the cover sheet except the title
and the statement required above. The disclosure document shall contain the
517
(a) The name of the seller, the name under which the seller is doing or
intends to do business and the name of any parent or affiliated company that
will engage in business transactions with purchasers or accept
responsibility for statements made by the seller.
(b) A statement of the initial payment to be paid by the purchaser to the
seller, or when not known, a statement of the approximate initial payment
charged, the amount of the initial payment to be paid to a person inducing,
directly or indirectly, a purchaser to contract for the seller assisted
marketing plan.
(c) A full and detailed description of the actual services the seller will
undertake to perform for the purchaser.
(d) When the seller makes any statement concerning earnings or range of
earnings that may be made through the seller assisted marketing plan, he
must comply with subdivision (d) of Section 1812.204 and set forth in
complete form in this disclosure statement the following: “No guarantee of
earnings or ranges of earnings can be made. The number of purchasers who
have earned through this business an amount in excess of the amount of their
initial payment is at least ______, which represents ____ percent of the total
number of purchasers of this seller assisted marketing plan.”
( e ) If training of any type is promised by the seller, a complete
description of the training and the length of the training.
(f) If the seller promises services to be performed in connection with the
placement of the equipment, product or supplies at a location from which
they will be sold or used, the full nature of those services as well as the
nature of the agreements to be made with the owner or manager of the
location at which the purchaser’s equipment, product or supplies will be
placed, must be set forth.
( g) If the seller represents orally or in writing when soliciting or
offering for sale or lease or selling or leasing a seller assisted marketing
plan that there is a “buy-back” arrangement or that the initial payment is in
some manner protected from loss or “secured,” the entire and precise nature
of the “buy-back”, “protection” or “security” arrangement shall be
completely and clearly disclosed.
Leg.H. 1978 ch. 876, 1981 ch. 258.

At least 48 hours prior to the execution of a seller assisted marketing plan
518
contract or agreement or at least 48 hours prior to the receipt of any
consideration, whichever occurs first, the seller or his or her representative
shall provide to the prospective purchaser in writing a document entitled
“SELLER ASSISTED MARKETING PLAN INFORMATION SHEET.” The
seller may combine the information required under this section with the
information required under Section 1812.205 and, if done, shall utilize the
single title “DISCLOSURES REQUIRED BY CALIFORNIA LAW,” and the
title page required by Section 1812.205. If a combined document is used, it
shall be given at the time required by Section 1812.205, provided that this time
meets the 48-hour test of this section. The information sheet required by this
section shall contain the following:
(a) The name of and the office held by the seller’s owners, officers,
directors, trustees and general or limited partners, as the case may be, and
the names of those individuals who have management responsibilities in
connection with the seller’s business activities.
(b) A statement whether the seller, any person identified in subdivision
(a), and any other company managed by a person identified in subdivision
(a):
(1) Has been convicted of a felony or misdemeanor or pleaded nolo
contendere to a felony or misdemeanor charge if the felony or
misdemeanor involved an alleged violation of this title, fraud,
embezzlement, fraudulent conversion or misappropriation of property.
( 2) Has been held liable in a civil action by final judgment or
consented to the entry of a stipulated judgment if the civil action alleged
a violation of this title, fraud, embezzlement, fraudulent conversion or
misappropriation of property or the use of untrue or misleading
representations in an attempt to sell or dispose of real or personal
property or the use of unfair, unlawful or deceptive business practices.
( 3) Is subject to any currently effective agreement, injunction, or
restrictive order, including, but not limited to, a “cease and desist”
order, an “assurance of discontinuance,” or other comparable agreement
or order, relating to business activity as the result of an action or
investigation brought by a public agency or department, including, but
not limited to, an action affecting any vocational license.
The statements required by paragraphs (1), (2) and (3) of this
subdivision shall set forth the terms of the agreement, or the court, the
docket number of the matter, the date of the conviction or of the judgment
and, when involved, the name of the governmental agency that initiated
the investigation or brought the action resulting in the conviction or
judgment.
519
(4) Has at any time during the previous seven fiscal years been the
subject of an order for relief in bankruptcy, been reorganized due to
insolvency, or been a principal, director, officer, trustee, general or
limited partner, or had management responsibilities of any other person,
as defined in subdivision (b) of Section 1812.201, that has so filed or
was so reorganized, during or within one year after the period that the
individual held that position. If so, the name and location of the person
having so filed, or having been so reorganized, the date thereof, the court
which exercised jurisdiction, and the docket number of the matter shall
be set forth.
(c) The length of time the seller:
(1) Has sold seller assisted marketing plans.
( 2 ) Has sold the specific seller assisted marketing plan being
offered to the purchaser.
(d) If the seller is required to secure a bond or establish a trust account
pursuant to the requirements of Section 1812.204, the information sheet shall
state either:
(1) “Seller has secured a bond issued by
________________,
(name and address of surety company)
a surety company admitted to do business in this state. Before signing
a contract to purchase this seller assisted marketing plan, you should
check with the surety company to determine the bond’s current status,”
or
(2) “Seller has deposited with the office of the Attorney General
information regarding its trust account. Before signing a contract to
purchase this seller assisted marketing plan, you should check with the
Attorney General to determine the current status of the trust account.”
(e) A copy of a recent, not more than 12 months old, financial statement
of the seller, together with a statement of any material changes in the
financial condition of the seller from the date thereof. That financial
statement shall either be audited or be under penalty of perjury signed by
one of the seller’s officers, directors, trustees or general or limited partners.
The declaration under penalty of perjury shall indicate that to the best of the
signatory’s knowledge and belief the information in the financial statement
is true and accurate; the date of signature and the location where signed
shall also be indicated. Provided, however, that where a seller is a
subsidiary of another corporation which is permitted by generally accepted
520
accounting standards to prepare financial statements on a consolidated
basis, the above information may be submitted in the same manner for the
parent if the corresponding financial statement of the seller is also provided
and the parent absolutely and irrevocably has agreed to guarantee all
obligations of the seller.
( f) An unexecuted copy of the entire seller assisted marketing plan
contract.
(g) For purposes of this section, “seller’s owners” means any individual
who holds an equity interest of at least 10 percent in the seller.
Added Stats 1978 ch. 876 § 1. Amended Stats 1981 ch. 258 § 4; Stats 1989 ch. 1021 § 3;
Stats 1997 ch. 377 § 1 (AB 1548); Stats 1998 ch. 595 § 2 (AB 1830); Stats 2009 ch. 500 §
13 (AB 1059), effective January 1, 2010.
§ 1812.207. Contract to Be Written—Copies to

Purchaser.
Every contract for sale or lease of a seller assisted marketing plan in this
state shall be in writing and shall be subject to the provisions of this title. A
copy of the fully completed contract and all other documents the seller requires
the purchaser to sign shall be given to the purchaser at the time they are signed.
Leg.H. 1978 ch. 876, 1981 ch. 258.

The purchaser shall have the right to cancel a seller assisted marketing plan
contract for any reason at any time within three business days of the date the
purchaser and the seller sign the contract. The notice of the right to cancel and
the procedures to be followed when a contract is canceled shall comply with
Section 1812.209.
Leg.H. 1978 ch. 876.
§ 1812.209. Contents of Contract—Procedure for

Cancellation.
Every seller assisted marketing plan contract shall set forth in at least 10-
point type or equivalent size if handwritten, all of the following:
(a) The terms and conditions of payment including the initial payment,
additional payments, and downpayment required. If the contract provides for
the seller to receive more than 20 percent of the initial payment before
delivery to the purchaser of the equipment, supplies or products or services
521
to be furnished under the terms of the contract, the contract shall clearly set
forth for the escrow account established pursuant to subdivision (b) of
Section 1812.210 and the name and address of the escrow account holder,
as well as the institution, branch, and account number of the escrow account.
If the contract provides for payment of any amount in excess of 20 percent of
the initial payment prior to delivery of the equipment, supplies or products
or services to be furnished under the terms of the contract, the contract shall
set forth that payment of the amount in excess of 20 percent shall be by
separate instrument made payable to the escrow account.
( b ) Immediately above the place at which the purchaser signs the
contract the following notification, in boldface type, of the purchaser’s right
to cancel the contract: “You have three business days in which you may
cancel this contract for any reason by mailing or delivering written notice to
the seller assisted marketing plan seller. The three business days shall
expire on
________________
(last date to mail or deliver notice)
and notice of cancellation should be mailed or delivered to
________________.
(seller assisted marketing plan seller’s name and business street address)
If you choose to mail your notice, it must be placed in the United States mail
properly addressed, first-class postage prepaid, and postmarked before
midnight of the above date. If you choose to deliver your notice to the seller
directly, it must be delivered to him by the end of his normal business day
on the above date. Within five business days of receipt of the notice of
cancellation, the seller shall return to the purchaser all sums paid by the
purchaser to the seller pursuant to this contract. Within five business days
after receipt of all such sums, the purchaser shall make available at his
address or at the place at which they were caused to be located, all
equipment, products and supplies provided to the purchaser pursuant to this
contract. Upon demand of the seller, such equipment, products and supplies
shall be made available at the time the purchaser receives full repayment by
cash, money order or certified check.”
(c) A full and detailed description of the acts or services the seller will
undertake to perform for the purchaser.
( d ) The seller’s principal business address and the name and the
address of its agent, other than the Secretary of State, in the State of
California authorized to receive service of process.
(e) The business form of the seller, whether corporate, partnership or
otherwise.
522
(f) The delivery date or, when the contract provides for a staggered
delivery of items to the purchaser, the approximate delivery date of those
products, equipment or supplies the seller is to deliver to the purchaser to
enable the purchaser to begin or maintain his business and whether the
products, equipment or supplies are to be delivered to the purchaser’s home
or business address or are to be placed or caused to be placed by the seller
at locations owned or managed by persons other than the purchaser.
(g) A complete description of the nature of the “buy-back”, “protection”,
or “security” arrangement, if the seller has represented orally or in writing
when selling or leasing, soliciting or offering a seller assisted marketing
plan that there is a “buy-back” or that the initial payment or any part of it is
“protected” or “secured.”
(h) A statement which accurately sets forth a purchaser’s right to void
the contract under the circumstances and in the manner set forth in
subdivisions (a) and (b) of Section 1812.215.
(i) The name of the supplier and the address of such supplier of the
products, equipment, or supplies the seller is to deliver to the purchaser to
enable the purchaser to begin or maintain his business.
Leg.H. 1978 ch. 876, 1981 ch. 258, 1989 ch. 1021.

(a) No seller assisted marketing plan contract shall require or entail the
execution of any note or series of notes by the purchaser which, when separately
negotiated, will cut off as to third parties any right of action or defense which
the purchaser may have against the seller.
( b ) If the contract referred to in Section 1812.209 provides for a
downpayment to be paid to the seller, the downpayment shall not exceed 20
percent of the initial payment amount. If no event shall the contract payment
schedule provide for the seller to receive more than 20 percent of the initial
payment before delivery to the purchaser, or to the place at which they are to be
located, the equipment, supplies or products, unless all sums in excess of 20
percent are placed in an escrow account as provided for in subdivision (c) of
Section 1812.214. Funds placed in an escrow account shall not be released until
the purchaser notifies the escrow holder in writing of the delivery of such
equipment, supplies or products within the time limits set forth in the seller
assisted marketing plan contract. Notification of delivery by the purchaser to the
escrow holder shall not be unreasonably withheld.
Leg.H. 1978 ch. 876, 1981 ch. 258, 1989 ch. 1021.
523
Any assignee of the seller assisted marketing plan contract or the seller’s
rights is subject to all equities, rights and defenses of the purchaser against the
seller.
Leg.H. 1978 ch. 876.
§ 1812.212. Reference to Seller’s Compliance With This

Title Prohibited.
No seller shall make or authorize the making of any reference to its
compliance with this title.
Leg.H. 1978 ch. 876.

Every seller shall at all times keep and maintain a complete set of books,
records and accounts of seller assisted marketing plan sales made by the seller.
All documents relating to each specific seller assisted marketing plan sold or
leased shall be maintained for four years after the date of the seller assisted
marketing plan contract.
Leg.H. 1978 ch. 876.
§ 1812.214. Designated Agent for Service—Procedure

for Service—Procedure for Bond, Trust Account, or
Escrow Account.
(a) Every seller of seller-assisted marketing plans other than a California
corporation shall file with the Attorney General an irrevocable consent
appointing the Secretary of State or successor in office to act as the seller’s
attorney to receive service or any lawful process in any noncriminal suit, action
or proceeding against the seller or the seller’s successor, executor or
administrator, which may arise under this title. When service is made upon the
Secretary of State, it shall have the same force and validity as if served
personally on the seller. Service may be made by leaving a copy of the process
in the office of the Secretary of State, but it shall not be effective unless:
( 1 ) The plaintiff forthwith sends by first-class mail a notice of the
service upon the Secretary of State and a copy of the process to the
defendant or respondent at the last address on file with the Attorney
General; and
524
(2) The plaintiff’s affidavit of compliance with this section is filed in
the case on or before the return date of the process, if any, or within such
further time as the court allows.
(b) If, pursuant to subdivision (c) of Section 1812.204, a seller must obtain
a surety bond or establish a trust account, the following procedures apply:
(1) If a bond is obtained, a copy of it shall be filed with the Attorney
General; if a trust account is established, notification of the depository, the
trustee and the account number shall be filed with the Attorney General.
(2) The bond or trust account required shall be in favor of the State of
California for the benefit of any person who is damaged by any violation of
this title or by the seller’s breach of a contract subject to this title or of any
obligation arising therefrom. The trust account shall also be in favor of any
person damaged by these practices.
(3) Any person claiming against the trust account for a violation of this
title may maintain an action at law against the seller and the trustee. The
surety or trustee shall be liable only for actual damages and not the punitive
damages permitted under Section 1812.218. The aggregate liability of the
trustee to all persons damaged by a seller’s violation of this title shall in no
event exceed the amount of the trust account.
(4) The bond or the trust account shall be in an amount equal to the total
amount of the “initial payment” section of all seller-assisted marketing plan
contracts the seller has entered into during the previous year or three
hundred thousand dollars ($300,000), whichever is less, but in no case shall
the amount be less than fifty thousand dollars ($50,000). The amount
required shall be adjusted twice a year, no later than the tenth day of the first
month of the seller’s fiscal year and no later than the tenth day of the seventh
month of the seller’s fiscal year. A seller need only establish a bond or trust
account in the amount of fifty thousand dollars ($50,000) at the
commencement of business and during the first six months the seller is in
business. By the tenth day of the seller’s seventh month in business, the
amount of the bond or trust account shall be established as provided for
herein as if the seller had been in business for a year.
(c) If, pursuant to subdivision (b) of Section 1812.210, a seller utilizes an
escrow account to receive those portions of the downpayment in excess of 20
percent of the initial payment before delivery to the purchaser of the equipment,
supplies or products or services to be furnished under the terms of the contract,
the following procedures shall apply:
(1) The holder of the escrow account shall be independent of the seller,
and the seller shall not have any authority to direct disbursements from the
525
escrow account by the holder except upon written notification by the
purchaser to the holder of the escrow account of the delivery of the
equipment, supplies, or products as required by and within the time limits
set forth in the seller assisted marketing plan contract.
(2) The name and address of the escrow account holder, the name of the
institution, the branch and account number of the escrow account shall be
reported to the Attorney General by the seller.
(3) Any person claiming against the escrow account for a violation of
this title may maintain an action at law against the seller and the escrow
account holder. The escrow account holder shall be liable only for actual
damages and not the punitive damages permitted under Section 1812.218.
The aggregate liability of the escrow account holder to all persons damaged
by a seller’s violation of this title shall in no event exceed the amount of the
escrow account.
Leg.H. 1978 ch. 876, 1981 ch. 258, 1982 ch. 517, 1989 ch. 1021, 1990 ch. 1491.

(a) If a seller uses any untrue or misleading statements to sell or lease a
seller assisted marketing plan, or fails to comply with Section 1812.203, or
fails to give the disclosure documents or disclose any of the information
required by Sections 1812.205 and 1812.206, or the contract does not comply
with the requirements of this title, then within one year of the date of the contract
at the election of the purchaser upon written notice to the seller, the contract
shall be voidable by the purchaser and unenforceable by the seller or his
assignee as contrary to public policy and the purchaser shall be entitled to
receive from the seller all sums paid to the seller when the purchaser is able to
return all equipment, supplies or products delivered by the seller; when such
complete return cannot be made, the purchaser shall be entitled to receive from
the seller all sums paid to the seller less the fair market value at the time of
delivery of the equipment, supplies or products not returned by the purchaser,
but delivered by the seller. Upon the receipt of such sums, the purchaser shall
make available to the seller at the purchaser’s address or at the places at which
they are located at the time the purchaser gives notice pursuant to this section,
the products, equipment or supplies received by the purchaser from the seller.
Provided, however, if the seller inadvertently has failed to make any of the
disclosures required by Section 1812.205 or 1812.206 or the contract
inadvertently fails to comply with the requirements of this title, the seller may
cure such inadvertent defect by providing the purchaser with the correct
disclosure statements or contract if at the time of providing such correct
disclosures or contract the seller also informs the purchaser in writing that
because of the seller’s error, the purchaser has an additional 15-day period after
526
receipt of the correct disclosures or contract within which to cancel the contract
and receive a full return of all moneys paid in exchange for return of whatever
equipment, supplies or products the purchaser has. If the purchaser does not
cancel the contract within 15 days after receipt of the correct disclosures or
contract, he may not in the future exercise his right to void the contract under this
section due to such noncompliance with the disclosure or contract requirements
of this title.
(b) If a seller fails to deliver the equipment, supplies or product within 30
days of the delivery date stated in the contract, unless such delivery delay is
beyond the control of the seller, then at any time prior to delivery or within 30
days after delivery, at the election of the purchaser upon written notice to the
seller, the contract shall be voidable by the purchaser and unenforceable by the
seller or his assignee as contrary to public policy. The rights of the purchaser
set forth in this section shall be cumulative to all other rights under this title or
otherwise.
Leg.H. 1978 ch. 876, 1981 ch. 258.

(a) Any waiver by a purchaser of the provisions of this title shall be deemed
contrary to public policy and shall be void and unenforceable. Any attempt by a
seller to have a purchaser waive rights given by this title shall be a violation of
this title.
( b ) In any proceeding involving this title, the burden of proving an
exemption or an exception from a definition is upon the person claiming it.
Leg.H. 1978 ch. 876, 1981 ch. 258.

Any person, including, but not limited to, the seller, a salesman, agent or
representative of the seller or an independent contractor who attempts to sell or
lease or sells or leases a seller assisted marketing plan, who willfully violates
any provision of this title or employs, directly or indirectly, any device, scheme
or artifice to deceive in connection with the offer or sale of any seller assisted
marketing plan, or willfully engages, directly or indirectly, in any act, practice
or course of business which operates or would operate as a fraud or deceit upon
any person in connection with the offer, purchase, lease or sale of any seller
assisted marketing plan shall, upon conviction, be fined not more than ten
thousand dollars ($10,000) for each unlawful transaction, or imprisoned in the
state prison pursuant to subdivision (h) of Section 1170 of the Penal Code,
or imprisoned in a county jail for not more than one year, or be punished by both
527
such that fine and imprisonment.
Added Stats 1978 ch 876 § 1. Amended Stats 2011 ch 15 § 34 (AB 109), effective April
4, 2011, operative October 1, 2011.

Any purchaser injured by a violation of this title or by the seller’s breach of
a contract subject to this title or of any obligation arising from the sale or lease
of the seller assisted marketing plan may bring any action for recovery of
damages. Judgment shall be entered for actual damages, plus reasonable
attorney’s fees and costs, but in no case shall the award of damages be less than
the amount of the initial payment provided the purchaser is able to return all the
equipment, supplies or products delivered by the seller; when such complete
return cannot be made, the minimum award shall be no less than the amount of
the initial payment less the fair market value at the time of delivery of the
equipment, supplies or products that cannot be returned but were actually
delivered by the seller. An award, if the trial court deems it proper, may be
entered for punitive damages.
Leg.H. 1978 ch. 876.

The provisions of this title are not exclusive. The remedies provided herein
for violation of any section of this title or for conduct proscribed by any section
of this title shall be in addition to any other procedures or remedies for any
violation or conduct provided for in any other law. Nothing in this title shall
limit any other statutory or any common law rights of the Attorney General, any
district attorney or city attorney, or any other person. If any act or practice
proscribed under this title also constitutes a cause of action in common law or a
violation of another statute, the purchaser may assert such common law or
statutory cause of action under the procedures and with the remedies provided
for in such other law.
Leg.H. 1978 ch. 876.

If any provision of this act or if any application thereof to any person or
circumstance is held unconstitutional, the remainder of the title and the
application of such provision to other persons and circumstances shall not be
affected thereby.
Leg.H. 1978 ch. 876.
528
§ 1812.221. Establishment and Payment of Claims
Against Deposit—Deposit Not Subject to
Attachment, Garnishment, or Execution.
(a) When a deposit has been made in lieu of bond pursuant to paragraph (1)
of subdivision (b) of Section 1812.214 and Section 995.710 of the Code of
Civil Procedure, the person asserting a claim against the deposit shall, in lieu of
the provisions of Section 996.430 of the Code of Civil Procedure, establish the
claim by furnishing evidence to the Attorney General of a money judgment
entered by a court together with evidence that the claimant is a person described
in paragraph (2) of subdivision (b) of Section 1812.214.
(b) When a person has completely established the claim with the Attorney
General, the Attorney General shall forthwith review and approve the claim and
enter the date of approval thereon. The claim shall be designated an “approved
claim.”
( c ) When the first claim against a particular deposit account has been
approved, it shall not be paid until the expiration of a period of 240 days after
the date of its approval by the Attorney General. Subsequent claims which are
approved by the Attorney General within the same 240-day period shall
similarly not be paid until the expiration of the 240-day period. Forthwith upon
the expiration of the 240-day period, the Attorney General shall pay all
approved claims from that 240-day period in full unless there are insufficient
funds in the deposit account in which case each approved claim shall be paid a
proportionate amount to exhaust the deposit account.
(d) When the Attorney General approves the first claim against a particular
deposit account after the expiration of a 240-day period, the date of approval of
that claim shall begin a new 240-day period to which subdivision (c) shall
apply with respect to the amount remaining in the deposit account.
(e) After a deposit account is exhausted, no further claims shall be paid by
the Attorney General. Claimants who have had their claims paid in full or in
part pursuant to subdivisions (c) and (d) shall not be required to make a
contribution back to the deposit account for the benefit of other claimants.
(f) When a deposit has been made in lieu of bond, the amount of the deposit
shall not be subject to attachment, garnishment, or execution with respect to an
action or judgment against the seller, other than as to an amount as no longer
needed or required for the purpose of this title which would otherwise be
returned to the seller by the Attorney General.
Leg.H. 1984 ch. 545, 1989 ch. 1021.
529
TITLE 4
LOAN
CHAPTER 1.5
LOANS TO MUSEUMS FOR INDEFINITE

OR LONG TERMS
The Legislature finds and declares as follows:
(a) Many museums have benefited greatly from having property loaned
to them for study or display. Problems have arisen, however, in connection
with loans for indefinite or long terms, when museums and lenders have
failed to maintain contact. Many of these problems could be avoided by a
clarification and regularization of the rights and obligations of the parties to
loans for indefinite or long terms.
(b) An existing law, the Unclaimed Property Law (commencing with
Section 1500 of the Code of Civil Procedure), is technically applicable to
property on loan to a museum which has been left unclaimed by its owner
for at least seven years.
(c) While the Unclaimed Property Law addresses problems similar to
those which arise in the museum context when the parties to loans fail to
maintain contact, there is need for an alternative method of dealing with
unclaimed property in the hands of museums, one tailored to the unique
circumstances of unclaimed loans to museums. These circumstances include
the likelihood that the unclaimed property has significant scientific,
historical, aesthetic, or cultural value but does not have great monetary
value; that the public’s interest in the intangible values of unclaimed
property loaned to museums can best be realized if title is transferred to the
museums holding the property; that often lenders intend eventually to donate
property but place it on indefinite or long term loan initially for tax and
other reasons; and that many museums have incurred unreimbursed expenses
in caring for and storing unclaimed loaned property.
530
(d) There is an inherent tendency for the condition of tangible property
to change over time. Loaned property often requires conservation work and
conservation measures may be expensive or potentially detrimental to the
property. Organic materials and specimens may serve as breeding grounds
for insects, fungi, or diseases which threaten other more valuable property.
( e ) Museums cannot reasonably be expected to make decisions
regarding conservation or disposition of loaned property at their own risk
and expense. Over time, however, lenders die or move, and museums and
lenders lose contact. If a lender has failed to maintain contact with a
museum, it is often impossible to locate the lender so that the lender can
make decisions regarding conservation or disposition of loaned property.
(f) Since museums rarely relocate, it is easier for lenders, and those
who claim through them, to notify museums of address or ownership changes
so that museums can readily contact lenders when decisions must be made
regarding conservation or disposition of loaned property.
(g) The best evidence of ownership of property on loan to a museum is
generally the original loan receipt. The longer property remains on loan, the
less likely it is that the original lender will claim it, and the more likely it is
that any claim which is made will be made by someone who does not have
the original loan receipt or other clear evidence of ownership. The state has
a substantial interest in cutting off stale and uncertain claims to tangible
personal property loaned to nonprofit and public museums.
(h) Most of the tangible personal property which escheats to the state
under the Unclaimed Property Law is found in safe deposit boxes. Although
40–50 percent of the intangible property which escheats to the state is
subsequently claimed, less than 1 percent of escheated tangible personal
property is claimed. Of the few claims which are presented to the Controller
for tangible personal property, most are presented within two years of the
date the Controller gives notice of the escheat.
(i) The public interest is served by requiring lenders to notify museums
of changes in address or ownership of loaned property, by establishing a
uniform procedure for lenders to preserve their interests in property loaned
to museums for indefinite or long terms, and by vesting title to unclaimed
property on loan to museums in the museums which have custody of the
property.
Leg.H. 1983 ch. 61.

For the purposes of this chapter:
531
(a) A “museum” is an institution located in California and operated by a
nonprofit corporation or public agency, primarily educational, scientific, or
aesthetic in purpose, which owns, borrows, or cares for, and studies,
archives, or exhibits property.
(b) A “lender’s address” is the most recent address as shown on the
museum’s records pertaining to the property on loan from the lender.
(c) The terms “loan,” “loaned,” and “on loan” include all deposits of
property with a museum which are not accompanied by a transfer of title to
the property.
( d ) “Property” includes all tangible objects, animate and inanimate,
under a museum’s care which have intrinsic value to science, history, art, or
culture, except that it does not include botanical or zoological specimens
loaned to a museum for scientific research purposes.
Leg.H. 1983 ch. 61.

( a ) When a museum is required to give a lender notice pursuant to the
provisions of this chapter, the museum shall be deemed to have given a lender
notice if the museum mails the notice to the lender at the lender’s address and
proof of receipt is received by the museum within 30 days from the date the
notice was mailed. If the museum does not have an address for the lender, or if
proof of receipt is not received by the museum, notice shall be deemed given if
the museum publishes notice at least once a week for three successive weeks in
a newspaper of general circulation in both the county in which the museum is
located and the county of the lender’s address, if any.
(b) In addition to any other information prescribed in this chapter, notices
given pursuant to it shall contain the lender’s name, the lender’s address, if
known, the date of the loan and, if the notice is being given by the museum, the
name, address, and telephone number of the appropriate office or official to be
contacted at the museum for information regarding the loan.
(c) For the purposes of this section, a museum is “located” in the county of a
branch of the museum to which a loan is made. In all other instances, a museum
is located in the county in which it has its principal place of business.
Leg.H. 1983 ch. 61.

(a) If, on or after January 1, 1984, a museum accepts a loan of property for
an indefinite term, or for a term in excess of seven years, the museum shall
532
inform the lender in writing at the time of the loan of the provisions of this
chapter. A copy of the form notice prescribed in Section 1899.5, or a citation to
this chapter, is adequate for this purpose.
(b) Unless the loaned property is returned to the claimant, the museum shall
retain for a period of not less than 25 years the original or an accurate copy of
each notice filed by a claimant pursuant to Section 1899.4.
(c) The museum shall furnish anyone who files a notice of intent to preserve
an interest in property on loan proof of receipt of the notice by mailing an
original receipt or a copy of the receipt portion of the form notice prescribed in
Section 1899.5 to the lender or other claimant at the address given on the notice
within 30 days of receiving the notice.
(d) A museum shall give a lender prompt notice of any known injury to or
loss of property on loan.
Leg.H. 1983 ch. 61.

(a) It is the responsibility of the owner of property on loan to a museum to
notify the museum promptly in writing of any change of address or change in
ownership of the property. Failure to notify the museum of these changes may
result in the owner’s loss of rights in the property.
(b) The owner of property on loan to a museum may file with the museum a
notice of intent to preserve an interest in the property as provided for in Section
1899.5. The filing of a notice of intent to preserve an interest in property on loan
to a museum does not validate or make enforceable any claim which would be
extinguished under the terms of a written loan agreement, or which would
otherwise be invalid or unenforceable.
Leg.H. 1983 ch. 61.
§ 1899.5. Notice of Intent to Preserve Interest in

Property—Form.
(a) A notice of intent to preserve an interest in property on loan to a museum
filed pursuant to this chapter shall be in writing, shall contain a description of
the property adequate to enable the museum to identify the property, shall be
accompanied by documentation sufficient to establish the claimant as owner of
the property, and shall be signed under penalty of perjury by the claimant or by a
person authorized to act on behalf of the claimant.
( b ) The museum need not retain a notice which does not meet the
requirements set forth in subdivision (a). If, however, the museum does not
533
intend to retain a notice for this reason, the museum shall promptly notify the
claimant at the address given on the notice that it believes the notice is
ineffective to preserve an interest, and the reasons therefor. The fact that the
museum retains a notice shall not be construed to mean that the museum accepts
the sufficiency or accuracy of the notice or that the notice is effective to
preserve an interest in property on loan to the museum.
(c) A notice of intent to preserve an interest in property on loan to a museum
which is in substantially the following form, and contains the information and
attachments described, satisfies the requirements of subdivision (a):
NOTICE OF INTENT TO PRESERVE

AN INTEREST IN PROPERTY
ON LOAN TO A MUSEUM
TO THE LENDER: Section 1899.4 of the California Civil Code requires
that you notify the museum promptly in writing of any change of address or
ownership of the property. If the museum is unable to contact you regarding your
loan, you may lose rights in the loaned property. If you choose to file this form
with the museum to preserve your interest in the property, the museum is
required to maintain it, or a copy of it, for 25 years. For full details, see Section
1899, et seq. of the California Civil Code. TO THE MUSEUM: You are hereby
notified that the undersigned claims an interest in the property described herein.
Claimant
Name: ________________
Address: ________________
Telephone: ________________
Social Security Number (optional): ________________
Museum Name: ________________
Date Property Loaned: ________________
Interest in Property:
If you are not the original lender, describe the origin of your interest in the
property and attach a copy of any document creating your interest:
Description of Property: ________________
Unless an accurate, legible copy of the original loan receipt is attached, give
a detailed description of the claimed property, including its nature and general
characteristics and the museum registration number assigned to the property, if
534
known, and attach any documentary evidence you have establishing the loan:
Registration # ________________
Description: ________________
(Attach additional sheets if necessary.)
I understand that I must promptly notify the museum in writing of any change
of address or change in ownership of the loaned property.
I declare under penalty of perjury that to the best of my knowledge the
information contained in this notice is true.
Signed: ______ (claimant) Date: ______
OR
I declare under penalty of perjury that I am authorized to act on behalf of the
claimant and am informed and believe that the information contained in this
notice is true.
Signed: ______ (claimant’s representative)
Date: ________________
RECEIPT FOR NOTICE OF INTENT TO PRESERVE AN

INTEREST IN
PROPERTY
(For use by the museum.)
Notice received by: ________________
Date of receipt: ________________
Copy of receipt returned to claimant:
By ________________ Date: ________________
(d) Notices of intent to preserve an interest in property on loan to a museum
filed pursuant to this chapter are exempt from the disclosure requirements of the
California Public Records Act (commencing with Section 6250 of the
Government Code).
Leg.H. 1983 ch. 61.
§ 1899.6. Conditions Under Which Museum May

Dispose of Loaned Property.
(a) Unless there is a written loan agreement to the contrary, a museum may
apply conservation measures to or dispose of property on loan to the museum
without a lender’s permission if:
535
(1) Immediate action is required to protect the property on loan or to
protect other property in the custody of the museum, or because the property
on loan has become a hazard to the health and safety of the public or of the
museum’s staff, and:
(A) The museum is unable to reach the lender at the lender’s last
address of record so that the museum and the lender can promptly agree
upon a solution; or
(B) The lender will not agree to the protective measures the museum
recommends, yet is unwilling or unable to terminate the loan and
retrieve the property.
( 2) In the case of a lender who cannot be contacted in person, the
museum publishes a notice containing the information described in
subdivision (a) of Section 1899.7 and there is no response for 120 days.
(b) If a museum applies conservation measures to or disposes of property
pursuant to subdivision (a):
(1) The museum shall have a lien on the property and on the proceeds
from any disposition thereof for the costs incurred by the museum; and
(2) The museum shall not be liable for injury to or loss of the property:
(A) If the museum had a reasonable belief at the time the action was
taken that the action was necessary to protect the property on loan or
other property in the custody of the museum, or that the property on loan
constituted a hazard to the health and safety of the public or the
museum’s staff; and
( B ) If the museum applied conservation measures, the museum
exercised reasonable care in the choice and application of the
conservation measures.
Leg.H. 1983 ch. 61.
§ 1899.7. Injury to or Loss of Property on Loan—

Published Notice.
(a) Except as provided in subdivision (b), if a museum is unable to give the
lender the notice required by subdivision (d) of Section 1899.3 of injury to or
loss of property on loan by mail, the museum shall be deemed to have given the
lender notice of any injury or loss if in addition to the information required by
subdivision (b) of Section 1899.2 the published notice includes a statement
containing substantially the following information:
“The records of ________ (name of museum) indicate that you have property on
536
loan to it. Your failure to notify it in writing of a change of address or
ownership of property on loan or to contact it in writing regarding the loan may
result in the loss of rights in the loaned property. See California Civil Code
Sections 1899, et seq.”
(b) If, within three years of giving notice of injury to or loss of loaned
property by publishing the notice set forth in subdivision (a), the museum
receives a notice from a claimant pursuant to Section 1899.4, the museum shall
promptly advise the claimant in writing of the nature of the injury to or the fact
of the loss of property on loan and the approximate date thereof. For the
purposes of the limitation period in Section 1899.8, if the museum mails the
information to the claimant within 30 days of the date the museum receives the
notice from the claimant, the museum shall be deemed to have given the claimant
notice of the injury to or loss of property on loan on the date notice by
publication pursuant to subdivision (a) was completed.
Leg.H. 1983 ch. 61.
§ 1899.8. Limitation on Action Against Museum for

Loss.
Effective January 1, 1985, no action shall be brought against a museum for
damages because of injury to or loss of property loaned to the museum more
than (1) three years from the date the museum gives the lender notice of the
injury or loss, or (2) ten years from the date of the injury or loss, whichever
occurs earlier.
Leg.H. 1983 ch. 61.
§ 1899.9. Museum’s Notice to Terminate Indefinite

Loan.
(a) A museum may give the lender notice of the museum’s intent to terminate
a loan which was made for an indefinite term, or which was made on or after
January 1, 1984, for a term in excess of seven years. A notice of intent to
terminate a loan given pursuant to this section shall include a statement
containing substantially the following information:
loan to it. The institution wishes to terminate the loan. You must contact the
institution, establish your ownership of the property, and make arrangements to
collect the property. If you fail to do so promptly, you will be deemed to have
donated the property to the institution. See California Civil Code Sections 1899,
et seq.”
537
(b) For the purposes of this chapter, a loan for a specified term becomes a
loan for an indefinite term if the property remains in the custody of the museum
when the specified term expires.
Leg.H. 1983 ch. 61.

( a ) The three-year limitation on actions to recover personal property
prescribed in Code of Civil Procedure Section 338.3 shall run from the date the
museum gives the lender notice of its intent to terminate the loan pursuant to
Section 1899.9.
(b) Except as provided in subdivision (e), effective January 1, 1985, no
action shall be brought against a museum to recover property on loan when more
than 25 years have passed from the date of the last written contact between the
lender and the museum, as evidenced in the museum’s records.
(c) A lender shall be deemed to have donated loaned property to a museum
if the lender fails to file an action to recover the property on loan to the museum
within the periods specified in subdivisions (a) and (b).
(d) One who purchases property from a museum acquires good title to the
property if the museum represents that it has acquired title to the property
pursuant to subdivision (c).
(e) Notwithstanding subdivisions (b) and (c), a lender who was not given
notice that the museum intended to terminate a loan and who proves that the
museum received a notice of intent to preserve an interest in loaned property
within the 25 years immediately preceding the date on which the lender’s right
to recover the property otherwise expired under subdivision (b) may recover
the property or, if the property has been disposed of, the reasonable value of the
property at the time the property was disposed of with interest at the rate on
judgments set by the Legislature pursuant to Section 1 of Article XV of the
California Constitution.
Leg.H. 1983 ch. 61, 1984 ch. 541, effective July 17, 1984.

( a ) The provisions of this chapter supersede the provisions of the
Unclaimed Property Law (commencing with Section 1500 of the Code of Civil
Procedure) except that at its option, a museum may report property which has
been on loan unclaimed by its owner for more than seven years to the Controller
pursuant to Section 1530 of the Code of Civil Procedure for disposition in
accordance with the provisions of the Unclaimed Property Law.
538
(b) Not less than six months or more than 12 months before reporting any
loaned property to the Controller, a museum shall mail to the lender at the
lender’s address, if known, a notice of intent to report the property to the
Controller. The notice shall include a statement containing substantially the
loan to the institution. The institution wishes to terminate the loan. You must
contact the institution, establish your ownership of the property and make
arrangements to collect the property before ________ (fill in date) or the
property will be disposed of in accordance with the provisions of the
Unclaimed Property Law (commencing with Section 1500 of the Code of Civil
Procedure).”
Leg.H. 1983 ch. 61.
TITLE 8
INVOLUNTARY TRUSTS
§ 2223. Creation of Involuntary Trust—Wrongful
Detention.
One who wrongfully detains a thing is an involuntary trustee thereof, for the
benefit of the owner.
§ 2224. Creation of Involuntary Trust—Mistake or

Wrongful Act.
One who gains a thing by fraud, accident, mistake, undue influence, the
violation of a trust, or other wrongful act, is, unless he or she has some other
and better right thereto, an involuntary trustee of the thing gained, for the benefit
of the person who would otherwise have had it.
Most intellectual property practitioners have not yet discovered this provision for
imposing a constructive trust on infringers who either withhold revenues and benefits
obtained through acts of infringement or have secured financial gain through fraud, accident,
mistake, undue influence, or other wrongful acts. Although constructive trust relief parallels
539
the relief typically available under a suit for unjust enrichment, this section provides a
statutory basis for such a claim. It can be argued that the involuntary trustee is not entitled to
claim any cost of operations, or even direct costs, that arise from the infringing activities.
Instead, all revenues or benefits secured are for the benefit of the true owner.
§ 2225. Proceeds or Profits From Sale of Felon’s Story

to Be Placed in Involuntary Trust—Definitions and
Procedures.
(1) “Convicted felon” means any person convicted of a felony, or found
not guilty by reason of insanity of a felony committed in California, either by
a court or jury trial or by entry of a plea in court.
(2) “Felony” means a felony defined by any California or United States
statute.
(3)
( A ) “Representative of the felon” means any person or entity
receiving proceeds or profits by designation of that felon, on behalf of
that felon, or in the stead of that felon, whether by the felon’s designation
or by operation of law.
(B) “Profiteer of the felony” means any person who sells or transfers
for profit any memorabilia or other property or thing of the felon, the
value of which is enhanced by the notoriety gained from the commission
of the felony for which the felon was convicted. This subparagraph shall
not apply to any media entity reporting on the felon’s story or on the sale
of the materials, memorabilia, or other property or thing of the felon.
Nor shall it apply to the sale of the materials, as the term is defined in
paragraph (6), where the seller is exercising his or her first amendment
rights. This subparagraph also shall not apply to the sale or transfer by a
profiteer of any other expressive work protected by the First
Amendment unless the sale or transfer is primarily for a commercial or
speculative purpose.
(4)
(A) “Beneficiary” means a person who, under applicable law, other
than the provisions of this section, has or had a right to recover damages
from the convicted felon for physical, mental, or emotional injury, or
pecuniary loss proximately caused by the convicted felon as a result of
the crime for which the felon was convicted.
540
( B ) If a beneficiary described in subparagraph (A) has died,
“beneficiary” also includes a person or estate entitled to recover
damages pursuant to Chapter 4 (commencing with Section 377.10) of
Title 3 of Part 2 of the Code of Civil Procedure.
(C) If a person has died and the death was proximately caused by the
convicted felon as a result of the crime for which the felon was
convicted, “beneficiary” also includes a person described in Section
377.60 of the Code of Civil Procedure and any beneficiary of a will of
the decedent who had a right under that will to receive more than 25
percent of the value of the estate of the decedent.
(5) “Beneficiary’s interest” means that portion of the proceeds or profits
necessary to pay the following:
(A) In the case of a beneficiary described in subparagraph (A) or
(B) of paragraph (4), those damages that, under applicable law, other
than the provisions of this section, the beneficiary has or had a right to
recover from the convicted felon for injuries proximately caused by the
convicted felon as a result of the crime for which the felon was
convicted.
(B) In the case of a beneficiary described in subparagraph (C) of
paragraph (4), those damages that, under all the circumstances of the
case, may be just.
( C ) A beneficiary’s interest shall be reduced by the following
amount:
( i ) Money paid to the beneficiary from the Restitution Fund
because of the crime for which the felon was convicted.
(ii) Money paid to the beneficiary by the convicted felon because
of a requirement of restitution imposed by a court in connection with
the crime for which the felon was convicted.
(iii) Money paid to the beneficiary because of a judgment against
the convicted felon based upon the crime for which the felon was
convicted.
( D ) In the case of an unsatisfied existing judgment or order of
restitution against the convicted felon and in favor of a beneficiary, any
money paid to the beneficiary pursuant to this section shall be applied to
reduce the amount of the unsatisfied judgment or order.
(6) “Materials” means books, magazine or newspaper articles, movies,
films, videotapes, sound recordings, interviews or appearances on
television and radio stations, and live presentations of any kind.
541
(7) “Story” means a depiction, portrayal, or reenactment of a felony and
shall not be taken to mean a passing mention of the felony, as in a footnote or
bibliography.
(8) “Sale” includes lease, license, or any other transfer or alienation
taking place in California or elsewhere.
( 9 ) “Proceeds” means all fees, royalties, real property, or other
consideration of any and every kind or nature received by or owing to a
felon or his or her representatives for the preparation for the purpose of sale
of materials, for the sale of the rights to materials, or the sale or distribution
by the convicted felon of materials whether earned, accrued, or paid before
or after the conviction. It includes any interest, earnings, or accretions upon
proceeds, and any property received in exchange for proceeds.
(10) “Profits” means all income from anything sold or transferred by the
felon, a representative of the felon, or a profiteer of the felony, including any
right, the value of which thing or right is enhanced by the notoriety gained
from the commission of a felony for which a convicted felon was convicted.
This income may have been accrued, earned, or paid before or after the
conviction. However, voluntary donations or contributions to a defendant to
assist in the defense of criminal charges shall not be deemed to be “profits,”
provided the donation or contribution to that defense is not given in
exchange for some material of value.
(b)
(1) All proceeds from the preparation for the purpose of sale, the sale of
the rights to, or the sale of materials that include or are based on the story of
a felony for which a convicted felon was convicted, shall be subject to an
involuntary trust for the benefit of the beneficiaries set forth in this section.
That trust shall continue until five years after the time of payment of the
proceeds to the felon or five years after the date of conviction, whichever is
later. If an action is filed by a beneficiary to recover his or her interest in a
trust within those time limitations, the trust character of the property shall
continue until the conclusion of the action. At the end of the five-year trust
period, any proceeds that remain in trust that have not been claimed by a
beneficiary shall be transferred to the Controller, to be allocated to the
Restitution Fund for the payment of claims pursuant to Section 13969 of the
Government Code.
(2) All profits shall be subject to an involuntary trust for the benefit of
the beneficiaries set forth in this section. That trust shall continue until five
years after the time of payment of the profits to the felon or five years after
the date of conviction, whichever is later. If an action is filed by a
beneficiary to recover his or her interest in a trust within those time
542
limitations, the trust character of the property shall continue until the
conclusion of the action. At the end of the five-year trust period, any profits
that remain in trust that have not been claimed by a beneficiary shall be
transferred to the Controller, to be allocated to the Restitution Fund for the
payment of claims pursuant to Section 13969 of the Government Code.
(3) Notwithstanding paragraph (2), in the case of a sale or transfer by a
profiteer of the felony, the court in an action under subdivision (c) shall,
upon an adequate showing by the profiteer of the felony, exclude from the
involuntary trust that portion of the profits that represents the inherent value
of the memorabilia, property, or thing sold or transferred and exclusive of
the amount of the enhancement to the value due to the notoriety of the
convicted felon.
(c)
( 1 ) Any beneficiary may bring an action against a convicted felon,
representative of the felon, or a profiteer of a felony to recover his or her
interest in the trust established by this section.
(2) That action may be brought in the superior court of the county in
which the beneficiary resides, or of the county in which the convicted felon
resides, or of the county in which proceeds or profits are located.
(3) If the court determines that a beneficiary is entitled to proceeds or
profits pursuant to this section, the court shall order the payment from
proceeds or profits that have been received, and, if that is insufficient, from
proceeds or profits that may be received in the future.
(d) If there are two or more beneficiaries and if the available proceeds or
profits are insufficient to pay all beneficiaries, the proceeds or profits shall be
equitably apportioned among the beneficiaries taking into account the impact of
the crime upon them. Prior to any distribution of any proceeds to a beneficiary,
the court shall determine whether the convicted felon has failed to pay any
portion of a restitution fine or penalty fine imposed by a court, or any restitution
imposed as a condition of probation. The court shall also determine whether the
felon is obligated to reimburse a governmental entity for the costs of his or her
defense and whether a portion of the proceeds is needed to cover his or her
reasonable attorney’s fees incurred in the criminal proceeding related to the
felony, or any appeal or other related proceeding, or in the defense of the action
brought under this section. The court shall order payment of these obligations
prior to any payment to a beneficiary, except that 60 percent of the proceeds or
profits shall be reserved for payment to the beneficiaries.
(e)
543
(1) The Attorney General may bring an action to require proceeds or
profits received by a convicted felon to be held in an express trust in a bank
authorized to act as a trustee.
(2) An action may be brought under this subdivision within one year
after the receipt of proceeds or profits by a convicted felon or one year after
the date of conviction, whichever is later. That action may be brought in the
superior court of any county in which the Attorney General has an office.
( 3 ) If the Attorney General proves that the proceeds or profits are
proceeds or profits from the sale of a story or thing of value that are subject
to an involuntary trust pursuant to this section, and that it is more probable
than not that there are beneficiaries within the meaning of this section, the
court shall order that all proceeds or profits be deposited in a bank and held
by the bank as trustee of the trust until an order of disposition is made by a
court pursuant to subdivision (d), or until the expiration of the period
specified in subdivision (b).
(4) If the Attorney General prevails in an action under this subdivision,
the court shall order the payment from the proceeds or profits to the
Attorney General of reasonable costs and attorney’s fees.
(f)
(1) In any action brought pursuant to this section, upon motion of a party
the court shall grant a preliminary injunction to prevent any waste of
proceeds or profits if it appears that the proceeds or profits are subject to
the provisions of this section, and that they may be subject to waste.
(2) Upon motion of the Attorney General or any potential beneficiary,
the court shall grant a preliminary injunction against a person against whom
an indictment or information for a felony has been filed in superior court to
prevent any waste of proceeds or profits if there is probable cause to
believe that the proceeds or profits would be subject to an involuntary trust
pursuant to this section upon conviction of this person, and that they may be
subject to waste.
(g) Any violation of an order of a court made pursuant to this section shall
be punishable as contempt.
(h) The remedies provided by this section are in addition to other remedies
provided by law. No period of limitations, except those provided by this
section, shall limit the right of recovery under this section.
Leg.H. 1986 ch. 820, operative July 1, 1987, 1992 ch. 178, 1994 ch. 556, effective
September 13, 1994, 1995 ch. 262, 2000 ch. 261.
2000 Note: The provisions of this act are severable. If any provision of this act or its
544
application is held invalid, that invalidity shall not affect other provisions or applications that
can be given effect without the invalid provision or application. Stats. 2000 ch. 261 § 3.
In Simon & Schuster, Inc. v. Members of the New York State Crime Victims Board, 502
U.S. 105, 112 S. Ct. 501, 116 L. Ed. 2d. 476 , No. 90-1059 (U.S. Dec. 10, 1991), the U.S.
Supreme Court struck down New York’s “Son of Sam” statute on the grounds that it violated
t he First Amendment. The Court specifically refrained from ruling on whether any other
federal or state statutes designed to serve the same purpose would also be unconstitutional.
It should be noted that the New York law, which requires mandatory transfer of funds to
the state, has a broader reach than the California statute. Nevertheless, the constitutionality
of Civ. Code § 2225 may be in doubt.
Annotations
Cases
Keenan v. Superior Court, 27 Cal. 4th 413, 117 Cal. Rptr. 2d 1, 40 P.3d 718 (2002) .
Civ. Code § 2225(b)(1) is unconstitutional under the free speech clause of the First
Amendment of the U.S. Constitution, and under the liberty of speech clause of the California
Constitution.
Simon & Schuster, Inc. v. Members of the New York State Crime Victim’s Board
(1991) 502 U.S. 105, 112 S. Ct. 501, 116 L. Ed. 2d 476 . The U.S. Supreme Court addressed
the constitutionality of New York’s “Son of Sam” statute, which requires publishers and film
producers to turn over to the New York Crime Victims Board all proceeds from a work
produced by anyone “accused or convicted of a crime.” Under the statute, the funds are held
in an escrow account for five years for payment to any victim who obtains a civil judgment
for that purpose.
A unanimous Supreme Court overruled the Second Circuit (Simon & Schuster v.
Fischetti (2d Cir. [N.Y.] 1990) 916 F.2d 777 ) and held that the “Son of Sam” law was
unconstitutional on First Amendment grounds. The statute impermissibly imposes a financial
burden only on works with a specified content, and so creates a financial disincentive to
create or publish works with a particular content. This is “presumptively inconsistent” with
the First Amendment. While the state does have compelling interest in compensating victims
from fruits of the crime, the “Son of Sam” statute is not narrowly drafted to achieve that
purpose. Instead, the statute is significantly overinclusive and potentially encompasses any
work in which the author admits to having committed a crime, whether or not the author was
ever actually accused or convicted of that crime.
Maxwell v. Superior Court (1982) 30 Cal. 3d 606, 180 Cal. Rptr. 177, 639 P.2d 248 .
Decided before enactment of Civ. Code § 2225, this is the only California case on the issue
of royalties paid to alleged and convicted criminals when the royalties arise from writing
about the criminal activity. This case addresses the ethics of a defense lawyer who accepts
the assignment of a criminal suspect’s royalties as payment for legal services. The court held
that the trial court erred in appointing substitute counsel despite defendant’s wish to retain
his chosen counsel in a case involving capital crimes. The trial court had ordered a
545
substitution of counsel on the ground that a fee contract giving counsel the right to exploit
defendant’s life story created an intolerable conflict of interest.
Articles
Co mme nt , Criminal Antiprofit Laws: Some Thoughts in Favor of Their
Constitutionality, 76 Cal. L. Rev. 1353 (1988).
Snider, Coming Soon to a Theater Near You, Cal. Law., April, 1987, at 29.
TITLE 10
RECORDING ARTIST CONTRACTS

[Added Stats 2004 ch 150 § 2. Former Title 10, entitled “Partnership” consisting of §§
2395–2520, was enacted 1872, amended Stats 1929 ch 864, and repealed Stats 1939 ch 93
(Pub Res C § 10002), Stats 1949 ch 383 (Corp C § 100002), Stats 1970 ch 618 § 5,
operative July 1, 1971. Heading of former Title 10 was repealed Stats 1979 ch 373 § 491.
Former Title 10, entitled “Mining Claims, Tunnel Rights and Mill Sites,” consisting of §§
1426–1426s, was added Stats 1909 ch 205 § 1 and repealed Stats 1939 ch 93 (Pub Res C §
10002).]
(a) “Royalty recipient” means a party to a contract for the furnishing of
services in the production of sound recordings, as defined in Section 101 of
Title 17 of the United States Code, who has the right to receive royalties
under that contract.
(b) A “royalty reporting party” is the party obligated to pay royalties to
the royalty recipient under the contract described in subdivision (a).
Added Stats 2004 ch 150 § 2 (SB 1034).
§ 2501. Right of Royalty Recipient to Audit Records of

Royalty Reporting Party; Confidential Information.
Notwithstanding any provision of a contract described in Section 2500:
(a) A royalty recipient may audit the books and records of the royalty
reporting party to determine if the royalty recipient earned all of the
royalties due the royalty recipient pursuant to the contract, subject to the
following:
546
(1) A royalty recipient may conduct an audit not more than once per
year.
(2) A royalty recipient shall request an audit within three years after
the end of a royalty earnings period under the contract.
(3) A royalty recipient may not audit a particular royalty earnings
period more than once.
(b) The royalty recipient shall retain a qualified royalty auditor of the
royalty recipient’s choice to conduct an audit described in this section.
(c) The royalty recipient may enter into a contingency fee agreement
with the auditor described in subdivision (b).
( d) A qualified royalty auditor may conduct individual audits of the
books and records of a royalty reporting party on behalf of different royalty
recipients simultaneously.
( e ) Except as required by law, a qualified royalty auditor shall not
disclose any confidential information obtained solely during an audit
without the express consent of the party or parties to whom that information
is confidential. This subdivision shall not prohibit the auditor from
disclosing to the royalty recipient, or an agent of the recipient, on behalf of
whom the auditor is conducting the audit information directly pertaining to
that royalty recipient’s contract, as described in Section 2500.
( f) The provisions of subdivisions (a), (b), (c), (d), and (e) are in
addition to any other rights provided by a contract, as described in Section
2500, between a royalty recipient and a royalty reporting party.
(g) Nothing in subdivision (a), (b), (c), (d), or (e) shall be deemed to
extend any limitations period applicable to royalty accounting or payments
not specifically addressed in this section.
(h) Nothing in subdivision (a), (b), (c), (d), or (e) shall be deemed to
limit any rights provided by collective bargaining agreement or by
applicable state or federal law.
Added Stats 2004 ch 150 § 2 (SB 1034).
DIVISION 4
GENERAL PROVISIONS
PART 1
547
Relief
TITLE 2
COMPENSATORY RELIEF
CHAPTER 1
DAMAGES IN GENERAL
ARTICLE 3
Exemplary Damages
§ 3294. Punitive Damages for Homicide, Oppression,

Fraud, or Malice.
(a) In an action for the breach of an obligation not arising from contract,
where it is proven by clear and convincing evidence that the defendant has been
guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual
damages, may recover damages for the sake of example and by way of punishing
the defendant.
(b) An employer shall not be liable for damages pursuant to subdivision (a),
based upon acts of an employee of the employer, unless the employer had
advance knowledge of the unfitness of the employee and employed him or her
with a conscious disregard of the rights or safety of others or authorized or
ratified the wrongful conduct for which the damages are awarded or was
personally guilty of oppression, fraud, or malice. With respect to a corporate
employer, the advance knowledge and conscious disregard, authorization,
ratification or act of oppression, fraud, or malice must be on the part of an
officer, director, or managing agent of the corporation.
(c) As used in this section, the following definitions shall apply:
548
(1) “Malice” means conduct which is intended by the defendant to cause
injury to the plaintiff or despicable conduct which is carried on by the
defendant with a willful and conscious disregard of the rights or safety of
others.
(2) “Oppression” means despicable conduct that subjects a person to
cruel and unjust hardship in conscious disregard of that person’s rights.
( 3 ) “Fraud” means an intentional misrepresentation, deceit, or
concealment of a material fact known to the defendant with the intention on
the part of the defendant of thereby depriving a person of property or legal
rights or otherwise causing injury.
(d) Damages may be recovered pursuant to this section in an action pursuant
to Chapter 4 (commencing with Section 377.10) of Title 3 of Part 2 of the Code
of Civil Procedure based upon a death which resulted from a homicide for
which the defendant has been convicted of a felony, whether or not the decedent
died instantly or survived the fatal injury for some period of time. The
procedures for joinder and consolidation contained in Section 377.62 of the
Code of Civil Procedure shall apply to prevent multiple recoveries of punitive
or exemplary damages based upon the same wrongful act.
(e) The amendments to this section made by Chapter 1498 of the Statutes of
1987 apply to all actions in which the initial trial has not commenced prior to
January 1, 1988.
Leg.H. 1872, 1905 p. 621, 1980 ch. 1242, 1982 ch. 174, 1983 ch. 408, 1987 ch. 1498,
1988 ch. 160, 1992 ch. 178.
Annotations
Cases
Hoffman v. Capital Cities/ABC, Inc., 33 F. Supp. 2d 867, 50 U.S.P.Q.2d 1195 (C.D. Cal.
1999), reversed, 255 F.3d 1180 (9th Cir. 2001) . In addition to compensatory damages
awarded under theories of common law right of publicity, statutory right of publicity under
Civil Code § 3344, and false association under § 43(a) of the Lanham Act, celebrity Dustin
Hoffman was entitled to an award of punitive damages against a magazine which used a still
photograph from the motion picture “Tootsie” to create a composite computer-generated
image of Hoffman, which falsely depicted him wearing fashion designers’ women’s clothes.
The magazine commercially exploited his image, robbed him of his dignity, professionalism
and talent. The magazine’s unauthorized use of his name and likeness was willful, malicious,
and in conscious disregard of his rights such that defendant was guilty of oppression, fraud
and malice under § 3294.
Kelley Blue Book v. Car-Smarts, Inc. (C.D. Cal. 1992) 802 F. Supp. 278. In Kelley Blue
Book, the court held that absent clear and convincing evidence of oppression, fraud, or
malice on the part of the defendants, the plaintiffs were not entitled to punitive damages
549
under § 3294, where the defendants used a phrase infringing the plaintiffs’ trademark,
allegedly with the intention of capitalizing on the plaintiffs’ reputation.
Transgo, Inc. v. Ajac Transmission Parts Corp. (9th Cir. 1985) 768 F.2d 1001 ,
certiorari denied, 474 U.S. 1059, 106 S. Ct. 802, 88 L. Ed. 2d 778. In Transgo, the court
held that a punitive damage award for copyright infringement, unfair competition, and false
designation of origin was appropriate under § 3294 where the plaintiff presented substantial
evidence of defendant’s deliberate and willful disregard of the plaintiff’s property rights.

Added Stats 2004 ch 227 § 8.5 (SB 1102), effective August 16, 2004, repealed July 1,
2006, by its own terms. The repealed section related to creation of Public Benefit Trust
Fund.
CHAPTER 2
MEASURE OF DAMAGES
ARTICLE 3
Penal Damages
§ 3344. Use of Another’s Name, Voice, Signature,

Photograph, or Likeness in Advertising or Soliciting
Without Prior Consent.
( a ) Any person who knowingly uses another’s name, voice, signature,
photograph, or likeness, in any manner, on or in products, merchandise, or
goods, or for purposes of advertising or selling, or soliciting purchases of,
products, merchandise, goods or services, without such person’s prior consent,
or, in the case of a minor, the prior consent of his parent or legal guardian, shall
be liable for any damages sustained by the person or persons injured as a result
thereof. In addition, in any action brought under this section, the person who
violated the section shall be liable to the injured party or parties in an amount
equal to the greater of seven hundred fifty dollars ($750) or the actual damages
suffered by him or her as a result of the unauthorized use, and any profits from
the unauthorized use that are attributable to the use and are not taken into account
in computing the actual damages. In establishing such profits, the injured party
or parties are required to present proof only of the gross revenue attributable to
550
such use, and the person who violated this section is required to prove his or
her deductible expenses. Punitive damages may also be awarded to the injured
party or parties. The prevailing party in any action under this section shall also
be entitled to attorney’s fees and costs.
( b ) As used in this section, “photograph” means any photograph or
photographic reproduction, still or moving, or any videotape or live television
transmission, of any person, such that the person is readily identifiable.
( 1 ) A person shall be deemed to be readily identifiable from a
photograph when one who views the photograph with the naked eye can
reasonably determine that the person depicted in the photograph is the same
person who is complaining of its unauthorized use.
(2) If the photograph includes more than one person so identifiable, then
the person or persons complaining of the use shall be represented as
individuals rather than solely as members of a definable group represented
in the photograph. A definable group includes, but is not limited to, the
following examples: a crowd at any sporting event, a crowd in any street or
public building, the audience at any theatrical or stage production, a glee
club, or a baseball team.
( 3 ) A person or persons shall be considered to be represented as
members of a definable group if they are represented in the photograph
solely as a result of being present at the time the photograph was taken and
have not been singled out as individuals in any manner.
(c) Where a photograph or likeness of an employee of the person using the
photograph or likeness appearing in the advertisement or other publication
prepared by or in behalf of the user is only incidental, and not essential, to the
purpose of the publication in which it appears, there shall arise a rebuttable
presumption affecting the burden of producing evidence that the failure to obtain
the consent of the employee was not a knowing use of the employee’s
photograph or likeness.
( d ) For purposes of this section, a use of a name, voice, signature,
photograph, or likeness in connection with any news, public affairs, or sports
broadcast or account, or any political campaign, shall not constitute a use for
which consent is required under subdivision (a).
( e ) The use of a name, voice, signature, photograph, or likeness in a
commercial medium shall not constitute a use for which consent is required
under subdivision (a) solely because the material containing such use is
commercially sponsored or contains paid advertising. Rather it shall be a
question of fact whether or not the use of the person’s name, voice, signature,
photograph, or likeness was so directly connected with the commercial
551
sponsorship or with the paid advertising as to constitute a use for which consent
is required under subdivision (a).
(f) Nothing in this section shall apply to the owners or employees of any
medium used for advertising, including, but not limited to, newspapers,
magazines, radio and television networks and stations, cable television systems,
billboards, and transit ads, by whom any advertisement or solicitation in
violation of this section is published or disseminated, unless it is established
that such owners or employees had knowledge of the unauthorized use of the
person’s name, voice, signature, photograph, or likeness as prohibited by this
section.
(g) The remedies provided for in this section are cumulative and shall be in
addition to any others provided for by law.
Leg.H. 1971 ch. 1595, 1984 ch. 1704.
There can be no liability under Civ. Code § 3344 if an advertiser uses a celebrity’s
likeness to accurately reflect some material fact about the contents of the publication. So
long as the use of the likeness does not suggest that the celebrity endorses or is associated
with the advertiser’s product or service, the use of the likeness will be protected by the First
Amendment in most instances. See Cher v. Forum Intern., Ltd. (9th Cir. 1982) 692 F.2d
634, cert. denied, 462 U.S. 1120, 103 S. Ct. 3089, 77 L. Ed. 2d 1350.
In Christoff v. Nestle USA, Inc., 47 Cal. 4th 468, 97 Cal. Rptr. 3d 798, 213 P.3d 132
(2009), the Supreme Court left no doubt that in an appropriate case, the single publication
rule under Civil Code § 3425.3 applies to a claim under Civil Code § 3344. How the single
publication rule will apply, however, depends on the facts of the particular case. This requires
a determination whether the creation and distribution of materials incorporating a person’s
likeness or otherwise giving rise to a section 3344 claim constitute a “single integrated
publication.” In a typical case, this might be hotly contested.
Annotations
See the annotations for Civ. Code § 3344.1.
Cases
In re NCAA Student-Athlete Name & Likeness Litigation, 724 F.3d 1268 (9th Cir.
2013). This 3344 claim is based on the incorporation into video games of identifiable
college players. EA Sports filed an anti-SLAPP motion to dismiss based on the assertion that
its use of identifiable college athletes in its games was entitled to first amendment
protection. The court applied the transformative use defense, i.e., if the use is sufficiently
transformative so that the end product has new creative elements such that it is more than
merely the use of a celebrity’s likeness, the first amendment would insulate the user from
liability. Here, the court found that the use was not transformative and that other common law
or statutory defenses did not apply. There was a vigorous dissent.
552
No Doubt v. Activision Publishing Inc., 192 Cal. App. 4th 1018, 122 Cal. Rptr. 3d 397
(2011). The rock band “No Doubt” sued Activision for statutory and common law violations
of their rights of publicity, unfair competition and other torts based on the incorporation of
the band’s members in the Band Hero videogame. Activision’s First Amendment argument
was unavailing because the incorporation of the band members into the video game was not
transformative.
Fraley v. Facebook, 830 F. Supp. 2d 785 (N.D. Cal. 2011) . In contrast to Cohen v.
Facebook, (see annotation below), the court upheld a 3344 claim against Facebook based on
the use of user’s names and images in ads targeted to their friends. In this context, the court
held that the plaintiff sufficiently alleged actual commercial injury.
Cohen v. Facebook, 798 F. Supp. 2d 1090 (N.D. Cal. 2011) . Plaintiff brought this
putative class action against Facebook for alleged violation of 3344 and the common law
through the unconsented use of names and images to promote Facebook’s friend finder
service. These claims failed because Plaintiff did not allege that he had suffered any actual
harm as a result and therefore lacked standing. (But see Fraley v. Facebook.)
Orthopedic Systems Inc. v. Schlein, 202 Cal. App. 4th 529, 135 Cal. Rptr. 3d 200
(2011). Dr. Schlein developed a product called the “Schlein Shoulder Positioner” for use in
shoulder surgery. In 1992 Orthopedic Systems Inc. (OSI) agreed to make and market the
device and pay a 5% royalty to Dr. Schlein. OSI paid royalties through 2004 but stopped
paying the royalties as of January 2005. OSI continued to market the device using Schlein’s
name through July 31, 2005. The jury found that Schlein’s damages for breach of contract
were $616,043.00, he was entitled to $750 minimum damages under section 3344, and that
OSI had earned profits of $1,220,000 for continued use of Sr. Schlein’s name between
January and July 2005. Because of ambiguity in the special verdict form the trial court did
not award the profits to Dr. Schlein. On appeal the court held that Dr. Schlein was entitled to
recover the contractual damages, plus the minimum $750 under section 3344 plus the profits
found by the jury. The court also affirmed the award of attorney’s fees to Dr. Schlein.
Jules Jordan Video, Inc. v. 144942 Canada Inc. , 617 F.3d 1146 (9th Cir. 2010) .
Plaintiffs were an adult video actor and his wholly owned production company. They sued
several defendants for copyright infringement and violation of the actor’s right of publicity
under section 3344 based on defendants’ unauthorized reproduction of DVDs of several
movies in which he performed. The court held that the section 3344 claim was preempted by
the Copyright Act.
Christoff v. Nestle USA, Inc., 47 Cal. 4th 468, 97 Cal. Rptr. 3d 798, 213 P.3d 132
(2009). In review of the Court of Appeals 2007 decision (see annotation below), the
Supreme Court reversed “to the extent that it holds that, for purposes of the statute of
limitations, Christoff’s cause of action necessarily accrued when Nestle first ‘published’ the
label … In all other respects the judgment of the Court of Appeal is affirmed and the matter
is remanded to the Court of Appeal for further proceedings.” The Supreme Court held that
the single publication rule in Civil Code § 3425.3 applies to Christoff’s claim, but the record
must be further developed to determine whether the printing of the product label over a five-
year period constitutes a “single integrated publication.” This requires further factual inquiry.
Miller v. Collectors Universe, Inc., 159 Cal. App. 4th 988, 72 Cal. Rptr. 3d 194 (2008) .
The defendant used “certificates of authenticity” (COAs) to authenticate certain items of
memorabilia, such as stamps, sports cards, coins, and autographs. Without plaintiff’s
authorization, defendant continued to use COAs with plaintiff’s name after purchasing
553
plaintiff’s interest in the business. Each COA had a separate serial number and was issued to
an individual customer to authenticate a specific item. The certificates were otherwise all the
same. Defendant was found liable for issuing 14,060 individual COAs appropriating
plaintiff’s name. The key issues in the case were whether the single publication rule (SPR) in
Cal. Civ. Code § 3425.3 applies and how to calculate minimum statutory damages. The court
reasoned that the SPR can apply to a 3344 claim, but held that the SPR did not apply in this
case because these were a series of individual uses not a distribution to a mass audience.
With regard to minimum damages, the trial court had ruled the statutory minimum of $750
should be multiplied by the number of uses (COAs). This resulted in statutory damages of
$10,545,000, calculated by multiplying 14,060 by $750. This was error. The appellate court
held that there is a single statutory minimum in this case, and reversed and remanded the
decision to enable the plaintiff to proceed on alternate theories of compensatory damages
and punitive damages which plaintiff had abandoned in favor of the calculation of minimum
damages.
Christoff v. Nestle USA, Inc., 152 Cal. App. 4th 1439, 62 Cal. Rptr. 3d 122 (2007) , rev.
granted, 67 Cal. Rptr. 3d 468, 169 P.3d 888 (2007) . On October 31, 2007, the Supreme
Court granted review of this case, and so the appellate decision has been superseded. There
are several significant issues presented in this case, including the applicable statute of
limitations, whether and when the single publication rule found in Cal. Civ. Code § 3425.3
applies to a 3344 claim, and the extent to which a defendant’s profits might be attributable to
the use of the plaintiff’s likeness. The appellate decision provides a thorough discussion of
these issues. Presumably, the Supreme Court will provide guidance on these and other issues.
Laws v. Sony Music Entm’t, Inc. , 448 F.3d 1134 (9th Cir. 2006) . Sampling of a
professional singer’s voice was attacked as a misappropriation of her voice under Civ. Code §
3344 and the common law. The claims were preempted by the Copyright Act. The court noted
that not all such claims will be preempted. Claims based on common law or statutory rights
of privacy, publicity, trade secrets, as well as defamation torts and the like will not be
preempted “so long as those claims do not concern the subject matter of copyright and
contain qualitatively different elements than those contained in a copyright infringement
suit.” (Note: Arguably, this should be in the disjunctive, i.e., either it does not concern the
subject matter or it contains a different element.)
Kirby v. Sega of America, Inc., 144 Cal. App. 4th 47, 50 Cal. Rptr. 3d 607 (2006) . A
video game character apparently was based in part on the plaintiff’s identity as leader of a
retro-funk-dance musical group known as “Deee-Lite” which was popular in the early 1990s.
Although there are issues of fact as to whether here was a misappropriation of plaintiff’s
likeness or identity, summary judgment in favor of defendants was affirmed. Because the
video game was sufficiently transformative, the First Amendment provides a complete
defense to the plaintiff’s claims under Cal. Civ. Code § 3344, the Lanham Act, Cal. Bus. &
Prof. Code § 17200, and the common law. In addition, defendants are entitled to recover
attorney’s fees under the mandatory provision in section 3344.
Long v. The Walt Disney Co., 116 Cal. App. 4th 868, 10 Cal. Rptr. 3d 836 (2004) .
Computer-altered (‘morphed’) sixth grade photographs of plaintiffs were used on national
television broadcasts. More than two years after the last broadcast, plaintiffs sued for
violation of the right of publicity, appropriation of their likenesses, and intentional infliction
of emotional distress. The court held that the Uniform Single Publication Act (“USPA”),
Civil Code § 3425.1 et seq., applies to all their causes of action and that their claims were
barred by the statute of limitations. Furthermore, the accrual of their causes of action are not
554
delayed by the discovery rule. When images are published or broadcast, the statute begins to
run.
Winter v. DC Comics, 30 Cal. 4th 881, 134 Cal. Rptr. 2d 634 (2003). The California
Supreme Court reversed the judgment of the Court of Appeal (see annotation below). The
comic books here were sufficiently transformative such that the First Amendment defeats the
claim under 3344. A significant observation by the Supreme Court is that this issue can often
be decided on summary judgment or even demurrer by the court simply comparing the works
at issue to decide the transformation issue.
Winter v. DC Comics, 99 Cal. App. 4th 458, 121 Cal. Rptr. 2d 431 (2002), rev. granted,
125 Cal. Rptr. 2d 442. Plaintiffs Johnny and Edgar Winter are well-known performers and
musicians originally from Texas. Without their consent, they were apparently used as the
basis for a couple of characters in a series of comic books as a loose parody of the singing
cowboys battling against worm-like creatures from beneath the surface of the earth. The
appellate court reversed summary judgment for the defendants finding a triable issue whether
there was sufficient “transformative use” of their personae so as to avoid liability under
section 3344 for misappropriation of their likenesses. The Supreme Court has granted review
of this case.
Solano v. Playgirl Inc., 292 F.3d 1078 (9th Cir. 2002) . An actor sued Playgirl for a
common law false light claim and a § 3344 misappropriation claim for using his photograph
on the magazine cover. The alleged false light was the intimation that the actor posed nude
for the magazine and implicitly endorsed its sexually explicit content. The news reporting
exemption in paragraph (d) does not protect a magazine which acts with actual malice in a
false depiction. Therefore summary judgment for the magazine was reversed.
Gionfriddo v. Major League Baseball, 94 Cal. App. 4th 400, 114 Cal. Rptr. 2d 307
(2001). Former major league baseball players sued Major League Baseball asserting that
historical and statistical information, lists of award winners, video clips, and other
information maintained by MLB on its website and elsewhere violated their rights of
publicity. There is no liability under § 3344, among other things because paragraph (d)
exempts “news, public affairs, or sports broadcast or account.”
Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180, 59 U.S.P.Q.2d (BNA) 1363 (9th
Cir. 2001). This case concerned a photograph in a magazine article which included a
computer altered photograph of Dustin Hoffman in his “Tootsie” character to make it appear
that he was modeling contemporary fashions. Hoffman had recovered compensatory and
punitive damages for misappropriation of his name and likeness in violation of Section 3344,
the Federal Lanham Act, and the common law right of publicity. On appeal the Ninth Circuit
reversed the District Court’s 1999 decision on First Amendment grounds. (The District
Court’s decision is reported at 33 F. Supp. 2d 867, 50 U.S.P.Q.2d 1195 (C.D. Cal. 1999) .
See last year’s annotations to this section.) The Ninth Circuit reviewed the entire article and
concluded that the totality of the presentation could not reasonably be interpreted as though
Hoffman had in fact posed for the computer altered photograph, and that readers would
realize that in fact the opposite was the case.
Cusano v. Klein, 264 F.3d 936 (9th Cir. 2001) . This case involves various claims
involving the famous rock’n’roll band KISS. Cusano is a former lead guitarist of KISS and he
asserted claims for royalties, defamation and infringement of his right of publicity under §
3344 based on the release of two videos and a book about the band. The case was complicated
by the fact that Cusano had filed bankruptcy at one time raising an issue as to whether Cusano
555
had standing to pursue various claims. The district court had dismissed the § 3344 claim on
the ground that the bankruptcy court first had to decide whether Cusano had standing to
pursue this claim. Without reaching the standing issue, the 9 th Circuit affirmed on the
separate ground that this claim was barred in any case by a two-year statute of limitations.
Thus, the salient feature of this case is the holding that the statute of limitations for a § 3344
claim is two years.
Downing v. Abercrombie & Fitch , 265 F.3d 994 (9th Cir. 2001) . Abercrombie used a
1965 photograph of plaintiff surfers in a Spring 1999 catalog of wearing apparel.
Abercrombie obtained summary judgment against the plaintiffs’ claims of commercial
misappropriation of their likenesses under § 3344, the Lanham Act, and other claims. The 9th
Circuit reversed. Among other things, the court held that Abercrombie was not protected by
the First Amendment and the § 3344 claim is not preempted by the Copyright Act. The court
held that a person’s name or likeness is not a work of authorship within the meaning of the
Copyright Act, even though their names and likenesses were embodied in a copyrightable
photograph.
KNB Enterprises v. Matthews (2000) 78 Cal. App. 4th 362, 92 Cal. Rptr. 2d 713 . The
defendant in this case displayed on a website several hundred erotic photographs of several
hundred models. All the models (who were not celebrities) had assigned their rights under §
3344 to the plaintiff. The court held that the 3344 claims for misappropriation of their
likenesses were not preempted by the federal Copyright Act. The court distinguished Fleet v.
CBS, Inc. (see below) which held that a 3344 claim for misappropriation was preempted by
the federal Copyright Act where the only misappropriation alleged was a film’s authorized
distribution by the exclusive distributor, CBS. One distinction made by the KNB court is that
in Fleet the film distribution was authorized, but here the posting of the photographs on the
website was un authorized. In addition to the authorized/unauthorized distinction, the court
disagreed with the Fleet court’s reasoning. For example, the court reasoned that a likeness or
persona is not copyrightable subject matter in the first place, because the likeness or persona
itself is not a work of authorship. Therefore, a 3344 claim is not the equivalent of a copyright
claim and cannot be preempted by the Copyright Act.
Newcombe v. Adolf Coors Co. (9th Cir. 1998) 157 F.3d 686, 48 U.S.P.Q.2d 1190 .
Former Brooklyn Dodger pitcher Don Newcombe sued Coors, its advertising agency and
Time, Inc., publisher of Sports Illustrated, because of an ad for Killian’s Irish Red Beer in the
magazine which depicted an old-time baseball scene. The pitcher in the ad was copied from a
1949 newspaper photograph of Newcombe pitching in the World Series. Summary judgment
had been granted for all defendants. The Ninth Circuit reversed as to Coors and the
advertising agency but affirmed as to Time. Section 3344 requires a plaintiff to establish (1)
a knowing use, (2) for purposes of advertising, and (3) a direct connection between the use
and the commercial purpose.
Whether the image in the ad was sufficiently like Newcombe was a question of fact, and
there was sufficient evidence on the other elements of the claim against Coors and the
advertising agency to defeat summary judgment. Not so as to Time. Time was exonerated
because there was no evidence that Time knew Newcombe did not consent to the use of the
image, and it had no commercial purpose in using his image. As a publisher, its commercial
purpose was in being paid for the ad regardless of the ad’s content.
Michaels v. Internet Entertainment Group, Inc. (C.D. Cal. 1998) 5 F. Supp. 2d 823, 46
U.S.P.Q.2d 1892 . The celebrity holders of the copyright on a videotape depicting them
556
engaging in sexual intercourse sued the possessor of a copy seeking a preliminary injunction
barring display or sale of the tape, stills therefrom, or use of their names and likenesses,
which injunction the court granted. The court stated that the statutory right of publicity in Civ.
Code § 3344 complements, rather than codifies the common law right which protects a
broader range of interests against a broader range of infringing conduct than does the
statutory right. The court found that the state right to publicity action was not pre-empted by
the Copyright statute where the claim contains elements that are different in kind from
copyright infringement.
Polydoros v. Twentieth Century Fox Film Corp. (1997) 67 Cal. App. 4th 318, 79 Cal.
Rptr. 2d 207. A noncelebrity sued the makers of a film claiming the filmmakers invaded his
privacy by appropriating his name and likeness. The court upheld a grant of summary
judgment in favor of defendant filmmakers, finding that plaintiff could not establish a direct
connection between the use of his name or likeness and a commercial purpose; a mere
similarity was insufficient to establish that a work of fiction concerns a real person; and that
as a work of fiction, the film was protected by the First Amendment.
Wendt v. Host Intern., Inc. (9th Cir. 1997) 125 F.3d 806, 44 U.S.P.Q.2d 1189 . George
Wendt and John Ratzenberger could pursue a claim under § 3344, the common law right of
publicity and § 43(a) of the Lanham Act, that animatronic robots placed in airport bars were
based upon their likenesses. Their claims were not preempted by federal copyright law
because they were not asserting a claim based on their copyrighted work in the Cheers
television series. Whether the robots were sufficiently like their appearance was an issue for
the jury. Therefore, summary judgment for defendants was reversed.
Fleet v. CBS, Inc., (1996) 50 Cal. App. 4th 1911, 58 Cal. Rptr. 2d 645 . The Court of
Appeal addressed the subject of federal copyright preemption with respect to a cause of
action under Civ. Code § 3344 based on a motion picture. Actors in a motion picture brought
action against distributor of a motion picture alleging violation of statutes prohibiting
unauthorized use of person’s name or likeness and unfair business practices. The trial court
reasoned that if California law permits actors to assert a cause of action under section 3344
when the only alleged exploitation is distribution of the actors’ performance in a motion
picture, then federal copyright law must preempt California law in this circumstance.
Affirming, the appellate court explained that actors’ performances on film were dramatic
works fixed in a tangible medium, and therefore fall within the scope and subject matter of
federal copyright law protection.
Abdul-Jabbar v. General Motors Corp., 85 F.3d 407 (9th Cir. 1996) (Cal. Civ. Code §
3344). The Ninth Circuit reversed and remanded the district court’s grant of summary
judgment in favor of defendants General Motors Corp. (“GMC”). The trial court found that
GMC’s use of Karem Abdul-Jabbar’s former name, Lew Alcindor, in a television commercial
could not constitute a cause of action. The district court based its judgment on findings that
Abdul-Jabbar had abandoned the name “Lew Alcindor” and GMC’s use of the name could not
be viewed as an endorsement of its product by Abdul-Jabbar. The Ninth Circuit viewed the
district court’s findings on abandonment and lack of common, present use as essentially a
single reason used to support summary judgment (e.g., Abdul-Jabbar can only sue under his
present name because he has abandoned his former name). The Ninth Circuit reasoned that
abandonment is not a defense to appropriation of a celebrity’s identity because the right of
publicity protects a celebrity’s decision not to use his name or identity for commercial
purposes as well as his rights to exploit his identity. While Civil Code § 3344(d) may accord
privilege if used in the context of news, public affairs or sports broadcast or account, GMC
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used the information in an automobile advertisement not a news or sports account. Thus,
GMC could not seek protection under § 3344(d).
Montana v. San Jose Mercury News, Inc. (6th Dist. 1995) 34 Cal. App. 4th 790, 40 Cal.
Rptr. 2d 639. The court held that a newspaper’s reproduction and sale in poster form of
newspaper pages containing photograph and artist’s rendition of Joe Montana was protected
by the first amendment from common law and Civil Code § 3344. This is because the posters
reported newsworthy items of public interest, and the newspaper had a constitutional right to
promote itself by reproducing its originally-protected articles or photographs.
Dora v. Frontline Video, Inc. (2d Dist. 1993) 15 Cal. App. 4th 536, 18 Cal. Rptr. 2d
790. Surfing documentary using interview with and film of plaintiff, a noted surfer, involved
“public affairs” within the meaning of Civ. Code § 3344. The term “public affairs” is not
limited to topics that might be covered on public television or radio, but must be related to
real-life occurrences.
White v. Samsung Electronics America, Inc. (9th Cir. 1992) 971 F.2d 1395, 23
U.S.P.Q. 2d 1583 . Defendant ran a print advertisement depicting a robot, dressed in a wig,
gown, and jewelry so that it resembled Vanna White and posed next to a game board. The
Ninth Circuit upheld the district court’s dismissal of Vanna White’s claim under Civ. Code §
3344, on grounds that the robot, which had “mechanical” features, was not White’s “likeness”
within the meaning of Civ. Code § 3344. The court cited its earlier decision in Midler v.
Ford Motor Co. (see below), in which Midler’s claim was dismissed because defendants did
not use Midler’s name or voice, but rather another person’s voice.
However, White’s common-law right-of-publicity claim is not similarly confined to use
of actual name or likeness, and therefore the district court erred in dismissing White’s
common-law claim. (The dissent pointed out that prior California case law has in fact
confined common-law right-of-publicity claims to use of name or likeness, and disagrees
with the majority that use of a robot misappropriates Vanna White’s “identity.”)
New Kids on the Block v. News America Pub., Inc. (9th Cir. 1992) 971 F.2d 302, 23
U.S.P.Q.2d (BNA) 1534 . The Ninth Circuit affirmed the district court’s grant of summary
judgment for defendant, but preferred to resolve the case on nonconstitutional grounds rather
than on the First Amendment grounds relied on by the district court (see discussion of
district court decision below). When the defendant uses a trademark to describe the
plaintiff’s product, rather than its own, defendant is entitled to a nominative fair use defense
if (1) the product or service is not readily identifiable without use of the mark; (2) only so
much of the mark is used as is reasonably necessary to identify the product or service; and
(3) the user does nothing that would suggest sponsorship or endorsement by the trademark
holder. Defendants met this three-part test and so were entitled to a nominative fair use
defense to plaintiff’s claims. Nominative use of a mark—when the only word reasonably
available to describe a particular thing must be called into service—lies outside the strictures
of trademark law. Since nominative use does not implicate the source-identification function
that is the purpose of trademark, it does not constitute unfair competition, because it does
not imply sponsorship or endorsement by the trademark holder.
With respect to plaintiff’s claims of commercial and common-law misappropriation
under California law, defendants have a complete defense to both claims under Civ. Code §
3344(d) if they used the New Kids name “in connection with any news, public affairs, or
sports broadcast or account” which was true in all material respects. Since defendants met
this standard, plaintiff’s misappropriation claims were barred under Civ. Code § 3344(d).
558
Waits v. Frito-Lay, Inc. (9th Cir. 1992) 23 U.S.P.Q.2d (BNA) 1721 . Defendant
broadcast a radio commercial that featured a vocal performance imitating Waits’s distinctive
singing voice. The Ninth Circuit affirmed the district court’s finding for Waits on his voice-
misappropriation claim, upholding a jury award of $375,000 in compensatory damages and
$2 million in punitive damages, but eliminating as duplicative $100,000 for Lanham Act
violations. The Ninth Circuit found that Midler v. Ford Motor Co. (see discussion below) is
still good law and that Waits’s claim of voice misappropriation was not preempted by the
Copyright Act. However, Waits’s claim was not based on Civ. Code § 3344, but instead on
the common-law tort of voice misappropriation (referred to by the court as the “Midler
tort”). The Ninth Circuit disagreed with defendant that compensatory damages are limited to
compensation for economic injury, and allowed compensation for injury to “peace, happiness
and feelings,” and also to “goodwill and future publicity value.” Regarding punitive damages,
evidence showed that defendants were aware of the Midler decision and acted in conscious
disregard of the effect of their actions on Waits’s legal rights. Such evidence was adequate to
support a finding that defendants acted with malice, and therefore the award of punitive
damages was upheld.
New Kids on the Block v. News America Pub., Inc. (C.D. Cal. 1990) 745 F. Supp. 1540,
16 U.S.P.Q. 2d 1283 . Inasmuch as the California Supreme Court has subjected the “right of
publicity” under California law to a narrowing interpretation that accords with First
Amendment values, defendants’ use of the New Kids’ name and likeness, as a matter of law,
was related to news gathering and thus immunized by the First Amendment against
misappropriation claims. NOTE: The Ninth Circuit affirmed this decision on other grounds
(see discussion above).
Midler v. Ford Motor Co. (9th Cir. 1988) 849 F.2d 460, 7 U.S.P.Q. 2d 1398 , cert.
denied, (1992) 503 U.S. 951, 112 S. Ct. 1514, 117 L. Ed. 2d 650 . Upon being refused
permission to use plaintiff’s voice in a commercial, defendants hired one of plaintiff’s
backup singers to record a “sound alike.” When the commercial was aired, many people
thought Midler herself was singing. The Ninth Circuit held that this unauthorized use of an
imitation was not prohibited under Civ. Code § 3344, which protects against unauthorized use
of “name, voice, signature, photograph, or likeness,” because defendants did not use Midler’s
actual voice, and “likeness” refers to visual image and not vocal imitation. However, the
statute does not preclude Midler from pursuing a cause of action at common law, pursuant to
Civ. Code § 3344(g). The cause of action is appropriation of property rights by analogy to
Civ. Code § 3344.1(b), which recognizes that use of a deceased person’s name, voice,
signature, photograph, or likeness is a “property right.” NOTE: In an unpublished disposition
dated September 20, 1991, the Ninth Circuit stood firm on its 1988 decision and affirmed
Midler’s $400,000 jury award. The court also upheld the district court’s finding that Midler
could not receive punitive damages.) On March 23, 1992, the U.S. Supreme Court denied a
petition for writ of certiorari. See 503 U.S. 951, 112 S. Ct. 1513, 117 L. Ed. 2d 650 . The
Supreme Court did grant leave to the American Association of Advertising Agencies to file a
brief as amicus curiae.
Cher v. Forum Intern., Ltd. (9th Cir. 1982) 692 F.2d 634, 217 U.S.P.Q. 407 , cert.
denied, 462 U.S. 1120, 103 S. Ct. 3089, 77 L. Ed. 2d 1350. Unauthorized publication of a
celebrity interview in a magazine does not violate Civ. Code § 3344 as long as the publication
is protected by the First Amendment; that is, it is protected absent a showing that the
publishers knew their statements were false or published them in reckless disregard of the
truth. However, a magazine’s false claim in its advertising that the celebrity told it things that
559
she would not tell to a rival magazine, and a false indication that she had endorsed the
magazine are not speech protected by the First Amendment and so recovery is permitted
under Civ. Code § 3344.
Articles
Heller and Barash, Calculation of Damages in Right of Publicity Claims, 31 L.A.
Lawyer 19 (2008).
William J. Brutocao on Single Publication Rule and California Civil Code § 3344,
2008 Emerging Issues 1296 (2008).
Heller, Calculation of Damages in Right of Publicity Claims, 31 L.A. Lawyer 19 (May
2008).
Hock, What’s in a Name? Fred Goldman’s Quest to Acquire O . J. Simpson’s Right of
Publicity and the Suit’s Implications for Celebrities, 35 Pepp. L. Rev. 347 (2008).
Dogan, What the Right of Publicity Can Learn from Trademark Law, 58 Stan. L. Rev.
1161 (2006).
Weinstein, Abbott and Costello meet Frankenstein, Dracula and the Wolf Man in the
year 2000 or the birth of the synthespian. 32 Beverly Hills B.A.J. 32 (1997).
Ping Hin Yu, Astaire v. Best Film & Video Corp. 13 Berk.Tech.L.J. 319 (1998).
Pemberton, The Parodist’s Claim to Fame: A Parody Exception to the Right of
Publicity, 27 U.C. Davis L. Rev. 97 (1993).
Case Note, White v. Samsung Electronics, Inc.: The Wheels of Justice Take an
Unfortunate Turn, 23 Golden Gate U. L. Rev. 299 (1993).
Frisch, New Technologies on the Block: New Kids on the Block v. New America
Publishing, Inc., 10 Cardozo Arts & Ent. L.J. 51 (1991).
Rohde, Dracula: Still Undead, 5 Cal. Law. 4 (1985).
Comment, Community Property Interests in Right of Publicity: Fame and/or Fortune,
25 U.C.L.A. L. Rev. 1095 (1978).

(a)
( 1 ) Any person who uses a deceased personality’s name, voice,
signature, photograph, or likeness, in any manner, on or in products,
merchandise, or goods, or for purposes of advertising or selling, or
soliciting purchases of, products, merchandise, goods, or services, without
prior consent from the person or persons specified in subdivision (c), shall
be liable for any damages sustained by the person or persons injured as a
result thereof. In addition, in any action brought under this section, the
person who violated the section shall be liable to the injured party or
560
parties in an amount equal to the greater of seven hundred fifty dollars
($750) or the actual damages suffered by the injured party or parties, as a
result of the unauthorized use, and any profits from the unauthorized use that
are attributable to the use and are not taken into account in computing the
actual damages. In establishing these profits, the injured party or parties
shall be required to present proof only of the gross revenue attributable to
the use, and the person who violated the section is required to prove his or
her deductible expenses. Punitive damages may also be awarded to the
injured party or parties. The prevailing party or parties in any action under
this section shall also be entitled to attorney’s fees and costs.
( 2 ) For purposes of this subdivision, a play, book, magazine,
newspaper, musical composition, audiovisual work, radio or television
program, single and original work of art, work of political or newsworthy
value, or an advertisement or commercial announcement for any of these
works, shall not be considered a product, article of merchandise, good, or
service if it is fictional or nonfictional entertainment, or a dramatic, literary,
or musical work.
(3) If a work that is protected under paragraph (2) includes within it a
use in connection with a product, article of merchandise, good, or service,
this use shall not be exempt under this subdivision, notwithstanding the
unprotected use’s inclusion in a work otherwise exempt under this
subdivision, if the claimant proves that this use is so directly connected with
a product, article of merchandise, good, or service as to constitute an act of
advertising, selling, or soliciting purchases of that product, article of
merchandise, good, or service by the deceased personality without prior
consent from the person or persons specified in subdivision (c).
( b ) The rights recognized under this section are property rights, freely
transferable or descendible, in whole or in part, by contract or by means of any
trust or any other testamentary instrument, executed before or after January 1,
1985. The rights recognized under this section shall be deemed to have existed
at the time of death of any deceased personality who died prior to January 1,
1985, and, except as provided in subdivision (o), shall vest in the persons
entitled to these property rights under the testamentary instrument of the
deceased personality effective as of the date of his or her death. In the absence
of an express transfer in a testamentary instrument of the deceased personality’s
rights in his or her name, voice, signature, photograph, or likeness, a provision
in the testamentary instrument that provides for the disposition of the residue of
the deceased personality’s assets shall be effective to transfer the rights
recognized under this section in accordance with the terms of that provision.
The rights established by this section shall also be freely transferable or
descendible by contract, trust, or any other testamentary instrument by any
561
subsequent owner of the deceased personality’s rights as recognized by this
section. Nothing in this section shall be construed to render invalid or
unenforceable any contract entered into by a deceased personality during his or
her lifetime by which the deceased personality assigned the rights, in whole or
in part, to use his or her name, voice, signature, photograph, or likeness,
regardless of whether the contract was entered into before or after January 1,
1985.
(c) The consent required by this section shall be exercisable by the person
or persons to whom the right of consent, or portion thereof, has been transferred
in accordance with subdivision (b), or if no transfer has occurred, then by the
person or persons to whom the right of consent, or portion thereof, has passed in
accordance with subdivision (d).
(d) Subject to subdivisions (b) and (c), after the death of any person, the
rights under this section shall belong to the following person or persons and may
be exercised, on behalf of and for the benefit of all of those persons, by those
persons who, in the aggregate, are entitled to more than a one-half interest in the
rights:
(1) The entire interest in those rights belong belongs to the surviving
spouse of the deceased personality unless there are any surviving children
or grandchildren of the deceased personality, in which case one-half of the
entire interest in those rights belong belongs to the surviving spouse.
(2) The entire interest in those rights belong belongs to the surviving
children of the deceased personality and to the surviving children of any
dead child of the deceased personality unless the deceased personality has a
surviving spouse, in which case the ownership of a one-half interest in
rights is divided among the surviving children and grandchildren.
( 3 ) If there is no surviving spouse, and no surviving children or
grandchildren, then the entire interest in those rights belong belongs to the
surviving parent or parents of the deceased personality.
(4) The rights of the deceased personality’s children and grandchildren
are in all cases divided among them and exercisable in the manner provided
in Section 240 of the Probate Code according to the number of the deceased
personality’s children represented. The share of the children of a dead child
of a deceased personality can be exercised only by the action of a majority
of them.
(e) If any deceased personality does not transfer his or her rights under this
section by contract, or by means of a trust or testamentary instrument, and there
are no surviving persons as described in subdivision (d), then the rights set forth
in subdivision (a) shall terminate.
562
(f)
(1) A successor in interest to the rights of a deceased personality under
this section or a licensee thereof may shall not recover damages for a use
prohibited by this section that occurs before the successor in interest or
licensee registers a claim of the rights under paragraph (2).
(2) Any person claiming to be a successor in interest to the rights of a
deceased personality under this section or a licensee thereof may register
that claim with the Secretary of State on a form prescribed by the Secretary
of State and upon payment of a fee as set forth in subdivision (d) of Section
12195 of the Government Code. The form shall be verified and shall include
the name and date of death of the deceased personality, the name and
address of the claimant, the basis of the claim, and the rights claimed.
(3) Upon receipt and after filing of any document under this section, the
Secretary of State shall post the document along with the entire registry of
persons claiming to be a successor in interest to the rights of a deceased
personality or a registered licensee under this section upon the Secretary of
State’s Internet Web site. The Secretary of State may microfilm or
reproduce by other techniques any of the filings or documents and destroy
the original filing or document. The microfilm or other reproduction of any
document under the provisions of this section shall be admissible in any
court of law. The microfilm or other reproduction of any document may be
destroyed by the Secretary of State 70 years after the death of the
personality named therein.
(4) Claims registered under this subdivision shall be public records.
(g) An action shall not be brought under this section by reason of any use of
a deceased personality’s name, voice, signature, photograph, or likeness
occurring after the expiration of 70 years after the death of the deceased
personality.
(h) As used in this section, “deceased personality” means any natural person
whose name, voice, signature, photograph, or likeness has commercial value at
the time of his or her death, or because of his or her death, whether or not during
the lifetime of that natural person the person used his or her name, voice,
signature, photograph, or likeness on or in products, merchandise, or goods, or
for purposes of advertising or selling, or solicitation of purchase of, products,
merchandise, goods, or services. A “deceased personality” shall include,
without limitation, any such natural person who has died within 70 years prior
to January 1, 1985.
( i ) As used in this section, “photograph” means any photograph or
photographic reproduction, still or moving, or any videotape or live television
563
transmission, of any person, such that the deceased personality is readily
identifiable. A deceased personality shall be deemed to be readily identifiable
from a photograph if one who views the photograph with the naked eye can
reasonably determine who the person depicted in the photograph is.
( j ) For purposes of this section, the use of a name, voice, signature,
photograph, or likeness in connection with any news, public affairs, or sports
broadcast or account, or any political campaign, shall not constitute a use for
( k) The use of a name, voice, signature, photograph, or likeness in a
commercial medium shall not constitute a use for which consent is required
under subdivision (a) solely because the material containing the use is
commercially sponsored or contains paid advertising. Rather, it shall be a
question of fact whether or not the use of the deceased personality’s name,
voice, signature, photograph, or likeness was so directly connected with the
commercial sponsorship or with the paid advertising as to constitute a use for
(l) Nothing in this section shall apply to the owners or employees of any
medium used for advertising, including, but not limited to, newspapers,
magazines, radio and television networks and stations, cable television systems,
billboards, and transit advertisements, by whom any advertisement or
solicitation in violation of this section is published or disseminated, unless it is
established that the owners or employees had knowledge of the unauthorized use
of the deceased personality’s name, voice, signature, photograph, or likeness as
prohibited by this section.
(m) The remedies provided for in this section are cumulative and shall be in
addition to any others provided for by law.
( n ) This section shall apply to the adjudication of liability and the
imposition of any damages or other remedies in cases in which the liability,
damages, and other remedies arise from acts occurring directly in this state. For
purposes of this section, acts giving rise to liability shall be limited to the use,
on or in products, merchandise, goods, or services, or the advertising or selling,
or soliciting purchases of, products, merchandise, goods, or services prohibited
by this section.
(o) Notwithstanding any provision of this section to the contrary, if an action
was taken prior to May 1, 2007, to exercise rights recognized under this section
relating to a deceased personality who died prior to January 1, 1985, by a
person described in subdivision (d), other than a person who was disinherited
by the deceased personality in a testamentary instrument, and the exercise of
those rights was not challenged successfully in a court action by a person
described in subdivision (b), that exercise shall not be affected by subdivision
564
(b). In that case, the rights that would otherwise vest in one or more persons
described in subdivision (b) shall vest solely in the person or persons described
in subdivision (d), other than a person disinherited by the deceased personality
in a testamentary instrument, for all future purposes.
(p) The rights recognized by this section are expressly made retroactive,
including to those deceased personalities who died before January 1, 1985.
Added Stats 1984 ch 1704 § 1, as CC § 990. Amended Stats 1988 ch 113 § 2, effective
May 25, 1988, operative July 1, 1988. Amended and renumbered by Stats 1999 ch 998 § 1
(SB 209), ch 1000 § 9.5 (SB 284); Stats 2007 ch 439 § 1 (SB 771), effective January 1,
2008; Stats 2009 ch 88 § 15 (AB 176), effective January 1, 2010; Stats 2010 ch 20 § 1 (AB
585), effective January 1, 2011; Stats 2011 ch 296 § 35 (AB 1023), effective January 1,
2012.
Annotations
Cases
Milton H. Greene Archives Inc. v. Marilyn Monroe LLC , 692 F.3d 983 (9th Cir. 2012) .
The estate of Marilyn Monroe and the successor in interest consistently argued since
Monroe’s death that she was a domiciliary of New York, not California. This resulted in
avoidance of estate and other taxes that would have been owed to California. Unlike
California, New York does not recognize a celebrity’s post mortem right of publicity. In this
action the Monroe parties argued that she died a domiciliary of California so as to assert the
post mortem right of publicity in section 3344.1. The court held that the Monroe parties are
judicially estopped from contradicting the nearly forty years of asserting that she was a New
York domiciliary. As a consequence the Monroe parties cannot assert claims under section
3344.1.
TITLE 3
SPECIFIC AND PREVENTIVE RELIEF

CHAPTER 2
SPECIFIC RELIEF
ARTICLE 3
565
Specific Performance of Obligations
§ 3390. Contracts Not Subject to Specific Performance.

The following obligations cannot be specifically enforced:
1. An obligation to render personal service;
2. An obligation to employ another in personal service;
3 . An agreement to perform an act which the party has not power
lawfully to perform when required to do so;
4 . An agreement to procure the act or consent of the wife of the
contracting party, or of any other third person; or,
5. An agreement, the terms of which are not sufficiently certain to make
the precise act which is to be done clearly ascertainable.
Leg.H. 1872, 1961 ch. 461.
CHAPTER 3
PREVENTIVE RELIEF
An injunction may not be granted:
(a) To stay a judicial proceeding pending at the commencement of the
action in which the injunction is demanded, unless this restraint is necessary
to prevent a multiplicity of proceedings.
(b) To stay proceedings in a court of the United States.
(c) To stay proceedings in another state upon a judgment of a court of
that state.
(d) To prevent the execution of a public statute, by officers of the law,
for the public benefit.
(e) To prevent the breach of a contract the performance of which would
not be specifically enforced, other than a contract in writing for the rendition
of personal services from one to another where the promised service is of a
special, unique, unusual, extraordinary, or intellectual character, which
gives it peculiar value, the loss of which cannot be reasonably or adequately
566
compensated in damages in an action at law, and where the compensation
for the personal services is as follows:
(1) As to contracts entered into on or before December 31, 1993, the
minimum compensation provided in the contract for the personal
services shall be at the rate of six thousand dollars ($6,000) per annum.
( 2) As to contracts entered into on or after January 1, 1994, the
criteria of subparagraph (A) or (B), as follows, are satisfied:
(A) The compensation is as follows:
(i) The minimum compensation provided in the contract shall
be at the rate of nine thousand dollars ($9,000) per annum for the
first year of the contract, twelve thousand dollars ($12,000) per
annum for the second year of the contract, and fifteen thousand
dollars ($15,000) per annum for the third to seventh years,
inclusive, of the contract.
(ii) In addition, after the third year of the contract, there shall
actually have been paid for the services through and including the
contract year during which the injunctive relief is sought, over
and above the minimum contractual compensation specified in
clause (i), the amount of fifteen thousand dollars ($15,000) per
annum during the fourth and fifth years of the contract, and thirty
thousand dollars ($30,000) per annum during the sixth and
seventh years of the contract. As a condition to petitioning for an
injunction, amounts payable under this clause may be paid at any
time prior to seeking injunctive relief.
( B ) The aggregate compensation actually received for the
services provided under a contract that does not meet the criteria of
subparagraph (A), is at least 10 times the applicable aggregate
minimum amount specified in clauses (i) and (ii) of subparagraph
(A) through and including the contract year during which the
injunctive relief is sought. As a condition to petitioning for an
injunction, amounts payable under this subparagraph may be paid at
any time prior to seeking injunctive relief.
( 3 ) Compensation paid in any contract year in excess of the
minimums specified in subparagraphs (A) and (B) of paragraph (2) shall
apply to reduce the compensation otherwise required to be paid under
those provisions in any subsequent contract years. However, an
injunction may be granted to prevent the breach of a contract entered into
between any nonprofit cooperative corporation or association and a
member or stockholder thereof in respect to any provision regarding the
567
sale or delivery to the corporation or association of the products
produced or acquired by the member or stockholder.
(f) To prevent the exercise of a public or private office, in a lawful
manner, by the person in possession.
(g) To prevent a legislative act by a municipal corporation.
Leg.H. 1872, 1874 p. 267, 1919 p. 328, 1925 p. 829, 1992 ch. 177, 1993 ch. 5,
effective April 3, 1993, ch. 836.
Annotations
Cases
Motown Record Corp. v. Teena Marie (2d Dist. 1984) 160 Cal. App. 3d 123, 207 Cal.
Rptr. 574. Motown sued Teena Marie for breach of the exclusivity provision in their
recording agreement. The Court of Appeal held that an option clause in an agreement which
gives the employer the option to pay the artist at least $6,000 annually does not satisfy the
minimum compensation requirement of Civ. Code § 3423. The Court of Appeal held also that
Civ. Code § 3423 is to be applied only to artists who, on entering into the contract, have
achieved distinction in their field. When she signed her contract, Teena Marie was unknown
in the music business.
MCA Records, Inc. v. Newton-John (2d Dist. 1979) 90 Cal. App. 3d 18, 23–24, 153 Cal.
Rptr. 153. MCA sued Olivia Newton-John for breach of an employment agreement providing
for an initial term of two years with three one-year options. Newton-John failed to perform
and MCA extended the term of the agreement pursuant to contractual provisions. The Court
of Appeal modified the trial court’s order for a prohibitory injunction for a period of seven
years, or the statutory maximum under Lab. Code § 2855, reasoning that if Newton-John had
performed under the contract that MCA could not enjoin her from recording for competitors
at the end of five years, and so Newton-John’s failure to perform under the contract cannot
extend the term of the contract beyond its specified five years.
Foxx v. Williams (2d Dist. 1966) 244 Cal. App. 2d 223, 236, 52 Cal. Rptr. 896. The trial
court enjoined Red Foxx from working for any record company other than Williams,
pursuant to an exclusivity clause, for as long as Foxx earned more than the statutory
minimum of $6,000 per year. The Court of Appeal reversed, holding that Civ. Code § 3423
requires that the artist be guaranteed the $6,000 annual compensation in the contract.
Articles
Note, Statutory Minimum Compensation and the Granting of Injunctive Relief to
Enforce Personal Service Contracts in the Entertainment Industries: The Need for
Legislative Reform, 52 S. Cal. L. Rev. 489 (1979).
TITLE 4
568
UNIFORM SINGLE PUBLICATION ACT
This title may be cited as the Uniform Single Publication Act.
Leg.H. 1955 ch. 867.
This act shall be so interpreted as to effectuate its purpose to make uniform
the law of those states or jurisdictions which enact it.
Leg.H. 1955 ch. 867.

No person shall have more than one cause of action for damages for libel or
slander or invasion of privacy or any other tort founded upon any single
publication or exhibition or utterance, such as any one issue of a newspaper or
book or magazine or any one presentation to an audience or any one broadcast
over radio or television or any one exhibition of a motion picture. Recovery in
any action shall include all damages for any such tort suffered by the plaintiff in
all jurisdictions.
Leg.H. 1955 ch. 867.
The single publication rule can apply to a variety of claims. In addition to traditional
defamation claims, it can also apply to invasion of privacy or commercial misappropriation
of identity or likeness under Cal. Civ. Code § 3344. Several cases address the issue,
including the Miller, Long, and Christoff cases annotated below.
Annotations
Cases
Christoff v. Nestle USA, Inc., 47 Cal. 4th 468, 97 Cal. Rptr. 3d 798, 213 P.3d 132
(2009). In review of the Court of Appeals 2007 decision (see annotation under Civ. Code §
3344), the Supreme Court reversed “to the extent that it holds that, for purposes of the
statute of limitations, Christoff’s cause of action necessarily accrued when Nestle first
‘published’ the label … In all other respects the judgment of the Court of Appeal is affirmed
and the matter is remanded to the Court of Appeal for further proceedings.” The Supreme
Court held that the single publication rule applies to Christoff’s claim, but the record must be
further developed to determine whether the printing of the product label over a five-year
period constitutes a “single integrated publication.” This requires further factual inquiry.
569
Miller v. Collectors Universe, Inc., 154 Cal. App. 4th 1047, 65 Cal. Rptr. 3d 351
(2007). The single publication rule can apply to a Cal. Civ. Code § 3344 claim if there is a
dissemination to a mass audience. See annotation for this case under Cal. Civ. Code § 3344
above.
Long v. The Walt Disney Co., 116 Cal. App. 4th 868, 10 Cal. Rptr. 3d 836 (2004) .
Computer-altered (‘morphed’) sixth grade photographs of plaintiffs were used on national
television broadcasts. More than two years after the last broadcast, plaintiffs sued for
violation of the right of publicity, appropriation of their likenesses, and intentional infliction
of emotional distress. The court held that the Uniform Single Publication Act (“USPA”),
Civil Code § 3425.1 et seq., applies to all their causes of action and that their claims were
barred by the statute of limitations. Furthermore, the accrual of their causes of action are not
delayed by the discovery rule. When images are published or broadcast, the statute begins to
run.
Belli v. Roberts Brothers Furs (1st Dist. 1966) 240 Cal. App. 2d 284, 289, 49 Cal.
Rptr. 625. The purpose of the Uniform Single Publication Act was to abrogate the former
rule under which a separate cause of action could accrue for each sale of a copy of a
newspaper, book, or other publication.

A judgment in any jurisdiction for or against the plaintiff upon the
substantive merits of any action for damages founded upon a single publication
or exhibition or utterance as described in Section 3425.3 shall bar any other
action for damages by the same plaintiff against the same defendant founded
upon the same publication or exhibition or utterance.
Leg.H. 1955 ch. 867.
Annotations

This title shall not be retroactive as to causes of action existing on its
effective date.
Leg.H. 1955 ch. 867.
TITLE 5
UNIFORM TRADE SECRETS ACT

§ 3426. How Cited.
570
This title may be cited as the Uniform Trade Secrets Act.
Leg.H. 1984 ch. 1724.
The 2002 edition addressed at some length the uncertain status under California law of
the “inevitable disclosure doctrine.” That doctrine, which has been adopted in other
jurisdictions, was rejected by the Fourth District Court of Appeal in Schlage Lock Co. v.
Whyte, 101 Cal. App. 4th 1443, 125 Cal. Rptr. 2d 277 (2002) (see annotation). In so doing,
the Fourth District reached the same conclusion as some commentators, and federal courts
construing California law. See, Feinberg, “Inevitable” Disclosure of Trade Secrets: The
Seductive Power of the Dark Side, 8 Journal of Antitrust and Unfair Competition Law
Section of the State Bar of California 1 (Spring 1999); Danjaq, LLC v. Sony Corporation
50 U.S.P.Q.2d 1638 (C.D. Cal. 1999) ; and Bayer Corp. v. Roche Molecular Sys., Inc., (N.D.
Cal. 1999).
Annotations
Cases
(2010). The plaintiff sued Intel because Intel had acquired certain software from a
competitor that Silvaco had previously sued for trade secret misappropriation by allegedly
stealing Silvaco’s source code and incorporating it into competing software. The theory
against Intel was that by using the competitor’s software, Intel misappropriated Silvaco’s
trade secrets. The court rejected this theory. Analogizing Intel to a customer who buys and
eats pie made from a secret recipe, the court held that Intel does not misappropriate or use
the alleged trade secret by using the software, any more than a consumer appropriates or uses
the recipe for a pie by buying and eating the pie.
Jasmine Networks, Inc. v. Superior Court, 180 Cal. App. 4th 980, 103 Cal. Rptr. 3d 426
(2009). Plaintiff sued for trade secret misappropriation. Shortly thereafter, plaintiff filed a
Chapter 11 proceeding and sold all its assets, including the trade secrets at issue, but
reserved the right to sue for the misappropriation. At trial, the defendants argued that the sale
of the assets deprived plaintiff of standing to pursue the claim because it had to be the
“current” owner of the trade secret at the time of trial. The trial court agreed and dismissed
the action. The appellate court granted a writ of mandate ordering the trial court to proceed
with the action. There is no such requirement and there is no requirement that the plaintiff
join the buyer of the trade secrets.
Cypress Semiconductor Corp. v. Superior Court , 163 Cal. App. 4th 575, 77 Cal. Rptr.
3d 685 (2008). This case (Silvaco Data Systems) presents the following issue: If someone
steals a trade secret and then sells it to a third party, when does the statute of limitations
begin to run on a trade secret misappropriation claim against the third party? The trade secret
here was source code that a former employee misappropriated and installed in a competitor’s
product. Plaintiff sued the competitor and former employee in 2000. That suit was settled in
2003. The settlement required the competitor to notify its customers. One customer refused
to stop using the product, so plaintiff sued the customer in 2004. The customer argued that
571
the statute of limitations commenced to run when the original misappropriation by the
competitor occurred. The plaintiff argued that the statute does not begin to run until the
customer was on notice. The court adopted a middle ground. The claim accrues against a
particular defendant when a plaintiff knows or has reason to know that the defendant has
misappropriated the trade secret. That does not require actual notice. The court issued a writ
of mandate to the trial court to let the jury decide when the statute of limitations began to
run.
Ali v. Fasteners for Retail, Inc., 544 F. Supp. 2d 1064 (E.D. Cal. 2008). Plaintiff and
Defendant were negotiating for a couple of years regarding certain technology developed by
Plaintiff. The negotiation failed. Plaintiff alleged that Defendant improperly acquired a
variety of information related to the technology and sued on multiple counts, including
breach of fiduciary duty, conversion, and trade secret misappropriation. Defendant moved to
dismiss the fiduciary duty and conversion claims on the ground, inter alia, that they were
preempted by the trade secret misappropriation claim. The court denied the motion because
the allegedly disclosed information went beyond the limits of the trade secret.
Hoffman v. Impact Confections, Inc., 544 F. Supp. 2d 1121 (S.D. Cal. 2008) . Alleged
trade secret claim was defeated because of failure to take reasonable steps to maintain
secrecy.
Therapeutic Research Faculty v. NBTY, Inc. , 488 F. Supp. 2d 991 (E.D. Cal. 2007). An
assigned username and password enabling one person to access Plaintiff’s online publication
qualified as a trade secret.
Ajaxo Inc. v. E*Trade Group Inc. , 135 Cal. App. 4th 21, 37 Cal. Rptr. 3d 221 (2005) .
Ajaxo established a strong circumstantial evidence case that E*Trade violated a
nondisclosure agreement and misappropriated Ajaxo’s trade secrets regarding technology
developed by Ajaxo for the purpose of buying and selling stock over the Internet using
wireless devices.
DVD Copy Control Assn. v. Bunner, 116 Cal. App. 4th 241, 10 Cal. Rptr. 3d 185
(2004). In the continuing saga of this litigation, on remand from the Supreme Court, the
court of appeal held that the plaintiff’s encryption code no longer qualified as a trade secret
because by the time Bunner had posted the decryption code on his website, the “secret was
out” in that the fact that the code had been reverse engineered was well known and had been
publicized all over the world.
DVD Copy Control Assn. v. Bunner, 31 Cal. 4th 864, 4 Cal. Rptr. 3d 69 (2003). This
case involved the decryption of DVD security which prevents duplication. The decryption
software had been posted to an Internet site. The appellate court, assuming that the decryption
software was a trade secret and had been obtained through improper means nevertheless held
that the posting on the Internet could not be enjoined because of First Amendment concerns,
finding that this was an unconstitutional prior restraint. (See annotation below.) The Supreme
Court reversed the judgment of the appellate court. The Supreme Court held that the
injunction here is not a prior restraint.
Sargent Fletcher Inc. v. Able Corp., 110 Cal. App. 4th 1658, 3 Cal. Rptr. 3d 279
(2003). This case involves the allocation of the burden of proof. The plaintiff manufacturer
had contracted with the defendant subcontractor for development of a new in-flight aircraft
refueling system. In that context the manufacturer revealed trade secrets. After the
relationship disintegrated, the subcontractor contracted with the US Air Force to provide a
572
similar device. There was no doubt here that the defendant had access to the plaintiff’s trade
secrets. The defense was that the subcontractor did not use the plaintiff’s trade secrets, but
reverse engineered and independently developed the device. The jury agreed with the
defendant and found no misappropriation. The losing plaintiff argued that the jury should have
been instructed that the burden of proof should have been on the defendant to prove it did not
use the trade secrets. The court refused to change the traditional burden of proof analysis,
i.e., plaintiff has the burden of proof. Once plaintiff has made a prima facie case, defendant
has the burden of producing contrary evidence, but the burden of proof remains on the
plaintiff.
Bourns Inc. v. Raychem Corp., 331 F.3d 704 (9th Cir. 2003) . In a relatively
straightforward misappropriation case, a former employee took confidential strategic plans
and used them for his new employer. Not surprisingly, the jury returned a substantial
compensatory and punitive verdict against the defendants. On appeal the defendants argued
that an instruction which appears to employ the inevitable disclosure doctrine was error. The
Ninth Circuit, acknowledging that California has not adopted the inevitable disclosure
doctrine, held that even if the instruction was erroneous, it was harmless error.
Cadence Design Systems Inc. v. Avant! Corp., 29 Cal. 4th 215, 127 Cal. Rptr. 2d 169
(2002). There is only one claim for trade secret misappropriation, and subsequent
disclosures augment the original claim and do not give rise to a new claim. Consequently, a
release of the claim barred subsequent claims for uses and disclosures subsequent to the
release.
Schlage Lock Co. v. Whyte, 101 Cal. App. 4th 1443, 125 Cal. Rptr. 2d 277 (2002) . This
case squarely rejected the inevitable disclosure doctrine. The inevitable disclosure doctrine,
in the jurisdictions which follow it, allows an employer to obtain injunctive relief against a
departing employee without showing any actual or threatened disclosure, but on the theory
that disclosure of trade secrets to the new employer is “inevitable.” This case also discusses
at length various alleged trade secrets, and articulates reasons why certain matters qualified
as trade secrets and others did not.
Pavlovich v. Superior Court (DVD Copy Control Assoc. Inc.), 91 Cal. App. 4th 409,
109 Cal. Rptr. 2d 909 (2001). This case involves a challenge to personal jurisdiction. The
defendant does not reside in California, and contended that his contacts with California were
insufficient to support personal jurisdiction over him. The claim involves alleged trade secret
misappropriation by the defendant who allegedly published over the Internet software which
defeats special encryption-based copy protection features on DVD’s. The court held that
defendant’s actions directly affected both the motion picture and computer industries, and
that defendant was aware that these industries were centered in California. Therefore, the
court upheld personal jurisdiction under the line of cases which authorize jurisdiction over a
defendant who engages in conduct with knowledge or intention that his conduct will have
direct effects in California.
Hilb Rogal and Hamilton Insurance Services of Orange County, Inc. v. Robb (2d Dist.
1995) 33 Cal. App. 4th 1812, 39 Cal. Rptr. 2d 887 . The court held that an employee’s
conduct informing some of his employer’s clients of his change in employment, and then
complying with the client’s instructions to move their accounts, was lawful even if the
employer’s customer list and other client information constituted trade secrets. This is
because nothing prohibits a client itself from providing the client information to an ex-
employee and instructing the employee to handle the client’s affairs.
573
Courtesy Temporary Service, Inc. v. Camacho (2d Dist. 1990) 222 Cal. App. 3d 1278,
272 Cal. Rptr. 352. Defendant employees misappropriated plaintiff’s customer list and used
it to solicit and pirate plaintiff’s customers and start a new business while still in plaintiff’s
employ. The Court of Appeal held that the customer list was a protectable trade secret
governed by the Uniform Trade Secrets Act, and that defendants are enjoined from using the
list. The court held that the trial court erred in following American Paper (below) in holding
that the customer list was not a trade secret, since the facts in this case are distinguishable.
Scott v. Snelling and Snelling, Inc. (N.D. Cal. 1990) 732 F. Supp. 1034. When applying
Civ. Code § 3426.1 to information belonging to a temporary employment service, customer
lists were not trade secrets as a matter of law when the customers were easily discoverable
through public sources and plaintiffs were able to show they developed their customer list
through their own efforts. Business forms and procedures used were not trade secrets as a
matter of law because they were widely used in the industry. Temporary employee lists were
not trade secrets because plaintiff showed they were independently developed.
American Credit Indemnity Co. v. Sacks (2d Dist. 1989) 213 Cal. App. 3d 622, 634–
636, 262 Cal. Rptr. 92. Enactment of the Uniform Trade Secrets Act ( Civ. Code §§ 3426–
3426.10) did not affect the common law doctrine that a departing employee is free to
announce his or her new affiliation to clients—even trade secret clients—of the firm from
which he or she is departing. However, solicitation of trade secret clients constitutes
misappropriation of trade secrets.
American Paper & Packaging Products, Inc. v. Kirgan (2d Dist. 1986) 183 Cal. App.
3d 1318, 228 Cal. Rptr. 713. Plaintiff, which sold shipping and packaging material, employed
defendants as salespersons. Defendants signed employment agreements prohibiting them
from soliciting plaintiff’s customers for three years after termination of employment;
defendants then established a customer list through their own efforts. The Court of Appeal
upheld the trial court’s denial of the preliminary injunction to prevent defendant from using
the customer list, because the list did not meet the statutory requirement for a “trade secret”
under Civ. Code § 3426.1 that it not be generally known to the public.
Articles
Vaisbort, Protecting Trade Secrets in a Digital Workplace , 31 L.A. Lawyer 18 (March
2008).
Goldstein, The Laundry Route Cases and How Not to Get Taken to the Cleaners , 49
O.C. Lawyer 50 (Sept. 2007).
Depel, Identifying and Protecting Nonindustrial Business Information as Trade
Secret, New Matter, Summer, 1992, 33.
Feldman & Jackson, Protecting Customer Lists, 16 Empl. Rel. L.J. 507 (1991).
Samuels & Johnson, The Uniform Trade Secrets Act: The States’ Response, 24
Creighton L. Rev. 49 (1990).
Allcock, Punishment Versus the Secrecy Requirement; How Long Should a Trade
Secret Last? New Matter, Fall, 1989, at 5.
Menell, An Analysis of the Scope of Copyright Protection for Application Programs,
41 Stan. L. Rev. 1045 (1989).
574
No t e , Inevitable Disclosure Trade Secret Disputes: Dissolutions of Concurrent
Property Interests, 40 Stan. L. Rev. 519 (1988).
Note, The Secret’s Out: California’s Adoption of The Uniform Trade Secrets Act—
Effects on the Employer-Employee Relationship, 20 Loy. L.A. L. Rev. 1167 (1987).
Suttora, The Customer List as a Trade Secret Under California’s Version of the UTSA,
New Matter, Spring, 1987, at 3.
Feldman, The Trade Secrets Protection Cycle, Cal. Law., May, 1986, at 41.
Croll, Customer Lists Protectable as Trade Secrets Under Uniform Trade Secrets Act,
8 CEB Cal. Bus. L. Rep. 121 (1986).
Ostroff, California Enacts the Uniform Trade Secrets Act, 6 CEB Cal. Bus. L. Rep. 181
(1985).
Pooley, Better Protection for Trade Secrets, Cal. Law., August, 1985, at 51.
Dubro, Keeping Trade Secrets in Silicon Valley, Cal. Law., September, 1984, at 43.
As used in this title, unless the context requires otherwise:
(a) “Improper means” includes theft, bribery, misrepresentation, breach
or inducement of a breach of a duty to maintain secrecy, or espionage
through electronic or other means. Reverse engineering or independent
derivation alone shall not be considered improper means.
(b) “Misappropriation” means:
(1) Acquisition of a trade secret of another by a person who knows
or has reason to know that the trade secret was acquired by improper
means; or
(2) Disclosure or use of a trade secret of another without express or
implied consent by a person who:
( A) Used improper means to acquire knowledge of the trade
secret; or
(B) At the time of disclosure or use, knew or had reason to know
that his or her knowledge of the trade secret was:
( i ) Derived from or through a person who had utilized
improper means to acquire it;
(ii) Acquired under circumstances giving rise to a duty to
maintain its secrecy or limit its use; or
(iii) Derived from or through a person who owed a duty to the
575
person seeking relief to maintain its secrecy or limit its use; or
(C) Before a material change of his or her position, knew or had
reason to know that it was a trade secret and that knowledge of it had
been acquired by accident or mistake.
(c) “Person” means a natural person, corporation, business trust, estate,
trust, partnership, limited liability company, association, joint venture,
government, governmental subdivision or agency, or any other legal or
commercial entity.
( d ) “Trade secret” means information, including a formula, pattern,
compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or potential, from
not being generally known to the public or to other persons who can
obtain economic value from its disclosure or use; and
( 2 ) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
Leg.H. 1984 ch. 1724, 1994 ch. 1010.
Annotations
Cases
San Jose Construction, Inc. v. S.B.C.C., Inc., 155 Cal. App. 4th 1528, 67 Cal. Rptr. 3d
54 (2007). The parties are competitors in the commercial construction business. A project
manager from plaintiff quit and went to work for defendant. He took with him copies of
project files for several jobs. The trial court had ruled that the information in the project
files, consisting of hundreds of documents, detailed project information, subcontractor bids,
and the like, did not qualify as a trade secret and granted summary judgment for the
defendant. The appellate court reversed. There is at least a triable issue whether this
information constitutes a trade secret.
Yield Dynamics, Inc. v. TEA Systems Corp. , 154 Cal. App. 4th 547, 66 Cal. Rptr. 3d 1
(2007). Eight software routines or subroutines were used by plaintiff’s former programmer
for a competitor. After a bench trial, the trial court ruled that these routines did not qualify as
trade secrets. The appellate court affirmed. The plaintiff failed to adduce sufficient evidence
to establish that these software procedures had independent economic value.
GAB Business Services, Inc. v. Lindsey & Newsom Claim Services, Inc. (2000) 83 Cal.
App. 4th 409, 99 Cal. Rptr. 2d 665. An officer and employee left his employer and took 17
other employees with him to work for a competitor. The plaintiff sued for breach of fiduciary
duty, unfair competition, interference with its employment contracts with its employees, and
trade secret misappropriation. Plaintiff lost at trial on all counts. The appellate court reversed
as to the first two claims, i.e., breach of fiduciary duty and unfair competition. The trial court
576
had refused to instruct the jury that the defendant owed a fiduciary duty as a matter of law and
left the issue to the jury to decide. This was error. As a corporate officer, the defendant owed
the plaintiff a fiduciary duty as a matter of law and the jury should have been so instructed.
The appellate court remanded the breach of fiduciary duty and unfair competition claims for
trial. There were no other viable claims, however. The appellate court refused to recognize a
novel tort claim for interference with the contract of employment. The trade secret claim
was based on the misappropriation of the plaintiff’s confidential salary structure for its
employees. Although this information qualified as secret, it did not have independent
economic value. The court held that the plaintiff “mistakenly assumed that secrecy equals
economic value.” To qualify as a trade secret the information must also have “independent
economic value” and the court would not disturb the jury’s conclusion on this issue.
PMC, Inc. v. Kadisha (2000) 78 Cal. App. 4th 1368, 93 Cal. Rptr. 2d 663 . This case
concerned the alleged wholesale misappropriation of trade secrets and confidential
information by a group of employees who left their employer and formed a competing
business. The issue on appeal was whether individuals who later invested in the new company
and became officers and directors of it, could have personal liability for trade secret
misappropriation and other torts. These individual defendants had obtained summary
judgment on the basic ground that they did not participate in any wrongful conduct
themselves, but merely joined the new company after the fact and after their investigation
indicated that the company was not engaging in wrongful conduct. Reversing the summary
judgment, the appellate court held that these individuals could have personal liability for their
subsequent participation. Essentially, they could be liable for misappropriation on the theory
that they participated in the company’s continuing use of trade secrets which had been
improperly obtained and they had reason to know these facts. Their potential liability in such
a scenario is direct, not vicarious.
Imax Corp. v. Cinema Technologies, Inc. (9th Cir. 1998) 152 F.3d 1161, 47 U.S.P.Q.2d
1821. This case involves Imax’s “rolling loop” projectors and the alleged misappropriation of
trade secrets by a competitor. Two noteworthy aspects of this case concern the interplay
between patent and trade secret law and the difficulty a plaintiff can have in adequately
identifying its alleged trade secrets. A substantial part of Imax’s claimed trade secrets could
be discerned from its various patents, which upon expiration left the technology in the public
domain. Imax contended that the precise “dimensions and tolerances” of its projection
system were not discernible by reference to its published patents, and that the “dimensions
and tolerances” were trade secrets, but Imax apparently failed to identify in discovery
responses the precise dimensions and tolerances it claimed as trade secrets. Summary
judgment was granted and affirmed on the trade secret claims because Imax failed to carry its
burden of identifying “exactly what dimensions and tolerances it claimed as trade secrets.”
Pillsbury, Madison & Sutro v. Schectman (1997) 55 Cal. App. 4th 1279, 64 Cal. Rptr.
2d 698, rehearing denied, review denied. A trade secret may be embodied in documents or
other personal property, but the trade secret itself is distinct from documents. A trade secret
has an intrinsic value which is based upon or at least preserved by being safeguarded from
disclosure. In this case, documents which were removed from a law firm were not trade
secrets, but they should not have been taken, and the court properly ordered their return.
Morlife, Inc. v. Perry (1997) 56 Cal. App. 4th 1514, 66 Cal. Rptr. 2d 731, 45
U.S.P.Q.2d 1741 . Roof repair business’s customer list was a trade secret. Use by former
employees was a misappropriation for which a permanent injunction was appropriate relief. A
monetary award which was a “reasonable approximation” of defendant’s unjust enrichment
577
was upheld.
Metro Traffic Control, Inc. v. Shadow Traffic Network (2d Dist. 1994) 22 Cal. App. 4th
853, 27 Cal. Rptr. 2d 573. Plaintiff, a company that provided traffic reporting services to
radio stations, sought to enforce non-competition clauses against former reporter-
employees who went to work for a competitor. Plaintiff claimed that a particular radio
station had special requirements regarding the “quality, sound, and personality” of traffic
reporters and that plaintiff’s knowledge of these requirements was a trade secret that it had
conveyed to its reporters in the course of their employment. The court of appeal noted that
the quality, sound, and personality of plaintiff’s reporters were subjective dimensions of
employees hired by the plaintiff and found acceptable by the radio station and not part of an
informational base belonging to plaintiff. The court observed that although plaintiff may have
conveyed the station’s preferences and requirements to its employees, this did not amount to
the compilation of an intangible property right owned by the employer. The court stated that
actors, musicians, athletes, and others are frequently trained, tutored, and coached to satisfy
the requirements of their sponsors and audiences, but their talents belong to them to contract
away as they please. The court concluded that simply hiring personnel who possess the
requirements specified by a customer does not convert the employee into a trade secret. In
other words, a stable of trained and talented at-will employees do not constitute an
employer’s trade secret. The court further noted that the radio station’s requirements could
not be a trade secret belonging to the plaintiff because information concerning those
requirements could be obtained directly from the station by anyone who contracted with the
station.
Vacco Industries, Inc. v. Van Den Berg (2d Dist. 1992) 5 Cal. App. 4th 34, 6 Cal. Rptr.
2d 602. A trade secret is protectable only so long as it is kept secret by the party creating it.
Trade secret protection fundamentally rests on the theory that trade secrets are protected
only when they are improperly acquired by a defendant, usually through theft or a breach of
confidence.
ABBA Rubber Co. v. Seaquist (4th Dist. 1991) 235 Cal. App. 3d 1, 286 Cal. Rptr. 518 .
This Fourth District case declined to follow the Second District case of American Paper &
Packaging Products, Inc. v. Kirgan (see annotations to Civ. Code § 3426) on the issue of
whether information that is not yet known to competitors but that is “readily ascertainable”
qualifies as a trade secret. The court held that plaintiff’s customer list could qualify as a trade
secret even though the identity of customers on the list was “readily ascertainable.”
Under American Paper & Packaging Products, Inc. v. Kirgan, a customer list is one of
the types of information that can qualify as a trade secret. Defendants contended that while
plaintiff did present evidence that its customer list was valuable, it did not demonstrate that it
was valuable because it was secret. The court in American Paper stated that the identity of
businesses that buy from a particular provider of goods or services is a trade secret only if
the competitors did not previously have this knowledge. The information at issue in both
American Credit Indemnity Co. v. Sacks (see annotations to Civ. Code § 3426), and
Courtesy Temporary Service, Inc. v. Camacho (see annotations to Civ. Code § 3426) would
qualify as a trade secret under this standard.
I n ABBA, plaintiff presented substantial evidence that it was not generally known to
competitors that the businesses on plaintiff’s customer list were consumers of plaintiff’s
goods. Therefore, the information was valuable because it was unknown to others and
qualified as a trade secret. The court noted that a fact is not excluded from being a trade
578
secret in California simply by virtue of being “readily ascertainable” (for example, in trade
directories or telephone books), since the Legislature has purposely chosen to exclude the
“readily ascertainable” element in the definition of “trade secret” used in Civ. Code §
3426.1(d)(1). Accordingly, the court in ABBA declined to follow American Paper &
Packaging Products, Inc. v. Kirgan (see annotations to Civ. Code § 3426) to the extent the
latter case suggested that information is not protectable as a trade secret if it is either known
or readily ascertainable.
( a ) Actual or threatened misappropriation may be enjoined. Upon
application to the court, an injunction shall be terminated when the trade secret
has ceased to exist, but the injunction may be continued for an additional period
of time in order to eliminate commercial advantage that otherwise would be
derived from the misappropriation.
(b) If the court determines that it would be unreasonable to prohibit future
use, an injunction may condition future use upon payment of a reasonable royalty
for no longer than the period of time the use could have been prohibited.
(c) In appropriate circumstances, affirmative acts to protect a trade secret
may be compelled by court order.
Leg.H. 1984 ch. 1724.
Annotations
Cases
Central Valley General Hospital v. Smith , 162 Cal. App. 4th 501, 75 Cal. Rptr. 3d 771
(2008). A threatened misappropriation of a trade secret may be enjoined. California’s
rejection of the inevitable disclosure doctrine does not change this result.
Huong Que, Inc. v. Luu, 150 Cal. App. 4th 400, 58 Cal. Rptr. 3d 527 (2007) . Alleged
misappropriation of a customer list by an employee may be enjoined on a theory of breach of
the duty of loyalty. The significance of this case is that a customer list may be protected on a
basis other than trade secret.
Readylink Healthcare v. Cotton, 126 Cal. App. 4th 1006, 24 Cal. Rptr. 3d 720 (2005) .
A preliminary injunction was properly issued to enjoin a former employee, who had
misappropriated trade secrets, from soliciting employees and customers of the former
employer.
Dodge, Warren & Peters Ins. Services, Inc. v. Riley , 105 Cal. App. 4th 1414, 130 Cal.
Rptr. 2d 385 (2003), vacated, Taiheiyo Cement Corp. v. Superior Court , 117 Cal. App. 4th
380, 12 Cal. Rptr. 3d 32 (2004). A preliminary injunction requiring Defendants to preserve
electronic data was appropriate in a case alleging multiple counts, including trade secret
misappropriation.
579
DVD Copy Control Assn. v. Bunner , 93 Cal. App. 4th 648, 113 Cal. Rptr. 2d 338
(2001). The plaintiff sought and obtained a preliminary injunction against defendant and
others to prevent use and disclosure of decryption software which defeats encryption-coded
copy protection on DVD’s. The software had been decoded by a teenager in Norway who then
posted the decrypted source code on the Internet. Defendant and others copied and reposted
the decryption code. The appellate court reversed the preliminary injunction on First
Amendment grounds. The court assumed for the sake of discussion that the plaintiff could
establish a trade secret and that it had been acquired or disclosed by improper means, but
nevertheless held that the First Amendment protected the defendant’s actions. The appellate
court held that the trial court’s prohibition of future disclosures of the decryption code was a
prior restraint on Bunner’s First Amendment right to publish the program.
(Comment: It is questionable whether this is an appropriate application of the prior
restraint doctrine. A prior restraint by definition is a prohibition in advance of the expression
at issue. Here, the injunction appears to be directed at preventing continued publication of
source code which had already been published. This would appear not to be a “prior”
restraint.)
§ 3426.3. Misappropriation—Recovery of Damages for

Loss.
( a ) A complainant may recover damages for the actual loss caused by
misappropriation. A complainant also may recover for the unjust enrichment
caused by misappropriation that is not taken into account in computing damages
for actual loss.
(b) If neither damages nor unjust enrichment caused by misappropriation are
provable, the court may order payment of a reasonable royalty for no longer than
the period of time the use could have been prohibited.
(c) If willful and malicious misappropriation exists, the court may award
exemplary damages in an amount not exceeding twice any award made under
subdivision (a) or (b).
Leg.H. 1984 ch. 1724.
Annotations
Cases
Ajaxo Inc. v. E*Trade Financial Corp., 187 Cal. App. 4th 1295, 115 Cal. Rptr. 3d 168
(2010). After liability for trade secret misappropriation had been established in a prior trial,
the action proceeded to a trial on damages. Ajaxco sought to recover E*Trade’s profits, but
the jury believed E*Trade’s evidence that it had made no profits from the misappropriation.
Under section 3426.3, a plaintiff can recover its damages or defendant’s unjust enrichment,
or if neither is “provable,” the court can award a reasonable royalty. When the jury returned a
580
verdict of zero, Ajaxco sought a reasonable royalty. The trial court ruled that unjust
enrichment was provable and therefore denied a royalty. The appellate court reversed and
held that where plaintiff fails as a matter of fact to prove unjust enrichment, it is entitled to a
reasonable royalty.
Cacique, Inc. v. Robert Reiser & Co., Inc. (9th Cir. 1999) 169 F.3d 619, 49 U.S.P.Q.2d
1997. This case involves a discovery dispute. Plaintiff sought discovery of a competitor’s
sales figures to support a claim to reasonable royalty. The district court ruled that such
information was relevant because a “reasonable royalty might be the appropriate measure of
its damages.” The appellate court reversed. The remedy of reasonable royalty would only be
available when the court finds that neither actual damages to the holder of the trade secret nor
unjust enrichment to the user is provable. Here, the remedy of unjust enrichment was
available and so the plaintiff could not recover a royalty and therefore the requested
discovery was irrelevant.
Robert L. Cloud & Associates, Inc. v. Mikesell (1999) 69 Cal. App. 4th 1141, 82 Cal.
Rptr. 2d 143, as modified. A former employer’s award of damages and royalties against its
former employee for the misappropriation of trade secrets was reversed on the grounds that
under Civ. Code § 3426.3 damages and royalties are alternative remedies, and the statute
does not allow for assessment of both.

If a claim of misappropriation is made in bad faith, a motion to terminate an
injunction is made or resisted in bad faith, or willful and malicious
misappropriation exists, the court may award reasonable attorney’s fees and
costs to the prevailing party. Recoverable costs hereunder shall include a
reasonable sum to cover the services of expert witnesses, who are not regular
employees of any party, actually incurred and reasonably necessary in either, or
both, preparation for trial or arbitration, or during trial or arbitration, of the
case by the prevailing party.
January 1, 2007.
Cases
Khavarian Enterprises Inc. v. Commline Inc., 216 Cal. App. 4th 310, 156 Cal. Rptr. 3d
657 (2013). Plaintiff and Defendant reached a settlement at mediation which reserved only
the issues of whether plaintiff was entitled to costs and attorney’s fees. The trial court
refused to entertain a motion for attorney’s fees, reasoning that the case was settled so the
plaintiff could not be a prevailing party. The appellate court reversed. The settlement reserved
this issue and the trial court is required to make a determination under 3426.4 whether
defendant engaged in willful and malicious misappropriation even though this would require
the court to take evidence on the issue.
SASCO v. Rosendin Electric Inc., 207 Cal. App. 4th 837, 143 Cal. Rptr. 3d 828 (2012) .
The plaintiff speculated that some former employees took alleged trade secrets with them to
a competitor, but there was no supporting evidence. This claim was therefore objectively
581
baseless which supports a bad faith finding and an award of attorney’s fees in favor of the
defendants after the plaintiff voluntarily dismissed the case with a summary judgment motion
pending.
FLIR Systems, Inc. v. Parrish, 174 Cal. App. 4th 1270, 95 Cal. Rptr. 3d 307 (2009) .
Plaintiff failed to prove that defendants, who were former employees setting up a new
business, had misappropriated trade secrets. The plaintiff’s claim was predicated on an
inevitable disclosure theory, which is not the law in California. The evidence indicated that
there was no misappropriation or threatened misappropriation, and that the claim was being
asserted because plaintiff did not want to face competition by its former employees. Finding
that the claim was objectively specious and in subjective bad faith, the court affirmed an
award of attorney’s fees to the prevailing defendants of more than $1.6 million.
CytoDyn of New Mexico, Inc. v. Amerimmune Pharmaceuticals, Inc., 160 Cal. App. 4th
288, 72 Cal. Rptr. 3d 600 (2008). This statute does not allow recovery of attorney’s fees for
a claim of misappropriation of patents or trademarks. The complaint had also mentioned
trade secrets, but the complaint did not allege a misappropriation of trade secrets claim.
Therefore, the award of attorney’s fees under Civ. Code § 3426.4 was reversed on appeal.
CRST Van Expedited, Inc. v. Werner Enters. , 479 F.3d 1099 (9th Cir. 2007) . Award of
attorney’s fees for filing trade secret misappropriation claim in bad faith was affirmed on
appeal.

In an action under this title, a court shall preserve the secrecy of an alleged
trade secret by reasonable means, which may include granting protective orders
in connection with discovery proceedings, holding in-camera hearings, sealing
the records of the action, and ordering any person involved in the litigation not
to disclose an alleged trade secret without prior court approval.
Leg.H. 1984 ch. 1724.
In addition to section 3426.5, California statutes contain several provisions regarding
protective orders to preserve trade secrets. Evidence Code §§ 1060–1063 pertain to trade
secret protection in criminal proceedings. Code of Civil Procedure § 2025(i)(13) provides
for a protective order to preserve trade secrets in a deposition; § 2030(e)(6) applies to
interrogatories; § 2031(f)(5) applies to document production; and § 2033(e)(4) applies to
requests for admission. A significant case regarding the issuance of a protective order to
preserve trade secrets is Stadish v. Superior Court (1999) 71 Cal. App. 4th 1130, 84 Cal.
Rptr. 2d 350, which held that a protective order for trade secrets in a civil case should follow
the procedures for protecting trade secrets in a criminal case set forth in Evidence Code §§
1060 and 1061. (See annotations to Evidence Code § 1060.) It is important to note that §
3426.5 by its terms only applies to “an action under this title,” i.e., an action which alleges
trade secret misappropriation. See annotation for In re Providian Credit Card Cases, 96
Cal. App. 4th 292, 116 Cal. Rptr. 2d 833 (2002) . The issue of trade secret protection can
obviously surface in any type of criminal or civil proceeding, in which case a protective order
should be sought under the applicable statutes in the Code of Civil Procedure and the
582
Evidence Code. Nevertheless, it may be advisable to call the court’s attention to the UTSA,
and in particular § 3426.5, for guidance in deciding whether to issue and how to fashion an
appropriate order.
There may be tradeoffs in obtaining a protective order to prevent disclosure of trade
secrets. In Steiny and Company v. California Electric Supply Co. (2000) 79 Cal. App. 4th
285, 93 Cal. Rptr. 2d 920, as a result of a protective order to protect trade secrets, the
manner in which a party’s damages was calculated was off limits. Other than the broad brush
description of the total damages, no discovery was possible. As a result the court held that no
damages evidence could be presented to the jury. This result is consistent with the general
rule that if the privileged information goes to the heart of the claim, the holder of the
privilege must choose between disclosing the information or giving up the claim.
Annotations
Cases
In re Providian Credit Card Cases, 96 Cal. App. 4th 292, 116 Cal. Rptr. 2d 833
(2002). In a lawsuit which does not arise under the UTSA, § 3426.5 does not apply. Thus,
whether documents containing alleged trade secrets are to be preserved as confidential is
governed by California Rules of Court Rules 243.1 and 243.2. This case involved the
designation of numerous documents as confidential under a stipulated protective order.
Plaintiffs moved to unseal the documents. Finding that none of the documents qualified for
confidential treatment the trial court granted the motion. The court of appeal affirmed,
finding for various reasons that none of the documents qualified as trade secrets.

An action for misappropriation must be brought within three years after the
misappropriation is discovered or by the exercise of reasonable diligence
should have been discovered. For the purposes of this section, a continuing
misappropriation constitutes a single claim.
Leg.H. 1984 ch. 1724.
Annotations
Cases
Glue-Fold, Inc. v. Slautterback Corporation (2000) 82 Cal. App. 4th 1018, 98 Cal.
Rptr. 2d 661. The plaintiff’s claims for trade secret misappropriation were barred by the
three-year statute of limitations from the date when the plaintiff discovered the wrong. Here
the plaintiff’s complaint alleged it first discovered the wrong three years and four months
before it filed suit, and so its own pleading defeated its claim. The plaintiff tried to resurrect
its claim by arguing that the defendant had engaged in two discrete and different periods of
583
misappropriation with a hiatus of a couple of years in between and the suit had been filed less
than three years after the second period of misappropriation. This argument failed, because
the continuing misappropriation gives only one cause of action and the statute of limitations
begins from the date when the plaintiff discovered or should have discovered the acts giving
rise to the claim.
Kolani v. Gluska (1998) 64 Cal. App. 4th 402, 75 Cal. Rptr. 2d 257 . The trial court’s
order sustaining a demurrer was reversed on grounds that the trial court should have granted
leave to amend to plead claims for theft of confidential information and trade secrets where
new claims for such misappropriation would relate back for limitation purposes to the date of
filing the original complaint, because such claims would be based on the same operative facts
as originally alleged.
Ashton-Tate Corp. v. Ross (9th Cir. 1990) 916 F.2d 516, 523–524, 16 U.S.P.Q. 2d
1541. Ninth Circuit affirmed district court’s application of the statute of limitations to a
trade secret misappropriation case and its finding that the claim was time-barred. The initial
misappropriation occurred in February 1985 when the alleged trade secrets were disclosed;
plaintiffs learned of this disclosure in March 1985, at which point the three-year statute was
tolled. The court rejected plaintiffs’ argument that the statute was tolled only in 1988 when
they discovered the actual use of the trade secrets.

(a) Except as otherwise expressly provided, this title does not supersede
any statute relating to misappropriation of a trade secret, or any statute
otherwise regulating trade secrets.
(b) This title does not affect (1) contractual remedies, whether or not based
upon misappropriation of a trade secret, (2) other civil remedies that are not
based upon misappropriation of a trade secret, or (3) criminal remedies,
whether or not based upon misappropriation of a trade secret.
(c) This title does not affect the disclosure of a record by a state or local
agency under the California Public Records Act (Chapter 3.5 (commencing with
Section 6250) of Division 7 of Title 1 of the Government Code). Any
determination as to whether the disclosure of a record under the California
Public Records Act constitutes a misappropriation of a trade secret and the
rights and remedies with respect thereto shall be made pursuant to the law in
effect before the operative date of this title.
Leg.H. 1984 ch. 1724.
584
Section 3426.7 states that it does not supersede contractual remedies and it does not
supersede noncontractual remedies “not based on misappropriation of a trade secret.” Cases
addressing the extent to which CUTSA supersedes or preempts noncontractual remedies with
respect to misuse of confidential information that does not rise to the level of a trade secret
by an employee or former employee fall into two camps. One line of cases state that only
confidential information that rises to the level of a trade secret can be protected by tort
remedies. See e.g., Mattel, Inc. v. MGA Entertainment, Inc., 782 F. Supp. 2d 911, 987 (C.D.
Cal. 2010) (UTSA supersedes claims based on the misappropriation of confidential
information, whether or not that information meets the statutory definition of a trade secret.)
A second view is that only claims based specifically on a trade secret are superseded, and
claims, such as breach of loyalty, based on misuse of confidential information that does not
rise to the level of a trade secret are not preempted. See PQ Labs, Inc. v. Yang Qi , 2012 U.S.
Dist. LEXIS 79354 (N.D. Cal. June 7, 2012) (If a claim is based on confidential information
other than a trade secret, as that term is defined in CUTSA, it is not preempted.). This issue is
discussed in Brutocao on Does CUTSA Preempt a Common Law Breach of Loyalty Claim?
2012 Emerging Issues 6846. In any event because CUTSA specifically states that it does not
supersede contractual remedies, it is advisable for employers to have employees sign
nondisclosure agreements whereby the employee agrees that the employer’s confidential
information may not be used or disclosed for any purpose other than the employer’s
business. Then if the employee leaves employment to compete with the employer either in a
new venture or for a competitor, and uses or discloses the employer’s confidential
information, the employer may have a contractual remedy in addition to a potential trade
secret misappropriation claim.
Annotations
Cases
Angelica Textile Services Inc. v. Park , 220 Cal. App. 4th 495, 163 Cal. Rptr. 3d 192
(2013). Former employee set up a competing laundry business and took numerous
documents from the company. The trial court dismissed Angelica’s non-trade secret claims
on the ground that they were displaced by the trade secret claim. At trial the jury found that
Park did not misappropriate any protectable trade secrets. On appeal, the plaintiff argued that
the trial court should not have granted summary adjudication dismissing the non-trade secret
claims. The appellate court agreed. Whether the other claims are displaced by the trade
secret claim depends on whether they are based on the same operative facts. The claims for
breach of contract, breach of fiduciary duty, unfair competition, interference with business
relations, and conversion were not displaced by the trade secret claim and should not have
been dismissed.
(2010). The UTSA supersedes other causes of action that are based on the misappropriation
of a trade secret, including conversion and unfair competition.
K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc. , 171 Cal.
App. 4th 939, 90 Cal. Rptr. 3d 247 (2009). The California Uniform Trade Secret Act
585
(CUTSA) preempts claims that are based on the same nucleus of facts as the claim for
misappropriation of trade secrets. The appellant’s claims for breach of confidence,
interference with contract, and statutory unfair competition were held preempted by the
CUTSA claim.
Articles
Brutocao on Does CUTSA Preempt a Common Law Breach of Loyalty Claim? 2012
Emerging Issues 6846

This title shall be applied and construed to effectuate its general purpose to
make uniform the law with respect to the subject of this title among states
enacting it.
Leg.H. 1984 ch. 1724.
Annotations

If any provision of this title or its application to any person or circumstances
is held invalid, the invalidity does not affect other provisions or applications of
the title which can be given effect without the invalid provision or application,
and to this end the provisions of this title are severable.
Leg.H. 1984 ch. 1724.
Annotations

This title does not apply to misappropriation occurring prior to January 1,
1985. If a continuing misappropriation otherwise covered by this title began
before January 1, 1985, this title does not apply to the part of the
misappropriation occurring before that date. This title does apply to the part of
the misappropriation occurring on or after that date unless the appropriation was
not a misappropriation under the law in effect before the operative date of this
title.
Leg.H. 1984 ch. 1724.
586
Annotations

Notwithstanding subdivision (b) of Section 47, in any legislative or judicial
proceeding, or in any other official proceeding authorized by law, or in the
initiation or course of any other proceeding authorized by law and reviewable
pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of
the Code of Civil Procedure, the voluntary, intentional disclosure of trade secret
information, unauthorized by its owner, to a competitor or potential competitor
of the owner of the trade secret information or the agent or representative of
such a competitor or potential competitor is not privileged and is not a
privileged communication for purposes of Part 2 (commencing with Section 43)
of Division 1. This section does not in any manner limit, restrict, impair, or
otherwise modify either the application of the other subdivisions of Section 47
to the conduct to which this section applies or the court’s authority to control,
order, or permit access to evidence in any case before it. Nothing in this section
shall be construed to limit, restrict, or otherwise impair, the capacity of persons
employed by public entities to report improper government activity, as defined
in Section 10542 of the Government Code, or the capacity of private persons to
report improper activities of a private business.
Leg.H. 1992 ch. 165.
PART 3
Nuisance
TITLE 4
MOTION PICTURES
(a) “Animal” means any amphibian, bird, mammal or reptile. It does not
include any fish or insect.
587
(b) “Motion picture” means any motion picture, regardless of length or
content, which is exhibited in a motion picture theater to paying customers,
or is exhibited on television to paying customers or under the sponsorship of
a paying advertiser. It shall not include motion pictures made for scientific,
research, or educational purposes, or motion pictures exhibited as home
movies, or amateur films, which are shown free or at cost to friends,
neighbors or civic groups.
( c ) “Person” means individuals, corporations, associations,
partnerships, limited liability companies, trustees, lessees, agents and
assignees.
Leg.H. 1978 ch. 1152, 1994 ch. 1010.
§ 3505. Exhibition of Motion Picture Showing

Intentional Killing or Cruelty to Animal or Human
Is Nuisance.
(a) The exhibition of any motion picture, if any intentional killing of, or
cruelty to, a human being or an animal is shown in the motion picture and such
intentional killing of, or cruelty to, a human being or an animal actually occurred
in the production of the motion picture for the purpose of such production, is a
nuisance, which shall be enjoined, abated, and prevented.
(b) As used in this section, “killing” and “cruelty” mean conduct which both
(1) results in the death or the infliction of any physical injury or wound,
including, but not limited to, any temporary or permanent physical harm
resulting from the administration of any drug or chemical, and (2) is patently
offensive to the average person, applying contemporary statewide community
standards. It does not include conduct committed against a human being to which
the human being has given his or her consent. In determining whether conduct is
patently offensive, the trier of fact may consider any or all of the following: (i)
the degree or extent of the physical injury inflicted, (ii) the manner in which the
injury is inflicted, (iii) the extent to which the injuring or wounding or acts
resulting therein are depicted on the screen, (iv) the number of instances of
infliction of injury, wound or harm occurring in the making of the motion
picture, and (v) whether such conduct is lawful or unlawful under any provision
of law other than this title.
(c) For the purposes of this section, it shall not be a requirement that the
entire motion picture and all of the conduct resulting therein be taken into
account in determining whether a nuisance exists, and to this end, the Legislature
finds and declares that any specific conduct which intentionally results in the
killing of, or cruelty to, an animal or a human being in the making of a motion
588
picture is unnecessary and is a nuisance, and that if a motion picture cannot be
completed in the absence of such conduct, it is, therefore, a nuisance in its
entirety.
Leg.H. 1978 ch. 1152.
§ 3506. Action by District Attorney or Attorney General

to Enjoin Nuisance—Independent Evidence
Required.
Whenever there is reasonable cause to believe that a nuisance as defined in
this title is kept, maintained or is in existence in any county, the district attorney
or the Attorney General, in the name of the people of the State of California,
shall, on a proper showing, commence an action in equity to abate and prevent
the nuisance and to perpetually enjoin the person conducting or maintaining it,
and the owner, lessee or agent of the building, or place, in or upon which the
nuisance exists, from maintaining or permitting it. As used herein, a proper
showing to commence an action under this title must be based upon evidence
independent of the motion picture itself that intentional killing of, or cruelty to, a
human being or an animal actually occurred in the production of the motion
picture for the purpose of such production.
Leg.H. 1978 ch. 1152.
§ 3507. Trial on Merits—Only Permanent Injunction

May Be Granted—Appeal.
Whenever an action is initiated under this title to abate an alleged nuisance,
an adversary trial on the merits shall be held pursuant to Section 3507.2. If the
court finds that the exhibition of the particular motion picture constitutes a
nuisance, it shall issue a permanent injunction to abate and prevent the
continuance or recurrence of such nuisance. No temporary restraining order or
preliminary injunction shall be granted in such an action. An appeal may be
taken from an order issuing a permanent injunction, and any injunction issued
pursuant to this title by the trial court may be stayed by such court pending the
outcome of such appeal. No appeal may be taken from a ruling by the trial court
denying an injunction requested under this title.
Leg.H. 1978 ch. 1152.

In actions brought under this title, the motion picture shall be admissible into
evidence. The burden of proof that the exhibition of the particular motion picture
589
constitutes a nuisance shall be met by the district attorney or Attorney General
only when clear and convincing evidence, independent of the motion picture
itself, is provided that the acts alleged actually occurred in the production of the
motion picture.
Leg.H. 1978 ch. 1152.

Actions brought under this title shall be brought as promptly as possible.
Such actions shall have precedence over all actions, excepting criminal
proceedings and election contests. It is also the intent of the Legislature that
actions commenced under this title be adjudicated in the most speedy and
expeditious manner.
Leg.H. 1978 ch. 1152.

Any violation or disobedience of an injunction or order expressly provided
for by this title is punishable as a contempt of court by a fine of not less than two
hundred dollars ($200) nor more than one thousand dollars ($1,000).
Leg.H. 1978 ch. 1152.
§ 3507.4. Distributor and Producer Liable to Exhibitor

for Damages—Duty to Assist in Defense—Contract
of Exhibition Not Enforceable.
The distributor who furnished a motion picture to a person who is made a
defendant in an action under this title, and the producer of a motion picture
which is the subject of this title shall be jointly and severally liable, upon proof
and after an opportunity to appear and interpose any appropriate defenses, to
such person and the exhibitor for damages, including loss of profits, attorney’s
fees, and other costs of defending such action. Such distributor and such
producer shall actively assist in such defense to the extent that such person
possesses information necessary to such defense concerning the production of
the motion picture which is not otherwise available to the defendant. The
exhibitor shall not be liable upon any portion of any contract made on or after
January 1, 1979, which requires the exhibition or advertisement of a motion
picture subject to this title on or after the date of the filing of any action under
this title, if the motion picture by final decision of a court is determined to be a
nuisance under this title.
Leg.H. 1978 ch. 1152.
590
(a) This title shall not apply to any of the following:
( 1 ) The exhibition of any motion picture, such as a newsreel or
documentary, involving acts of killing or cruelty which were not
intentionally committed for the purpose of producing the motion picture.
(2) Any motion picture made, in whole or in part, prior to January 1,
1979.
(3) Any motion picture all or part of which has been edited or remade
so that any previous conduct which constituted a nuisance under this title no
longer appears.
(4) The taking of any animal as permitted by any provision of the Fish
and Game Code or pursuant thereto in accordance with regulations adopted
by the Fish and Game Commission unless the time, place, or manner of such
taking violates any provision of law except this title. This title shall apply to
any other animal whether or not the time, place, or manner of the taking is
prohibited by any laws other than this title, however, this title shall not
apply to the taking of any animal authorized by law in any other jurisdiction
unless the time, place or manner of such taking is prohibited by law or
regulation.
( 5) A motion picture which includes scenes of killing or cruelty to
animals if the acts constituting the killing or cruelty were authorized by the
laws governing such acts in the jurisdiction where the scenes were filmed.
(6) Any motion picture which bears within its contents a statement from
the producer of the motion picture that all scenes depicting animals were
filmed without the intentional killing of, or cruelty to an animal or that any
killing or cruelty to an animal was authorized by the laws of the jurisdiction
where the scenes were filmed or that the film is otherwise exempt under this
title.
( 7) Any motion picture if the exhibitor thereof has a written signed
statement, or a copy thereof, from the producer of the motion picture that all
scenes depicting animals were filmed without the intentional killing of, or
cruelty to an animal or that any killing or cruelty to an animal was
authorized by the laws of the jurisdiction where the scenes were filmed or
that the film is otherwise exempt under this title.
(b) This title shall not apply in any case in which it would conflict with
federal supremacy in the field of television broadcasting.
Leg.H. 1978 ch. 1152.
591
§ 3508.1. Willful Misstatement of Exempt Status of
Picture as Misdemeanor.
Any producer who willfully misstates or causes to be misstated any fact
contained in a statement under paragraph (6) or (7) of Section 3508 is guilty of a
misdemeanor.
Leg.H. 1978 ch. 1152.

If any provision of this title or the application thereof to any person or
applications of this title which can be given effect without the invalid provision
or application, and to this end the provisions of this title are severable.
Leg.H. 1978 ch. 1152.

SYNOPSIS
Contents
PART 2 Of Civil Actions

TITLE 2 OF THE TIME OF COMMENCING CIVIL ACTIONS
CHAPTER 3 THE TIME OF COMMENCING ACTIONS OTHER THAN FOR THE
RECOVERY OF REAL PROPERTY
§ 338. Statutory Liability; Injury to Property; Fraud or Mistake; Bonds of Public
Officials and Notaries; Slander of Title; False Advertising; Pollution
Violations; Challenge to Tax Levy; Three Years; Specified Recovery of
Work of Fine Art to Be Commenced Within 6 Years.
TITLE 3 Of the Parties to Civil Actions
CHAPTER 5 PERMISSIVE JOINDER
§ 382. Party Who Cannot Be Joined as Plaintiff Being Made Defendant;
Defense by Parties on Behalf of Others Having Common Interest.
TITLE 6 OF THE PLEADINGS IN CIVIL ACTIONS
CHAPTER 2 PLEADINGS DEMANDING RELIEF
ARTICLE 5 Contents of Documents in Particular Actions or Proceedings
§ 429.30. Action for Infringement of Rights in Literary, Artistic, or
Intellectual Production.
TITLE 7 OTHER PROVISIONAL REMEDIES IN CIVIL ACTIONS
CHAPTER 3 INJUNCTION
TITLE 9 ENFORCEMENT OF JUDGMENTS
592
DIVISION 2 ENFORCEMENT OF MONEY JUDGMENTS
CHAPTER 6 MISCELLANEOUS CREDITORS’ REMEDIES
ARTICLE 6 Assignment Order
§ 708.510. Application for Order for Assignment to Judgment Creditor
of Right to Payment Due or to Become Due to Judgment Debtor.
TITLE 11 CONTRIBUTION AMONG JOINT JUDGMENT DEBTORS
CHAPTER 1 RELEASES FROM AND CONTRIBUTION AMONG JOINT
TORTFEASORS
§ 877. Effect of Release, Dismissal, or Covenant Not to Sue or Enforce
Judgment.
§ 877.5. Disclosure of Sliding Scale Recovery Agreement.
CHAPTER 2 CONTRIBUTION AMONG OTHER JUDGMENT DEBTORS
§ 883. Motion to Court for Order Determining Liability for Contribution or
Repayment.
PART 4 Miscellaneous Provisions
TITLE 4 CIVIL DISCOVERY ACT
CHAPTER 5 METHODS AND SEQUENCE OF DISCOVERY
ARTICLE 2 Methods and Sequence of Discovery in Specific Contexts
CHAPTER 9 ORAL DEPOSITION INSIDE CALIFORNIA
ARTICLE 4 Objections, Sanctions, Protective Orders, Motions to Compel, and
Suspension of Depositions
§ 2025.420. Motion for Protective Order; What Order May Include;
Discovery of Electronically Stored Information; Denial of Protective
Order; Monetary Sanction.
CHAPTER 13 WRITTEN INTERROGATORIES
ARTICLE 1 Propounding Interrogatories
§ 2030.090. Motion for Protective Order; What Protective Order May
Provide; Denial of Protective Order; Monetary Sanction.
CHAPTER 14 INSPECTION, COPYING, TESTING, SAMPLING, AND
PRODUCTION OF DOCUMENTS, ELECTRONICALLY STORED
INFORMATION, TANGIBLE THINGS, LAND, AND OTHER PROPERTY
ARTICLE 1 Inspection Demand
§ 2031.060. Motion for Protective Order; What Protective Order May
Provide; Denial of Protective Order; Monetary Sanction.
CHAPTER 16 REQUESTS FOR ADMISSION
ARTICLE 1 Requests For Admission
§ 2033.080. Motion for Protective Order; Grounds; Denial of Order;
Monetary Sanction.
593
PART 2
Of Civil Actions
TITLE 2
OF THE TIME OF COMMENCING

CIVIL ACTIONS
CHAPTER 3
THE TIME OF COMMENCING

ACTIONS OTHER THAN FOR THE
RECOVERY OF REAL PROPERTY
§ 338. Statutory Liability; Injury to Property; Fraud or
Mistake; Bonds of Public Officials and Notaries;
Slander of Title; False Advertising; Pollution
Violations; Challenge to Tax Levy; Three Years;
Specified Recovery of Work of Fine Art to Be
Commenced Within 6 Years.
Within three years:
(a) An action upon a liability created by statute, other than a penalty or
forfeiture.
(b) An action for trespass upon or injury to real property.
(c)
(1) An action for taking, detaining, or injuring any goods or chattels,
including actions for the specific recovery of personal property.
(2) The cause of action in the case of theft, as described in Section 484
594
of the Penal Code, of any article of historical, interpretive, scientific, or
artistic significance is not deemed to have accrued until the discovery of the
whereabouts of the article by the aggrieved party, his or her agent, or the
law enforcement agency that originally investigated the theft.
(3)
( A ) Notwithstanding paragraphs (1) and (2), an action for the
specific recovery of a work of fine art brought against a museum,
gallery, auctioneer, or dealer, in the case of an unlawful taking or theft,
as described in Section 484 of the Penal Code, of a work of fine art,
including a taking or theft by means of fraud or duress, shall be
commenced within six years of the actual discovery by the claimant or
his or her agent, of both of the following:
(i) The identity and the whereabouts of the work of fine art. In the
case where there is a possibility of misidentification of the object of
fine art in question, the identity can be satisfied by the identification
of facts sufficient to determine that the work of fine art is likely to be
the work of fine art that was unlawfully taken or stolen.
(ii) Information or facts that are sufficient to indicate that the
claimant has a claim for a possessory interest in the work of fine art
that was unlawfully taken or stolen.
(B) The provisions of this paragraph shall apply to all pending and
future actions commenced on or before December 31, 2017, including
any actions dismissed based on the expiration of statutes of limitation in
effect prior to the date of enactment of this statute if the judgment in that
action is not yet final or if the time for filing an appeal from a decision
on that action has not expired, provided that the action concerns a work
of fine art that was taken within 100 years prior to the date of enactment
of this statute.
(C) For purposes of this paragraph:
(i) “Actual discovery,” notwithstanding Section 19 of the Civil
Code, does not include any constructive knowledge imputed by law.
(ii) “Auctioneer” means any individual who is engaged in, or
who by advertising or otherwise holds himself or herself out as
being available to engage in, the calling for, the recognition of, and
the acceptance of, offers for the purchase of goods at an auction as
defined in subdivision (b) of Section 1812.601 of the Civil Code.
(iii) “Dealer” means a person who holds a valid seller’s permit
and who is actively and principally engaged in, or conducting the
595
business of, selling works of fine art.
( i v) “Duress” means a threat of force, violence, danger, or
retribution against an owner of the work of fine art in question, or his
or her family member, sufficient to coerce a reasonable person of
ordinary susceptibilities to perform an act that otherwise would not
have been performed or to acquiesce to an act to which he or she
would otherwise not have acquiesced.
(v) “Fine art” has the same meaning as defined in paragraph (1)
of subdivision (d) of Section 982 of the Civil Code.
(vi) “Museum or gallery” shall include any public or private
organization or foundation operating as a museum or gallery.
( 4 ) Section 361 shall not apply to an action brought pursuant to
paragraph (3).
(5) A party in an action to which paragraph (3) applies may raise all
equitable and legal affirmative defenses and doctrines, including, without
limitation, laches and unclean hands.
(d) An action for relief on the ground of fraud or mistake. The cause of
action in that case is not deemed to have accrued until the discovery, by the
aggrieved party, of the facts constituting the fraud or mistake.
(e) An action upon a bond of a public official except any cause of action
based on fraud or embezzlement is not deemed to have accrued until the
discovery, by the aggrieved party or his or her agent, of the facts constituting the
cause of action upon the bond.
(f)
(1) An action against a notary public on his or her bond or in his or her
official capacity except that any cause of action based on malfeasance or
misfeasance is not deemed to have accrued until discovery, by the aggrieved
party or his or her agent, of the facts constituting the cause of action.
(2) Notwithstanding paragraph (1), an action based on malfeasance or
misfeasance shall be commenced within one year from discovery, by the
aggrieved party or his or her agent, of the facts constituting the cause of
action or within three years from the performance of the notarial act giving
rise to the action, whichever is later.
(3) Notwithstanding paragraph (1), an action against a notary public on
his or her bond or in his or her official capacity shall be commenced within
six years.
(g) An action for slander of title to real property.
596
( h ) An action commenced under Section 17536 of the Business and
Professions Code. The cause of action in that case shall not be deemed to have
accrued until the discovery by the aggrieved party, the Attorney General, the
district attorney, the county counsel, the city prosecutor, or the city attorney of
the facts constituting grounds for commencing the action.
(i) An action commenced under the Porter-Cologne Water Quality Control
Act (Division 7 (commencing with Section 13000) of the Water Code). The
cause of action in that case shall not be deemed to have accrued until the
discovery by the State Water Resources Control Board or a regional water
quality control board of the facts constituting grounds for commencing actions
under their jurisdiction.
( j ) An action to recover for physical damage to private property under
Section 19 of Article I of the California Constitution.
( k) An action commenced under Division 26 (commencing with Section
39000) of the Health and Safety Code. These causes of action shall not be
deemed to have accrued until the discovery by the State Air Resources Board or
by a district, as defined in Section 39025 of the Health and Safety Code, of the
facts constituting grounds for commencing the action under its jurisdiction.
(l) An action commenced under Section 1603.1, 1615, or 5650.1 of the Fish
and Game Code. These causes of action shall not be deemed to have accrued
until discovery by the agency bringing the action of the facts constituting the
grounds for commencing the action.
(m) An action challenging the validity of the levy upon a parcel of a special
tax levied by a local agency on a per parcel basis.
(n) An action commencing under Section 51.7 of the Civil Code.
Enacted 1872. Amended Stats 1921 ch 183 § 1; Stats 1933 ch 306 § 1; Stats 1935 ch
581 § 1; Stats 1943 ch 1025 § 1; Stats 1949 ch 1540 § 1; Stats 1957 ch 649 § 1; Stats 1972
ch 823 § 2; Stats 1981 ch 247 § 1, effective July 21, 1981, ch 494 § 2; Stats 1982 ch 340 §
1; Stats 1987 ch 1200 § 1, ch 1201 §§ 1, 31 (making 1987 amendment applicable only to
actions commenced on or after January 1, 1990); Stats 1988 ch 1186 § 1; Stats 1989 ch 467
§ 1; Stats 1990 ch 669 § 1 (AB 4049); Stats 1995 ch 238 § 1 (AB 1174); Stats 1998 ch 342
§ 1 (AB 1933); Stats 2005 ch 123 § 2 (AB 378), ch 383 § 1.5 (SB 1110); Stats 2006 ch 538
§ 62 (SB 1852), effective January 1, 2007; Stats 2010 ch 691 § 2 (AB 2765), effective
January 1, 2011.
TITLE 3
Of the Parties to Civil Actions

597
CHAPTER 5
PERMISSIVE JOINDER
§ 382. Party Who Cannot Be Joined as Plaintiff Being
Made Defendant; Defense by Parties on Behalf of
Others Having Common Interest.
If the consent of any one who should have been joined as plaintiff cannot be
obtained, he may be made a defendant, the reason thereof being stated in the
complaint; and when the question is one of a common or general interest, of
many persons, or when the parties are numerous, and it is impracticable to bring
them all before the court, one or more may sue or defend for the benefit of all.
Enacted 1872. Amended Stats 1971 ch 244 § 12, operative July 1, 1972.
TITLE 6
OF THE PLEADINGS IN CIVIL ACTIONS

CHAPTER 2
PLEADINGS DEMANDING RELIEF

ARTICLE 5
Contents of Documents in Particular Actions or

Proceedings
§ 429.30. Action for Infringement of Rights in Literary,

Artistic, or Intellectual Production.
598
(1) “Complaint” includes a cross-complaint.
(2) “Plaintiff” includes the person filing a cross-complaint.
(b) If the complaint contains a demand for relief on account of the alleged
infringement of the plaintiff’s rights in and to a literary, artistic, or intellectual
production, there shall be attached to the complaint a copy of the production as
to which the infringement is claimed and a copy of the alleged infringing
production. If, by reason of bulk or the nature of the production, it is not
practicable to attach a copy to the complaint, that fact and the reasons why it is
impracticable to attach a copy of the production to the complaint shall be
alleged; and the court, in connection with any demurrer, motion, or other
proceedings in the cause in which a knowledge of the contents of such
production may be necessary or desirable, shall make such order for a view of
the production not attached as will suit the convenience of the court to the end
that the contents of such production may be deemed to be a part of the complaint
to the same extent and with the same force as though such production had been
capable of being and had been attached to the complaint. The attachment of any
such production in accordance with the provisions of this section shall not be
deemed a making public of the production within the meaning of Section 983 of
the Civil Code.
An issue frequently argued is which, if any, state procedural requirements apply to a
federal action with pendent state causes of action.
Annotations
Cases
Edgar Rice Burroughs, Inc. v. Metro-Goldwyn-Mayer, Inc. (2d Dist. 1962) 205 Cal.
App. 2d 441, 450–451, 23 Cal. Rptr. 14. Plaintiff alleged that defendant breached its contract
with him providing that any remake of plaintiff’s “Tarzan” story would be based substantially
upon plaintiff’s story. The Court of Appeal held that the Superior Court could determine
issues of similarity as a matter of law, based on the copies of work and alleged infringement
attached to the complaint.
TITLE 7
OTHER PROVISIONAL REMEDIES IN
599
CIVIL ACTIONS
CHAPTER 3
INJUNCTION
(a) An injunction may be granted in the following cases:
(1) When it appears by the complaint that the plaintiff is entitled to the
relief demanded, and the relief, or any part thereof, consists in restraining
the commission or continuance of the act complained of, either for a limited
period or perpetually.
(2) When it appears by the complaint or affidavits that the commission
or continuance of some act during the litigation would produce waste, or
great or irreparable injury, to a party to the action.
(3) When it appears, during the litigation, that a party to the action is
doing, or threatens, or is about to do, or is procuring or suffering to be done,
some act in violation of the rights of another party to the action respecting
the subject of the action, and tending to render the judgment ineffectual.
(4) When pecuniary compensation would not afford adequate relief.
(5) Where it would be extremely difficult to ascertain the amount of
compensation which would afford adequate relief.
(6) Where the restraint is necessary to prevent a multiplicity of judicial
proceedings.
(7) Where the obligation arises from a trust.
(b) An injunction can not be granted in the following cases:
(1) To stay a judicial proceeding pending at the commencement of the
action in which the injunction is demanded, unless the restraint is necessary
to prevent a multiplicity of proceedings.
(2) To stay proceedings in a court of the United States.
(3) To stay proceedings in another state upon a judgment of a court of
that state.
(4) To prevent the execution of a public statute by officers of the law for
600
the public benefit.
(5) To prevent the breach of a contract the performance of which would
not be specifically enforced, other than a contract in writing for the rendition
of personal services from one to another where the promised service is of a
special, unique, unusual, extraordinary, or intellectual character, which
gives it peculiar value, the loss of which cannot be reasonably or adequately
compensated in damages in an action at law, and where the compensation
for the personal services is as follows:
(A) As to contracts entered into on or before December 31, 1993,
the minimum compensation provided in the contract for the personal
services shall be at the rate of six thousand dollars ($6,000) per annum.
(B) As to contracts entered into on or after January 1, 1994, the
criteria of clause (i) or (ii), as follows, are satisfied:
(i) The compensation is as follows:
(I) The minimum compensation provided in the contract shall
be at the rate of nine thousand dollars ($9,000) per annum for the
first year of the contract, twelve thousand dollars ($12,000) per
annum for the second year of the contract, and fifteen thousand
dollars ($15,000) per annum for the third to seventh years,
inclusive, of the contract.
(II) In addition, after the third year of the contract, there shall
actually have been paid for the services through and including the
contract year during which the injunctive relief is sought, over
and above the minimum contractual compensation specified in
subclause (I), the amount of fifteen thousand dollars ($15,000)
per annum during the fourth and fifth years of the contract, and
thirty thousand dollars ($30,000) per annum during the sixth and
seventh years of the contract. As a condition to petitioning for an
injunction, amounts payable under this clause may be paid at any
time prior to seeking injunctive relief.
( i i ) The aggregate compensation actually received for the
services provided under a contract that does not meet the criteria of
subparagraph (A), is at least 10 times the applicable aggregate
minimum amount specified in subclauses (I) and (II) of clause (i)
through and including the contract year during which the injunctive
relief is sought. As a condition to petitioning for an injunction,
amounts payable under this subparagraph may be paid at any time
prior to seeking injunctive relief.
( C ) Compensation paid in any contract year in excess of the
601
minimums specified in clauses (i) and (ii) of subparagraph (B) shall
apply to reduce the compensation otherwise required to be paid under
those provisions in any subsequent contract years. However, an
injunction may be granted to prevent the breach of a contract entered into
between any nonprofit cooperative corporation or association and a
member or stockholder thereof, in respect to any provision regarding the
sale or delivery to the corporation or association of the products
produced or acquired by the member or stockholder.
(6) To prevent the exercise of a public or private office, in a lawful
manner, by the person in possession.
(7) To prevent a legislative act by a municipal corporation.
Leg.H. 1872, 1907 p. 341, 1919 p. 325, 1925 p. 828, 1992 ch. 177, 1993 ch. 836.
TITLE 9
ENFORCEMENT OF JUDGMENTS
DIVISION 2
ENFORCEMENT OF MONEY
JUDGMENTS
CHAPTER 6
MISCELLANEOUS CREDITORS’
REMEDIES
ARTICLE 6
Assignment Order
§ 708.510. Application for Order for Assignment to

602
Judgment Creditor of Right to Payment Due or to
Become Due to Judgment Debtor.
(a) Except as otherwise provided by law, upon application of the judgment
creditor on noticed motion, the court may order the judgment debtor to assign to
the judgment creditor or to a receiver appointed pursuant to Article 7
(commencing with Section 708.610) all or part of a right to payment due or to
become due, whether or not the right is conditioned on future developments,
including but not limited to the following types of payments:
( 1 ) Wages due from the federal government that are not subject to
withholding under an earnings withholding order.
(2) Rents.
(3) Commissions.
(4) Royalties.
(5) Payments due from a patent or copyright.
(6) Insurance policy loan value.
(b) The notice of the motion shall be served on the judgment debtor. Service
shall be made personally or by mail.
(c) Subject to subdivisions (d), (e), and (f), in determining whether to order
an assignment or the amount of an assignment pursuant to subdivision (a), the
court may take into consideration all relevant factors, including the following:
(1) The reasonable requirements of a judgment debtor who is a natural
person and of persons supported in whole or in part by the judgment debtor.
( 2 ) Payments the judgment debtor is required to make or that are
deducted in satisfaction of other judgments and wage assignments, including
earnings assignment orders for support.
(3) The amount remaining due on the money judgment.
(4) The amount being or to be received in satisfaction of the right to
payment that may be assigned.
(d) A right to payment may be assigned pursuant to this article only to the
extent necessary to satisfy the money judgment.
(e) When earnings or periodic payments pursuant to a pension or retirement
plan are assigned pursuant to subdivision (a), the amount of the earnings or the
periodic payments assigned shall not exceed the amount that may be withheld
from a like amount of earnings under Chapter 5 (commencing with Section
603
706.010) (Wage Garnishment Law).
(f) Where a specific amount of the payment or payments to be assigned is
exempt by another statutory provision, the amount of the payment or payments to
be assigned pursuant to subdivision (a) shall not exceed the amount by which the
payment or payments exceed the exempt amount.
Leg.H. 1982 ch. 1364, operative July 1, 1983, 1992 ch. 163, operative January 1, 1994.
TITLE 11
CONTRIBUTION AMONG JOINT

JUDGMENT DEBTORS
CHAPTER 1
RELEASES FROM AND CONTRIBUTION

AMONG
JOINT TORTFEASORS
(a) Where a money judgment has been rendered jointly against two or more
defendants in a tort action there shall be a right of contribution among them as
hereinafter provided.
(b) Such right of contribution shall be administered in accordance with the
principles of equity.
(c) Such right of contribution may be enforced only after one tortfeasor has,
by payment, discharged the joint judgment or has paid more than his pro rata
share thereof. It shall be limited to the excess so paid over the pro rata share of
the person so paying and in no event shall any tortfeasor be compelled to make
contribution beyond his own pro rata share of the entire judgment.
(d) There shall be no right of contribution in favor of any tortfeasor who has
intentionally injured the injured person.
(e) A liability insurer who by payment has discharged the liability of a
tortfeasor judgment debtor shall be subrogated to his right of contribution.
604
(f) This title shall not impair any right of indemnity under existing law, and
where one tortfeasor judgment debtor is entitled to indemnity from another there
shall be no right of contribution between them.
(g) This title shall not impair the right of a plaintiff to satisfy a judgment in
full as against any tortfeasor judgment debtor.
Leg.H. 1957 ch. 1700.

( a ) The pro rata share of each tortfeasor judgment debtor shall be
determined by dividing the entire judgment equally among all of them.
(b) Where one or more persons are held liable solely for the tort of one of
them or of another, as in the case of the liability of a master for the tort of his
servant, they shall contribute a single pro rata share, as to which there may be
indemnity between them.
Leg.H. 1957 ch. 1700.
§ 877. Effect of Release, Dismissal, or Covenant Not to

Sue or Enforce Judgment.
Where a release, dismissal with or without prejudice, or a convenant
covenant not to sue or not to enforce judgment is given in good faith before
verdict or judgment to one or more of a number of tortfeasors claimed to be
liable for the same tort, or to one or more other co-obligors mutually subject to
contribution rights, it shall have the following effect:
(a) It shall not discharge any other such party from liability unless its
terms so provide, but it shall reduce the claims against the others in the
amount stipulated by the release, the dismissal or the covenant, or in the
amount of the consideration paid for it, whichever is the greater.
(b) It shall discharge the party to whom it is given from all liability for
any contribution to any other parties.
( c ) This section shall not apply to co-obligors who have expressly
agreed in writing to an apportionment of liability for losses or claims among
themselves.
(d) This section shall not apply to a release, dismissal with or without
prejudice, or a covenant not to sue or not to enforce judgment given to a co-
obligor on an alleged contract debt where the contract was made prior to
January 1, 1988.
605
Annotations
Cases
McDermott, Inc. v. Amclyde 511 U.S. 202, 114 S. Ct. 1461, 128 L. Ed. 2d 148 (1994) .
This admiralty case arose from an offshore crane accident. The crane operator settled with
three of the defendants and the non-settling defendants requested credit for the dollar amount
of the settlement. The Supreme Court held that liability of non-settling defendants in
admiralty cases should be calculated with reference to a jury’s allocation of proportionate
responsibility, rather than by giving non-settling defendants credit for dollar amount of
settlement. The Court elected the “proportionate share approach” under which the money
paid extinguishes any claim that the injured party has against a released tortfeasor and also
diminishes the claim that the injured party has against the other tortfeasors by the amount of
the equitable share of the obligation of the released tortfeasor. This is in contrast with the
pro tanto approach under which the non-settling tortfeasors would be given credit for the
dollar amount of the money paid.
Buttram v. Owens-Corning Fiberglass Corporation (1st Dist. 1995) 33 Cal. App. 4th
1009, 39 Cal. Rptr. 2d 703. Under Code Civ. Proc. § 877(a), a non-settling defendant’s
liability is unaffected by insolvency of a settling defendant and/or exhaustion of or non-
recourse to insurance. It is the non-settling tortfeasors who bear the risk of the insolvency of
the parties who are jointly and severally liable, and not the innocent plaintiff.
Lama v. Comcast Cablevision (2d Dist. 1993) 14 Cal. App. 4th 59, 17 Cal. Rptr. 2d
224. Although Code Civ. Proc. § 877 allows for a proceeding against a joint tortfeasor even
after a dismissal with prejudice, no action could be maintained when the dismissal was
pursuant to a release that expressly discharged “any person” from liability. A dismissal with
prejudice, in effect, bars any future action on the same subject matter.
General Motors Corp. v. Superior Court (4th Dist. 1993) 12 Cal. App. 4th 435, 15 Cal.
Rptr. 2d 622. Code Civ. Proc. § 877(a) contains no requirement that a release agreement
specifically identify the tortfeasor to be released.
Engle v. Endlich (2 Dist. 1992) 9 Cal. App. 4th 1152, 12 Cal. Rptr. 2d 145 . Under Code
Civ. Proc. § 877(a), a non-settling defendant’s potential liability is unaffected by the
discharge of a settling defendant unless the settlement provides otherwise. The effect of a
good faith settlement is to provide an offset against a plaintiff’s award in the amount
specified or in the amount of the consideration, whichever is more. Thus, the good faith
settlement of one defendant does not alter the right of a remaining defendant to assert the
offset since the liability of the non-settling defendant is unaffected by the settlement. The
amount representing the good faith settlement is deducted from the plaintiff’s total award and
operates to lessen the plaintiff’s net recovery against the nonsettling defendants in that
amount.
§ 877.5. Disclosure of Sliding Scale Recovery

Agreement.
606
(a) Where an agreement or covenant is made which provides for a sliding
scale recovery agreement between one or more, but not all, alleged defendant
tortfeasors and the plaintiff or plaintiffs:
( 1 ) The parties entering into any such agreement or covenant shall
promptly inform the court in which the action is pending of the existence of
the agreement or covenant and its terms and provisions.
( 2) If the action is tried before a jury, and a defendant party to the
agreement is called as a witness at trial, the court shall, upon motion of a
party, disclose to the jury the existence and content of the agreement or
covenant, unless the court finds that this disclosure will create substantial
danger of undue prejudice, of confusing the issues, or of misleading the jury.
The jury disclosure herein required shall be no more than necessary to
inform the jury of the possibility that the agreement may bias the testimony
of the witness.
(b) As used in this section, a “sliding scale recovery agreement” means an
agreement or covenant between a plaintiff or plaintiffs and one or more, but not
all, alleged tortfeasor defendants, which limits the liability of the agreeing
tortfeasor defendants to an amount which is dependent upon the amount of
recovery which the plaintiff is able to recover from the nonagreeing defendant
or defendants. This includes, but is not limited to, agreements within the scope
of Section 877, and agreements in the form of a loan from the agreeing tortfeasor
defendant or defendants to the plaintiff or plaintiffs which is repayable in whole
or in part from the recovery against the nonagreeing tortfeasor defendant or
defendants.
(c) No sliding scale recovery agreement is effective unless, at least 72 hours
prior to entering into the agreement, a notice of intent to enter into an agreement
has been served on all nonsignatory alleged defendant tortfeasors. However,
upon a showing of good cause, the court or a judge thereof may allow a shorter
time. The failure to comply with the notice requirements of this subdivision
shall not constitute good cause to delay commencement of trial.
Leg.H. 1977 ch. 568, 1987 chs. 1201, 1202, 1990 ch. 17.
1987 Note: Section 877.5 as amended by 1987 ch. 1202 applies only to actions based
upon acts or omissions occurring on or after January 1, 1988. Stats. 1987 ch. 1202 § 2.
Annotations
Articles
Note, Torts; Sliding Scale Recovery Agreements, 22 Pac. L.J. 729 (1991).
Mishky & Tessier, California Code of Civil Procedure Sections 877 , 877.5, and
607
877.6: The Settlement Game in the Ballpark That Tech-Bilt, 13 Pepperdine L. Rev. 823
(1986).
Note, Sliding Scale Agreements and the Good Faith Requirement of Settlement
Negotiation, 12 Pacific L.J. 121 (1980).

(a)
(1) Any party to an action in which it is alleged that two or more
parties are joint tortfeasors or co-obligors on a contract debt shall be
entitled to a hearing on the issue of the good faith of a settlement entered
into by the plaintiff or other claimant and one or more alleged
tortfeasors or co-obligors, upon giving notice in the manner provided in
subdivision (b) of Section 1005. Upon a showing of good cause, the
court may shorten the time for giving the required notice to permit the
determination of the issue to be made before the commencement of the
trial of the action, or before the verdict or judgment if settlement is made
after the trial has commenced.
(2) In the alternative, a settling party may give notice of settlement to
all parties and to the court, together with an application for
determination of good faith settlement and a proposed order. The
application shall indicate the settling parties, and the basis, terms, and
amount of the settlement. The notice, application, and proposed order
shall be given by certified mail, return receipt requested. Proof of
service shall be filed with the court. Within 25 days of the mailing of the
notice, application, and proposed order, or within 20 days of personal
service, a nonsettling party may file a notice of motion to contest the
good faith of the settlement. If none of the nonsettling parties files a
motion within 25 days of mailing of the notice, application, and
proposed order, or within 20 days of personal service, the court may
approve the settlement. The notice by a nonsettling party shall be given
in the manner provided in subdivision (b) of Section 1005. However,
this paragraph shall not apply to settlements in which a confidentiality
agreement has been entered into regarding the case or the terms of the
settlement.
(b) The issue of the good faith of a settlement may be determined by the
court on the basis of affidavits served with the notice of hearing, and any
counteraffidavits filed in response, or the court may, in its discretion, receive
other evidence at the hearing.
(c) A determination by the court that the settlement was made in good faith
shall bar any other joint tortfeasor or co-obligor from any further claims against
608
the settling tortfeasor or co-obligor for equitable comparative contribution, or
partial or comparative indemnity, based on comparative negligence or
comparative fault.
(d) The party asserting the lack of good faith shall have the burden of proof
on that issue.
( e ) When a determination of the good faith or lack of good faith of a
settlement is made, any party aggrieved by the determination may petition the
proper court to review the determination by writ of mandate. The petition for
writ of mandate shall be filed within 20 days after service of written notice of
the determination, or within any additional time not exceeding 20 days as the
trial court may allow.
(1) The court shall, within 30 days of the receipt of all materials to be
filed by the parties, determine whether or not the court will hear the writ
and notify the parties of its determination.
(2) If the court grants a hearing on the writ, the hearing shall be given
special precedence over all other civil matters on the calendar of the court
except those matters to which equal or greater precedence on the calendar is
granted by law.
(3) The running of any period of time after which an action would be
subject to dismissal pursuant to the applicable provisions of Chapter 1.5
(commencing with Section 583.110) of Title 8 of Part 2 shall be tolled
during the period of review of a determination pursuant to this subdivision.
Leg.H. 1980 ch. 562, 1984 ch. 311, 1985 ch. 621, 1987 ch. 677, 1988 ch. 128, 1989
ch. 693, 1992 ch. 876, 1995 ch. 796, 2001 ch. 812.
Annotations
Cases
Hartford Accident and Indemnity Company, et al., v. The Superior Court of San
Diego County (4th Dist. 1994) 29 Cal. App. 4th 435, 34 Cal. Rptr. 2d 520 . Protection of
Code Civ. Proc. § 877.6, under which other joint tortfeasors or co-obligors are barred from
obtaining a credible comparative contribution from a settling joint tortfeasor based on
“comparative negligence or comparative fault,” has no application to claims by insurers
seeking contribution from non-participating insurer. This is because such contribution claims
do not depend on “fault” concepts but are based on equitable apportionment of contractual
undertakings. Therefore, protection of § 877.6 has no application in a lawsuit brought by an
insured against multiple insurers allegedly covering the same “loss” in which one insurer
settled with the insured, and the settling insurer sought to use an order approving settlement
in order to avoid cross-claims for contribution from other insurers.
Alcal Roofing & Insulation v. Superior Court (1st Dist. 1992) 8 Cal. App. 4th 1121, 10
609
Cal. Rptr. 2d 844. A party seeking court confirmation in order to take advantage of Code Civ.
Proc. § 877.6(c) must, at a minimum, explain who has settled with whom; the dollar amount
of each settlement; if a settlement is allocated, how it is allocated between issues and/or
parties; what non-monetary consideration has been included; and how the parties to the
settlement value the non-monetary considerations.
Tech-Bilt, Inc. v. Woodward-Clyde & Associates (1985) 38 Cal. 3d 488, 213 Cal. Rptr.
256. The Supreme Court of California held that a test for determining whether a settlement is
in “good faith” under § 877.6 was whether the amount of the settlement was within the
reasonable range of the settling tortfeasor’s proportional share of comparative liability for
the plaintiff’s injuries.

Judgment for contribution may be entered by one tortfeasor judgment debtor
against other tortfeasor judgment debtors by motion upon notice. Notice of such
motion shall be given to all parties in the action, including the plaintiff or
plaintiffs, at least 10 days before the hearing thereon. Such notice shall be
accompanied by an affidavit setting forth any information which the moving
party may have as to the assets of defendants available for satisfaction of the
judgment or claim for contribution.
Leg.H. 1957 ch. 1700.
CHAPTER 2
CONTRIBUTION AMONG OTHER

JUDGMENT DEBTORS
This chapter governs contribution among joint judgment debtors other than
joint tortfeasors.

If two or more judgment debtors are jointly liable on a money judgment:
( a ) A judgment debtor who has satisfied more than his or her due
proportion of the judgment, whether voluntarily or through enforcement
procedures, may compel contribution from another judgment debtor who has
satisfied less than his or her due proportion of the judgment.
610
(b) If the judgment is based upon an obligation of one judgment debtor
as surety for another and the surety satisfies the judgment or any part thereof,
whether voluntarily or through enforcement procedures, the surety may
compel repayment from the principal.
§ 883. Motion to Court for Order Determining Liability

for Contribution or Repayment.
(a) A judgment debtor entitled to compel contribution or repayment pursuant
to this chapter may apply on noticed motion to the court that entered the
judgment for an order determining liability for contribution or repayment. The
application shall be made at any time before the judgment is satisfied in full or
within 30 days thereafter.
(b) The order determining liability for contribution or repayment entitles the
judgment debtor to the benefit of the judgment to enforce the liability, including
every remedy that the judgment creditor has against the persons liable, to the
extent of the liability.
(c) Nothing in this section limits any other remedy that a judgment debtor
entitled to contribution or repayment may have.
PART 4
TITLE 4
CIVIL DISCOVERY ACT

CHAPTER 5
METHODS AND SEQUENCE OF

DISCOVERY
611
ARTICLE 2
Methods and Sequence of Discovery in Specific

Contexts

In any action alleging the misappropriation of a trade secret under the
Uniform Trade Secrets Act (Title 5 (commencing with Section 3426) of Part 1
of Division 4 of the Civil Code), before commencing discovery relating to the
trade secret, the party alleging the misappropriation shall identify the trade
secret with reasonable particularity subject to any orders that may be
appropriate under Section 3426.5 of the Civil Code.
Leg.H. 2004 ch. 182 (AB 3081), operative July 1, 2005.
Annotations
Cases
Perlan Therapeutics, Inc. v. Superior Court, 178 Cal. App. 4th 1333, 101 Cal. Rptr. 3d
211 (2009). The alleged trade secrets in this case were set forth in a document with vague
and conclusory language and did not identify the alleged trade secrets with sufficient clarity,
nor did the statement clearly differentiate the alleged trade secrets from publicly available
knowledge. The argument that “defendants know what they took” was unavailing.
Brescia v. Angelin , 172 Cal. App. 4th 133, 90 Cal. Rptr. 3d 842 (2009) . The alleged
trade secrets in this case were the formula and manufacturing process for a high protein, low
carbohydrate pudding. The trial court had required the plaintiff to specify how his formula
and process were different from matters of general knowledge within the food science
industry. The appellate court held a plaintiff needs to identify his alleged trade secret with
sufficient particularity, but he does not need to explain how it is different from what is
generally known in the field, at least in this particular case.
Advanced Modular Sputtering Inc. v. Superior Court (Sputtered Films Inc.), 132 Cal.
App. 4th 826, 33 Cal. Rptr. 3d 901 (2005). Section 2019.210 (formerly § 2019(d)) is not
limited to a cause of action for misappropriation of a trade secret under the Uniform Trade
Secrets Act, but applies to related causes of action. The person claiming the trade secret
must identify the trade secret with reasonable particularity, meaning it must make a showing
that is fair, proper, just, and rational.
Articles
Sugden, C.C.P. Section 2019.210 : A Sword, Not a Shield, 48 O.C. Lawyer 50 (March
2006).
612
CHAPTER 9
ORAL DEPOSITION INSIDE CALIFORNIA

ARTICLE 4
Objections, Sanctions, Protective Orders, Motions to

Compel, and Suspension of Depositions
§ 2025.420. Motion for Protective Order; What Order

May Include; Discovery of Electronically Stored
Information; Denial of Protective Order; Monetary
Sanction.
(a) Before, during, or after a deposition, any party, any deponent, or any
other affected natural person or organization may promptly move for a
protective order. The motion shall be accompanied by a meet and confer
declaration under Section 2016.040.
( b) The court, for good cause shown, may make any order that justice
requires to protect any party, deponent, or other natural person or organization
from unwarranted annoyance, embarrassment, or oppression, or undue burden
and expense. This protective order may include, but is not limited to, one or
more of the following directions:
(1) That the deposition not be taken at all.
(2) That the deposition be taken at a different time.
(3) That a video recording of the deposition testimony of a treating or
consulting physician or of any expert witness, intended for possible use at
trial under subdivision (d) of Section 2025.620, be postponed until the
moving party has had an adequate opportunity to prepare, by discovery
deposition of the deponent, or other means, for cross-examination.
(4) That the deposition be taken at a place other than that specified in the
deposition notice, if it is within a distance permitted by Sections 2025.250
and 2025.260.
(5) That the deposition be taken only on certain specified terms and
613
conditions.
(6) That the deponent’s testimony be taken by written, instead of oral,
examination.
(7) That the method of discovery be interrogatories to a party instead of
an oral deposition.
( 8 ) That the testimony be recorded in a manner different from that
specified in the deposition notice.
(9) That certain matters not be inquired into.
(10) That the scope of the examination be limited to certain matters.
(11) That all or certain of the writings or tangible things designated in
the deposition notice not be produced, inspected, or copied, tested, or
sampled, or that conditions be set for the production of electronically
stored information designated in the deposition notice.
(12) That designated persons, other than the parties to the action and
their officers and counsel, be excluded from attending the deposition.
(13) That a trade secret or other confidential research, development, or
commercial information not be disclosed or be disclosed only to specified
persons or only in a specified way.
(14) That the parties simultaneously file specified documents enclosed
in sealed envelopes to be opened as directed by the court.
(15) That the deposition be sealed and thereafter opened only on order
of the court.
( 16) That examination of the deponent be terminated. If an order
terminates the examination, the deposition shall not thereafter be resumed,
except on order of the court.
( c ) The party, deponent, or any other affected natural person or
organization that seeks a protective order regarding the production,
inspection, copying, testing, or sampling of electronically stored
information on the basis that the information is from a source that is not
reasonably accessible because of undue burden or expense shall bear the
burden of demonstrating that the information is from a source that is not
reasonably accessible because of undue burden or expense.
(d) If the party or affected person from whom discovery of electronically
stored information is sought establishes that the information is from a
source that is not reasonably accessible because of undue burden or
614
expense, the court may nonetheless order discovery if the demanding party
shows good cause, subject to any limitations imposed under subdivision (f).
(e) If the court finds good cause for the production of electronically
stored information from a source that is not reasonably accessible, the
court may set conditions for the discovery of the electronically stored
information, including allocation of the expense of discovery.
(f) The court shall limit the frequency or extent of discovery of
electronically stored information, even from a source that is reasonably
accessible, if the court determines that any of the following conditions
exist:
(1) It is possible to obtain the information from some other source
that is more convenient, less burdensome, or less expensive.
(2) The discovery sought is unreasonably cumulative or duplicative.
(3) The party seeking discovery has had ample opportunity by
discovery in the action to obtain the information sought.
(4) The likely burden or expense of the proposed discovery
outweighs the likely benefit, taking into account the amount in
controversy, the resources of the parties, the importance of the issues in
the litigation, and the importance of the requested discovery in resolving
the issues.
(g) If the motion for a protective order is denied in whole or in part, the
court may order that the deponent provide or permit the discovery against which
protection was sought on those terms and conditions that are just.
(d)
(h) The court shall impose a monetary sanction under Chapter 7
(commencing with Section 2023.010) against any party, person, or attorney
who unsuccessfully makes or opposes a motion for a protective order,
unless it finds that the one subject to the sanction acted with substantial
justification or that other circumstances make the imposition of the sanction
unjust.
(i)
(1) Notwithstanding subdivision (h), absent exceptional
circumstances, the court shall not impose sanctions on any party,
deponent, or other affected natural person or organization or any of
their attorneys for failure to provide electronically stored information
that has been lost, damaged, altered, or overwritten as the result of the
615
routine, good faith operation of an electronic information system.
(2) This subdivision shall not be construed to alter any obligation to
preserve discoverable information.
Added Stats 2004 ch 182 § 23 (AB 3081), operative July 1, 2005. Amended Stats 2012
CHAPTER 13
WRITTEN INTERROGATORIES
ARTICLE 1
Propounding Interrogatories
§ 2030.090. Motion for Protective Order; What

Protective Order May Provide; Denial of Protective
(a) When interrogatories have been propounded, the responding party, and
any other party or affected natural person or organization may promptly move
for a protective order. This motion shall be accompanied by a meet and confer
declaration under Section 2016.040.
requires to protect any party or other natural person or organization from
unwarranted annoyance, embarrassment, or oppression, or undue burden and
expense. This protective order may include, but is not limited to, one or more of
the following directions:
(1) That the set of interrogatories, or particular interrogatories in the set,
need not be answered.
(2) That, contrary to the representations made in a declaration submitted
under Section 2030.050, the number of specially prepared interrogatories is
unwarranted.
(3) That the time specified in Section 2030.260 to respond to the set of
interrogatories, or to particular interrogatories in the set, be extended.
(4) That the response be made only on specified terms and conditions.
616
( 5 ) That the method of discovery be an oral deposition instead of
interrogatories to a party.
commercial information not be disclosed or be disclosed only in a certain
way.
(7) That some or all of the answers to interrogatories be sealed and
thereafter opened only on order of the court.
(c) If the motion for a protective order is denied in whole or in part, the
court may order that the party provide or permit the discovery against which
protection was sought on terms and conditions that are just.
( d ) The court shall impose a monetary sanction under Chapter 7
(commencing with Section 2023.010) against any party, person, or attorney who
unsuccessfully makes or opposes a motion for a protective order under this
section, unless it finds that the one subject to the sanction acted with substantial
unjust.
CHAPTER 14
INSPECTION, COPYING, TESTING,

SAMPLING, AND PRODUCTION OF
DOCUMENTS, ELECTRONICALLY
STORED INFORMATION, TANGIBLE
THINGS, LAND, AND OTHER PROPERTY
ARTICLE 1
Inspection Demand
§ 2031.060. Motion for Protective Order; What

Protective Order May Provide; Denial of Protective
617
(a) When an inspection, copying, testing, or sampling of documents, tangible
things, places, or electronically stored information has been demanded, the party
to whom the demand has been directed, and any other party or affected person,
may promptly move for a protective order. This motion shall be accompanied
by a meet and confer declaration under Section 2016.040.
requires to protect any party or other person from unwarranted annoyance,
embarrassment, or oppression, or undue burden and expense. This protective
order may include, but is not limited to, one or more of the following directions:
(1) That all or some of the items or categories of items in the demand
need not be produced or made available at all.
demands, or to a particular item or category in the set, be extended.
( 3) That the place of production be other than that specified in the
demand.
(4) That the inspection, copying, testing, or sampling be made only on
specified terms and conditions.
commercial information not be disclosed, or be disclosed only to specified
persons or only in a specified way.
(6) That the items produced be sealed and thereafter opened only on
order of the court.
(c) The party or affected person who seeks a protective order regarding the
production, inspection, copying, testing, or sampling of electronically stored
information on the basis that the information is from a source that is not
reasonably accessible because of undue burden or expense shall bear the burden
of demonstrating that the information is from a source that is not reasonably
accessible because of undue burden or expense.
(d) If the party or affected person from whom discovery of electronically
stored information is sought establishes that the information is from a source that
is not reasonably accessible because of undue burden or expense, the court may
nonetheless order discovery if the demanding party shows good cause, subject
to any limitations imposed under subdivision (f).
(e) If the court finds good cause for the production of electronically stored
information from a source that is not reasonably accessible, the court may set
conditions for the discovery of the electronically stored information, including
allocation of the expense of discovery.
618
( f ) The court shall limit the frequency or extent of discovery of
electronically stored information, even from a source that is reasonably
accessible, if the court determines that any of the following conditions exist:
(1) It is possible to obtain the information from some other source that is
more convenient, less burdensome, or less expensive.
(2) The discovery sought is unreasonably cumulative or duplicative.
(3) The party seeking discovery has had ample opportunity by discovery
in the action to obtain the information sought.
(4) The likely burden or expense of the proposed discovery outweighs
the likely benefit, taking into account the amount in controversy, the
resources of the parties, the importance of the issues in the litigation, and the
importance of the requested discovery in resolving the issues.
(g) If the motion for a protective order is denied in whole or in part, the
court may order that the party to whom the demand was directed provide or
permit the discovery against which protection was sought on terms and
conditions that are just.
(h) Except as provided in subdivision (i), the court shall impose a monetary
sanction under Chapter 7 (commencing with Section 2023.010) against any
party, person, or attorney who unsuccessfully makes or opposes a motion for a
protective order, unless it finds that the one subject to the sanction acted with
substantial justification or that other circumstances make the imposition of the
sanction unjust.
(i)
(1) Notwithstanding subdivision (h), absent exceptional circumstances,
the court shall not impose sanctions on a party or any attorney of a party for
failure to provide electronically stored information that has been lost,
damaged, altered, or overwritten as the result of the routine, good faith
operation of an electronic information system.
(2) This subdivision shall not be construed to alter any obligation to
preserve discoverable information.
Added Stats 2004 ch 182 § 23 (AB 3081), operative July 1, 2005. Amended Stats 2009
ch 5 § 9 (AB 5), effective June 29, 2009.
2009 Note: Stats 2009 ch 5 provides: Section 1. This act shall be known as the
Electronic Discovery Act.
CHAPTER 16
619
REQUESTS FOR ADMISSION
ARTICLE 1
Requests For Admission
§ 2033.080. Motion for Protective Order; Grounds;

Denial of Order; Monetary Sanction.
(a) When requests for admission have been made, the responding party may
promptly move for a protective order. This motion shall be accompanied by a
meet and confer declaration under Section 2016.040.
requires to protect any party from unwarranted annoyance, embarrassment,
oppression, or undue burden and expense. This protective order may include,
but is not limited to, one or more of the following directions:
(1) That the set of admission requests, or particular requests in the set,
need not be answered at all.
(2) That, contrary to the representations made in a declaration submitted
under Section 2033.050, the number of admission requests is unwarranted.
admission requests, or to particular requests in the set, be extended.
commercial information not be admitted or be admitted only in a certain
way.
(5) That some or all of the answers to requests for admission be sealed
and thereafter opened only on order of the court.
(c) If the motion for a protective order is denied in whole or in part, the
court may order that the responding party provide or permit the discovery
against which protection was sought on terms and conditions that are just.
( d ) The court shall impose a monetary sanction under Chapter 7
(commencing with Section 2023.010) against any party, person, or attorney who
unsuccessfully makes or opposes a motion for a protective order under this
section, unless it finds that the one subject to the sanction acted with substantial
620
unjust.

Contents
DIVISION 2 SALES
CHAPTER 3 GENERAL OBLIGATION AND CONSTRUCTION OF CONTRACT
§ 2312. Warranty of Title and Against Infringement; Buyer’s Obligation Against
Infringement.
CHAPTER 6 BREACH, REPUDIATION AND EXCUSE
§ 2607. Effect of Acceptance; Notice of Breach; Burden of Establishing Breach
After Acceptance; Notice of Claim or Litigation to Person Answerable Over.
CHAPTER 7 REMEDIES
§ 2714. Buyer’s Damages for Breach in Regard to Accepted Goods.
DIVISION 10 PERSONAL PROPERTY LEASES
CHAPTER 2 FORMATION AND CONSTRUCTION OF LEASE CONTRACT
§ 10211. Implied Warranty Against Infringement; Supplier’s or Lessor’s
Compliance With Specifications Furnished by Lessee.
§ 10214. Limitation of Express Warranty; Exclusion or Modification of Implied
Warranty.
CHAPTER 5 DEFAULT
ARTICLE 2 Default by Lessor
§ 10516. Lessee Obligations Upon Acceptance; Lessee Sued for Obligation of
Lessor.
DIVISION 2
SALES
CHAPTER 3
GENERAL OBLIGATION AND

CONSTRUCTION OF CONTRACT
621
§ 2312. Warranty of Title and Against Infringement;
Buyer’s Obligation Against Infringement.
(1) Subject to subdivision (2) there is in a contract for sale a warranty by
the seller that
(a) The title conveyed shall be good, and its transfer rightful; and
(b) The goods shall be delivered free from any security interest or other
lien or encumbrance of which the buyer at the time of contracting has no
knowledge.
(2) A warranty under subdivision (1) will be excluded or modified only by
specific language or by circumstances which give the buyer reason to know that
the person selling does not claim title in himself or that he is purporting to sell
only such right or title as he or a third person may have.
(3) Unless otherwise agreed a seller who is a merchant regularly dealing in
goods of the kind warrants that the goods shall be delivered free of the rightful
claim of any third person by way of infringement or the like but a buyer who
furnishes specifications to the seller must hold the seller harmless against any
such claim which arises out of compliance with the specifications.
Leg.H. 1963 ch. 819, effective January 1, 1965.
When a defendant has been sued for patent infringement, trademark infringement,
copyright infringement, or the like, § 2312(3) may provide a basis for the defendant to sue
for indemnification. This section provides that in an ordinary transaction between merchants
the seller warrants that the goods are “free of the rightful claim of any third person by way of
infringement or the like.” Conversely, if the seller makes goods to the buyer’s specifications,
the buyer must indemnify the seller against infringement claims. Thus, when representing a
party accused of infringement, counsel should consider whether there may be an available
claim for indemnification under § 2312(3).
Cases
Pacific Sunwear of California, Inc. v. Olaes Enterprises, Inc., 167 Cal. App. 4th 466,
84 Cal. Rptr. 3d 182 (2008). In a case of first impression, the court construed “rightful
claim” in U. Com. Code § 2312(3) as “a nonfrivolous claim of infringement that has any
significant and adverse effect on the buyer’s ability to make use of the purchased goods.”
This means that the claim of infringement does not have to succeed in court. Rather, as soon
as the buyer is notified of a nonfrivolous infringement claim he may pursue the warranty
claim.
CHAPTER 6
622
BREACH, REPUDIATION AND EXCUSE
§ 2607. Effect of Acceptance; Notice of Breach; Burden
of Establishing Breach After Acceptance; Notice of
Claim or Litigation to Person Answerable Over.
(1) The buyer must pay at the contract rate for any goods accepted.
( 2) Acceptance of goods by the buyer precludes rejection of the goods
accepted and, if made with knowledge of a nonconformity, cannot be revoked
because of it unless the acceptance was on the reasonable assumption that the
nonconformity would be seasonably cured. Acceptance does not of itself impair
any other remedy provided by this division for nonconformity.
(3) Where a tender has been accepted:
(A) The buyer must, within a reasonable time after he or she discovers
or should have discovered any breach, notify the seller of breach or be
barred from any remedy; and
(B) If the claim is one for infringement or the like (subdivision (3) of
Section 2312) and the buyer is sued as a result of such a breach, the buyer
must so notify the seller within a reasonable time after he or she receives
notice of the litigation or be barred from any remedy over for liability
established by the litigation.
(4) The burden is on the buyer to establish any breach with respect to the
goods accepted.
(5) Where the buyer is sued for breach of a warranty or other obligation for
which his or her seller is answerable over:
(A) He or she may give the seller written notice of the litigation. If the
notice states that the seller may defend and that if the seller does not do so
he or she will be bound in any action against the seller by the buyer by any
determination of fact common to the two litigation actions, then unless the
seller after seasonable receipt of the notice does defend he or she is so
bound.
(B) If the claim is one for infringement or the like (subdivision (3) of
Section 2312) the original seller may demand in writing that the buyer turn
over to the seller control of the litigation, including settlement, or else be
barred from any remedy over and if the seller also agrees to bear all
623
expense and to satisfy any adverse judgment, then unless the buyer after
seasonable receipt of the demand does turn over control the buyer is so
barred.
(6) The provisions of subdivisions (3), (4) and (5) apply to any obligation
of a buyer to hold the seller harmless against infringement or the like
(subdivision (3) of Section 2312).
Leg.H. 1963 ch. 819, 1995 ch. 91.
CHAPTER 7
REMEDIES
§ 2714. Buyer’s Damages for Breach in Regard to
Accepted Goods.
(1) Where the buyer has accepted goods and given notification (subdivision
(3) of Section 2607) he or she may recover, as damages for any nonconformity
of tender, the loss resulting in the ordinary course of events from the seller’s
breach as determined in any manner that is reasonable.
(2) The measure of damages for breach of warranty is the difference at the
time and place of acceptance between the value of the goods accepted and the
value they would have had if they had been as warranted, unless special
circumstances show proximate damages of a different amount.
(3) In a proper case any incidental and consequential damages under Section
2715 also may be recovered.
Leg.H. 1963 ch. 819, 1995 ch. 91.

(1) Incidental damages resulting from the seller’s breach include expenses
reasonably incurred in inspection, receipt, transportation and care and custody
of goods rightfully rejected, any commercially reasonable charges, expenses or
commissions in connection with effecting cover and any other reasonable
expense incident to the delay or other breach.
(2) Consequential damages resulting from the seller’s breach include.
(a) Any loss resulting from general or particular requirements and needs
of which the seller at the time of contracting had reason to know and which
624
could not reasonably be prevented by cover or otherwise; and
(b) Injury to person or property proximately resulting from any breach of
warranty.
DIVISION 10
PERSONAL PROPERTY LEASES

CHAPTER 2
FORMATION AND CONSTRUCTION OF

LEASE CONTRACT
§ 10211. Implied Warranty Against Infringement;
Supplier’s or Lessor’s Compliance With
Specifications Furnished by Lessee.
(a) There is in a lease contract a warranty that for the lease term no person
holds a claim to or interest in the goods that arose from an act or omission of the
lessor, other than a claim by way of infringement or the like, which will
interfere with the lessee’s enjoyment of its leasehold interest.
(b) Except in a finance lease there is in a lease contract by a lessor who is a
merchant regularly dealing in goods of the kind a warranty that the goods are
delivered free of the rightful claim of any person by way of infringement or the
like.
(c) A lessee who furnishes specifications to a lessor or a supplier shall hold
the lessor and the supplier harmless against any claim by way of infringement or
the like that arises out of compliance with the specifications.
Leg.H. 1988 ch. 1359, operative January 1, 1990, 1991 ch. 111, effective July 14,
1991.
§ 10214. Limitation of Express Warranty; Exclusion or

Modification of Implied Warranty.
625
(a) Words or conduct relevant to the creation of an express warranty and
words or conduct tending to negate or limit a warranty must be construed
wherever reasonable as consistent with each other; but, subject to the provisions
of Section 10202 on parol or extrinsic evidence, negation or limitation is
inoperative to the extent that the construction is unreasonable.
(b) Subject to subdivision (c), to exclude or modify the implied warranty of
merchantability or any part of it the language must mention “merchantability,” be
by a writing, and be conspicuous. Subject to subdivision (c), to exclude or
modify any implied warranty of fitness the exclusion must be by a writing and
be conspicuous. Language to exclude all implied warranties of fitness is
sufficient if it is in writing, is conspicuous and states, for example, “There is no
warranty that the goods will be fit for a particular purpose.”
(c) Notwithstanding subdivision (b), but subject to subdivision (d),
(1) Unless the circumstances indicate otherwise, all implied warranties
are excluded by expressions like “as is,” or “with all faults,” or by other
language that in common understanding calls the lessee’s attention to the
exclusion of warranties and makes plain that there is no implied warranty, if
in writing and conspicuous;
(2) If the lessee before entering into the lease contract has examined the
goods or the sample or model as fully as desired or has refused to examine
the goods, there is no implied warranty with regard to defects that an
examination ought in the circumstances to have revealed; and
(3) An implied warranty may also be excluded or modified by course of
dealing, course of performance, or usage of trade.
( d ) To exclude or modify a warranty against interference or against
infringement (Section 10211) or any part of it, the language must be specific, be
by a writing, and be conspicuous, unless the circumstances, including course of
performance, course of dealing, or usage of trade, give the lessee reason to
know that the goods are being leased subject to a claim or interest of any
person.
Leg.H. 1988 ch. 1359, operative January 1, 1990, 1991 ch. 111, effective July 14,
1991.
CHAPTER 5
DEFAULT
626
ARTICLE 2
Default by Lessor
§ 10516. Lessee Obligations Upon Acceptance; Lessee

Sued for Obligation of Lessor.
(a) A lessee must pay rent for any goods accepted in accordance with the
lease contract, with due allowance for goods rightfully rejected or not
delivered.
( b ) A lessee’s acceptance of goods precludes rejection of the goods
accepted. In the case of a finance lease, other than a consumer lease in which the
supplier assisted in the preparation of the lease contract or participated in
negotiating the terms of the lease contract with the lessor, if made with
knowledge of a nonconformity, acceptance cannot be revoked because of it. In
any other case, if made with knowledge of a nonconformity, acceptance cannot
be revoked because of it unless the acceptance was on the reasonable
assumption that the nonconformity would be seasonably cured. Acceptance does
not of itself impair any other remedy provided by this division or the lease
agreement for nonconformity.
(c) If a tender has been accepted:
(1) Within a reasonable time after the lessee discovers or should have
discovered any default, the lessee shall notify the lessor and the supplier, if
any, or be barred from any remedy against the party not notified;
(2) Within a reasonable time after the lessee receives notice of litigation
for infringement or the like (Section 10211) the lessee shall notify the lessor
or be barred from any remedy over for liability established by the litigation;
and
(3) The burden is on the lessee to establish any default.
(d) If a lessee is sued for breach of a warranty or other obligation for which
a lessor or a supplier is answerable over the following apply:
( 1) The lessee may give the lessor or the supplier, or both, written
notice of the litigation. If the notice states that the person notified may come
in and defend and that if the person notified does not do so that person will
be bound in any action against that person by the lessee by any determination
of fact common to the two litigations, then unless the person notified after
seasonable receipt of the notice does come in and defend that person is so
627
bound.
(2) The lessor or the supplier may demand in writing that the lessee turn
over control of the litigation including settlement if the claim is one for
infringement or the like (Section 10211) or else be barred from any remedy
over. If the demand states that the lessor or the supplier agrees to bear all
expense and to satisfy any adverse judgment, then unless the lessee after
seasonable receipt of the demand does turn over control the lessee is so
barred.
(e) Subdivisions (c) and (d) apply to any obligation of a lessee to hold the
lessor or the supplier harmless against infringement or the like (Section 10211).
(f) Subdivision (c) shall not apply to a consumer lease.
Leg.H. 1988 ch. 1359, operative January 1, 1990, ch. 1368 § 13.4, operative January 1,
1990, 1991 ch. 111, effective July 14, 1991.

SYNOPSIS
Contents
TITLE 1 CORPORATIONS
DIVISION 1 GENERAL CORPORATION LAW
§ 200. Formation of Corporations—Execution of Articles—Initiation of
Corporate Existence.
§ 200.5. Incorporation of Existing Unincorporated Association.
§ 201. Filing Where “Bank,” “Trust,” or “Trustee” in Name; Certificate of
Approval of Commissioner of Financial Institutions; Misleading or
Deceptive Name; Reservation.
§ 201.5. When Certificate of Insurance Commissioner Is Required.
§ 201.7. Filing of Articles of Incorporation of Domestic Mutual Insurer, Mutual
Holding Company, or Stock Holding Company.
CHAPTER 21 FOREIGN CORPORATIONS
§ 2105. Qualification of Foreign Corporation to Transact Intrastate Business.
§ 2106.5. When Certificate of Insurance Commissioner Is Required.
DIVISION 2 NONPROFIT CORPORATION LAW
PART 2 Nonprofit Public Benefit Corporations
628
ARTICLE 2 Formation
§ 5122. Filing Where “Bank,” “Trust,” or “Trustee” in Name; Certificate
of Approval of Commissioner of Financial Institutions; Misleading
or Deceptive Name; Reservation.
PART 3 Nonprofit Mutual Benefit Corporations
ARTICLE 2 Formation
§ 7122. Filing Where “Bank”, “Trust”, or “Trustee” in Name; Certificate
PART 4 Nonprofit Religious Corporations
ARTICLE 2 Formation
§ 9122. Filing Where “Bank,” “Trust,” or “Trustee” in Name; Certificate
DIVISION 3 CORPORATIONS FOR SPECIFIC PURPOSES
PART 2 Consumer Cooperative Corporations
CHAPTER 1 GENERAL PROVISIONS, ORGANIZATION AND BYLAWS
ARTICLE 4 Articles of Incorporation
§ 12311. Corporate Names to Include “Cooperative”; Use of Word
“Cooperative.”
PART 4 Professional Corporations
TITLE 2 PARTNERSHIPS
CHAPTER 2 UNIFORM LIMITED PARTNERSHIP ACT [Repealed]
CHAPTER 3 CALIFORNIA REVISED LIMITED PARTNERSHIP ACT [Repealed]
ARTICLE 1 General Provisions (Repealed January 1, 2010)
TITLE 2.5 LIMITED LIABILITY COMPANIES [REPEALED JANUARY 1, 2014]
CHAPTER 2 FORMATION [REPEALED JANUARY 1, 2014]
§ 17052. (Repealed January 1, 2014) Company Name; Requirements.
§ 17053. (Repealed January 1, 2014) Certificate of Reservation of Name.
TITLE 2.6 CALIFORNIA REVISED UNIFORM LIMITED LIABILITY COMPANY ACT
[OPERATIVE JANUARY 1, 2014]
ARTICLE 1 General Provisions [Operative January 1, 2014]
§ 17701.08. (Operative January 1, 2014) Name; Application to Use; Proscribed
Words.
§ 17701.09. (Operative January 1, 2014) Reservation of Name.
TITLE 4 SECURITIES
DIVISION 5 FRANCHISE INVESTMENT LAW
629
PART 1 Definitions
§ 31010. “Franchise” Includes “Area Franchise” and “Subfranchise.”
§ 31018. “Sale,” “Sell,” “Offer,” and “Offer to Sell” Defined.
PART 2 Regulation of the Sale of Franchises
§ 31109.1. Offer and Sale of Franchises Registered Under Section 31111,
31121, Or 31123 When Terms are Different from Terms of Offer
Registered.
CHAPTER 2 DISCLOSURE
§ 31110. Requirement of Registration of Offers and Sales.
§ 31119. Provision of franchise disclosure document to prospective
franchisee; Electronic provision allowed.
630
§ 31123. Notification of Change in Application Information.
§ 31125. Registration of Material Modification of Existing Franchise;
Exemption; “California Franchise” Defined; Restriction.
§ 31154. Misleading Application and Unlawful Representations.
§ 31155. Nonresident Applicant’s Irrevocable Appointment of
Commissioner as Attorney to Receive Service of Process; Procedure
for Service of Process.
PART 3 Fraudulent and Prohibited Practices
CHAPTER 1 FRAUDULENT PRACTICES
§ 31202. Misrepresentation in Exempt Offerings by Large Franchisor.
§ 31204. Tampering With Intent to Impede, Obstruct, or Influence
Administration or Enforcement of Division Unlawful.
CHAPTER 2 PROHIBITED PRACTICES
CHAPTER 3 UNFAIR PRACTICES
§ 31220. Right of Franchisees to Join Trade Association or Right of Free
Association.
PART 4 Enforcement
CHAPTER 1 CIVIL LIABILITY
§ 31302. Joint and Several Liability of Principals and Agents.
§ 31302.5. Cause of Action for Violation of Franchisee’s Right to Join
Trade Association or Right of Free Association.
§ 31306. No Liability by Implication—Liability Under Prior Law.
CHAPTER 2 POWERS OF THE COMMISSIONER
§ 31400.1. Persons Ineligible From Acting as an Officer or Director.
§ 31402. Desist and Refrain Order—Unregistered Offers.
631
§ 31403. Desist and Refrain Order—Misrepresentations.
§ 31406. Citations; Sanctions Separate From Other Remedies; Hearings;
Review.
§ 31407. Order Directing Discontinuance of Violation; Finality After
Notice; Hearing.
§ 31408. Inclusions in Administrative Actions; Recovery of Costs.
CHAPTER 3 CRIMES
§ 31411. Fraudulent Device, Scheme, or Artifice to Defraud in Offer or
Sale; Penalty.
CHAPTER 4 SERVICE OF PROCESS
§ 31420. Service of Process on Commissioner Authorized.
PART 5 Administration
§ 31500. Fees.
§ 31502. Authority of Commissioner to Make, Amend, and Rescind Rules.
PART 6 General Provisions
TITLE 1
CORPORATIONS
DIVISION 1
GENERAL CORPORATION LAW
632
CHAPTER 2
ORGANIZATION AND BYLAWS

§ 200. Formation of Corporations—Execution of
Articles—Initiation of Corporate Existence.
(a) One or more natural persons, partnerships, associations or corporations,
domestic or foreign, may form a corporation under this division by executing
and filing articles of incorporation.
(b) If initial directors are named in the articles, each director named in the
articles shall sign and acknowledge the articles; if initial directors are not
named in the articles, the articles shall be signed by one or more persons
described in subdivision (a) who thereupon are the incorporators of the
corporation.
( c ) The corporate existence begins upon the filing of the articles and
continues perpetually, unless otherwise expressly provided by law or in the
articles.
Leg.H. 1975 ch. 682, effective January 1, 1977, 1983 ch. 1223.
§ 200.5. Incorporation of Existing Unincorporated

Association.
(a) An existing business association organized as a trust under the laws of
this state or of a foreign jurisdiction may incorporate under this division upon
approval by its board of trustees or similar governing body and approval by the
affirmative vote of a majority of the outstanding voting shares of beneficial
interest (or such greater proportion of the outstanding shares of beneficial
interest or the vote of such other classes of shares of beneficial interest as may
be specifically required by its declaration of trust or bylaws) and the filing of
articles of incorporation with certificate attached pursuant to this chapter.
(b) In addition to the matters required to be set forth in the articles pursuant
to Section 202, the articles in the case of an incorporation authorized by
subdivision (a) shall set forth that an existing unincorporated association, stating
its name, is being incorporated by the filing of the articles.
( c ) The articles filed pursuant to this section shall be signed by the
president, or any vice president, and the secretary, or any assistant secretary, of
633
the existing association and shall be accompanied by a certificate signed and
verified by such officers signing the articles and stating that the incorporation of
the association has been approved by the trustees and by the required vote of
holders of shares of beneficial interest in accordance with subdivision (a).
(d) Upon the filing of articles of incorporation pursuant to this section, the
corporation shall succeed automatically to all of the rights and property of the
association being incorporated and shall be subject to all of its debts and
liabilities in the same manner as if the corporation had itself incurred them. The
incumbent trustee of the association shall constitute the initial directors of the
corporation and shall continue in office until the next annual meeting of the
shareholders, unless they die, resign or are removed prior thereto. All rights of
creditors and all liens upon the property of the association shall be preserved
unimpaired. Any action or proceeding pending by or against the association may
be prosecuted to judgment, which shall bind the corporation, or the corporation
may be proceeded against or substituted in its place.
(e) The filing for record in the office of the county recorder of any county in
this state in which any of the real property of the association is located of a copy
of the articles of incorporation filed pursuant to this section, certified by the
Secretary of State, shall evidence record ownership in the corporation of all
interests of the association in and to the real property located in that county.
Leg.H. 1978 ch. 370.

Name; Reservation.
(a) The Secretary of State shall not file articles setting forth a name in which
“bank,” “trust,” “trustee” or related words appear, unless the certificate of
approval of the Commissioner of Financial Institutions is attached thereto. This
subdivision does not apply to the articles of any corporation subject to the
Banking Law on which is endorsed the approval of the Commissioner of
Financial Institutions.
(b) The Secretary of State shall not file articles which set forth a name
which is likely to mislead the public or which is the same as, or resembles so
closely as to tend to deceive, the name of a domestic corporation, the name of a
foreign corporation which is authorized to transact intrastate business or has
registered its name pursuant to Section 2101, a name which a foreign
corporation has assumed under subdivision (b) of Section 2106, a name which
will become the record name of a domestic or foreign corporation upon the
634
effective date of a filed corporate instrument where there is a delayed effective
date pursuant to subdivision (c) of Section 110 or subdivision (c) of Section
5008, or a name which is under reservation for another corporation pursuant to
this section, Section 5122, Section 7122, or Section 9122 title, except that a
corporation may adopt a name that is substantially the same as an existing
domestic corporation or foreign corporation which is authorized to transact
intrastate business or has registered its name pursuant to Section 2101, upon
proof of consent by such domestic or foreign corporation and a finding by the
Secretary of State that under the circumstances the public is not likely to be
misled.
The use by a corporation of a name in violation of this section may be
enjoined notwithstanding the filing of its articles by the Secretary of State.
(c) Any applicant may, upon payment of the fee prescribed therefor in the
Government Code, obtain from the Secretary of State a certificate of reservation
of any name not prohibited by subdivision (b), and upon the issuance of the
certificate the name stated therein shall be reserved for a period of 60 days. The
Secretary of State shall not, however, issue certificates reserving the same name
for two or more consecutive 60-day periods to the same applicant or for the use
or benefit of the same person, partnership, firm or corporation; nor shall
consecutive reservations be made by or for the use or benefit of the same
person, partnership, firm or corporation of names so similar as to fall within the
prohibitions of subdivision (b).
Added Stats 1975 ch 682 § 7, effective January 1, 1977. Amended Stats 1978 ch 370 §
2.6, ch 1305 § 2, operative January 1, 1980; Stats 1996 ch 1064 § 9, operative July 1, 1997;
A corporation should file its articles of incorporation promptly in order to obtain
(should it be the first to file and use the corporate name as a business name) a rebuttable
presumption that it has the exclusive right in California to use the corporate name as a trade
name. See Bus. & Prof. Code § 14415.
Annotations
Cases
Boyer v. Jones, 88 Cal. App. 4th 220, 105 Cal. Rptr. 2d 824 (2001) . A corporate name
may be reserved under § 201. But, section 201 prohibits the reservation or adoption of a
corporate name which is the same as or confusingly similar with an existing corporation’s
name. This case holds that the name of a suspended corporation may be reserved and adopted
by another corporation. A corporation may be suspended for inter alia failing to file annual
statements as required by § 1502, or failing to file tax returns. (Rev. & Tax. Code § 23305.1 )
Once a corporation has been suspended, the prohibition no longer applies and another
635
corporation can reserve and adopt the suspended corporation’s name.
§ 201.5. When Certificate of Insurance Commissioner

Is Required.
The Secretary of State shall not file articles in which the business is to be an
insurer unless the certificate of the Insurance Commissioner approving the
corporate name is attached thereto.
Leg.H. 1979 ch. 737.

The Secretary of State shall file the certificate of redomestication of an
insurer for which articles of incorporation have previously been filed if the
Insurance Commissioner has approved the redomestication under Section 709.5
of the Insurance Code.
Leg.H. 1995 ch. 702.
§ 201.7. Filing of Articles of Incorporation of Domestic

Mutual Insurer, Mutual Holding Company, or Stock
Holding Company.
Upon receipt of a certified copy of the commissioner’s authorization issued
pursuant to subdivision (a) of Section 11542 or subdivision (a) of Section
4097.11 of the Insurance Code and subject to subdivision (a) of Section 110 of
the Corporations Code, the Secretary of State shall accept for filing the
certificate of amendment of the articles of incorporation of the domestic mutual
insurer certified by the secretary thereof. Upon receipt of a certified copy of the
commissioner’s authorization to file articles of incorporation of a mutual
holding company and a stock holding company authorized pursuant to
conversion proceedings pursuant to subdivision (a) of Section 11542 or
subdivision (a) of Section 4097.11 of the Insurance Code and subject to
subdivision (a) of Section 110 of the Corporations Code, the Secretary of State
shall accept for filing the articles of incorporation of the mutual holding
company and stock holding company.
Leg.H. 1996 ch. 406, effective August 19, 1996, 1998 ch. 421.

The articles of incorporation shall set forth:
(a) The name of the corporation; provided, however, that in order for
636
the corporation to be subject to the provisions of this division applicable to
a close corporation (Section 158), the name of the corporation must contain
the word “corporation,” , “incorporated,” or “limited” or an abbreviation of
one of such words.
(b)
(1) The applicable one of the following statements:
(i)
(A) The purpose of the corporation is to engage in any lawful
act or activity for which a corporation may be organized under
the General Corporation Law of California other than the banking
business, the trust company business or the practice of a
profession permitted to be incorporated by the California
Corporations Code; or
(ii)
(B) The purpose of the corporation is to engage in the
profession of ________ (with the insertion of a profession
permitted to be incorporated by the California Corporations
Code) and any other lawful activities (other than the banking or
trust company business) not prohibited to a corporation engaging
in such profession by applicable laws and regulations.
(2) In case the corporation is a corporation subject to the Banking
La w (Division 1 (commencing with Section 99) of the Financial
Code), the articles shall set forth a statement of purpose which is
prescribed in the applicable provision of the Banking Law.
(3) In case the corporation is a corporation subject to the Insurance
Code as an insurer, the articles shall additionally state that the business
of the corporation is to be an insurer.
(4) If the corporation is intended to be a “professional corporation”
within the meaning of the Moscone-Knox Professional Corporation Act
(Part 4 (commencing with Section 13400) of Division 3), the articles
shall additionally contain the statement required by Section 13404.
The articles shall not set forth any further or additional statement
with respect to the purposes or powers of the corporation, except by
way of limitation or except as expressly required by any law of this state
other than this division or any federal or other statute or regulation
(including the Internal Revenue Code and regulations thereunder as a
condition of acquiring or maintaining a particular status for tax
637
purposes).
(c) The name and street address in this state of the corporation’s initial
agent for service of process in accordance with subdivision (b) of Section
1502.
(d) The initial street address of the corporation.
(e) The initial mailing address of the corporation, if different from
the initial street address.
(f) If the corporation is authorized to issue only one class of shares, the
total number of shares which the corporation is authorized to issue.
(e)
(g) If the corporation is authorized to issue more than one class of
shares, or if any class of shares is to have two or more series:
(1) The total number of shares of each class the corporation is
authorized to issue, and the total number of shares of each series
which the corporation is authorized to issue or that the board is
authorized to fix the number of shares of any such series;
(2) The designation of each class, and the designation of each
series or that the board may determine the designation of any such
series; and
(3) The rights, preferences, privileges, and restrictions granted to
or imposed upon the respective classes or series of shares or the
holders thereof, or that the board, within any limits and restrictions
stated, may determine or alter the rights, preferences, privileges, and
restrictions granted to or imposed upon any wholly unissued class of
shares or any wholly unissued series of any class of shares. As to
any series the number of shares of which is authorized to be fixed by
the board, the articles may also authorize the board, within the limits
and restrictions stated therein or stated in any resolution or
resolutions of the board originally fixing the number of shares
constituting any series, to increase or decrease (but not below the
number of shares of such series then outstanding) the number of
shares of any such series subsequent to the issue of shares of that
series. In case the number of shares of any series shall be so
decreased, the shares constituting such decrease shall resume the
status which they had prior to the adoption of the resolution
originally fixing the number of shares of such series.
2.7; Stats 1979 ch 737 § 2; Stats 2000 ch 485 § 3 (AB 1895); Stats 2012 ch 494 § 4 (SB
638
CHAPTER 21
FOREIGN CORPORATIONS
(a) Any foreign corporation (other than a foreign association) not transacting
intrastate business may register its corporate name with the Secretary of State,
provided its corporate name would be available pursuant to Section 201 to a
new corporation organized under this division at the time of such registration.
( b ) Such registration may be made by filing (1) an application for
registration signed by a corporate officer stating the name of the corporation, the
state or place under the laws of which it is incorporated, the date of its
incorporation, and that it desires to register its name under this section; and (2)
a certificate of an authorized public official of the state or place in which it is
organized stating that such corporation is in good standing under those laws.
Such registration shall be effective until the close of the calendar year in which
the application for registration is filed.
(c) A corporation which has in effect a registration of its corporate name
may renew such registration from year to year by annually filing an application
for renewal setting forth the facts required to be set forth in an original
application for registration and a certificate of good standing as required for the
original registration between the first day of October and the 31st day of
December in each year. Such renewal application shall extend the registration
for the following calendar year.
§ 2105. Qualification of Foreign Corporation to

Transact Intrastate Business.
( a ) A foreign corporation shall not transact intrastate business without
having first obtained from the Secretary of State a certificate of qualification. To
obtain that certificate it shall file, on a form prescribed by the Secretary of
State, a statement and designation signed by a corporate officer stating:
(1) Its name and the state or place of its incorporation or organization.
(2) The street address of its principal executive office.
639
(3) The street address of its principal office within this state, if any.
(4) The mailing address of its principal executive office, if different
from the addresses specified pursuant to paragraphs (2) and (3).
(5) The name of an agent upon whom process directed to the corporation
may be served within this state. The designation shall comply with the
provisions of subdivision (b) of Section 1502.
(5)
(6)
(A) Its irrevocable consent to service of process directed to it
upon the agent designated and to service of process on the Secretary
of State if the agent so designated or the agent’s successor is no
longer authorized to act or cannot be found at the address given.
(B) Consent under this paragraph extends to service of process
directed to the foreign corporation’s agent in California for a search
warrant issued pursuant to Section 1524.2 of the Penal Code, or for
any other validly issued and properly served search warrant, for
records or documents that are in the possession of the foreign
corporation and are located inside or outside of this state. This
subparagraph shall apply to a foreign corporation that is a party or a
nonparty to the matter for which the search warrant is sought. For
purposes of this subparagraph, “properly served” means delivered
by hand, or in a manner reasonably allowing for proof of delivery if
delivered by United States mail, overnight delivery service, or
facsimile to a person or entity listed in Section 2110 of the
Corporations Code.
(6)
(7) If it is a corporation which will be subject to the Insurance Code
as an insurer, it shall so state that fact.
(b) Annexed to that statement and designation shall be a certificate by an
authorized public official of the state or place of incorporation of the
corporation to the effect that the corporation is an existing corporation in good
standing in that state or place or, in the case of an association, an officers’
certificate stating that it is a validly organized and existing business association
under the laws of a specified foreign jurisdiction.
(c) Before it may be designated by any foreign corporation as its agent for
service of process, any corporate agent must comply with Section 1505.
640
3; Stats 1985 ch 764 § 3, operative July 1, 1986; Stats 1999 ch 896 § 1 (SB 662); Stats 2004
ch 629 § 1 (AB 1776); Stats 2012 ch 494 § 9 (SB 1532), effective January 1, 2013.

(a) Subject to the provisions of subdivision (b), upon payment of the fees
required by law the Secretary of State shall file the statement and designation
prescribed in Section 2105 and shall issue to the corporation a certificate of
qualification stating the date of filing of said statement and designation and that
the corporation is qualified to transact intrastate business, subject, however, to
any licensing requirements otherwise imposed by the laws of this state.
(b) No foreign corporation having a name which would not be available
pursuant to subdivision (b) of Section 201 to a new corporation organized under
this division shall transact intrastate business in this state or qualify to do so
under this chapter or file an amended statement and designation containing such
name unless either: (1) it obtains and files an order from a court of competent
jurisdiction permanently enjoining the other corporation having a conflicting
name from doing business in this state under that name; or (2) the Secretary of
State finds, upon proof by affidavit or otherwise as the Secretary of State may
determine, that the business to be conducted in this state by the foreign
corporation is not the same as or similar to the business being conducted by the
corporation (or to be conducted by the proposed corporation) with whose name
it may conflict and that the public is not likely to be deceived, and the foreign
corporation agrees that it will transact business in this state under an assumed
name disclosed to the Secretary of State and that it will use such assumed name
in all of its dealings with the Secretary of State and in the conduct of its affairs
in this state. Such assumed name may be its name with the addition of some
distinguishing word or words acceptable to the Secretary of State or a name
available for the name of a domestic corporation pursuant to subdivision (b) of
Section 201. A corporation which has made such an agreement with the
Secretary of State shall not do business in this state except under the name
agreed upon, so long as the agreement remains in effect. This subdivision shall
not apply to any corporation which is subject to the Insurance Code as an
insurer unless the insurer has first obtained from the Insurance Commissioner a
certificate approving the assumed name.
Leg.H. 1975 ch. 682, 1976 ch. 641, effective January 1, 1977, 1979 ch. 737.
§ 2106.5. When Certificate of Insurance Commissioner

Is Required.
The Secretary of State shall not file any statement and designation pursuant
to Section 2106 or any amended statement and designation pursuant to Section
641
2107, where it appears that the business is that of an insurer subject to the
Insurance Code unless a certificate of the Insurance Commissioner approving
the Corporate name is attached thereto.
Leg.H. 1979 ch. 737.

(a) If any foreign corporation (but not a foreign association) qualified to
transact intrastate business shall change its name or make a change affecting an
assumed name under Section 2106, it shall file, on a form prescribed by the
Secretary of State, an amended statement signed by a corporate officer setting
forth the change made. The amended statement shall set forth the name
relinquished as well as the new name assumed and there shall be annexed to the
amended statement a certificate of an authorized public official of its state or
place of incorporation that the change of name was made in accordance with the
laws of that state or place. Upon the filing of the amended statement, the
Secretary of State shall issue a new certificate of qualification.
(b) If any foreign association qualified to transact intrastate business shall
change its name, the address of its principal office in this state, the address of its
principal executive office or its agent for the service of process, or if the stated
address of any natural person designated as agent is changed, it shall file, on a
form prescribed by the Secretary of State, an amended statement and designation
signed by an officer setting forth the change or changes made. In the case of a
change of name, the amended statement and designation shall set forth the name
relinquished as well as the new name assumed and there shall be annexed to the
amended statement and designation an officer’s certificate stating that such
change of name was made in accordance with its declaration of trust. If the
change includes a change of name, or a change affecting an assumed name
pursuant to Section 2106, upon the filing of the amended statement, the Secretary
of State shall issue a new certificate of qualification.
(c) If the change includes a change of name of an insurer subject to the
Insurance Code, the form shall include a statement that the corporation is such
an insurer if it does not already so appear.
(d) If a foreign corporation qualified to transact business in this state shall
change the address of its principal office in this state, the address of its
principal executive office, or its agent for the service of process, or if the stated
address of any natural person designated as agent is changed, the filing of a
statement pursuant to Section 2117 shall supersede the statement and designation
with respect thereto.
Leg.H. 1985 ch. 764 § 5, operative July 1, 1986.
642
DIVISION 2
NONPROFIT CORPORATION LAW

PART 2
Nonprofit Public Benefit Corporations

CHAPTER 1

ARTICLE 2
Formation

Name; Reservation.
approval of the Commissioner of Financial Institutions is attached thereto.
corporation has assumed under subdivision (b) of Section 2106 or a name
which will become the record name of a domestic or foreign corporation upon
the effective date of a filed corporate instrument where there is a delayed
effective date pursuant to subdivision (c) of Section 110, or subdivision (c) of
643
Section 5008, or a name which is under reservation pursuant to this section,
Section 201, Section 7122, or Section 9122 title, except that a corporation may
adopt a name that is substantially the same as an existing domestic or foreign
corporation which is authorized to transact intrastate business or has registered
its name pursuant to Section 2101, upon proof of consent by such corporation
and a finding by the Secretary of State that under the circumstances the public is
not likely to be misled.
or benefit of the same person; nor shall consecutive reservations be made by or
for the use or benefit of the same person of names so similar as to fall within the
Added Stats 1978 ch 567 § 5, operative January 1, 1980, operative until July 1, 1997.
Amended Stats 1996 ch 1064 § 12 (AB 3351), operative July 1, 1997; Stats 2011 ch 740 §
13 (SB 201), effective January 1, 2012.
PART 3
Nonprofit Mutual Benefit Corporations

CHAPTER 1

ARTICLE 2
Formation
§ 7122. Filing Where “Bank”, “Trust”, or “Trustee” in
644
Name; Reservation.
(b) The Secretary of State shall not file articles pursuant to this part setting
forth a name which may create the impression that the purpose of the
corporation is public, charitable or religious or that it is a charitable foundation.
(c) The Secretary of State shall not file articles which set forth a name
corporation has assumed under subdivision (b) of Section 2106, a name which
will become the record name of a domestic or foreign corporation upon the
effective date of a filed corporate instrument where there is a delayed effective
date pursuant to subdivision (c) of Section 110, or subdivision (c) of Section
5008, or a name which is under reservation pursuant to this section, Section
201, Section 5122, or Section 9122 title, except that a corporation may adopt a
name that is substantially the same as an existing domestic or foreign
(d) Any applicant may, upon payment of the fee prescribed therefor in the
of any name not prohibited by subdivision (c), and upon the issuance of the
prohibitions of subdivision (c).
Added Stats 1978 ch 567 § 6, operative January 1, 1980. Amended Stats 1996 ch 1064 §
13 (AB 3351), operative July 1, 1997; Stats 2011 ch 740 § 14 (SB 201), effective January 1,
2012.
645
PART 4
Nonprofit Religious Corporations

CHAPTER 1

ARTICLE 2
Formation

Name; Reservation.
corporation has assumed under subdivision (b) of Section 2106 or a name
which will become the record name of a domestic or foreign corporation upon
the effective date of a filed corporate instrument where there is a delayed
effective date pursuant to subdivision (c) of Section 110 or subdivision (c) of
Section 5008, or a name which is under reservation pursuant to this section,
Section 201, Section 5122, or Section 7122 title, except that a corporation may
adopt a name that is substantially the same as an existing domestic or foreign
646
Added Stats 1978 ch 567 § 7, operative January 1, 1980, operative until July 1, 1997.
Amended Stats 1996 ch 1064 § 14 (AB 3351), operative July 1, 1997; Stats 2011 ch 740 §
15 (SB 201), effective January 1, 2012.
DIVISION 3
CORPORATIONS FOR SPECIFIC

PURPOSES
PART 2
Consumer Cooperative Corporations

CHAPTER 1
GENERAL PROVISIONS, ORGANIZATION

AND BYLAWS
ARTICLE 4
Articles of Incorporation
647
§ 12311. Corporate Names to Include “Cooperative”;
Use of Word “Cooperative.”
( a ) The names of all corporations formed under this part shall include
“cooperative.” No corporation shall be formed under this part unless there is
affixed or prefixed to its name some word or abbreviation which will indicate
that it is a corporation, as distinguished from a natural person, a firm, or an
unincorporated association.
( b ) No person shall adopt or use the word “cooperative” or any
abbreviation or derivation thereof, or any word similar thereto, as part of the
name or designation under which it does business in this state, unless
incorporated as provided in this part or unless incorporated as a nonprofit
cooperative association under Chapter 1 (commencing with Section 54001) of
Division 20 of the Food and Agricultural Code, as a stock cooperative, as
defined in Section 11003.2 of the Business and Professions Code, as a limited-
equity housing cooperative, as defined in Section 33007.5 of the Health and
Safety 817 of the Civil Code, as a credit union or organization owned for the
mutual benefit of credit unions, or under some other law of this state enabling it
to do so. However, the foregoing prohibition shall be inapplicable to any credit
union or organization owned for the mutual benefit of credit unions, any housing
cooperative, the financing of which is insured, guaranteed, or provided, in
whole or in part, by a public or statutorily chartered entity pursuant to a program
created for housing cooperatives, a nonprofit corporation, a majority of whose
membership is composed of cooperative corporations, or an academic
institution that serves cooperative corporations.
(c) A domestic or foreign corporation or association which did business in
this state under a name or designation including the word “cooperative” prior to
September 19, 1939, and which conducts business on a cooperative basis
substantially as set forth in this part, may continue to do business under that
name or designation.
(d) Any person, firm, individual, partnership, trust, domestic corporation,
foreign corporation, or association which did business in this state under a name
or designation including the word “cooperative” prior to September 19, 1939,
but which does not conduct business on a cooperative basis as contemplated by
Section 12201 of this part, may continue to do business under that name or
designation if the words “not organized under the law relating to cooperative
corporations” are always placed immediately after the name or designation
wherever it is used.
( e ) Any foreign corporation, organized under and complying with the
cooperative law of the state or other jurisdiction of its creation, may use the
648
term “cooperative” in this state if it has complied with the laws of this state
applicable to foreign corporations, insofar as those laws are applicable to it,
and if it is doing business on a cooperative basis as contemplated by Section
12201.
9; Stats 1990 ch 1491 § 12 (AB 3765); Stats 2011 ch 442 § 28 (AB 1211), effective January
1, 2012.
PART 4
Professional Corporations

( a ) A professional corporation may adopt any name permitted by a law
expressly applicable to the profession in which such corporation is engaged or
by a rule or regulation of the governmental agency regulating such profession.
The provisions of subdivision (b) of Section 201 shall not apply to the name of
a professional corporation if such name shall contain and be restricted to the
name or the last name of one or more of the present, prospective, or former
shareholders or of persons who were associated with a predecessor person,
partnership or other organization or whose name or names appeared in the name
of such predecessor organization, and the Secretary of State shall have no
authority by reason of subdivision (b) of Section 201 to refuse to file articles of
incorporation which set forth such a name; provided, however, that such name
shall not be substantially the same as the name of a domestic corporation, the
name of a foreign corporation qualified to render professional services in this
state which is authorized to transact business in this state, or a name which is
under reservation for another corporation. The Secretary of State may require
proof by affidavit or otherwise establishing that the name of the professional
corporation complies with the requirements of this section and of the law
governing the profession in which such professional corporation is engaged.
The statements of fact in such affidavits may be accepted by the Secretary of
State as sufficient proof of the facts.
( b ) A foreign professional corporation qualified to render professional
services in this state may transact intrastate business in this state by any name
permitted by a law expressly applicable to the profession in which the
corporation is engaged, or by a rule or regulation of the governmental agency
regulating the rendering of professional services in this state by the corporation.
The provisions of subdivision (b) of Section 201 shall not apply to the name of
a foreign professional corporation if the name contains and is restricted to the
649
name or the last name of one or more of the present, prospective, or former
shareholders or of persons who were associated with a predecessor person,
partnership, or other organization, or whose name or names appeared in the
name of the predecessor organization, and the Secretary of State shall have no
authority by reason of subdivision (b) of Section 201 to refuse to issue a
certificate of qualification to a foreign professional corporation that sets forth
that name in its statement and designation; provided, however, that such a name
shall not be substantially the same as the name of a domestic corporation, the
name of a foreign corporation qualified to render professional services in the
state, or a name that is under reservation for another corporation. The Secretary
of State may require proof by affidavit or otherwise establishing that the name
of the foreign professional corporation qualified to render professional services
in this state complies with the requirements of this section and of the law
governing the profession in which the foreign professional corporation qualified
to render professional services in this state proposes to engage in this state. The
statements of fact in such affidavits may be accepted by the Secretary of State as
sufficient proof of the facts.
Leg.H. 1968 ch. 1375, 1976 ch. 641, 1993 ch. 910.
TITLE 2
PARTNERSHIPS
CHAPTER 2
UNIFORM LIMITED PARTNERSHIP ACT

[Repealed]
Added Stats 1949 ch 383 § 1. Repealed by the terms of Corp C § 15534, effective
January 1, 2010. The repealed section related to name of limited partner in partnership name.
CHAPTER 3
CALIFORNIA REVISED LIMITED

650
PARTNERSHIP
ACT [Repealed]
ARTICLE 1
General Provisions
(Repealed January 1, 2010)

1, effective April 30, 1984, operative July 1, 1984; Stats 1987 ch. 1364 § 1; Stats 1990 ch.
1088 § 1 (SB 2575); Stats 1992 ch. 1023 § 2 (SB 1686); Stats 1993 ch. 543 § 14 (AB
2063); Stats 1994 ch. 1010 § 68 (SB 2053) (ch. 1200 prevails), ch. 1200 § 24 (SB 469),
effective September 30, 1994. Repealed by the terms of Corp C § 15724, effective January
1, 2010. The repealed section related to definitions.

2, effective April 30, 1984, operative July 1, 1984; Stats 1987 ch. 1364 § 2; Stats 1990 ch.
1088 § 2 (SB 2575). Repealed by the terms of Corp C § 15724, effective January 1, 2010.
The repealed section related to requirements as to name.

3.
TITLE 2.5
LIMITED LIABILITY COMPANIES

[REPEALED JANUARY 1, 2014]
CHAPTER 2
FORMATION
651
[REPEALED JANUARY 1, 2014]
§ 17052. (Repealed January 1, 2014) Company Name;
Requirements.
The name of each limited liability company as set forth in its articles of
organization:
(a) Shall contain either the words “limited liability company” or the
abbreviation “LLC” or “L.L.C.” as the last words in the name of the limited
liability company. The words “limited” and “company” may be abbreviated
to “Ltd.” and “Co.,” respectively.
(b) May contain the name of one or more members.
(c) Shall not be a name that the Secretary of State determines is likely to
mislead the public and shall not be the same as, or resemble so closely as to
tend to deceive, (1) the name of any limited liability company that has filed
articles of organization pursuant to Section 17050, (2) the name of any
foreign limited liability company registered to do business in this state
pursuant to Section 17451, or (3) any name that is under reservation for
another domestic limited liability company or foreign limited liability
company pursuant to Section 17053. However, a limited liability company
may adopt a name that is substantially the same as that of an existing
domestic limited liability company or foreign limited liability company that
is registered pursuant to Section 17451 upon proof of consent by that
domestic limited liability company or foreign limited liability company and
a finding by the Secretary of State that, under the circumstances, the public
is not likely to be misled.
( d ) Shall not contain the words “bank,” “trust,” “trustee,”
“incorporated,” “inc.,” “corporation,” or “corp.,” and shall not contain the
words “insurer” or “insurance company” or any other words suggesting that
it is in the business of issuing policies of insurance and assuming insurance
risks.
(e) The use by a limited liability company or a foreign limited liability
company of a name in violation of this section may be enjoined,
notwithstanding the filing of its articles of organization or its registration
with the Secretary of State.
(f) A limited liability company may record in the office of the county
recorder of any county in this state, and county recorders, on request, shall
record a certified copy of the limited liability company articles of
organization and any exhibits or attachments, or any amendment or
652
correction thereto, that has been filed in the office of the Secretary of State.
A foreign limited liability company may record in the office of the county
recorder of any county in the state a certified copy of the limited liability
company application for registration, certificate of registration, or any
amendment thereto, that has been filed in the office of the Secretary of State.
The recording shall create a conclusive presumption in favor of any bona
fide purchaser or encumbrancer for value of the limited liability company
real property located in the county in which the certified copy has been
recorded, of the statements contained therein.
Added Stats 1994 ch 1200 § 27 (SB 469), effective September 30, 1994. Amended Stats
1996 ch 57 § 7 (SB 141), effective June 6, 1996, ch 883 § 2 (AB 2177); Stats 2012 ch 419 §
19 (SB 323), effective January 1, 2013, repealed January 1, 2014.
§ 17053. (Repealed January 1, 2014) Certificate of

Reservation of Name.
Any applicant may, upon payment of the fee prescribed in subdivision (a) of
Section 17701, obtain from the Secretary of State a certificate of reservation of
any name not prohibited by Section 17052, and upon the issuance of the
certificate the name stated therein may be reserved for a period of 60 days. The
Secretary of State shall not issue certificates reserving the same name for two or
more consecutive 60-day periods to the same applicant or for the use or benefit
of the same person; nor shall consecutive reservations be made by or for the use
or benefit of the same person for names so similar as to fall within the
prohibitions of subdivision (c) of Section 17052.
Added Stats 1994 ch 1200 § 27 (SB 469), effective September 30, 1994; Stats 2012 ch
419 § 19 (SB 323), effective January 1, 2013, repealed January 1, 2014.
TITLE 2.6
CALIFORNIA REVISED UNIFORM

LIMITED LIABILITY COMPANY ACT
[OPERATIVE JANUARY 1, 2014]
ARTICLE 1
General Provisions
653
[Operative January 1, 2014]
§ 17701.08. (Operative January 1, 2014) Name;

Application to Use; Proscribed Words.
(a) The name of a limited liability company shall contain the words “limited
liability company,” or the abbreviation “L.L.C.” or “LLC.” “Limited” may be
abbreviated as “Ltd.,” and “company” may be abbreviated as “Co.”
(b) Unless authorized by subdivision (c), the name of a limited liability
company shall not be a name that the Secretary of State determines is likely to
mislead the public and shall be distinguishable in the records of the Secretary of
State from all of the following:
( 1 ) The name of any limited liability company or foreign limited
liability company authorized to transact business in this state.
(2) Each name reserved under Section 17701.09.
( c ) A limited liability company may apply to the Secretary of State for
authorization to use a name that does not comply with subdivision (b). The
Secretary of State shall authorize use of the name applied for if, as to each
noncomplying name, either of the following applies:
(1) The present user, registrant, or owner of the noncomplying name
consents in a signed record to the use and submits an undertaking in a form
satisfactory to the Secretary of State to change the noncomplying name to a
name that complies with subdivision (b) and is distinguishable in the
records of the Secretary of State from the name applied for.
(2) The applicant delivers to the Secretary of State a certified copy of
the final judgment of a court establishing the applicant’s right to use in this
state the name applied for.
(d) Subject to Section 17708.04, this section applies to a foreign limited
liability company transacting intrastate business in this state that has a certificate
of registration to transact intrastate business in this state or that has applied for a
certificate of registration.
( e ) The name shall not include the words “bank,” “trust,” “trustee,”
“incorporated,” “inc.,” “corporation,” or “corp.” and shall not include the
words “insurer” or “insurance company” or any other words suggesting that it is
in the business of issuing policies of insurance and assuming insurance risks.
Added Stats 2012 ch 419 § 20 (SB 323), effective January 1, 2013, operative January 1,
2014.
654
§ 17701.09. (Operative January 1, 2014) Reservation of
Name.
(a) A person may reserve the exclusive use of the name of a limited liability
company or foreign limited liability company, including an alternative name for
a foreign limited liability company whose name is not available, by delivering
an application to the Secretary of State. The application shall state the name and
address of the applicant and the name proposed to be reserved. If the Secretary
of State finds that the name applied for is available, it shall be reserved for the
applicant’s exclusive use for up to 60 days. The Secretary of State shall not
issue certificates reserving the same name for two or more consecutive 60-day
periods to the same applicant or for the use or benefit of the same person; nor
shall consecutive reservations be made by or for the use or benefit of the same
person for a name so similar as to fall within the prohibitions of subdivision (b)
of Section 17701.08.
(b) The owner of a name reserved for a limited liability company or foreign
limited liability company may transfer the reservation to another person by
delivering to the Secretary of State for filing a signed notice of the transfer
which states the name and address of the transferee.
Added Stats 2012 ch 419 § 20 (SB 323), effective January 1, 2013, operative January 1,
2014.
TITLE 4
SECURITIES
DIVISION 5
FRANCHISE INVESTMENT LAW

PART 1
Definitions
655
This division may be known as the “Franchise Investment Law.” References
in this division to “this law” refer to the applicable provisions of this division.
Leg.H. 1970 ch. 1400, operative January 1, 1971.
Practitioners preparing trademark or copyright licenses should review the Franchise
Investment Law’s definition of “franchise” in order to determine whether the license
agreement comes within that law. Suitable changes to the agreement may avoid the expensive
and burdensome obligations of registration and disclosure imposed by the Franchise
Investment Law on the franchisor, and the even more expensive consequences to the licensor
of not meeting those obligations.

The Legislature hereby finds and declares that the widespread sale of
franchises is a relatively new form of business which has created numerous
problems both from an investment and a business point of view in the State of
California. Prior to the enactment of this division, the sale of franchises was
regulated only to the limited extent to which the Corporate Securities Law of
1968 applied to those transactions. California franchisees have suffered
substantial losses where the franchisor or his or her representative has not
provided full and complete information regarding the franchisor-franchisee
relationship, the details of the contract between franchisor and franchisee, and
the prior business experience of the franchisor. It is the intent of this law to
provide each prospective franchisee with the information necessary to make an
intelligent decision regarding franchises being offered. Further, it is the intent of
this law to prohibit the sale of franchises where the sale would lead to fraud or
a likelihood that the franchisor’s promises would not be fulfilled, and to protect
the franchisor and franchisee by providing a better understanding of the
relationship between the franchisor and franchisee with regard to their business
relationship.
Leg.H. 1970 ch. 1400, operative January 1, 1971, 2004 ch. 458 (AB 2921), effective
September 10, 2004, operative January 1, 2005.

(a) To enhance the uniform and efficient administration, and the effective
enforcement, of this division, it is the intent of the Legislature that the
commissioner shall maintain a risk-based process of reviewing franchise
656
applications as described in this section.
(b) Under the risk-based review process, the commissioner shall focus on
reviewing application information posing the most risk to prospective
franchisees in accordance with Section 31115, with emphasis on risks
associated with the franchisor’s financial condition, the franchisor’s compliance
record, and significant deficiencies with the franchisor’s application.
(c) When reviewing franchise filings under this section, the commissioner
shall concentrate on helping to prevent misappropriation, mismanagement, and
misrepresentation in connection with the offer or sale of any franchise subject to
this division.
( d ) The commissioner shall consider guidelines, or other information
developed by the North American Securities Administrators Association that
are in effect, to assist in the implementation of the risk-based review process.
The risk-based review procedures implemented by the commissioner shall be
considered internal management criteria and guidelines within the meaning of
subdivisions (d) and (e) of Section 11340.9 of the Government Code.
Leg.H. 2004 ch. 458 (AB 2921), effective September 10, 2004, operative January 1,
2005.

Unless the context otherwise requires, the definitions in this part apply
throughout this division.

“Advertisement” means any written or printed communication or any
communication by means of recorded telephone messages or spoken on radio,
television, or similar communications media, published in connection with an
offer or sale of a franchise.

“Business days” are all days other than every Saturday, every Sunday, and
such other days as are specified or provided for as holidays in the Government
Code.
Leg.H. 1973 ch. 539.
657
“Commissioner” means the Commissioner of Corporations Business
Oversight.
Added Stats 1970 ch 1400 § 3, operative January 1, 1971. See this section as modified
in Governor’s Reorganization Plan No. 2 § 41 of 2012. Amended Stats 2013 ch 353 § 45 (SB
820), effective September 26, 2013, operative July 1, 2013.
Editor’s Notes:
2012 Governor’s Reorganization Plan No. 2 was submitted to the Legislature on May 3,
2012, and became effective July 3, 2012, pursuant to Gov C § 12080.5, and substantively
operative July 1, 2013.
2012 Amendment:
Substituted “Deputy Commissioner of Business Oversight for the Division of
Corporations” for “Commissioner of Corporations”.
Stats 2013 ch 353 (SB 820) § 45 enacts the statutory changes necessary to reflect the
changes made by 2012 Governor’s Reorganization Plan No. 2 § 41.
2013 Amendment:
Substituted “Commissioner of Business Oversight” for “Commissioner of
Corporations”.

(a) “Franchise” means a contract or agreement, either expressed or implied,
whether oral or written, between two or more persons by which:
(1) A franchisee is granted the right to engage in the business of offering,
selling or distributing goods or services under a marketing plan or system
prescribed in substantial part by a franchisor; and
(2) The operation of the franchisee’s business pursuant to such plan or
system is substantially associated with the franchisor’s trademark, service
mark, trade name, logotype, advertising or other commercial symbol
designating the franchisor or its affiliate; and
(3) The franchisee is required to pay, directly or indirectly, a franchise
fee.
(b) For the purposes of this division, the term “franchise” also means the
following:
( 1 ) Any contractual agreement between a petroleum corporation or
distributor and a gasoline dealer, or between a petroleum corporation and
658
distributor, under which the petroleum distributor or the gasoline dealer is
granted the right to use a trademark, trade name, service mark, or other
identifying symbol or name owned by the other party to the agreement, or
any agreement between a petroleum corporation or distributor and a
gasoline dealer, or between a petroleum corporation and distributor, under
which the petroleum distributor or the gasoline dealer is granted the right to
occupy premises owned, leased, or controlled by the other party to the
agreement, for the purposes of engaging in the retail sale of petroleum and
other products of the other party to the agreement.
(2) Any contract between a refiner and a petroleum distributor, between
a refiner and a petroleum retailer, between a petroleum distributor and
another petroleum distributor, or between a petroleum distributor and a
petroleum retailer, under which a refiner or petroleum distributor authorizes
or permits a petroleum retailer or petroleum distributor to use, in connection
with the sale, consignment, or distribution of gasoline, diesel, gasohol, or
aviation fuel, a trade mark which is owned or controlled by such refiner or
by a refiner which supplies fuel to the petroleum distributor which
authorizes or permits such use. The term “franchise” as defined in this
paragraph includes the following:
( A) Any contract under which a petroleum retailer or petroleum
distributor is authorized or permitted to occupy leased marketing
premises, which premises are to be employed in connection with the
sale, consignment, or distribution of fuel under a trademark which is
owned or controlled by such refiner or by a refiner which supplies fuel
to the petroleum distributor which authorizes or permits such occupancy.
(B) Any contract pertaining to the supply of fuel which is to be sold,
consigned, or distributed under a trademark owned or controlled by a
refiner, or under a contract which has existed continuously since May
15, 1973, and pursuant to which, on May 15, 1973, fuel was sold,
consigned, or distributed under a trademark owned and controlled on
such date by a refiner.
( C ) The unexpired portion of any franchise, as defined by the
preceding provisions of this subdivision, which is transferred or
assigned as authorized by the provisions of such franchise or by any
applicable provision of state law which permits such transfer or
assignment without regard to any provision of the franchise.
(c) For purposes of this division, the term “franchise” does not include a
nonprofit organization operated on a cooperative basis by and for independent
retailers which wholesales goods and services primarily to its member retailers
and to which all of the following is applicable:
659
(1) Control and ownership of each member is substantially equal.
(2) Membership is limited to those who will avail themselves of the
services furnished by the organization.
(3) Transfer of ownership is prohibited or limited.
(4) Capital investment receives no return.
(5) Substantially equal benefits pass to the members on the basis of
patronage of the organization.
( 6 ) Members are not personally liable for obligations of the
organization in the absence of a direct undertaking or authorization by them.
(7) Services of the organization are furnished primarily for the use of the
members.
(8) Each member and prospective member is provided with an offering
circular which complies with the specifications of Section 31111.
(9) No part of the receipts, income, or profit of the organization is paid
to any profitmaking entity, except for arms-length payments for necessary
goods and services, and members are not required to purchase goods or
services from any designated profitmaking entity.
( d) The nonprofit organization is subject to an action for rescission or
damages under Section 3343.7 of the Civil Code if the organization fraudulently
induced the plaintiff to join the organization.
Leg.H. 1970 ch. 1400, operative January 1, 1971, 1974 ch. 925, 1981 ch. 90, 1989 ch.
1380.
Annotations
Cases
Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997, 2nd Dist) 59 Cal. App.
4th 741, 69 Cal. Rptr. 2d 640. Real estate buyer sued broker franchisee and franchisor for
fraud, misrepresentation, and breach of fiduciary duty. Appellate court found fact that
franchisor received a royalty based on franchisee’s gross receipts did not create a true
agency relationship, thus franchisor did not have a fiduciary duty to buyer, and could not be
found liable on the basis of respondeat superior. However, court reversed granting of
summary judgment in favor of franchisor and found that triable issues of fact existed on
whether the franchisor could be held liable on an ostensible agency theory.

For the purposes of this division and in respect only to a franchise as
660
defined in subdivision (b) of Section 31005, the following terms shall have the
following meanings:
( a ) “Franchisor” means a refiner or petroleum distributor who
authorizes or permits, under a franchise, a petroleum retailer or petroleum
distributor to use a trademark in connection with the sale, consignment, or
distribution of fuel.
(b) “Franchisee” means a petroleum retailer or petroleum distributor
who is authorized or permitted, under a franchise, to use a trademark in
(c) “Refiner” means any person engaged in the refining of crude oil to
produce fuel, and includes any affiliate of such person.
(d) “Petroleum distributor” means any person, including any affiliate of
such person, who either purchases fuel for sale, consignment, or distribution
to another, or receives fuel on consignment for consignment or distribution
to his or her own fuel accounts or to accounts of his or her supplier, but
shall not include a person who is an employee of, or merely serves as a
common carrier providing transportation service for, such supplier.
(e) “Petroleum retailer” means any person who purchases fuel for sale
to the general public for ultimate consumption.
(f) “Marketing premises” means, in the case of any franchise, premises
( g) “Leased marketing premises” means marketing premises owned,
the sale, consignment, or distribution of fuel.
( h ) “Contract” means any oral or written agreement. For supply
purposes, delivery levels during the same month of the previous year shall
be prima facie evidence of an agreement to deliver such levels.
( i ) “Trademark” means any trademark, trade name, service mark, or
other identifying symbol or name.
(j) “Fuel” means gasoline, diesel, gasohol, or aviation fuel.
( k) “Affiliate” means any person who, other than by means of a
franchise, controls, is controlled by, or is under common control with, any
other person.
(l ) “Petroleum corporation” means any corporation or person owning,
661
managing, or controlling the exploration, production, processing,
transportation, or sale of crude or refined petroleum or any petroleum
product.
Leg.H. 1981 ch. 90.

A “franchisee” is a person to whom a franchise is granted.

A “franchisor” is a person who grants a franchise.

“Area franchise” means any franchise between a franchisor and a franchisee
whereby the franchisee is granted the right to operate more than one unit within
a specified geographical area.
Leg.H. 1970 ch. 1400, operative January 1, 1971, 1980 ch. 534, 1988 ch. 562.

“Subfranchise” means any contract or agreement between a franchisor and a
subfranchisor whereby the subfranchisor is granted the right, for consideration
given in whole or in part for that right, to sell or negotiate the sale of franchises
in the name or on behalf of the franchisor. A contract or agreement which is a
franchise does not become a subfranchise merely because under its terms a
person is granted the right to receive compensation for referrals to a franchisor
or subfranchisor or to receive compensation for acting as a sales representative
on their behalf.
Leg.H. 1988 ch. 562.

A “subfranchisor” is a person to whom a subfranchise is granted.
Leg.H. 1970 ch. 1400, operative January 1, 1971, 1988 ch. 562.
§ 31010. “Franchise” Includes “Area Franchise” and

“Subfranchise.”
Where used in this law, unless specifically stated otherwise, “franchise”
662
includes “area franchise” and “subfranchise.”

“Franchise fee” means any fee or charge that a franchisee or subfranchisor
is required to pay or agrees to pay for the right to enter into a business under a
franchise agreement, including, but not limited to, any payment for goods and
services. However, the following shall not be considered the payment of a
franchise fee:
( a ) The purchase or agreement to purchase goods at a bona fide
wholesale price if no obligation is imposed upon the purchaser to purchase
or pay for a quantity of the goods in excess of that which a reasonable
businessperson normally would purchase by way of a starting inventory or
supply or to maintain a going inventory or supply.
(b) The payment of a reasonable service charge to the issuer of a credit
card by an establishment accepting or honoring that credit card.
( c ) Amounts paid to a trading stamp company under Chapter 3
(commencing with Section 17750) of Part 3 of Division 7 of the Business
and Professions Code by a person issuing trading stamps in connection with
the retail sale of merchandise or service.

“Fraud” and “deceit” are not limited to common law fraud or deceit.

(a) An offer or sale of a franchise is made in this state when an offer to sell
is made in this state, or an offer to buy is accepted in this state, or, if the
franchisee is domiciled in this state, the franchised business is or will be
operated in this state.
(b) An offer to sell is made in this state when the offer either originates from
this state or is directed by the offeror to this state and received at the place to
which it is directed. An offer to sell is accepted in this state when acceptance is
communicated to the offeror in this state; and acceptance is communicated to the
offeror in this state when the offeree directs it to the offeror in this state
reasonably believing the offeror to be in this state and it is received at the place
663
to which it is directed.
(c) An offer to sell is not made in this state merely because (1) the publisher
circulates or there is circulated on his behalf in this state any bona fide
newspaper or other publication of general, regular, and paid circulation which
has had more than two-thirds of its circulation outside this state during the past
12 months, or (2) a radio or television program originating outside this state is
received in this state.

“Order” means a consent, authorization, approval, prohibition or
requirement applicable to a specific case issued by the commissioner.

“Person” means an individual, corporation, a partnership, a limited liability
company, a joint venture, an association, a joint stock company, a trust or an
unincorporated organization.

“Publish” means publicly to issue or circulate by newspaper, mail, radio or
television, or otherwise to disseminate to the public.

“Rule” means any published regulation or standard of general application
issued by the commissioner.
§ 31018. “Sale,” “Sell,” “Offer,” and “Offer to Sell”

Defined.
(a) “Sale” or “sell” includes every contract or agreement of sale of, contract
to sell, or disposition of, a franchise or interest in a franchise for value.
( b ) “Offer” or “offer to sell” includes every attempt to dispose of, or
solicitation of an offer to buy, a franchise or interest in a franchise for value.
664
(c) The terms defined in this section do not include the renewal or extension
of an existing franchise where there is no interruption in the operation of the
franchised business by the franchisee; provided, that a material modification of
an existing franchise, whether upon renewal or otherwise, is a “sale” within the
meaning of this section.

“State” means any state, territory, or possession of the United States, the
District of Columbia and Puerto Rico.
PART 2
Regulation of the Sale of Franchises

CHAPTER 1
EXEMPTIONS
§ 31109.1. Offer and Sale of Franchises Registered
Under Section 31111, 31121, Or 31123 When Terms
are Different from Terms of Offer Registered.
(a) There shall be exempted from the provisions of Chapter 2 (commencing
with Section 31110) the offer and sale of a franchise registered under Section
31111, 31121, or 31123 on terms different from the terms of the offer registered
thereunder if all of the following requirements are met:
(1) The initial offer is the offer registered under Section 31111, 31121,
or 31123.
( 2 ) The prospective franchisee receives all of the following in a
separate written appendix to the offering circular franchise disclosure
document:
( A) A summary description of each material negotiated term that
was negotiated by the franchisor for a California franchise during the
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12-month period ending in the calendar month immediately preceding
the month in which the negotiated offer or sale is made under this
section.
(B) A statement indicating that copies of the negotiated terms are
available upon written request.
(C) The name, telephone number, and address of the representative
of the franchisor to whom requests for a copy of the negotiated terms
may be obtained.
(3) The franchisor certifies or declares in an appendix to its application
for renewal that it has complied with all of the requirements of this section,
in the event this exemption is claimed.
(4) The negotiated terms, on the whole, confer additional benefits on the
franchisee.
(b) The franchisor shall provide a copy of the negotiated terms described in
subdivision (a) to the prospective franchisee within five business days
following the request of the franchisee.
(c) The franchisor shall maintain copies of all material negotiated terms for
which this exemption is claimed for a period of five years from the effective
date of the first agreement containing the relevant negotiated term. Upon the
request of the commissioner, the franchisor shall make the copies available to
the commissioner for review. For purposes of this section, the commissioner
may prescribe by rule or order the format and content of the summary
description of the negotiated terms required by subparagraph (A) of paragraph
(2) of subdivision (a).
( d ) For purposes of this section, “material” means that a reasonable
franchisee would view the terms as important in negotiating the franchise.
Added Stats 2004 ch 458 § 4 (AB 2921), effective September 10, 2004, operative
January 1, 2005. Amended Stats 2005 ch 22 § 25 (SB 1108), effective January 1, 2006; Stats
2013 ch 334 § 3 (SB 537), effective January 1, 2014.
2013 Amendment:
Substituted “franchise disclosure document” for “offering circular” in subd (a)(2).
CHAPTER 2
DISCLOSURE
666
§ 31110. Requirement of Registration of Offers and
Sales.
On and after April 15, 1971, it shall be unlawful for any person to offer or
sell any franchise in this state unless the offer of the franchise has been
registered under this part or exempted under Chapter 1 (commencing with
Section 31100) of this part.
Annotations
Cases
Dollar Systems v. Avcar Leasing Systems (9th Cir. 1989) 890 F.2d 165 . Franchisor
sued franchisee for breach of a franchise agreement. Court of Appeals held that the
California Franchise Act applied to an agreement signed in California by out of state parties
operating a franchise out of state, despite a foreign choice of laws clause, and also that the
franchisor’s officers could be held jointly and severally liable under California law.
Articles
Ke up, A Valid Trademark License or a Violation of the California Franchise
Investment Act? New Matter, Summer, 1988, at 2.
Sheldon & Sutton, Warning: Your US Trademark License may be a “Franchise”—with
Severe Consequences, Trademark World, March, 1990, at 18.

( a ) The application for registration of an offer shall be filed with the
commissioner upon the Uniform Franchise Registration Application, as
identified, modified, and supplemented by rule of the commissioner.
( b ) An authorization for the commissioner to examine the registrant’s
financial records of the sale of the franchise pursuant to Section 7473 of the
Government Code shall be filed with the application.
Annotations
See the annotations to Corp. Code § 31110.

Any application or amendment under this law shall be signed and verified
667
by the franchisor or by the subfranchisor. Such verification shall be in the same
manner provided in the Code of Civil Procedure for the verification of
pleadings.
Annotations

If the commissioner finds that it is necessary and appropriate for the
protection of prospective franchisees or subfranchisors because the applicant
has failed to demonstrate that adequate financial arrangements have been made
to fulfill the franchisor’s obligations to provide real estate, improvements,
equipment, inventory, training, or other items included in the offering, the
commissioner may by rule or order require the escrow or impound of franchisee
fees and other funds paid by the franchisee or subfranchisor until such
obligations have been satisfied. At the option of the franchisor, the franchisor
may furnish a surety bond as provided by rule of the commissioner.
Leg.H. 1973 ch. 539, 1982 ch. 517.
Annotations

The application for registration shall be accompanied by a proposed
offering circular franchise disclosure document, which shall contain the
material information set forth in the application for registration, as specified by
rule of the commissioner, and such additional disclosures as the commissioner
may require. The offering circular franchise disclosure document shall recite
in bold type of not less than 10-point type that registration does not constitute
approval, recommendation, or endorsement by the commissioner.
4; Stats 1988 ch 562 § 8; Stats 2013 ch 334 § 4 (SB 537), effective January 1, 2014.
2013 Amendment:
Substituted “franchise disclosure document” for “offering circular” throughout the
section.
668
The commissioner may summarily issue a stop order denying the
effectiveness of or suspending or revoking effectiveness of any registration if
the commissioner finds:
(a) That there has been a failure to comply with any of the provisions of
this law or the rules of the commissioner pertaining thereto.
( b ) That the offer or sale of the franchise would constitute
misrepresentation to, or deceit or fraud of the purchasers, or that, in the case
of a franchise other than a subfranchise, a major inducement to prospective
franchisees is fees or other compensation from participation in the sale of
additional franchises.
(c) That the applicant has failed to comply with any rule or order of the
commissioner issued pursuant to Section 31113.
( d ) That any person identified in the application or any officer or
director of the franchisor, whether or not identified in the application, meets
one or more of the following conditions, and the involvement of this person
in the sale or management of the franchise creates an unreasonable risk to
prospective franchisees:
(1) Has been convicted of a felony, or pleaded nolo contendere to a
felony charge, or held liable in a civil action by final judgment if the
felony or civil action involved fraud, embezzlement, fraudulent
conversion, or misappropriation of property.
(2) Is subject to any currently effective order of the Securities and
Exchange Commission or the securities administrator of any state
denying registration to or revoking or suspending the registration of the
person as a securities broker or dealer or investment adviser or is
subject to any currently effective order of any national securities
association or national securities exchange (as defined in the Securities
and Exchange Act of 1934) suspending or expelling the person from
membership in the association or exchange.
(3) Is subject to any currently effective order or ruling of the Federal
Trade Commission.
( 4 ) Is subject to any currently effective injunctive or restrictive
order relating to business activity as a result of an action brought by any
public agency or department, including, without limitation, actions
affecting a license as a real estate broker or sales person.
Leg.H. 1970 ch. 1400, operative January 1, 1971, 1980 ch. 534, 1989 ch. 1026, 1991
ch. 379.
669
Annotations

(a) Except as provided in subdivision (b), if no stop order under Section
31115 is in effect under this law, registration of the offer of franchises
automatically becomes effective at 12 o’clock noon, California time, of the 15th
business day after the filing of the application for registration or the last
amendment thereto, or at such earlier time as the commissioner determines.
670
(b) With respect to any application for registration or the last amendment
thereto filed between January 1, 1971, and March 15, 1971, if no stop order
under Section 31115 is in effect under this law, registration becomes effective
on April 15, 1971; with respect to any application filed after March 15, 1971
and before May 10, 1971, if no stop order under Section 31115 is in effect
under this law, registration becomes effective on June 1, 1971, or the 15th
business day after the filing, whichever is the later, or at such earlier time as the
commissioner determines.
Annotations

Upon the entry of a stop order under Section 31115 the commissioner shall
promptly notify the applicant that it has been entered and of the reasons therefor
and that upon receipt of written request the matter will be set down for hearing
to commence within 15 business days after such receipt unless the applicant
consents to a later date. If no hearing is requested within 30 days after receipt of
the notice and none is ordered by the commissioner, the order will remain in
effect until it is modified or vacated by the commissioner. If a hearing is
requested or ordered, the commissioner, after notice and hearing in accordance
with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code, in connection with which the
commissioner shall have all of the powers granted thereunder, may modify or
vacate the order or extend it until its final determination.
Annotations

The commissioner may vacate or modify a stop order if he finds that the
conditions which caused its entry have changed or that it is otherwise in the
public interest to do so.
Annotations
671
§ 31119. Provision of franchise disclosure document to
prospective franchisee; Electronic provision allowed.
( a ) It is unlawful to sell any franchise in this state that is subject to
registration under this law without first providing to the prospective franchisee,
at least 14 days prior to the execution by the prospective franchisee of any
binding franchise or other agreement, or at least 14 days prior to the receipt of
any consideration, whichever occurs first, a copy of the offering circular
franchise disclosure document, together with a copy of all proposed
agreements relating to the sale of the franchise.
(b) Nothing in this division shall be construed to prevent a franchisor from
providing copies of the offering circular franchise disclosure documents to
prospective franchisees through electronic means pursuant to any requirements
or conditions that may be imposed by rule or order of the commissioner.
Added Stats 1970 ch 1400 § 3, operative January 1, 1971. Amended Stats 1980 ch 1355
§ 3, effective October 1, 1980, operative January 1, 1981; Stats 1988 ch 562 § 10; Stats
2004 ch 458 § 5 (AB 2921), effective September 10, 2004, operative January 1, 2005; Stats
2007 ch 101 § 11 (SB 998), effective January 1, 2008; Stats 2013 ch 334 § 5 (SB 537),
2013 Amendment:
Substituted “franchise disclosure document” for “offering circular” in subd (a) and
“franchise disclosure documents” for “offering circular documents” in subd (b).

A franchise offering shall be deemed duly registered for a period of one
year from the effective date of the registration, unless the commissioner by order
or rule specifies a different period.
Annotations

The registration may be renewed for additional periods of one year each,
unless the commissioner by rule or order specifies a different period, by
submitting to the commissioner a registration renewal statement no later than 15
business days prior to the expiration of the registration unless such period is
waived by order of the commissioner. If no stop order or other order under
672
Section 31115 is in effect under this law, registration of the offer of the
franchises automatically becomes renewed effective at 12 o’clock noon,
California time, of the date on which the prior registration is due to expire, or at
such earlier time as the commissioner determines.
Annotations

The registration renewal statement shall be in the form and content
prescribed by the commissioner, and shall be accompanied by a proposed
offering prospectus. Each such registration renewal statement shall be
accompanied by the fee prescribed in Part 5 (commencing with Section 31500)
of this division.
Annotations
§ 31123. Notification of Change in Application

Information.
A franchisor shall promptly notify the commissioner in writing, by an
application to amend the registration, of any material change in the information
contained in the application as originally submitted, amended or renewed. The
commissioner may by rule further define what shall be considered a material
change for such purposes, and the circumstances under which a revised offering
prospectus must accompany such application.
Annotations

An amendment to an application filed after the effective date of the
registration of the sale of franchises, if such amendment is approved by the
commissioner, shall become effective on such date as the commissioner may
673
determine, having due regard for the public interest and the protection of
franchisees.
Annotations
§ 31125. Registration of Material Modification of

Existing Franchise; Exemption; “California
Franchise” Defined; Restriction.
(a) An application for registration of a material modification of an existing
franchise or of existing franchises shall be in a form and contain information as
the commissioner may by rule prescribe, and shall be accompanied by a
proposed disclosure form as specified in subdivision (b). The application may
be included with an application pursuant to Section 31111 or 31121.
(b) Except as provided in subdivisions (c) and (d), it is unlawful to solicit
the agreement of a franchisee to a proposed material modification of an existing
franchise without first delivering to the franchisee a written disclosure, in a
form and containing information as the commissioner may by rule or order
require, identifying the proposed modification, either five business days prior to
the execution of any binding agreement by the franchisee to the modification or
containing a statement that the franchisee may, by written notice mailed or
delivered to the franchisor or a specified agent of the franchisor within not less
than five business days following the execution of the agreement, rescind the
agreement to the material modification.
(c) Any modification of a franchise agreement with an existing franchisee of
a franchisor shall be exempted from the provisions of this chapter, if all of the
following are met:
(1) The franchisee receives the complete written modification at least
five business days prior to the execution of a binding agreement, or
providing that the franchisee may, by written notice mailed or delivered to
the franchisor or a specified agent of the franchisor within not less than five
business days following the execution of the agreement, rescind the
agreement to the material modification; provided (A) the agreement is not
executed within 12 months after the date of the franchise agreement, and (B)
the modification does not waive any right of the franchisee under the
California Franchise Relations Act (Chapter 5.5 (commencing with Section
20000) of Division 8 of the Business and Professions Code), but the
modification may include a general release of all known and unknown
674
claims by a party to the modification.
(2) The modification meets one of the following:
(A) The proposed modification is in connection with the resolution
of a bona fide dispute between the franchisor and the franchisee or the
resolution of a claimed or actual franchisee or franchisor default, and
the modification is not applied on a franchise systemwide basis at or
about the time the modification is executed. A modification shall not be
deemed to be made on a franchise systemwide basis if it is offered on a
voluntary basis to fewer than 25 percent of the franchisor’s California
franchises within any 12-month period.
(B) The proposed modification is offered on a voluntary basis to
fewer than 25 percent of the franchisor’s California franchises within
any 12-month period, provided each franchisee is given a right to
rescind the modification agreement if the modification is not made in
compliance with paragraph (1) of subdivision (c).
(d) Any modification of a franchise agreement with an existing franchise of
a franchisee shall be exempted from this chapter if the modification is offered
on a voluntary basis and does not substantially and adversely impact the
franchisee’s rights, benefits, privileges, duties, obligations, or responsibilities
under the franchise agreement.
( e ) For purposes of this section, “California franchise” means: (1) an
existing franchise of a franchisee with any location in this state from which
sales, leases, or other transactions between the franchised business and its
customers are made or goods or services are distributed, or (2) an existing
franchise of a franchisee that is a resident of this state and that owns, controls,
or has an equity interest in the franchise.
(f) A franchisor shall not make modifications in consecutive years for the
purpose of evading the 25 percent requirements set forth above.
Leg.H. 1977 ch. 762, 1980 ch. 1355, effective October 1, 1980, 1988 ch. 562, 1996
ch. 477, 2004 ch. 458 (AB 2921), effective September 10, 2004, operative January 1, 2005.
CHAPTER 3
GENERAL PROVISIONS
675
Every franchisor or subfranchisor offering franchises for sale in this state
shall at all times keep and maintain a complete set of books, records, and
accounts of such sales.

The commissioner may accept and act upon the opinions, appraisements and
reports of any engineers, appraisers, or other experts which may be presented
by an applicant or any interested party, on any question of fact concerning or
affecting the franchises proposed to be offered and sold. In lieu of, or in
addition to, such opinions, appraisements, and reports, the commissioner may
have any or all matters concerning or affecting such franchises investigated,
appraised, passed upon and certified to him by engineers, appraisers or other
experts selected by him.

Any document filed under this law or under the Corporate Securities Law of
1968 or a predecessor statute thereto may be incorporated by reference in a
subsequent application filed under this law if it was filed within four years
prior to the filing of such application, or is otherwise available in the files of
the commissioner, to the extent that the document is currently accurate.

In any proceeding under this law, the burden of proving an exemption or an
exception from a definition is upon the person claiming it.
§ 31154. Misleading Application and Unlawful

Representations.
(a) Neither (1) the fact that an application for registration under this law has
been filed, nor (2) the fact that such registration has become effective constitutes
a finding by the commissioner that any document filed under this law is true,
complete or not misleading. Neither any such fact nor the fact that an exemption
is available for a transaction means that the commissioner has passed in any
way upon the merits or qualifications of, or recommended or given approval to,
any person, franchise or transaction.
676
(b) It is unlawful to make or cause to be made to any prospective purchaser
or offeree any representation inconsistent with subdivision (a) of this section.
§ 31155. Nonresident Applicant’s Irrevocable

Appointment of Commissioner as Attorney to
Receive Service of Process; Procedure for Service of
Process.
Every applicant for registration of an offer to sell franchises under this law,
by other than a California corporation, California limited partnership, or
California limited liability company, shall file with the commissioner, in such
form as he or she by rule prescribed, an irrevocable consent appointing the
commissioner or his or her successor in office to be his or her attorney to
receive service of any lawful process in any noncriminal suit, action or
proceeding against him or her or his or her successor, executor or administrator,
which arises under this law or any rule or order hereunder after the consent has
been filed, with the same force and validity as if served personally on the
person filing the consent. A person who has filed such a consent in connection
with a previous registration under this law need not file another. Service may be
made by leaving a copy of the process in the office of the commissioner but it is
not effective unless (a) the plaintiff, who may be the commissioner in a suit,
action, or proceeding instituted by him or her, forthwith sends notice of the
service and a copy of the process by registered or certified mail to the defendant
or respondent at his or her last address on file with the commissioner, and (b)
the plaintiff’s affidavit of compliance with this section is filed in the case on or
before the return day of the process, if any, or within such further time as the
court allows.
Added Stats 1970 ch. 1400 § 3, operative January 1, 1971. Amended Stats 2007 ch. 101
§ 12 (SB 998), effective January 1, 2008; Stats 2009 ch. 140 § 41 (AB 1164), effective
January 1, 2010.

No person shall publish in this state any advertisement offering a franchise
subject to the registration requirements of this law unless a true copy of the
advertisement has been filed in the office of the commissioner at least three
business days prior to the first publication or such shorter period as the
commissioner by rule or order may allow, or unless such advertisement has
been exempted by rule of the commissioner.
677
No person shall publish any advertisement concerning any franchise in this
state after the commissioner finds that the advertisement contains any statement
that is false or misleading or omits to make any statement necessary in order to
make the statements made, in light of the circumstances under which they were
made, not misleading and so notifies the person in writing. Such notification
may be given summarily without notice of hearing. At any time after the issuance
of a notification under this section, the person desiring to use the advertisement
may in writing request that the order be rescinded. Upon the receipt of such a
written request, the matter shall be set down for hearing to commence within 15
business days after such receipt unless the person making the request consents to
a later date. After such hearing, which shall be conducted in accordance with
the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code, the commissioner shall determine
whether to affirm and continue or to rescind such order, and the commissioner
shall have all the powers granted under such act.
PART 3
Fraudulent and Prohibited Practices

CHAPTER 1
FRAUDULENT PRACTICES
It is unlawful for any person willfully to make any untrue statement of a
material fact in any application, notice or report filed with the commissioner
under this law, or willfully to omit to state in any such application, notice, or
report any material fact which is required to be stated therein, or fail to notify
the commissioner of any material change as required by Section 31123.

It is unlawful for any person to offer or sell a franchise in this state by
678
means of any written or oral communication not enumerated in Section 31200
which includes an untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading.
§ 31202. Misrepresentation in Exempt Offerings by

Large Franchisor.
It is unlawful for any person willfully to make any untrue statement of a
material fact in any statement required to be disclosed in writing pursuant to
Section 31101, or willfully to omit to state in any such statement any material
fact which is required to be stated therein.

It is unlawful for any person to violate any order of the commissioner or
condition to the effectiveness of the registration of the offer or sale of
franchises.
§ 31204. Tampering With Intent to Impede, Obstruct,

or Influence Administration or Enforcement of
Division Unlawful.
( a ) It is unlawful for any person to knowingly alter, destroy, mutilate,
conceal, cover up, falsify, or make a false entry in any record, document, or
tangible object with the intent to impede, obstruct, or influence the
administration or enforcement of any provision of this division.
(b) It is unlawful for any person to knowingly make an untrue statement to
the commissioner during the course of licensing, investigation, or examination,
with the intent to impede, obstruct, or influence the administration or
enforcement of any provision of this division.
CHAPTER 2
PROHIBITED PRACTICES
679
It is unlawful for any person to effect or attempt to effect a sale of a
franchise in this state, except in transactions exempted under Chapter 1
(commencing with Section 31100) of Part 2 of this division, unless such person
is: (1) identified in an application or amended application filed with the
commissioner pursuant to Part 2 (commencing with Section 31100) of this
division, (2) licensed by the California Department Bureau of Real Estate as
a real estate broker or real estate salesman, or (3) licensed by the commissioner
as a broker-dealer or agent pursuant to the Corporate Securities Law of 1968.
66 (AB 1317), effective September 26, 2013, operative July 1, 2013.
2013 Amendment:
Substituted “Bureau of Real Estate” for “California Department of Real Estate”.

If in the opinion of the commissioner any person is acting in violation of
Section 31210, the commissioner may order such person to desist and refrain
from further activity. If, after such an order has been made, a request for a
hearing is filed in writing by the person to whom such order was directed, a
hearing shall be held in accordance with the provisions of Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code, and the commissioner shall have all of the powers granted
thereunder; unless such hearing is commenced within 15 business days after the
request is made (or the person affected consents to a later date), such order shall
be deemed rescinded.
CHAPTER 3
UNFAIR PRACTICES
§ 31220. Right of Franchisees to Join Trade Association
or Right of Free Association.
It shall be a violation of this division for any franchisor, directly or
indirectly, through any officer, agent or employee, to restrict or inhibit the right
of franchisees to join a trade association or to prohibit the right of free
680
association among franchisees for any lawful purposes. Notwithstanding Section
31410, a violation of this section shall not constitute a crime.
Leg.H. 1977 ch. 510.
PART 4
Enforcement
CHAPTER 1
CIVIL LIABILITY
Any person who offers or sells a franchise in violation of Section 31101,
31110, 31119, 31200, or 31202, or in violation of any provision of this division
that provides an exemption from the provisions of Chapter 2 (commencing with
Section 31110) of Part 2 or any portions of Part 2, shall be liable to the
franchisee or subfranchisor, who may sue for damages caused thereby, and if the
violation is willful, the franchisee may also sue for rescission, unless, in the
case of a violation of Section 31200 or 31202, the defendant proves that the
plaintiff knew the facts concerning the untruth or omission, or that the defendant
exercised reasonable care and did not know, or, if he or she had exercised
reasonable care, would not have known, of the untruth or omission.
Leg.H. 1970 ch. 1400, operative January 1, 1971, 1980 ch. 534, 2004 ch. 458 (AB
2921), effective September 10, 2004, operative January 1, 2005.

Any person who violates Section 31201 shall be liable to any person (not
knowing or having cause to believe that such statement was false or misleading)
who, while relying upon such statement shall have purchased a franchise, for
damages, unless the defendant proves that the plaintiff knew the facts concerning
the untruth or omission or that the defendant exercised reasonable care and did
not know, (or if he had exercised reasonable care would not have known) of the
untruth or omission.
681
§ 31302. Joint and Several Liability of Principals and
Agents.
Every person who directly or indirectly controls a person liable under
Section 31300 or 31301, every partner in a firm so liable, every principal
executive officer or director of a corporation so liable, every person occupying
a similar status or performing similar functions, every employee of a person so
liable who materially aids in the act or transaction constituting the violation, are
also liable jointly and severally with and to the same extent as such person,
unless the other person who is so liable had no knowledge of or reasonable
grounds to believe in the existence of the facts by reason of which the liability is
alleged to exist.
§ 31302.5. Cause of Action for Violation of Franchisee’s

Right to Join Trade Association or Right of Free
Association.
(a) Any person who violates Section 31220 may be sued in the superior
court in the county in which the defendant resides or where a franchise affected
by the violation does business, for temporary and permanent injunctive relief
and for damages, if any, and the costs of suit, including reasonable attorney’s
fees. A plaintiff shall not be required to allege or prove that actual damages
have been suffered in order to obtain injunctive relief.
(b) No action shall be maintained to enforce any liability created under
Section 31220 unless brought before the expiration of two years after the
violation upon which it is based or the expiration of one year after the discovery
by the plaintiff of the facts constituting such violation, whichever occurs first.
Leg.H. 1977 ch. 510.

No action shall be maintained to enforce any liability created under Section
31300 unless brought before the expiration of four years after the act or
transaction constituting the violation, the expiration of one year after the
discovery by the plaintiff of the fact constituting the violation, or 90 days after
delivery to the franchisee of a written notice disclosing any violation of Section
31110 or 31200, which notice shall be approved as to form by the
commissioner, whichever shall first expire.
682
Annotations
Cases
People v. Speedee Oil Change Systems Inc., 95 Cal. App. 4th 709, 116 Cal. Rptr. 2d
497 (2002). This case held that the four year statute of limitations in § 31303 for certain
claims under the Franchise Investment Law is absolute, and not subject to tolling. The statute
provides that an action must be commenced no later than 4 years from the date of violation or
one year from the date of discovery whichever occurs first. Therefore, claims filed more
than four years later than the date of the alleged violations were time-barred, notwithstanding
allegations that the complainants had not discovered the alleged wrongdoing until later. The
court rejected various arguments for tolling the statute of limitations.
Powell v. Coffee Beanery, Ltd. , 932 F. Supp. 985 (E.D. Mich. 1996). The Michigan
District Court applied California Franchise Investment Law and found claimant’s action
barred by the statute of limitations Cal. Corp. Code § 31303. The claimant argued that the
statute of limitations began once the claimant is aware of the legal significance of the facts
constituting a violation. The court concluded that “the language of § 31303 is clear—the one
year period begins to run from the date that a claimant knows of the facts.” The claimant need
not know the legal significance of those facts of start the statute running constituting a
violation.

No action shall be maintained to enforce any liability created under Section
31301 unless brought before the expiration of two years after the violation upon
which it is based, expiration of one year after the discovery by the plaintiff of
the facts constituting such violation, or 90 days after delivery to the franchisee
of a written notice disclosing any violation of Section 31201 or 31202 which
notice shall be approved as to form by the commissioner, whichever shall first
expire.
Annotations
Cases
People v. Speedee Oil Change Systems Inc., 95 Cal. App. 4th 709, 116 Cal. Rptr. 2d
497 (2002). This case held that the two year statute of limitations in § 31304 for certain
claims under the Franchise Investment Law is absolute, and not subject to tolling. The statute
provides that an action must be commenced no later than 2 years from the date of violation or
one year from the date of discovery whichever occurs first. Therefore, claims filed more
than four years later than the date of the alleged violations were time-barred, notwithstanding
allegations that the complainants had not discovered the alleged wrongdoing until later. The
court rejected various arguments for tolling the statute of limitations.
683
Every cause of action under this chapter survives the death of any person
who might have been a plaintiff or defendant.
§ 31306. No Liability by Implication—Liability Under

Prior Law.
Except as explicitly provided in this chapter, no civil liability in favor of
any private party shall arise against any person by implication from or as a
result of the violation of any provision of this law or any rule or order
hereunder. Nothing in this chapter shall limit any liability which may exist by
virtue of any other statute or under common law if this law were not in effect.
CHAPTER 2
POWERS OF THE COMMISSIONER

(a) Whenever it appears to the commissioner that any person has engaged or
is about to engage in any act or practice constituting a violation of any provision
of this law or any rule or order hereunder, the commissioner may in the
commissioner’s discretion bring an action, or the commissioner may request the
Attorney General to bring an action in the name of the people of the State of
California, in the superior court to enjoin the acts or practices or to enforce
compliance with this law or any rule or order hereunder. Upon a proper
showing a permanent or preliminary injunction, restraining order or writ of
mandate shall be granted and a receiver or conservator may be appointed for the
defendant or the defendant’s assets.
( b ) If the commissioner determines it is in the public interest, the
commissioner may include in any action authorized by subdivision (a) a claim
for ancillary relief, including, but not limited to, a claim for restitution or
disgorgement or damages on behalf of the persons injured by the act or practice
constituting the subject matter of the action, and the court shall have jurisdiction
to award that additional relief.
698.
684
§ 31400.1. Persons Ineligible From Acting as an Officer
or Director.
In any proceeding under Section 31400, the court may prohibit,
conditionally or unconditionally, and permanently or for such period of time as
it shall determine, any person who violated Section 31200, 31201, or 31202
from acting as an officer or director of any franchisor if the person’s conduct
demonstrates unfitness to serve as an officer or director of the franchisor.

(a) The commissioner may in his discretion (1) make such public or private
investigations within or outside of this state as he deems necessary to determine
whether any person has violated or is about to violate any provision of this law
or any rule or order hereunder or to aid in the enforcement of this law or in the
prescribing of rules and forms hereunder, and (2) publish information
concerning the violation of this law or any rule or order hereunder.
(b) For the purpose of any investigation or proceeding under this law, the
commissioner or any officer designated by him may administer oaths and
affirmations, subpoena witnesses, compel their attendance, take evidence, and
require the production of any books, papers, correspondence, memoranda,
agreements, or other documents or records which the commissioner deems
relevant or material to the inquiry.
(c) In case of contumacy by, or refusal to obey a subpoena issued to, any
person, the superior court, upon application by the commissioner, may issue to
the person an order requiring him to appear before the commissioner, or the
officer designated by him, there to produce documentary evidence, if so
ordered, or to give evidence touching the matter under investigation or in
question. Failure to obey the order of the court may be punished by the court as
a contempt.
(d) No person is excused from attending and testifying or from producing
any document or record before the commissioner, or in obedience to the
subpoena of the commissioner or any officer designated by him, or in any
proceeding instituted by the commissioner, on the ground that the testimony or
evidence (documentary or otherwise) required of him may tend to incriminate
him or subject him to a penalty or forfeiture; but no individual may be
prosecuted or subjected to any penalty or forfeiture for or on account of any
transaction, matter, or thing concerning which he is compelled, after validly
claiming his privilege against self-incrimination, to testify or produce evidence
(documentary or otherwise), except that the individual testifying is not exempt
685
from prosecution and punishment for perjury or contempt committed in
testifying.
§ 31402. Desist and Refrain Order—Unregistered

Offers.
If, in the opinion of the commissioner, the offer of any franchise is subject to
registration under this law and it is being, or it has been, offered for sale
without the offer first being registered, the commissioner may order the
franchisor or offeror of that franchise to desist and refrain from the further offer
or sale of that franchise unless and until the offer has been duly registered under
this law. If, after that order has been made, a request for a hearing is filed in
writing within 60 days from the date of service of the order by the person to
whom the order was directed, a hearing shall be held in accordance with
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2
of the Government Code, and the commissioner shall have all of the powers
granted under that chapter. Unless that hearing is commenced within 15 business
days after the request is made (or the person affected consents to a later date),
the order shall be deemed rescinded. If that person fails to file a written request
for a hearing within 60 days from the date of service of the order, the order shall
be deemed a final order of the commissioner and shall not be subject to review
by any court or agency, notwithstanding Section 31501.
458 (AB 2921), effective September 10, 2004, operative January 1, 2005.
§ 31403. Desist and Refrain Order—

Misrepresentations.
If, in the opinion of the commissioner, the offer of any franchise exempt from
registration under this law is being or has been offered for sale without
complying with Section 31201, or any other provision that provides an
exemption from Chapter 2 (commencing with Section 31110) of Part 2, the
commissioner may order the franchisor or offeror of the franchise to desist and
refrain from the further offer or sale of the franchise unless and until the offer is
made in compliance with this law. If, after that order has been made, a request
for a hearing is filed in writing within 60 days from the date of service of the
order by the person to whom the order was directed, a hearing shall be held in
accordance with Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code and the commissioner shall have
all of the powers granted under that chapter. Unless that hearing is commenced
within 15 business days after the request is made, or the person affected
686
consents to a later date, the order shall be deemed rescinded. If that person fails
to file a written request for a hearing within 60 days from the date of service of
the order, the order shall be deemed a final order of the commissioner and shall
not be subject to review by any court or agency, notwithstanding Section 31501.
458 (AB 2921), effective September 10, 2004, operative January 1, 2005.
1984 Note: The amendments to Sections 25532 and 31403 of the Corporations Code
made by chapter 619 shall apply only to orders issued pursuant to those sections on or after
the effective date of that chapter.

The commissioner may refer evidence that is available concerning any
violation of this law or of any rule or order hereunder to the district attorney of
the county in which the violation occurred, who may, with or without such a
reference, institute appropriate criminal proceedings under this law. Upon
request of the district attorney, the commissioner and the counsel, deputies, or
assistants of the commissioner may assist the district attorney in presenting the
law or facts at the trial.

(a) Any person who violates any provision of this law, or who violates any
rule or order made under this law, shall be liable for a civil penalty not to
exceed ten thousand dollars ($10,000) for each violation, which shall be
assessed and recovered in a civil action brought in the name of the people of the
State of California by the commissioner in any court of competent jurisdiction.
(b) As applied to the penalties for acts in violation of this division, the
remedies provided by this section and by other sections of this division are not
exclusive, and may be sought and employed in any combination to enforce the
provisions of this division.
( c ) No action shall be maintained to enforce any liability created under
subdivision (a) unless brought before the expiration of four years after the act or
transaction constituting the violation.
Leg.H. 1985 ch. 946, 2004 ch. 458 (AB 2921), effective September 10, 2004,
operative January 1, 2005.
§ 31406. Citations; Sanctions Separate From Other

Remedies; Hearings; Review.
687
( a ) If, upon inspection or investigation, based upon a complaint or
otherwise, the commissioner has cause to believe that a person is violating any
provision of this division or any rule or order promulgated pursuant to this
division, the commissioner may issue a citation to that person in writing
describing with particularity the basis of the citation. Each citation may contain
an order to desist and refrain and an assessment of an administrative penalty not
to exceed two thousand five hundred dollars ($2,500) per violation and shall
contain reference to this section, including the provisions of subdivision (c). All
penalties collected under this section shall be deposited in the State
Corporations Fund.
(b) The sanctions authorized under this section shall be separate from, and
in addition to, all other administrative, civil, or criminal remedies.
(c) If within 60 days from the receipt of the citation, the person cited fails to
notify the commissioner that the person intends to request a hearing as described
in subdivision (d), the citation shall be deemed final.
(d) Any hearing under this section shall be conducted in accordance with
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2
of the Government Code.
( e ) After the exhaustion of the review procedures provided for in this
section, the commissioner may apply to the appropriate superior court for a
judgment in the amount of the administrative penalty and order compelling the
cited person to comply with the order of the commissioner. The application
shall include a certified copy of the final order of the commissioner and shall
constitute a sufficient showing to warrant the issuance of the judgment and
order.
2005.
§ 31407. Order Directing Discontinuance of Violation;

Finality After Notice; Hearing.
(a) If, after examination or investigation, the commissioner has reasonable
grounds to believe that any person is conducting business in violation of any
provision of this division or related rule or order binding upon it, the
commissioner may, by written order addressed to the person, direct the
discontinuance of the violation. The order shall be effective immediately, but
shall not become final except in accordance with subdivision (b).
(b) An order issued pursuant to this section shall not become final except
after notice to the affected person of the commissioner’s intention to make the
order final and of the reasons for the finding. The commissioner shall also notify
688
the person that upon receiving a request the matter shall be set for hearing to
commence within 15 business days after receipt of the request. The person may
consent to have the hearing commence at a later date. If no hearing is requested
within 60 days after the mailing or service of the required notice, and none is
ordered by the commissioner, the order may become final without a hearing and
that person shall immediately discontinue the practices named in the order. If a
hearing is requested or ordered it shall be held in accordance with Chapter 5
(commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code, and the commissioner shall have all of the powers granted
under that chapter. If, upon the conclusion of the hearing, it appears to the
commissioner that the person is violating any provision of this division or any
related rule or order binding upon it, the commissioner shall make the order of
discontinuance final and the person shall immediately discontinue the practices
named in the order.
2005.
§ 31408. Inclusions in Administrative Actions;

Recovery of Costs.
( a ) If the commissioner determines it is in the public interest, the
commissioner may include in any administrative action brought under this
division, including a stop order, a claim for ancillary relief, including, but not
limited to, a claim for rescission, restitution or disgorgement or damages on
behalf of the persons injured by the act or practice constituting the subject matter
of the action, and the administrative law judge shall have jurisdiction to award
additional relief. The person affected may be required to attend remedial
education, as directed by the commissioner.
(b) In an administrative action brought under this part the commissioner is
entitled to recover costs, which in the discretion of the administrative law judge
may include any amount representing reasonable attorney’s fees and
investigative expenses for the services rendered, for deposit into the State
Corporations Fund for the use of the Department of Corporations.
2005.
CHAPTER 3
CRIMES
689
Any person who willfully violates any provision of this law, or who
willfully violates any rule or order under this law, shall upon conviction be
fined not more than one hundred thousand dollars ($100,000) or imprisoned in
the state prison pursuant to subdivision (h) of Section 1170 of the Penal
Code, or in a county jail for not more than one year, or be punished by both that
fine and imprisonment; but no person may be imprisoned for the violation of any
rule or order if he or she proves that he or she had no knowledge of the rule or
order.
Added Stats 1970 ch 1400 § 3, operative January 1, 1971; Amended Stats 1976 ch 1139
§ 15, operative July 1, 1977; Stats 2004 ch 458 § 14 (AB 2921), effective September 10,
2004, operative January 1, 2005; Stats 2011 ch 15 § 53 (AB 109), effective April 4, 2011,
operative October 1, 2011.
§ 31411. Fraudulent Device, Scheme, or Artifice to

Defraud in Offer or Sale; Penalty.
Any person who willfully employs, directly or indirectly, any device,
scheme, or artifice to defraud in connection with the offer or sale of any
franchise or willfully engages, directly or indirectly, in any act, practice, or
course of business which operates or would operate as a fraud or deceit upon
any person in connection with the offer, purchase, or sale of any franchise shall
upon conviction be fined not more than one hundred thousand dollars
($100,000) or imprisoned in the state prison pursuant to subdivision (h) of
Section 1170 of the Penal Code, or in a county jail for not more than one year,
or be punished by both that fine and imprisonment.
Added Stats 1970 ch 1400 § 3, operative January 1, 1971. Amended Stats 1976 ch 1139
§ 15.5, operative July 1, 1977; Stats 2004 ch 458 § 15 (AB 2921), effective September 10,
2004, operative January 1, 2005; Stats 2011 ch 15 § 54 (AB 109), effective April 4, 2011,
operative October 1, 2011.

Nothing in this law limits the power of the state to punish any person for any
conduct which constitutes a crime under any other statute.
CHAPTER 4
690
SERVICE OF PROCESS
§ 31420. Service of Process on Commissioner
Authorized.
When any person, including any nonresident of this state, engages in conduct
prohibited or made actionable by this law or any rule or order hereunder,
whether or not he has filed a consent to service of process under Section 31155,
and personal jurisdiction over him cannot otherwise be obtained in this state,
that conduct shall be considered equivalent to his appointment of the
commissioner or his successor in office to be his attorney to receive service of
any lawful process in any noncriminal suit, action, or proceeding against him or
his successor, executor, or administrator which grows out of that conduct and
which is brought under this law or any rule or order hereunder, with the same
force and validity as if served on him personally. Service may be made by
leaving a copy of the process in the office of the commissioner, but it is not
effective unless (a) the plaintiff, who may be the commissioner in a suit, action,
or proceeding instituted by him, forthwith sends notice of the service and a copy
of the process by registered or certified mail to the defendant or respondent at
his last known address or takes other steps which are reasonably calculated to
give actual notice, and (b) the plaintiff’s affidavit of compliance with this
section is filed in the case on or before the return day of the process, if any, or
within such further time as the court allows.
Annotations
Cases
Thomson v. Anderson, 113 Cal. App. 4th 258, 6 Cal. Rptr. 3d 262 (2003) . Section
31420 provides a mechanism for service of process but does not create an independent basis
of personal jurisdiction. It remains necessary to establish general or specific personal
jurisdiction over the defendant.
PART 5
Administration
§ 31500. Fees.
(a) The commissioner shall charge and collect the fees fixed by this section.
691
All fees and charges collected under this section shall be transmitted to the
Treasurer at least weekly, accompanied by a detailed statement thereof and
shall be credited to the State Corporations Fund.
(b) The fee for filing an application for registration of the offer of franchises
under Section 31111 is six hundred seventy-five dollars ($675).
( c ) The fee for filing an application for renewal of a registration under
Section 31121 is four hundred fifty dollars ($450).
(d) The fee for filing an amendment to the application filed under Section
31111 or 31121 after the effective date of the registration of the offer of
franchises, is fifty dollars ($50).
(e) The fee for filing an application for material modification under Section
31125 is fifty dollars ($50), whether or not it accompanies an application under
Section 31111 or 31121.
(f) The fee for filing the initial notice of exemption under Section 31101 is
four hundred fifty dollars ($450) and the fee for filing each consecutive
subsequent notice of exemption under these provisions is one hundred fifty
dollars ($150).
(g) The fee for filing an application for approval of a written notice of
violation under Section 31303 or 31304 is six hundred seventy-five dollars
($675).
Leg.H. 1970 ch. 1400, operative January 1, 1971, 1976 ch. 1154, 1977 ch. 762, 1983
ch. 442, 1989 ch. 1026, 1991 ch. 379, 1992 ch. 427.

Every final order, decision, license, or other official act of the
commissioner is subject to judicial review in accordance with law.
§ 31502. Authority of Commissioner to Make, Amend,

and Rescind Rules.
The commissioner may from time to time make, amend and rescind such
rules, forms, and orders as are necessary to carry out the provisions of this law,
including rules and forms governing applications and reports, and defining any
terms, whether or not used in this law, insofar as the definitions are not
inconsistent with the provisions of this law.
692
All rules of the commissioner, other than those relating solely to the internal
administration of the Department of Corporations, shall be made, amended or
rescinded in accordance with the provisions of Chapter 4.5 (commencing with
Section 11371) of Part 1 of Division 3 of Title 2 of the Government Code.

(a) All applications, reports and other papers and documents filed with the
commissioner under this law shall be open to public inspection, except that the
commissioner may, in his discretion, withhold from public inspection any
information the disclosure of which is, in the judgment of the commissioner, not
necessary in the public interest or for the protection of investors. The
commissioner may publish any information filed with him or obtained by him, if,
in the judgment of the commissioner, such action is in the public interest. No
provision of this law authorizes the commissioner or any of his assistants,
clerks, or deputies to disclose any information withheld from public inspection
except among themselves or when necessary or appropriate in a proceeding or
investigation under this law or to other federal or state regulatory agencies. No
provision of this law either creates or derogates from any privilege which exists
at common law or otherwise when documentary or other evidence is sought
under a subpoena directed to the commissioner or any of his assistants, clerks,
or deputies.
(b) It is unlawful for the commissioner or any of his assistants, clerks, or
deputies to use for personal benefit any information which is filed with or
obtained by the commissioner and which is not then generally available to the
public.

Upon request and at such reasonable charges as he prescribes by rule, the
commissioner shall furnish to any person photostatic or other copies (certified
under his seal of office if requested) of any document which is retained as a
matter of public record, except that he shall not charge or collect any fee for
photostatic or other copies of any document furnished to public officers for use
in their official capacity. In any judicial proceeding or prosecution, any copy so
certified is prima facie evidence of the contents of the document certified.
693
(a) The commissioner may destroy any applications or orders, together with
the files and folders, as useless or obsolete, four years after the date of filing or
issuance, with the approval of the Department of General Services; provided
that a permanent record shall be maintained of any disciplinary action taken by
the commissioner.
(b) Copies on microfilm or in other form which may be retained by the
commissioner in his discretion of any records destroyed under this section shall
be accepted for all purposes as equivalent to the original when certified by the
commissioner.
PART 6
General Provisions

The commissioner in his discretion may honor requests from interested
persons for interpretive opinions.

No provision of this law imposing any liability applies to any act done or
omitted in good faith in conformity with any rule, form, order, or any written
interpretive opinion of the commissioner, or any opinion of the Attorney
General, notwithstanding that the rule, form, order, or written interpretive
opinion may later be amended or rescinded or be determined by judicial or
other authority to be invalid for any reason.

Any condition, stipulation or provision purporting to bind any person
acquiring any franchise to waive compliance with any provision of this law or
any rule or order hereunder is void.
694
Whenever a person is entitled under this law to a hearing in accordance
with the provisions of Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code, a formal hearing before the
Department of Corporations may be substituted with the consent of such person
and of the commissioner for such hearing before an independent hearing officer;
and in that case after such hearing before the Department of Corporations such
person shall not be entitled to any further administrative remedy.

If any provision of this law or the application thereof to any person or
circumstance is held invalid, the invalidity shall not affect other provisions or
applications of this law which can be given effect without the invalid provision
or application, and to this end the provisions of this law are declared to be
severable.

Prior law exclusively governs all suits, actions, prosecutions or
proceedings which are pending or may be initiated on the basis of facts or
circumstances occurring before the effective date of this law.

Nothing in this law is intended to preclude the applicability of the Real
Estate Law, Part 1 (commencing with Section 10000), Division 4 of the
Business and Professions Code, to any sale or lease of real property.

SYNOPSIS
Contents
TITLE 1 GENERAL EDUCATION CODE PROVISIONS

DIVISION 1 GENERAL EDUCATION CODE PROVISIONS
695
PART 19 Miscellaneous
CHAPTER 3 MISCELLANEOUS
ARTICLE 7 Copyright Laws
§ 32360. Use of Funds to Secure Copyrights in Works Developed by
District or Board.
§ 32361. Use of Employee Work Time to Secure Copyrights in Works
TITLE 2 ELEMENTARY AND SECONDARY EDUCATION
DIVISION 3 LOCAL ADMINISTRATION
PART 21 Local Educational Agencies
CHAPTER 2 GOVERNING BOARDS
ARTICLE 4 Powers and Duties
§ 35170. Royalties From Copyrights Secured in Name of District.
DIVISION 4 INSTRUCTION AND SERVICES
PART 33 Instructional Materials and Testing
§ 60076. Royalties to School Official From Instructional Material.
TITLE 3 POSTSECONDARY EDUCATION
DIVISION 7 COMMUNITY COLLEGES
PART 45 Districts and Governing Boards
CHAPTER 3 POWERS AND DUTIES
§ 72207. Authority of Community College District to Secure
Copyrights; Royalties From Same.
PART 48 Community Colleges, Education Programs
§ 78900. Improper Influence; Royalties; Punishment; Samples.
PART 49 Community Colleges, Education Facilities
CHAPTER 2 PROPERTY—SALE, LEASE, USE, AND EXCHANGE
ARTICLE 9 Sale of Personal Property
§ 81459. Sale, Gift, or Exchange of Published Materials Prepared by
Community College District; License of Copyrights in Same.
TITLE 1
GENERAL EDUCATION CODE

PROVISIONS
DIVISION 1
696
GENERAL EDUCATION CODE
PROVISIONS
PART 19
Miscellaneous
CHAPTER 3
MISCELLANEOUS
ARTICLE 7
Copyright Laws
§ 32360. Use of Funds to Secure Copyrights in Works

No funds shall be expended by a school district, a community college
district, a county board of education, or a county superintendent of schools to
secure a copyright for any person or firm, but nothing in this section shall be
construed to prevent the governing board of any school district, community
college district, or county board of education from securing copyrights, in the
name of the district or board, to all copyrightable works developed by the
district or board.
Leg.H. 1976 ch. 1010, operative April 30, 1977.
§ 32361. Use of Employee Work Time to Secure

Copyrights in Works Developed by District or Board.
A school district, a community college district, a county board of education,
or a county superintendent of schools shall not use the regular worktime of any
employee to secure a copyright for any person or firm, but nothing in this section
697
shall be construed to prevent the governing board of any school district,
community college district, or county board of education from securing
copyrights, in the name of the district or board, to all copyrightable works
developed by the district or board.
TITLE 2
ELEMENTARY AND SECONDARY

EDUCATION
DIVISION 3
LOCAL ADMINISTRATION
PART 21
Local Educational Agencies

CHAPTER 2
GOVERNING BOARDS
ARTICLE 4
Powers and Duties
§ 35170. Royalties From Copyrights Secured in Name of

District.
The governing board of any school district may secure copyrights, in the
name of the district, to all copyrightable works developed by the school district,
698
and royalties or revenue from said copyrights are to be for the benefit of the
school district securing said copyrights.
DIVISION 4
INSTRUCTION AND SERVICES

PART 33
Instructional Materials and Testing

CHAPTER 1
INSTRUCTIONAL MATERIALS
ARTICLE 5
Prohibited Acts
§ 60076. Royalties to School Official From Instructional

Material.
Nothing contained in this article shall be construed to prohibit or restrict a
school official from receiving royalties or other compensation from the
publisher or manufacturer of instructional materials written, designed, or
prepared by such school official, and adopted or purchased by any governing
board, other than compensation paid as commission to the school official for
negotiating sales to governing boards. No district shall have or claim the right to
receive any such royalty or other compensation due to any school official
employed by the district unless the instructional material was written or
prepared during the normal schoolday during which the school official is
required by the district to be on duty.
699
TITLE 3
POSTSECONDARY EDUCATION
DIVISION 7
COMMUNITY COLLEGES
PART 45
Districts and Governing Boards

CHAPTER 3
POWERS AND DUTIES

ARTICLE 1
General Provisions
§ 72207. Authority of Community College District to

Secure Copyrights; Royalties From Same.
The governing board of a community college district may secure copyrights,
in the name of the district, to all copyrightable works developed by the district,
and royalties or revenue from said copyrights are to be for the benefit of the
district securing said copyrights.
PART 48
700
Community Colleges, Education Programs
CHAPTER 7
INSTRUCTIONAL MATERIALS
ARTICLE 1
Prohibited Acts
§ 78900. Improper Influence; Royalties; Punishment;

Samples.
(a) No publisher or manufacturer of instructional materials, nor any of his or
her representatives, shall offer or give any emolument, money, or other valuable
thing, or any inducement, to any community college official to directly or
indirectly introduce, recommend, vote for, or otherwise influence the adoption
or purchase of any instructional material.
(b) No community college official shall accept any emolument, money, or
other valuable thing, or any inducement to directly or indirectly introduce,
recommend, vote for, or otherwise influence the adoption or purchase of any
instructional material.
(c) Any publisher or manufacturer of instructional materials or his or her
representative, or any community college official who violates any of the
provisions of this article is guilty of a misdemeanor. Any community college
official who violates this article shall, in addition to any other penalty, be
removed from his or her official position.
( d) Nothing in this chapter shall be construed to prevent any publisher,
manufacturer, or agent from supplying for purposes of examination necessary
sample copies of instructional materials to any community college official.
( e ) Nothing in this chapter shall be construed to prevent a community
college official from receiving sample copies of instructional materials.
(f) Nothing contained in this chapter shall be construed to prohibit or restrict
a community college official from receiving royalties or other compensation
from the publisher or manufacturer of instructional materials written, designed,
or prepared by the community college official, and adopted or purchased by any
701
governing board, other than compensation paid as a commission to the
community college official for negotiating sales to governing boards. No district
shall have or claim the right to receive a royalty or other compensation due to
any community college official employed by the district unless the instructional
material was written or prepared during the normal schoolday during which the
community college official is required by the district to be on duty.
Leg.H. 1976 ch. 1010, operative April 30, 1977, 1990 ch. 1372.
PART 49
Community Colleges, Education Facilities

CHAPTER 2
PROPERTY—SALE, LEASE, USE, AND

EXCHANGE
ARTICLE 9
Sale of Personal Property
§ 81459. Sale, Gift, or Exchange of Published Materials

Prepared by Community College District; License of
Copyrights in Same.
A community college district may, in accordance with regulations adopted
by the governing board of the district and for educational use, sell, give, or
exchange for similar published materials, published materials prepared by the
district in connection with the curricular and special services that the district is
authorized to perform. Unless restricted by the regulations of the governing
board, the sale or gift may be made to, and the exchange may be made with, any
person, political subdivision, public officer or agency, or educational
institution. The distribution of the published material in accordance with this
section is declared to be a public purpose and in furtherance of Section 1 of
Article IX of the California Constitution. A community college district may also
license the use of copyrights held by the district, to the same persons or entities
702
and for the same purposes as provided in the above paragraph. The district shall
grant a license to any public agency organized under the authority of this state,
unless an exclusive license has previously been granted a private publisher. Any
charge which may be assessed such a public agency for the license to use the
copyright or for materials, to which the district holds the copyright, shall not
exceed the cost to the district of the preparation and reproduction of the
materials. Any granting of a license, by a district, to reproduce copyrighted
material is declared to be for a public purpose in furtherance of Section 1 of
Article IX of the California Constitution.

SYNOPSIS
Contents
DIVISION 8 PRIVILEGES
CHAPTER 3 GENERAL PROVISIONS RELATING TO PRIVILEGES
§ 915. Disclosure of Information to Determine Claim—Official Information—
Identity of Informer—Trade Secrets.
CHAPTER 4 PARTICULAR PRIVILEGES
ARTICLE 11 Trade Secret
DIVISION 11 WRITINGS
CHAPTER 2 SECONDARY EVIDENCE OF WRITINGS
ARTICLE 1 Proof of the Content of a Writing
§ 1520. Original Writing Admissible as Proof of Content.
§ 1521. Secondary Evidence Admissible as Proof of Content.
DIVISION 8
PRIVILEGES
CHAPTER 3
703
GENERAL PROVISIONS RELATING TO
PRIVILEGES
§ 915. Disclosure of Information to Determine Claim—
Official Information—Identity of Informer—Trade
Secrets.
( a ) Subject to subdivision (b), the presiding officer may not require
disclosure of information claimed to be privileged under this division or
attorney work product under subdivision (a) of Section 2018.030 of the Code of
Civil Procedure in order to rule on the claim of privilege; provided, however,
that in any hearing conducted pursuant to subdivision (c) of Section 1524 of the
Penal Code in which a claim of privilege is made and the court determines that
there is no other feasible means to rule on the validity of the claim other than to
require disclosure, the court shall proceed in accordance with subdivision (b).
( b ) When a court is ruling on a claim of privilege under Article 9
(commencing with Section 1040) of Chapter 4 (official information and identity
of informer) or under Section 1060 (trade secret) or under subdivision (b) of
Section 2018.030 of the Code of Civil Procedure (attorney work product) and is
unable to do so without requiring disclosure of the information claimed to be
privileged, the court may require the person from whom disclosure is sought or
the person authorized to claim the privilege, or both, to disclose the information
in chambers out of the presence and hearing of all persons except the person
authorized to claim the privilege and any other persons as the person authorized
to claim the privilege is willing to have present. If the judge determines that the
information is privileged, neither the judge nor any other person may ever
disclose, without the consent of a person authorized to permit disclosure, what
was disclosed in the course of the proceedings in chambers.
182 (AB 3081), operative July 1, 2005.
An issue frequently argued is which, if any, state procedural requirements apply to a
federal action with pendent state causes of action.
CHAPTER 4
704
PARTICULAR PRIVILEGES
ARTICLE 11
Trade Secret

If he or his agent or employee claims the privilege, the owner of a trade
secret has a privilege to refuse to disclose the secret, and to prevent another
from disclosing it, if the allowance of the privilege will not tend to conceal
fraud or otherwise work injustice.
Annotations
Cases
Citizens of Humanity, LLC v. Costco Wholesale Corp. , 171 Cal. App. 4th 1, 89 Cal.
Rptr. 3d 455 (2009). The identity of the suppliers of Costco’s goods qualified as a trade
secret such that the trial court properly denied a motion to compel discovery of the supplier
of certain merchandise that the plaintiff contended was stolen.
Stadish v. Superior Court (1999) 71 Cal. App. 4th 1130, 84 Cal. Rptr. 2d 350 .
Plaintiffs alleged injuries resulting from exposure to toxic chemicals. The Appellate Court
found that the trial court had authority under Code Civ. Proc. § 2031(f) to issue a protective
order to protect trade secrets, even though the party seeking the protective order had as a
matter of law waived the trade secret privilege by failing to timely assert the privilege in its
response to document requests, and documents containing the trade secrets had already been
produced. The trial court was required to employ the procedure contained in Evidence Code §
1061(b)(1) regarding protective orders in a criminal matter to determine which items of
discovery contain trade secrets.
Bridgestone/Firestone, Inc. v. Superior Court (1st Dist. 1992) 7 Cal. App. 4th 1384, 9
Cal. Rptr. 2d 709. The Court of Appeal set aside a lower court’s order under Evid. Code §
1060 requiring defendant to provide trade secret information regarding manufacturing
specifications for a tire involved in a fatal automobile accident, and specified the following
guidelines for trial courts evaluating trade secret discovery requests under Evid. Code §
1060:
[T]he party seeking discovery must make a prima facie, particularized showing that the
information sought is relevant and necessary to the proof of, or defense against, a material
element of one or more causes of action presented in the case, and that it is reasonable to
conclude that the information sought is essential to a fair resolution of the lawsuit. It is then
up to the holder of the privilege to demonstrate any claimed disadvantages of a protective
705
order. … [T]he burden is upon the trade secret claimant to demonstrate that an alternative to
disclosure will not be unduly burdensome to the opposing side and that it will maintain the
same fair balance in the litigation that would have been achieved by disclosure.
The court found that while plaintiffs had established that the tire specifications would be
helpful to their case, they had not made the requisite prima facie showing that the
specifications were necessary to prove their claims.
Articles
No t e , Trade Secrets in Discovery: From First Amendment Disclosure to Fifth
Amendment Protection, 104 Harv. L. Rev. 1330 (1991).

(a) For purposes of this section, and Sections 1062 and 1063:
(1) “Trade secret” means “trade secret,” as defined in subdivision (d)
of Section 3426.1 of the Civil Code, or paragraph (9) of subdivision (a) of
Section 499c of the Penal Code.
( 2 ) “Article” means “article,” as defined in paragraph (2) of
subdivision (a) of Section 499c of the Penal Code.
( b ) In addition to Section 1062, the following procedure shall apply
whenever the owner of a trade secret wishes to assert his or her trade secret
privilege, as provided in Section 1060, during a criminal proceeding:
(1) The owner of the trade secret shall file a motion for a protective
order, or the people may file the motion on the owner’s behalf and with the
owner’s permission. The motion shall include an affidavit based upon
personal knowledge listing the affiant’s qualifications to give an opinion
concerning the trade secret at issue, identifying, without revealing, the
alleged trade secret and articles which disclose the secret, and presenting
evidence that the secret qualifies as a trade secret under either subdivision
(d) of Section 3426.1 of the Civil Code or paragraph (9) of subdivision (a)
of Section 499c of the Penal Code. The motion and affidavit shall be served
on all parties in the proceeding.
( 2 ) Any party in the proceeding may oppose the request for the
protective order by submitting affidavits based upon the affiant’s personal
knowledge. The affidavits shall be filed under seal, but shall be provided to
the owner of the trade secret and to all parties in the proceeding. Neither the
owner of the trade secret nor any party in the proceeding may disclose the
affidavit to persons other than to counsel of record without prior court
approval.
706
(3) The movant shall, by a preponderance of the evidence, show that the
issuance of a protective order is proper. The court may rule on the request
without holding an evidentiary hearing. However, in its discretion, the court
may choose to hold an in camera evidentiary hearing concerning disputed
articles with only the owner of the trade secret, the people’s representative,
the defendant, and defendant’s counsel present. If the court holds such a
hearing, the parties’ right to examine witnesses shall not be used to obtain
discovery, but shall be directed solely toward the question of whether the
alleged trade secret qualifies for protection.
(4) If the court finds that a trade secret may be disclosed during any
criminal proceeding unless a protective order is issued and that the issuance
of a protective order would not conceal a fraud or work an injustice, the
court shall issue a protective order limiting the use and dissemination of the
trade secret, including, but not limited to, articles disclosing that secret. The
protective order may, in the court’s discretion, include the following
provisions:
(A) That the trade secret may be disseminated only to counsel for the
parties, including their associate attorneys, paralegals, and investigators,
and to law enforcement officials or clerical officials.
(B) That the defendant may view the secret only in the presence of
his or her counsel, or if not in the presence of his or her counsel, at
counsel’s offices.
( C) That any party seeking to show the trade secret, or articles
containing the trade secret, to any person not designated by the
protective order shall first obtain court approval to do so:
( i ) The court may require that the person receiving the trade
secret do so only in the presence of counsel for the party requesting
approval.
(ii) The court may require the person receiving the trade secret to
sign a copy of the protective order and to agree to be bound by its
terms. The order may include a provision recognizing the owner of
the trade secret to be a third-party beneficiary of that agreement.
(iii) The court may require a party seeking disclosure to an
expert to provide that expert’s name, employment history, and any
other relevant information to the court for examination. The court
shall accept that information under seal, and the information shall not
be disclosed by any court except upon termination of the action and
upon a showing of good cause to believe the secret has been
disseminated by a court-approved expert. The court shall evaluate
707
the expert and determine whether the expert poses a discernible risk
of disclosure. The court shall withhold approval if the expert’s
economic interests place the expert in a competitive position with
the victim, unless no other experts are available. The court may
interview the expert in camera in aid of its ruling. If the court rejects
the expert, it shall state its reasons for doing so on the record and a
transcript of those reasons shall be prepared and sealed.
( D) That no articles disclosing the trade secret shall be filed or
otherwise made a part of the court record available to the public without
approval of the court and prior notice to the owner of the secret. The
owner of the secret may give either party permission to accept the notice
on the owner’s behalf.
(E) Other orders as the court deems necessary to protect the integrity
of the trade secret.
( c ) A ruling granting or denying a motion for a protective order filed
pursuant to subdivision (b) shall not be construed as a determination that the
alleged trade secret is or is not a trade secret as defined by subdivision (d) of
Section 3426.1 of the Civil Code or paragraph (9) of subdivision (a) of Section
499c of the Penal Code. Such a ruling shall not have any effect on any civil
litigation.
(d) This section shall have prospective effect only and shall not operate to
invalidate previously entered protective orders.
Leg.H. 1990 chs. 149, 714, 2002 ch. 784.
Annotations
See the annotations to § 1060.

( a ) Notwithstanding any other provision of law, in a criminal case, the
court, upon motion of the owner of a trade secret, or upon motion by the People
with the consent of the owner, may exclude the public from any portion of a
criminal proceeding where the proponent of closure has demonstrated a
substantial probability that the trade secret would otherwise be disclosed to the
public during that proceeding and a substantial probability that the disclosure
would cause serious harm to the owner of the secret, and where the court finds
that there is no overriding public interest in an open proceeding. No evidence,
however, shall be excluded during a criminal proceeding pursuant to this
section if it would conceal a fraud, work an injustice, or deprive the People or
the defendant of a fair trial.
708
( b) The motion made pursuant to subdivision (a) shall identify, without
revealing, the trade secrets which would otherwise be disclosed to the public.
A showing made pursuant to subdivision (a) shall be made during an in camera
hearing with only the owner of the trade secret, the People’s representative, the
defendant, and defendant’s counsel present. A court reporter shall be present
during the hearing. Any transcription of the proceedings at the in camera
hearing, as well as any articles presented at that hearing, shall be ordered
sealed by the court and only a court may allow access to its contents upon a
showing of good cause. The court, in ruling upon the motion made pursuant to
subdivision (a), may consider testimony presented or affidavits filed in any
proceeding held in that action.
(c) If, after the in camera hearing described in subdivision (b), the court
determines that exclusion of trade secret information from the public is
appropriate, the court shall close only that portion of the criminal proceeding
necessary to prevent disclosure of the trade secret. Before granting the motion,
however, the court shall find and state for the record that the moving party has
met its burden pursuant to subdivision (b), and that the closure of that portion of
the proceeding will not deprive the People or the defendant of a fair trial.
(d) The owner of the trade secret, the People, or the defendant may seek
relief from a ruling denying or granting closure by petitioning a higher court for
extraordinary relief.
(e) Whenever the court closes a portion of a criminal proceeding pursuant to
this section, a transcript of that closed proceeding shall be made available to the
public as soon as practicable. The court shall redact any information qualifying
as a trade secret before making that transcript available.
( f ) The court, subject to Section 867 of the Penal Code, may allow
witnesses who are bound by a protective order entered in the criminal
proceeding protecting trade secrets, pursuant to Section 1061, to remain within
the courtroom during the closed portion of the proceeding.
Leg.H. 1990 chs. 149, 714.

The following provisions shall govern requests to seal articles which are
protected by a protective order entered pursuant to Evidence Code Section 1060
or 1061:
(a) The People shall request sealing of articles reasonably expected to
be filed or admitted into evidence as follows:
(1) No less than 10 court days before trial, and no less than five
709
court days before any other criminal proceeding, the People shall file
with the court a list of all articles which the People reasonably expect to
file with the court, or admit into evidence, under seal at that proceeding.
That list shall be available to the public. The People may be relieved
from providing timely notice upon showing that exigent circumstances
prevent that notice.
(2) The court shall not allow the listed articles to be filed, admitted
into evidence, or in any way made a part of the court record otherwise
open to the public before holding a hearing to consider any objections to
the People’s request to seal the articles. The court at that hearing shall
allow those objecting to the sealing to state their objections.
(3) After hearing any objections to sealing, the court shall conduct an
in camera hearing with only the owner of the trade secret contained
within those articles, the People’s representative, defendant, and
defendant’s counsel present. The court shall review the articles sought
to be sealed, evaluate objections to sealing, and determine whether the
People have satisfied the constitutional standards governing public
access to articles which are part of the judicial record. The court may
consider testimony presented or affidavits filed in any proceeding held
in that action. The People, defendant, and the owner of the trade secret
may file affidavits based on the affiant’s personal knowledge to be
considered at that hearing. Those affidavits are to be sealed and not
released to the public, but shall be made available to the parties. The
court may rule on the request to seal without taking testimony. If the
court takes testimony, examination of witnesses shall not be used to
obtain discovery, but shall be directed solely toward whether sealing is
appropriate.
( 4 ) If the court finds that the movant has satisfied appropriate
constitutional standards with respect to sealing particular articles, the
court shall seal those articles if and when they are filed, admitted into
evidence, or in any way made a part of the court record otherwise open
to the public. The articles shall not be unsealed absent an order of a
court upon a showing of good cause. Failure to examine the court file for
notice of a request to seal shall not constitute good cause to consider
objections to sealing.
(b) The following procedure shall apply to other articles made a part of
the court record:
( 1 ) Where any articles protected by a protective order entered
pursuant to Section 1060 or 1061 are filed, admitted into evidence, or in
any way made a part of the court record in such a way as to be
710
otherwise open to the public, the People, a defendant, or the owner of a
trade secret contained within those articles may request the court to seal
those articles.
(2) The request to seal shall be made by noticed motion filed with
the court. It may also be made orally in court at the time the articles are
made a part of the court record. Where the request is made orally, the
movant must file within 24 hours a written description of that request,
including a list of the articles which are the subject of that request.
These motions and lists shall be available to the public.
( 3 ) The court shall promptly conduct hearings as provided in
paragraphs (2), (3), and (4) of subdivision (a). The court shall, pending
the hearings, seal those articles which are the subject of the request.
Where a request to seal is made orally, the court may conduct hearings
at the time the articles are made a part of the court record, but shall
reconsider its ruling in light of additional objections made by objectors
within two court days after the written record of the request to seal is
made available to the public.
( 4 ) Any articles sealed pursuant to these hearings shall not be
unsealed absent an order of a court upon a showing of good cause.
Failure to examine the court file for notice of a request to seal shall not
constitute good cause to consider objections to sealing.
Leg.H. 1990 ch. 714.
DIVISION 11
WRITINGS
CHAPTER 2
SECONDARY EVIDENCE OF WRITINGS

ARTICLE 1
Proof of the Content of a Writing
711
§ 1520. Original Writing Admissible as Proof of
Content.
The content of a writing may be proved by an otherwise admissible original.
Leg.H. 1998 ch. 100.
§ 1521. Secondary Evidence Admissible as Proof of

Content.
( a ) The content of a writing may be proved by otherwise admissible
secondary evidence. The court shall exclude secondary evidence of the content
of writing if the court determines either of the following:
(1) A genuine dispute exists concerning material terms of the writing
and justice requires the exclusion.
(2) Admission of the secondary evidence would be unfair.
(b) Nothing in this section makes admissible oral testimony to prove the
content of a writing if the testimony is inadmissible under Section 1523 (oral
testimony of the content of a writing).
( c ) Nothing in this section excuses compliance with Section 1401
(authentication).
(d) This section shall be known as the “Secondary Evidence Rule.”
Leg.H. 1998 ch. 100.

(a) In addition to the grounds for exclusion authorized by Section 1521, in a
criminal action the court shall exclude secondary evidence of the content of a
writing if the court determines that the original is in the proponent’s possession,
custody, or control, and the proponent has not made the original reasonably
available for inspection at or before trial. This section does not apply to any of
the following:
(1) A duplicate as defined in Section 260.
(2) A writing that is not closely related to the controlling issues in the
action.
(3) A copy of a writing in the custody of a public entity.
(4) A copy of a writing that is recorded in the public records, if the
record or a certified copy of it is made evidence of the writing by statute.
712
(b) In a criminal action, a request to exclude secondary evidence of the
content of a writing, under this section or any other law, shall not be made in the
presence of the jury.
Leg.H. 1998 ch. 100.

( a ) Except as otherwise provided by statute, oral testimony is not
admissible to prove the content of a writing.
(b) Oral testimony of the content of a writing is not made inadmissible by
subdivision (a) if the proponent does not have possession or control of a copy
of the writing and the original is lost or has been destroyed without fraudulent
intent on the part of the proponent of the evidence.
(c) Oral testimony of the content of a writing is not made inadmissible by
subdivision (a) if the proponent does not have possession or control of the
original or a copy of the writing and either of the following conditions is
satisfied:
( 1 ) Neither the writing nor a copy of the writing was reasonably
procurable by the proponent by use of the court’s process or by other
available means.
(2) The writing is not closely related to the controlling issues and it
would be inexpedient to require its production.
(d) Oral testimony of the content of a writing is not made inadmissible by
subdivision (a) if the writing consists of numerous accounts or other writings
that cannot be examined in court without great loss of time, and the evidence
sought from them is only the general result of the whole.
Leg.H. 1998 ch. 100.

Contents
TITLE 1 GENERAL
DIVISION 7 MISCELLANEOUS
CHAPTER 3.5 INSPECTION OF PUBLIC RECORDS
§ 6254.2. Public Disclosure of Pesticide Safety and Efficacy Information;
Trade Secret Exception.
§ 6254.20. Electronically Collected Personal Information—Records.
§ 6254.21. Posting Home Address or Phone Number of Official on Internet
Without Permission; Violation; Relief; Definitions.
713
§ 6254.26. Disclosure of Specified Records Regarding Alternative
Investments in Which Public Investment Funds Invest.
§ 6254.27. County Recorder Not to Disclose “Official Record” If “Public
Record” Available.
§ 6254.28. Filing Office Not to Disclose “Official Record” if “Public
Record” Available.
§ 6254.29. Intent of Legislature to Protect Against Risk of Identity Theft.
§ 6254.7. Public Disclosure of Air Pollution Information, Notices and
Orders to Building Owners; Trade Secret Exception.
§ 6254.9. Computer Software Developed by State or Local Agency; Sale,
Lease, or License of Same; Public Record Status of Information Stored
in Computer.
TITLE 2 GOVERNMENT OF THE STATE OF CALIFORNIA
DIVISION 3 EXECUTIVE DEPARTMENT
CHAPTER 3 SECRETARY OF STATE
ARTICLE 3 Fees
TITLE 1
GENERAL
DIVISION 7
MISCELLANEOUS
CHAPTER 3.5
INSPECTION OF PUBLIC RECORDS

§ 6254.2. Public Disclosure of Pesticide Safety and
Efficacy Information; Trade Secret Exception.
( a ) Nothing in this chapter exempts from public disclosure the same
categories of pesticide safety and efficacy information that are disclosable
714
under paragraph (1) of subsection (d) of Section 10 of the federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. Sec. 136h(d)(1)), if the individual
requesting the information is not an officer, employee, or agent specified in
subdivision (h) and signs the affirmation specified in subdivision (h).
(b) The Director of Pesticide Regulation, upon his or her initiative, or upon
receipt of a request pursuant to this chapter for the release of data submitted and
designated as a trade secret by a registrant or applicant, shall determine whether
any or all of the data so submitted is a properly designated trade secret. In order
to assure that the interested public has an opportunity to obtain and review
pesticide safety and efficacy data and to comment prior to the expiration of the
public comment period on a proposed pesticide registration, the director shall
provide notice to interested persons when an application for registration enters
the registration evaluation process.
(c) If the director determines that the data is not a trade secret, the director
shall notify the registrant or applicant by certified mail.
( d) The registrant or applicant shall have 30 days after receipt of this
notification to provide the director with a complete justification and statement
of the grounds on which the trade secret privilege is claimed. This justification
and statement shall be submitted by certified mail.
(e) The director shall determine whether the data is protected as a trade
secret within 15 days after receipt of the justification and statement or, if no
justification and statement is filed, within 45 days of the original notice. The
director shall notify the registrant or applicant and any party who has requested
the data pursuant to this chapter of that determination by certified mail. If the
director determines that the data is not protected as a trade secret, the final
notice shall also specify a date, not sooner than 15 days after the date of mailing
of the final notice, when the data shall be available to any person requesting
information pursuant to subdivision (a).
(f) “Trade secret” means data that is nondisclosable under paragraph (1) of
subsection (d) of Section 10 of the federal Insecticide, Fungicide, and
Rodenticide Act.
(g) This section shall be operative only so long as, and to the extent that,
enforcement of paragraph (1) of subsection (d) of Section 10 of the federal
Insecticide, Fungicide, and Rodenticide Act has not been enjoined by federal
court order, and shall become inoperative if an unappealable federal court
judgment or decision becomes final that holds that paragraph invalid, to the
extent of the invalidity.
(h) The director shall not knowingly disclose information submitted to the
state by an applicant or registrant pursuant to Article 4 (commencing with
715
Section 12811) of Chapter 2 of Division 7 of the Food and Agricultural Code to
any officer, employee, or agent of any business or other entity engaged in the
production, sale, or distribution of pesticides in countries other than the United
States or in countries in addition to the United States, or to any other person who
intends to deliver this information to any foreign or multi-national business or
entity, unless the applicant or registrant consents to the disclosure. To
implement this subdivision, the director shall require the following affirmation
to be signed by the person who requests such information:
AFFIRMATION OF STATUS
This affirmation is required by Section 6254.2 of the Government Code. I
have requested access to information submitted to the Department of Pesticide
Regulation (or previously submitted to the Department of Food and Agriculture)
by a pesticide applicant or registrant pursuant to the California Food and
Agricultural Code. I hereby affirm all of the following statements:
(1) I do not seek access to the information for purposes of delivering it
or offering it for sale to any business or other entity, including the business
or entity of which I am an officer, employee, or agent engaged in the
production, sale, or distribution of pesticides in countries other than the
United States or in countries in addition to the United States, or to the
officers, employees, or agents of such a business or entity.
(2) I will not purposefully deliver or negligently cause the data to be
delivered to a business or entity specified in paragraph (1) or its officers,
employees, or agents. I am aware that I may be subject to criminal penalties
under Section 118 of the Penal Code if I make any statement of material
facts knowing that the statement is false or if I willfully conceal any material
fact.
Name of Name of Requester’s Organization

Requester
Signature of Address of Requester
Requester
Date Telephone Number of Requester
Request No.
Name, Address, and Telephone Number of Requester’s

Client, if the requester has requested access to the
information on behalf of someone other than the requester
or the requester’s organization listed above.
(i) Notwithstanding any other provision of this section, the director may
disclose information submitted by an applicant or registrant to any person in
connection with a public proceeding conducted under law or regulation, if the
716
director determines that the information is needed to determine whether a
pesticide, or any ingredient of any pesticide, causes unreasonable adverse
effects on health or the environment.
(j) The director shall maintain records of the names of persons to whom
data is disclosed pursuant to this section and the persons or organizations they
represent and shall inform the applicant or registrant of the names and the
affiliation of these persons.
(k) Section 118 of the Penal Code applies to any affirmation made pursuant
to this section.
(l ) Any officer or employee of the state or former officer or employee of the
state who, because of this employment or official position, obtains possession
of, or has access to, material which is prohibited from disclosure by this
section, and who, knowing that disclosure of this material is prohibited by this
section, willfully discloses the material in any manner to any person not entitled
to receive it, shall, upon conviction, be punished by a fine of not more than ten
thousand dollars ($10,000), or by imprisonment in the county jail for not more
than one year, or by both fine and imprisonment. For purposes of this
subdivision, any contractor with the state who is furnished information pursuant
to this section, or any employee of any contractor, shall be considered an
employee of the state.
( m) This section does not prohibit any person from maintaining a civil
action for wrongful disclosure of trade secrets.
(n) The director may limit an individual to one request per month pursuant to
this section if the director determines that a person has made a frivolous request
within the past 12-month period.
Leg.H. 1984 ch. 765, 1985 ch. 1436, 1996 ch. 435.
§ 6254.20. Electronically Collected Personal

Information—Records.
Nothing in this chapter shall be construed to require the disclosure of
records that relate to electronically collected personal information, as defined
by Section 11015.5, received, collected, or compiled by a state agency.
Leg.H. 1998 ch. 429.
§ 6254.21. Posting Home Address or Phone Number of

Official on Internet Without Permission; Violation;
Relief; Definitions.
717
( a ) No state or local agency shall post the home address or telephone
number of any elected or appointed official on the Internet without first
obtaining the written permission of that individual.
(b) No person shall knowingly post the home address or telephone number
of any elected or appointed official, or of the official’s residing spouse or child,
on the Internet knowing that person is an elected or appointed official and
intending to cause imminent great bodily harm that is likely to occur or
threatening to cause imminent great bodily harm to that individual. A violation
of this subdivision is a misdemeanor. A violation of this subdivision that leads
to the bodily injury of the official, or his or her residing spouse or child, is a
misdemeanor or a felony.
(c)
(1)
( A ) No person, business, or association shall publicly post or
publicly display on the Internet the home address or telephone number of
any elected or appointed official if that official has made a written
demand of that person, business, or association to not disclose his or her
home address or telephone number.
( B ) A written demand made under this paragraph by a state
constitutional officer, a mayor, or a Member of the Legislature, a city
council, or a board of supervisors shall include a statement describing a
threat or fear for the safety of that official or of any person residing at
the official’s home address.
( C) A written demand made under this paragraph by an elected
official shall be effective for four years, regardless of whether or not the
official’s term has expired prior to the end of the four-year period.
(D)
(i) A person, business, or association that receives the written
demand of an elected or appointed official pursuant to this paragraph
shall remove the official’s home address or telephone number from
public display on the Internet, including information provided to
cellular telephone applications, within 48 hours of delivery of the
written demand, and shall continue to ensure that this information is
not reposted on the same Internet Web site, subsidiary site, or any
other Internet Web site maintained by the recipient of the written
demand.
(ii) After receiving the elected or appointed official’s written
demand, the person, business, or association shall not transfer the
718
appointed or elected official’s home address or telephone number to
any other person, business, or association through any other medium.
(iii) Clause (ii) shall not be deemed to prohibit a telephone
corporation, as defined in Section 234 of the Public Utilities Code,
or its affiliate, from transferring the elected or appointed official’s
home address or telephone number to any person, business, or
association, if the transfer is authorized by federal or state law,
regulation, order, or tariff, or necessary in the event of an emergency,
or to collect a debt owed by the elected or appointed official to the
telephone corporation or its affiliate.
( E) For purposes of this paragraph, “publicly post” or “publicly
display” means to intentionally communicate or otherwise make
available to the general public.
(2) An official whose home address or telephone number is made public
as a result of a violation of paragraph (1) may bring an action seeking
injunctive or declarative relief in any court of competent jurisdiction. If a
court finds that a violation has occurred, it may grant injunctive or
declarative relief and shall award the official court costs and reasonable
attorney’s fees. A fine not exceeding one thousand dollars ($1,000) may be
imposed for a violation of the court’s order for an injunction or declarative
relief obtained pursuant to this paragraph.
(3) An elected or appointed official may designate in writing the
official’s employer, a related governmental entity, or any voluntary
professional association of similar officials to act, on behalf of that official,
as that official’s agent with regard to making a written demand pursuant to
this section. A written demand made by an agent pursuant to this paragraph
shall include a statement describing a threat or fear for the safety of that
official or of any person residing at the official’s home address.
(d)
(1) No person, business, or association shall solicit, sell, or trade on the
Internet the home address or telephone number of an elected or appointed
official with the intent to cause imminent great bodily harm to the official or
to any person residing at the official’s home address.
(2) Notwithstanding any other law, an official whose home address or
telephone number is solicited, sold, or traded in violation of paragraph (1)
may bring an action in any court of competent jurisdiction. If a jury or court
finds that a violation has occurred, it shall award damages to that official in
an amount up to a maximum of three times the actual damages but in no case
less than four thousand dollars ($4,000).
719
(e) An interactive computer service or access software provider, as defined
in Section 230(f) of Title 47 of the United States Code, shall not be liable under
this section unless the service or provider intends to abet or cause imminent
great bodily harm that is likely to occur or threatens to cause imminent great
bodily harm to an elected or appointed official.
(f) For purposes of this section, “elected or appointed official” includes, but
is not limited to, all of the following:
(1) State constitutional officers.
(2) Members of the Legislature.
(3) Judges and court commissioners.
(4) District attorneys.
(5) Public defenders.
(6) Members of a city council.
(7) Members of a board of supervisors.
(8) Appointees of the Governor.
(9) Appointees of the Legislature.
(10) Mayors.
(11) City attorneys.
(12) Police chiefs and sheriffs.
(13) A public safety official, as defined in Section 6254.24.
(14) State administrative law judges.
(15) Federal judges and federal defenders.
(16) Members of the United States Congress and appointees of the
President.
(g) Nothing in this section is intended to preclude punishment instead under
Sections 69, 76, or 422 of the Penal Code, or any other provision of law.
Added Stats 1998 ch 429 § 4 (SB 1386). Amended Stats 2002 ch 621 § 2 (AB 2238);
Stats 2005 ch 343 § 1 (AB 1595), effective January 1, 2006; Stats 2009 ch 403 § 1 (AB 32),
effective January 1, 2010; Stats 2010 ch 194 § 1 (AB 1813), effective January 1, 2011.
ARTICLE 1
720
General Provisions

As used in this chapter, “public safety official” means the following parties,
whether active or retired:
(a) A peace officer as defined in Sections 830 to 830.65, inclusive, of
the Penal Code, or a person who is not a peace officer, but may exercise the
powers of arrest during the course and within the scope of their employment
pursuant to Section 830.7 of the Penal Code.
( b ) A public officer or other person listed in Sections 1808.2 and
1808.6 of the Vehicle Code.
(c) An “elected or appointed official” as defined in subdivision (f) of
Section 6254.21.
(d) An attorney employed by the Department of Justice, the State Public
Defender, or a county office of the district attorney or public defender, the
United States Attorney, or the Federal Public Defender.
( e ) A city attorney and an attorney who represent cities in criminal
matters.
(f) An employee of the Department of Corrections and Rehabilitation
who supervises inmates or is required to have a prisoner in his or her care
or custody.
(g) A sworn or nonsworn employee who supervises inmates in a city
police department, a county sheriff’s office, the Department of the California
Highway Patrol, federal, state, or a local detention facility, and a local
juvenile hall, camp, ranch, or home, and a probation officer as defined in
Section 830.5 of the Penal Code.
(h) A federal prosecutor, a federal criminal investigator, and a National
Park Service Ranger working in California.
(i) The surviving spouse or child of a peace officer defined in Section
830 of the Penal Code, if the peace officer died in the line of duty.
(j) State and federal judges and court commissioners.
(k) An employee of the Attorney General, a district attorney, or a public
defender who submits verification from the Attorney General, district
attorney, or public defender that the employee represents the Attorney
General, district attorney, or public defender in matters that routinely place
that employee in personal contact with persons under investigation for,
721
charged with, or convicted of, committing criminal acts.
(l) A nonsworn employee of the Department of Justice or a police
department or sheriff’s office that, in the course of his or her employment, is
responsible for collecting, documenting, and preserving physical evidence
at crime scenes, testifying in court as an expert witness, and other technical
duties, and a nonsworn employee that, in the course of his or her
employment, performs a variety of standardized and advanced laboratory
procedures in the examination of physical crime evidence, determines their
results, and provides expert testimony in court.
Added Stats 2002 ch 621 § 3 (AB 2238). Amended Stats 2003 ch 468 § 4 (SB 851);
Stats 2006 ch 472 § 1 (AB 2005), effective January 1, 2007; Stats 2010 ch 194 § 2 (AB
§ 6254.26. Disclosure of Specified Records Regarding

Alternative Investments in Which Public Investment
Funds Invest.
( a ) Notwithstanding any provision of this chapter or other law, the
following records regarding alternative investments in which public investment
funds invest shall not be subject to disclosure pursuant to this chapter, unless the
information has already been publicly released by the keeper of the information:
(1) Due diligence materials that are proprietary to the public investment
fund or the alternative investment vehicle.
(2) Quarterly and annual financial statements of alternative investment
vehicles.
(3) Meeting materials of alternative investment vehicles.
(4) Records containing information regarding the portfolio positions in
which alternative investment funds invest.
(5) Capital call and distribution notices.
(6) Alternative investment agreements and all related documents.
(b) Notwithstanding subdivision (a), the following information contained in
records described in subdivision (a) regarding alternative investments in which
public investment funds invest shall be subject to disclosure pursuant to this
chapter and shall not be considered a trade secret exempt from disclosure:
(1) The name, address, and vintage year of each alternative investment
vehicle.
( 2 ) The dollar amount of the commitment made to each alternative
722
investment vehicle by the public investment fund since inception.
( 3 ) The dollar amount of cash contributions made by the public
investment fund to each alternative investment vehicle since inception.
(4) The dollar amount, on a fiscal yearend basis, of cash distributions
received by the public investment fund from each alternative investment
vehicle.
(5) The dollar amount, on a fiscal yearend basis, of cash distributions
received by the public investment fund plus remaining value of partnership
assets attributable to the public investment fund’s investment in each
alternative investment vehicle.
(6) The net internal rate of return of each alternative investment vehicle
since inception.
(7) The investment multiple of each alternative investment vehicle since
inception.
(8) The dollar amount of the total management fees and costs paid on an
annual fiscal yearend basis, by the public investment fund to each alternative
investment vehicle.
(9) The dollar amount of cash profit received by public investment funds
from each alternative investment vehicle on a fiscal year-end basis.
(c) For purposes of this section, the following definitions shall apply:
(1) “Alternative investment” means an investment in a private equity
fund, venture fund, hedge fund, or absolute return fund.
( 2 ) “Alternative investment vehicle” means the limited partnership,
limited liability company, or similar legal structure through which the public
investment fund invests in portfolio companies.
(3) “Portfolio positions” means individual portfolio investments made
by the alternative investment vehicles.
(4) “Public investment fund” means any public pension or retirement
system, and any public endowment or foundation.
Added Stats 2005 ch 258 § 2 (SB 439), effective January 1, 2006. Amended Stats 2006
§ 6254.27. County Recorder Not to Disclose “Official

Record” If “Public Record” Available.
Nothing in this chapter shall be construed to require the disclosure by a
723
county recorder of any “official record” if a “public record” version of that
record is available pursuant to Article 3.5 (commencing with Section 27300) of
Chapter 6 of Part 3 of Division 2 of Title 3.
§ 6254.28. Filing Office Not to Disclose “Official

Record” if “Public Record” Available.
Nothing in this chapter shall be construed to require the disclosure by a
filing office of any “official record” if a “public record” version of that record
is available pursuant to Section 9526.5 of the Commercial Code.
§ 6254.29. Intent of Legislature to Protect Against Risk

of Identity Theft.
(a) It is the intent of the Legislature that, in order to protect against the risk
of identity theft, local agencies shall redact social security numbers from
records before disclosing them to the public pursuant to this chapter.
(b) Nothing in this chapter shall be construed to require a local agency to
disclose a social security number.
(c) This section shall not apply to records maintained by a county recorder.
§ 6254.7. Public Disclosure of Air Pollution

Information, Notices and Orders to Building
Owners; Trade Secret Exception.
( a ) All information, analyses, plans, or specifications that disclose the
nature, extent, quantity, or degree of air contaminants or other pollution which
any article, machine, equipment, or other contrivance will produce, which any
air pollution control district or air quality management district, or any other
state or local agency or district, requires any applicant to provide before the
applicant builds, erects, alters, replaces, operates, sells, rents, or uses the
article, machine, equipment, or other contrivance, are public records.
(b) All air or other pollution monitoring data, including data compiled from
stationary sources, are public records.
(c) All records of notices and orders directed to the owner of any building
of violations of housing or building codes, ordinances, statutes, or regulations
724
which constitute violations of standards provided in Section 1941.1 of the Civil
Code, and records of subsequent action with respect to those notices and orders,
are public records.
( d ) Except as otherwise provided in subdivision (e) and Chapter 3
(commencing with Section 99150) of Part 65 of the Education Code, trade
secrets are not public records under this section. “Trade secrets,” as used in this
section, may include, but are not limited to, any formula, plan, pattern, process,
tool, mechanism, compound, procedure, production data, or compilation of
information which is not patented, which is known only to certain individuals
within a commercial concern who are using it to fabricate, produce, or
compound an article of trade or a service having commercial value and which
gives its user an opportunity to obtain a business advantage over competitors
who do not know or use it.
(e) Notwithstanding any other provision of law, all air pollution emission
data, including those emission data which constitute trade secrets as defined in
subdivision (d), are public records. Data used to calculate emission data are not
emission data for the purposes of this subdivision and data which constitute
trade secrets and which are used to calculate emission data are not public
records.
(f) Data used to calculate the costs of obtaining emissions offsets are not
public records. At the time that an air pollution control district or air quality
management district issues a permit to construct to an applicant who is required
to obtain offsets pursuant to district rules and regulations, data obtained from the
applicant consisting of the year the offset transaction occurred, the amount of
offsets purchased, by pollutant, and the total cost, by pollutant, of the offsets
purchased is a public record. If an application is denied, the data shall not be a
public record.
Leg.H. 1970 ch. 1295, 1971 ch. 1601, 1972 ch. 400, 1973 ch. 186, effective July 9,
1973, 1981 ch. 729, 1992 ch. 612.
Annotations
Cases
Masonite Corp. v. Superior Court (1st Dist. 1994) 25 Cal. App. 4th 1045, 31 Cal. Rptr.
2d 173. Under Air Toxics “Hot Spots” Information And Assessments Act and California
Public Records Act, all air pollution emission data are public records and are not entitled to
protection from disclosure, even if otherwise defined as trade secrets. However, certain data
used to calculate emission data are not themselves regarded as emission data, and thus, if
classifiable as trade secrets, may be protected from disclosure. Therefore, in supplying
information to Air Quality and Management District (AQMD) in conjunction with reporting
obligations under Air Toxics “Hot Spots” Information and Assessment Act, a manufacturer
725
should claim trade secret protection somewhere in its report or trade secret protection is
waived.
§ 6254.9. Computer Software Developed by State or

Local Agency; Sale, Lease, or License of Same;
Public Record Status of Information Stored in
Computer.
(a) Computer software developed by a state or local agency is not itself a
public record under this chapter. The agency may sell, lease, or license the
software for commercial or noncommercial use.
(b) As used in this section, “computer software” includes computer mapping
systems, computer programs, and computer graphics systems.
(c) This section shall not be construed to create an implied warranty on the
part of the State of California or any local agency for errors, omissions, or other
defects in any computer software as provided pursuant to this section.
(d) Nothing in this section is intended to affect the public record status of
information merely because it is stored in a computer. Public records stored in a
computer shall be disclosed as required by this chapter.
(e) Nothing in this section is intended to limit any copyright protections.
Leg.H. 1988 ch. 447.
TITLE 2
GOVERNMENT OF THE STATE OF

CALIFORNIA
DIVISION 3
EXECUTIVE DEPARTMENT
CHAPTER 3
726
SECRETARY OF STATE
ARTICLE 3
Fees

The trademark and service mark fees are the following:
(a) Filing an application for registration of a trademark: Seventy dollars
($70).
(b) Issuing a certificate of assignment of a trademark: Thirty dollars
($30).
( c ) Filing a renewal for registration of a trademark: Thirty dollars
($30).
(d) Filing of a name, mark, or device used as a brand: Thirty dollars
($30).
(e) Issuing a certificate of filing of a laundry supply designation: Ten
dollars ($10).
( f) Filing the registration of any name used by an organization: Ten
dollars ($10).
(g) Issuing a certificate with the name of a farm, ranch, or villa: Ten
dollars ($10).
Leg.H. 1999 ch. 1000.

SYNOPSIS
Contents
DIVISION 2 EMPLOYMENT REGULATION AND SUPERVISION

PART 3 Privileges and Immunities
CHAPTER 2 CLASS OF LABOR EMPLOYED; LABOR UNION INSIGNIA
§ 1016. Unauthorized Use of Union Label or Trademark.
727
DIVISION 3 EMPLOYMENT RELATIONS
CHAPTER 2 EMPLOYER AND EMPLOYEE
ARTICLE 1 The Contract of Employment
§ 2750.5. Rebuttable Presumption That Worker Is Employee; Proof of
Independent Contractor Status.
§ 2855. Enforcement of Contract to Render Personal Service; Personal Service
in Production of Phonorecords.
§ 2860. Employer Owns Things Acquired by Virtue of Employment.
§ 2870. Limitation on Assignment of Invention Provisions in Employment
Agreement; Unenforceability of Such Provisions.
§ 2871. Employer May Not Make Unenforceable Assignment Provision a
Condition of Employment; Requirement of Disclosure of Inventions Not
Forbidden.
§ 2872. Notice to Employee in Employment Agreement; Burden of Proof on
Employee.
DIVISION 4 WORKERS’ COMPENSATION AND INSURANCE
CHAPTER 2 EMPLOYERS, EMPLOYEES, AND DEPENDENTS
ARTICLE 2 Employees
§ 3352.94. Exclusions for Disaster Service Workers as “Employees.”
§ 3355. “Course of Trade, Business, Profession, or Occupation.”
§ 3357. Presumption That One Rendering Service Is Employee.
DIVISION 2
EMPLOYMENT REGULATION AND

SUPERVISION
PART 3
Privileges and Immunities

CHAPTER 2
728
CLASS OF LABOR EMPLOYED; LABOR
UNION INSIGNIA
Any person who, without having an unrevoked written authority from such
trade union, labor association or labor organization, willfully forges or procures
to be forged such label or trademark, with intent to sell or assist other persons
to sell, any goods to which such forged label is affixed as having been made,
manufactured, or produced in whole or in part by labor, laborers, or employees
who are members of, or allied or associated with, such trade union, labor
association, or labor organization, is guilty of a misdemeanor, punishable by a
fine not more than one thousand dollars ($1,000) or imprisonment for not more
than 90 days, or both.
Leg.H. 1937 ch. 90, 1983 ch. 1092, effective September 27, 1983, operative January 1,
1984.
§ 1016. Unauthorized Use of Union Label or

Trademark.
Any person who willfully uses or displays the genuine label, trademark,
insignia, seal, device, or form of advertisement of any association or labor
union, in any manner not authorized by such association or labor organization or
not in conformity with the bylaws thereof, is guilty of a misdemeanor punishable
by a fine not exceeding two hundred dollars ($200) or imprisonment for not
more than three months, or both.
Leg.H. 1937 ch. 90, 1983 ch. 1092, effective September 27, 1983, operative January 1,
1984.
DIVISION 3
EMPLOYMENT RELATIONS
CHAPTER 2
729
EMPLOYER AND EMPLOYEE
ARTICLE 1
The Contract of Employment

The contract of employment is a contract by which one, who is called the
employer, engages another, who is called the employee, to do something for the
benefit of the employer or a third person.
Leg.H. 1937 ch. 90.
An employer seeking “work for hire” status for works by a true consultant is between the
proverbial “rock and a hard place.” Failure to comply with Lab. Code §§ 2750, 2750.5, 3350–
3357, and Unemp. Ins. Code §§ 601.5, 621–622, 686, could result in a work not being
considered a “work for hire.” Compliance with these provisions could result in an increase in
unemployment insurance charges when the “employee” makes an unemployment claim.
§ 2750.5. Rebuttable Presumption That Worker Is

Employee; Proof of Independent Contractor Status.
There is a rebuttable presumption affecting the burden of proof that a worker
performing services for which a license is required pursuant to Chapter 9
(commencing with Section 7000) of Division 3 of the Business and Professions
Code, or who is performing such services for a person who is required to obtain
such a license is an employee rather than an independent contractor. Proof of
independent contractor status includes satisfactory proof of these factors:
(a) That the individual has the right to control and discretion as to the
manner of performance of the contract for services in that the result of the
work and not the means by which it is accomplished is the primary factor
bargained for.
( b ) That the individual is customarily engaged in an independently
established business.
(c) That the individual’s independent contractor status is bona fide and
not a subterfuge to avoid employee status. A bona fide independent
contractor status is further evidenced by the presence of cumulative factors
730
such as substantial investment other than personal services in the business,
holding out to be in business for oneself, bargaining for a contract to
complete a specific project for compensation by project rather than by time,
control over the time and place the work is performed, supplying the tools
or instrumentalities used in the work other than tools and instrumentalities
normally and customarily provided by employees, hiring employees,
performing work that is not ordinarily in the course of the principal’s work,
performing work that requires a particular skill, holding a license pursuant
to the Business and Professions Code, the intent by the parties that the work
relationship is of an independent contractor status, or that the relationship is
not severable or terminable at will by the principal but gives rise to an
action for breach of contract. In addition to the factors contained in
subdivisions (a), (b), and (c), any person performing any function or activity
for which a license is required pursuant to Chapter 9 (commencing with
Section 7000) of Division 3 of the Business and Professions Code shall
hold a valid contractors’ license as a condition of having independent
contractor status. For purposes of workers’ compensation law, this
presumption is a supplement to the existing statutory definitions of employee
and independent contractor, and is not intended to lessen the coverage of
employees under Division 4 and Division 5.
Leg.H. 1978 ch. 1246, 1979 ch. 605.
See Consultant’s Comments to Lab. Code § 2750.
§ 2855. Enforcement of Contract to Render Personal

Service; Personal Service in Production of
Phonorecords.
(a) Except as otherwise provided in subdivision (b), a contract to render
personal service, other than a contract of apprenticeship as provided in Chapter
4 (commencing with Section 3070), may not be enforced against the employee
beyond seven years from the commencement of service under it. Any contract,
otherwise valid, to perform or render service of a special, unique, unusual,
extraordinary, or intellectual character, which gives it peculiar value and the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law, may nevertheless be enforced against the person contracting to
render the service, for a term not to exceed seven years from the commencement
of service under it. If the employee voluntarily continues to serve under it
beyond that time, the contract may be referred to as affording a presumptive
measure of the compensation.
731
(b) Notwithstanding subdivision (a);
( 1 ) Any employee who is a party to a contract to render personal
service in the production of phonorecords in which sounds are first fixed, as
defined in Section 101 of Title 17 of the United States Code, may not invoke
the provisions of subdivision (a) without first giving written notice to the
employer in accordance with Section 1020 of the Code of Civil Procedure,
specifying that the employee from and after a future date certain specified in
the notice will no longer render service under the contract by reason of
subdivision (a).
(2) Any party to a contract described in paragraph (1) shall have the
right to recover damages for a breach of the contract occurring during its
term in an action commenced during or after its term, but within the
applicable period prescribed by law.
( 3) If a party to a contract described in paragraph (1) is, or could
contractually be, required to render personal service in the production of a
specified quantity of the phonorecords and fails to render all of the required
service prior to the date specified in the notice provided in paragraph (1),
the party damaged by the failure shall have the right to recover damages for
each phonorecord as to which that party has failed to render service in an
action that, notwithstanding paragraph (2), shall be commenced within 45
days after the date specified in the notice.
Enacted 1937. Amended Stats 1987 ch 591 § 1; Stats 2006 ch 538 § 487 (SB 1852),
§ 2860. Employer Owns Things Acquired by Virtue of

Employment.
Everything which an employee acquires by virtue of his employment, except
the compensation which is due to him from his employer, belongs to the
employer, whether acquired lawfully or unlawfully, or during or after the
expiration of the term of his employment.
Leg.H. 1937 ch. 90.
Annotations
Cases
U.S.P.Q. 285 . An injunction preventing a former employee of a radio station, who had
appeared in a chicken costume as the station’s mascot, from appearing in any type of chicken
suit in the San Diego area was invalid because it restricted the defendant’s right to earn a
732
living. Although the chicken suit was developed by the radio station, the former employee had
developed his own changing routine and this does not belong to the employer under Lab.
Code § 2860.
§ 2870. Limitation on Assignment of Invention

Provisions in Employment Agreement;
Unenforceability of Such Provisions.
( a ) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an invention
to his or her employer shall not apply to an invention that the employee
developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
( 1) Relate at the time of conception or reduction to practice of the
invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer; or
(2) Result from any work performed by the employee for the employer.
( b ) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the public
policy of this state and is unenforceable.
Leg.H. 1979 ch. 1001, 1986 ch. 346, 1991 ch. 647.
Employers should have all employees, at the time of hiring, execute an employee
invention agreement that quotes or paraphrases the language of Lab. Code § 2870. The
agreement should identify the employee’s salary as the consideration. An agreement with an
employee who has been with the employer for some time should be supported by a raise or
promotion as the consideration.
For employment agreements used by multi-state organizations, we recommend inclusion
of a “Notice to California Employees” that follows the language of Lab. Code § 2870.
Lab. Code § 2870 recognizes the common law right of employees to own their own
inventions. However, employers in California can require assignment of inventions in which
the employer would only have a shop right at common law. Moreover, nothing in Lab. Code
§§ 2870–2872 prohibits the employer from requiring disclosure of all inventions so that the
employer can independently determine who owns the invention.
Annotations
733
Cases
Iconix, Inc. v. Tokuda , 457 F. Supp. 2d 969 (N.D. Cal. 2006). In granting a motion for a
preliminary injunction, by an employer against former employees, in a factually intensive
discussion, the court found the employer was likely to succeed on the merits of the claim,
among others, that former employees had violated contractual employment provisions
explicitly incorporating Lab. Code § 2870, and that their invention was related to employer’s
business and developed on company time using company resources.
Cubic Corp. v. Marty (4th Dist. 1986) 185 Cal. App. 3d 438, 229 Cal. Rptr. 828, 1
U.S.P.Q. 2d 1709 . Application of Lab. Code § 2870. Marty conceived an invention while he
was employed by Cubic Corp. and had signed Cubic’s standard Employee Invention
Agreement. The Court of Appeal held that the Employee Invention Agreement was
enforceable; Marty’s employment was sufficient consideration even though Marty signed the
agreement after starting employment. Marty’s employment encompassed invention duties
and he was adequately compensated for that.
Articles
Co mme nt , A Penny for Their Thoughts: Employee-Inventors, Preinvention
Assignment Agreements, Property, and Personhood, 81 Cal. L. Rev. 597 (1993).
Jester, Investor Loses Appellate Decision Involving California Statute Regulating
Employee Invention Contract, New Matter, Winter, 1986, at 2.
Note, Reform for Rights of Employed Inventors, 57 S. Cal. L. Rev. 603 (1984).
§ 2871. Employer May Not Make Unenforceable

Assignment Provision a Condition of Employment;
Requirement of Disclosure of Inventions Not
Forbidden.
No employer shall require a provision made void and unenforceable by
Section 2870 as a condition of employment or continued employment. Nothing
in this article shall be construed to forbid or restrict the right of an employer to
provide in contracts of employment for disclosure, provided that any such
disclosures be received in confidence, of all of the employee’s inventions made
solely or jointly with others during the term of his or her employment, a review
process by the employer to determine such issues as may arise, and for full title
to certain patents and inventions to be in the United States, as required by
contracts between the employer and the United States or any of its agencies.
Leg.H. 1979 ch. 1001.
Annotations
See the annotations to Lab. Code § 2870.
734
§ 2872. Notice to Employee in Employment Agreement;
Burden of Proof on Employee.
If an employment agreement entered into after January 1, 1980, contains a
provision requiring the employee to assign or offer to assign any of his or her
rights in any invention to his or her employer, the employer must also, at the
time the agreement is made, provide a written notification to the employee that
the agreement does not apply to an invention which qualifies fully under the
provisions of Section 2870. In any suit or action arising thereunder, the burden
of proof shall be on the employee claiming the benefits of its provisions.
Leg.H. 1979 ch. 1001.
Annotations
See the annotations to Lab. Code § 2870.
DIVISION 4
WORKERS’ COMPENSATION AND

INSURANCE
CHAPTER 2
EMPLOYERS, EMPLOYEES, AND

DEPENDENTS
ARTICLE 2
Employees

Unless the context otherwise requires, the definitions set forth in this article
shall govern the construction and meaning of the terms and phrases used in this
division.
Leg.H. 1937 ch. 90.
735
Leg.H. 1937 ch. 90.
“Employee” means every person in the service of an employer under any
appointment or contract of hire or apprenticeship, express or implied, oral or
written, whether lawfully or unlawfully employed, and includes:
(a) Aliens and minors.
(b) All elected and appointed paid public officers.
(c) All officers and members of boards of directors of quasi-public or
private corporations while rendering actual service for the corporations for
pay; provided that, where the officers and directors of the private
corporation are the sole shareholders thereof, the corporation and the
officers and directors shall come under the compensation provisions of this
division only by election as provided in subdivision (a) of Section 4151.
(d) Except as provided in subdivision (h) of Section 3352, any person
employed by the owner or occupant of a residential dwelling whose duties
are incidental to the ownership, maintenance, or use of the dwelling,
including the care and supervision of children, or whose duties are personal
and not in the course of the trade, business, profession, or occupation of the
owner or occupant.
(e) All persons incarcerated in a state penal or correctional institution
while engaged in assigned work or employment as defined in paragraph (1)
of subdivision (a) of Section 10021 of Title 8 of the California Code of
Regulations, or engaged in work performed under contract.
(f) All working members of a partnership or limited liability company
receiving wages irrespective of profits from the partnership or limited
liability company; provided that where the working members of the
partnership or limited liability company are general partners or managers,
the partnership or limited liability company and the partners or managers
shall come under the compensation provisions of this division only by
election as provided in subdivision (a) of Section 4151. If a private
corporation is a general partner or manager, “working members of a
736
partnership or limited liability company” shall include the corporation and
the officers and directors of the corporation, provided that the officers and
directors are the sole shareholders of the corporation. If a limited liability
company is a partner or member, “working members of the partnership or
limited liability company” shall include the managers of the limited liability
company.
(g) For the purposes of subdivisions (c) and (f), the persons holding the
power to revoke a trust as to shares of a private corporation or as to general
partnership or limited liability company interests held in the trust, shall be
deemed to be the shareholders of the private corporation, or the general
partners of the partnership, or the managers of the limited liability company.
Leg.H. 1977 ch. 17, effective March 25, 1977, 1978 ch. 958, 1985 ch. 1156, 1994 ch.
497, 1996 ch. 57, effective June 6, 1996.

“Employee” includes:
( a ) Any person whose employment training is arranged by the State
Department of Rehabilitation with any employer. Such person shall be
deemed an employee of such employer for workers’ compensation
purposes; provided that, the department shall bear the full amount of any
additional workers’ compensation insurance premium expense incurred by
the employer due to the provisions of this section.
( b ) Any person defined in subdivision (d) of Section 3351 who
performs domestic service comprising in-home supportive services under
Article 7 (commencing with Section 12300), Chapter 3, Part 3, Division 9
of the Welfare and Institutions Code. For purposes of Section 3352, such
person shall be deemed an employee of the recipient of such services for
workers’ compensation purposes if the state or county makes or provides
for direct payment to such person or to the recipient of in-home supportive
services for the purchase of services, subject to the provisions of Section
12302.2 of the Welfare and Institutions Code.
(c) Any person while engaged by contract for the creation of a specially
ordered or commissioned work of authorship in which the parties expressly
agree in a written instrument signed by them that the work shall be
considered a work made for hire, as defined in Section 101 of Title 17 of
the United States Code, and the ordering or commissioning party obtains
ownership of all the rights comprised in the copyright in the work.
Leg.H. 1969 ch. 1133, 1978 ch. 463, effective July 18, 1978, 1982 ch. 1332.
737
“Employee” excludes the following:
( a ) Any person defined in subdivision (d) of Section 3351 who is
employed by his or her parent, spouse, or child.
(b) Any person performing services in return for aid or sustenance only,
received from any religious, charitable, or relief organization.
(c) Any person holding an appointment as deputy clerk or deputy sheriff
appointed for his or her own convenience, and who receives no
compensation from the county or municipal corporation or from the citizens
thereof for his or her services as the deputy. This exclusion is operative
only as to employment by the county or municipal corporation and does not
deprive any person so deputized from recourse against a private person
employing him or her for injury occurring in the course of and arising out of
the employment.
(d) Any person performing voluntary services at or for a recreational
camp, hut, or lodge operated by a nonprofit organization, exempt from
federal income tax under Section 101(6) of the Internal Revenue Code, of
which he or she or a member of his or her family is a member and who
receives no compensation for those services other than meals, lodging, or
transportation.
(e) Any person performing voluntary service as a ski patrolman who
receives no compensation for those services other than meals or lodging or
the use of ski tow or ski lift facilities.
(f) Any person employed by a ski lift operator to work at a snow ski
area who is relieved of and not performing any prescribed duties, while
participating in recreational activities on his or her own initiative.
(g) Any person, other than a regular employee, participating in sports or
athletics who receives no compensation for the participation other than the
use of athletic equipment, uniforms, transportation, travel, meals, lodgings,
or other expenses incidental thereto.
(h) Any person defined in subdivision (d) of Section 3351 who was
employed by the employer to be held liable for less than 52 hours during the
90 calendar days immediately preceding the date of the injury for injuries,
as defined in Section 5411, or during the 90 calendar days immediately
preceding the date of the last employment in an occupation exposing the
employee to the hazards of the disease or injury for injuries, as defined in
Section 5412, or who earned less than one hundred dollars ($100) in wages
from the employer during the 90 calendar days immediately preceding the
738
date of the injury for injuries, as defined in Section 5411, or during the 90
calendar days immediately preceding the date of the last employment in an
occupation exposing the employee to the hazards of the disease or injury for
injuries, as defined in Section 5412.
(i) Any person performing voluntary service for a public agency or a
private, nonprofit organization who receives no remuneration for the
services other than meals, transportation, lodging, or reimbursement for
incidental expenses.
(j) Any person, other than a regular employee, performing officiating
services relating to amateur sporting events sponsored by any public agency
or private, nonprofit organization, who receives no remuneration for these
services other than a stipend for each day of service no greater than the
amount established by the Department of Personnel Administration
Human Resources as a per diem expense for employees or officers of the
state. The stipend shall be presumed to cover incidental expenses involved
in officiating, including, but not limited to, meals, transportation, lodging,
rule books and courses, uniforms, and appropriate equipment.
(k) Any student participating as an athlete in amateur sporting events
sponsored by any public agency, public or private nonprofit college,
university or school, who receives no remuneration for the participation
other than the use of athletic equipment, uniforms, transportation, travel,
meals, lodgings, scholarships, grants-in-aid, or other expenses incidental
thereto.
(l) Any law enforcement officer who is regularly employed by a local or
state law enforcement agency in an adjoining state and who is deputized to
work under the supervision of a California peace officer pursuant to
paragraph (4) of subdivision (a) of Section 832.6 of the Penal Code.
( m) Any law enforcement officer who is regularly employed by the
Oregon State Police, the Nevada Department of Motor Vehicles and Public
Safety, or the Arizona Department of Public Safety and who is acting as a
peace officer in this state pursuant to subdivision (a) of Section 830.32 of
the Penal Code.
(n) Any person, other than a regular employee, performing services as a
sports official for an entity sponsoring an intercollegiate or interscholastic
sports event, or any person performing services as a sports official for a
public agency, public entity, or a private nonprofit organization, which
public agency, public entity, or private nonprofit organization sponsors an
amateur sports event. For purposes of this subdivision, “sports official”
includes an umpire, referee, judge, scorekeeper, timekeeper, or other person
739
who is a neutral participant in a sports event.
(o) Any person who is an owner-builder, as defined in subdivision (a)
of Section 50692 of the Health and Safety Code, who is participating in a
mutual self-help housing program, as defined in Section 50087 of the Health
and Safety Code, sponsored by a nonprofit corporation.
Added Stats 1977 ch 17 § 18, effective March 25, 1977. Amended Stats 1978 ch 239 §
1, effective June 16, 1978, ch 1303 § 1; Stats 1979 ch 76 § 1; Stats 1981 ch 21 § 8, effective
April 18, 1981; Stats 1988 ch 1482 § 1; Stats 1989 ch 594 § 2. Amended Stats 1995 ch 725
§ 1 (AB 1655); Stats 1996 ch 320 § 30 (AB 2160) (ch 320 prevails), ch 872 § 106 (AB
3472); Stats 1998 ch 931 § 347 (SB 2139), effective September 28, 1998; Stats 2004 ch 83
§ 1 (AB 2649). See this section as modified in Governor’s Reorganization Plan No. 1 § 198
of 2011; Amended Stats 2012 ch 665 § 178 (SB 1308), effective January 1, 2013.
§ 3352.94. Exclusions for Disaster Service Workers as

“Employees.”
“Employee” excludes a disaster service worker while performing services
as a disaster service worker except as provided in Chapter 10 of this part.
“Employee” excludes any unregistered person performing like services as a
disaster service worker without pay or other consideration, except as provided
by Section 3211.92 of this code.
Leg.H. 1946 First Extra. Sess. ch. 104, effective March 8, 1946, 1951 ch. 1440.

“Independent contractor” means any person who renders service for a
specified recompense for a specified result, under the control of his principal as
to the result of his work only and not as to the means by which such result is
accomplished.
Leg.H. 1937 ch. 90.
§ 3355. “Course of Trade, Business, Profession, or

Occupation.”
As used in subdivision (d) of Section 3351, the term “course of trade,
business, profession, or occupation” includes all services tending toward the
preservation, maintenance, or operation of the business, business premises, or
business property of the employer.
Leg.H. 1977 ch. 17, effective March 25, 1977.
740
As used in subdivision (d) of Section 3351 and in Section 3355, the term
“trade, business, profession, or occupation” includes any undertaking actually
engaged in by the employer with some degree of regularity, irrespective of the
trade name, articles of incorporation, or principal business of the employer.
Leg.H. 1977 ch. 17, effective March 25, 1977.
§ 3357. Presumption That One Rendering Service Is

Employee.
Any person rendering service for another, other than as an independent
contractor, or unless expressly excluded herein, is presumed to be an employee.
Leg.H. 1937 ch. 90.

SYNOPSIS
Contents
PART I Crimes and Punishments

TITLE IX OF CRIMES AGAINST THE PERSON INVOLVING SEXUAL ASSAULT,
AND CRIMES AGAINST PUBLIC DECENCY AND GOOD MORALS
CHAPTER 12 OTHER INJURIES TO PERSONS
§ 350. Manufacture or Sale of Counterfeit Mark; Punishment; Forfeiture and
Destruction; Donations; Applicability; Restitution.
TITLE XIII CRIMES AGAINST PROPERTY
CHAPTER 5 LARCENY
§ 484j. Publishing Access Card Number, Code to Avoid Payment or Defraud—
Misdemeanor.
§ 496. Receiving or Concealing Stolen Property; Duty of Swap Meet Vendor or
Personal Property Dealer or Collector to Make Reasonable Inquiry; Action
for Damages; Attempts.
§ 499c. Trade Secrets; Theft or Unauthorized Copying; Bribery.
§ 502.01. Forfeiture of Telecommunications and Computer Property Used in
Committing Specified Crimes; Hearing; Claim of Interest in Property;
Distribution of Proceeds.
§ 502.6. Use of Scanning Device to Obtain Information From Magnetic Strip of
Payment Card.
CHAPTER 8 FALSE PERSONATIONS AND CHEATS
§ 537e. Purchase, Possession or Sale of Item Having Altered or Obliterated
Serial Number or Identification Mark.
741
§ 538.5 Fraudulently Obtaining Information From Public Utility.
TITLE XV MISCELLANEOUS CRIMES
CHAPTER 2 MISCELLANEOUS CRIMES
§ 653f. Soliciting Commission of Certain Crimes; Punishment; Proof.
§ 653h. Sound Recordings Transferred Without Consent of Owner;
Unauthorized Sale; Persons Exempted.
§ 653s. Transportation of Sounds of Live Performance Recorded Without
Consent of Owner; Applicability; Punishment.
§ 653u. Recording or Causing to Be Recorded Live Performance Without
Consent of Owner; Punishment.
§ 653v. Court Order for Forfeiture and Destruction of Articles.
§ 653w. Failure to Disclose Origin of Recording or Audiovisual Work;
Punishment.
§ 653z. Operation of Recording Device in Theater While Motion Picture Is
Being Exhibited Without Authority; Punishment.
§ 653aa. Unauthorized Electronic Dissemination of Commercial Recordings or
Audiovisual Works as a Crime; Punishment; Applicability.
PART III Of Imprisonment and Death Penalty
TITLE 1 IMPRISONMENT OF MALE PRISONERS IN STATE PRISONS
CHAPTER 5 EMPLOYMENT OF PRISONERS
ARTICLE 1 Employment of Prisoners Generally
§ 2702. Computer-Related Crimes—No Access to Department Computer
System.
PART I
Crimes and Punishments

TITLE IX
OF CRIMES AGAINST THE PERSON

INVOLVING SEXUAL ASSAULT, AND
CRIMES AGAINST PUBLIC DECENCY
AND GOOD MORALS
CHAPTER 12
742
OTHER INJURIES TO PERSONS
§ 350. Manufacture or Sale of Counterfeit Mark;
Punishment; Forfeiture and Destruction; Donations;
Applicability; Restitution.
(a) Any person who willfully manufactures, intentionally sells, or knowingly
possesses 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, shall, upon conviction, be punishable as follows:
(1) 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 Section 487, and if the person is an
individual, he or she shall be punished by a fine of not more than ten
thousand dollars ($10,000), 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 two hundred thousand dollars
($200,000).
(2) 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 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 pursuant to subdivision (h) of Section 1170
for 16 months, or two or three years, or by a fine not to exceed five hundred
thousand dollars ($500,000), or by both that imprisonment and fine; or, if
the person is a business entity, by a fine not to exceed one million dollars
($1,000,000).
(b) Any person who has been convicted of a violation of either paragraph
(1) or (2) of subdivision (a) shall, upon a subsequent conviction of paragraph
(1) of subdivision (a), if the person is an individual, be punished by a fine of not
more than one hundred thousand dollars ($100,000), or by imprisonment in a
county jail for not more than one year, or pursuant to subdivision (h) of Section
1170 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
four hundred thousand dollars ($400,000).
(c) Any person who has been convicted of a violation of subdivision (a) 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
743
on the counterfeited item for its intended purpose shall, if the person is an
individual, be punished by a fine of not more than one hundred thousand dollars
($100,000), or by imprisonment pursuant to subdivision (h) of Section 1170 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 four hundred thousand dollars
($400,000).
(d)
(1) Except as provided in paragraph (2), in any action brought under this
section resulting in a conviction or a plea of nolo contendere, the court shall
order the forfeiture and destruction of all of those marks and of all goods,
articles, or other matter bearing the marks, and the forfeiture and destruction
or other disposition of all means of making the marks, and any and all
electrical, mechanical, or other devices for manufacturing, reproducing,
transporting, or assembling these marks, that were used in connection with,
or were part of, any violation of this section.
(2) Upon request of any law enforcement agency and consent from the
specific registrants, the court may consider a motion to have the items
described in paragraph (1), not including recordings or audiovisual works
as defined in Section 653w, donated to a nonprofit organization for the
purpose of distributing the goods to persons living in poverty at no charge to
the persons served by the organization.
(3) Forfeiture of the proceeds of the crime shall be subject to Chapter 9
(commencing with Section 186) of Title 7 of Part 1. However, no vehicle
shall be forfeited under this section that may be lawfully driven on the
highway with a class 3 or 4 C, M1, or M2 license, as prescribed in Section
12804 12804.9 of the Vehicle Code, and that is any of the following:
(A) A community property asset of a person other than the defendant.
(B) The sole class 3 or 4 C, M1, or M2 vehicle available to the
immediate family of that person or of the defendant.
(C) Reasonably necessary to be retained by the defendant for the
purpose of lawfully earning a living, or for any other reasonable and
lawful purpose.
(e) For the purposes of this section, the following definitions shall apply:
( 1 ) When counterfeited but unassembled components of computer
software packages are recovered, including, but not limited to, counterfeited
computer diskettes, instruction manuals, or licensing envelopes, the number
of “articles” shall be equivalent to the number of completed computer
software packages that could have been made from those components.
744
( 2 ) “Business entity” includes, but is not limited to, a corporation,
limited liability company, or partnership. “Business entity” does not include
a sole proprietorship.
(3) “Counterfeit mark” means a spurious mark that is identical with, or
confusingly similar to, a registered mark and is used, or intended to be used,
on or in connection with the same type of goods or services for which the
genuine mark is registered. It is not necessary for the mark to be displayed
on the outside of an article for there to be a violation. For articles containing
digitally stored information, it shall be sufficient to constitute a violation if
the counterfeit mark appears on a video display when the information is
retrieved from the article. The term “spurious mark” includes genuine marks
used on or in connection with spurious articles and includes identical
articles containing identical marks, where the goods or marks were
reproduced without authorization of, or in excess of any authorization
granted by, the registrant. When counterfeited but unassembled components
of any articles described under subdivision (a) are recovered, including, but
not limited to, labels, patches, fabric, stickers, wrappers, badges, emblems,
medallions, charms, boxes, containers, cans, cases, hangtags,
documentation, or packaging, or any other components of any type or nature
that are designed, marketed, or otherwise intended to be used on or in
connection with any articles described under subdivision (a), the number of
“articles” shall be equivalent to the number of completed articles that could
have been made from those components.
(4) “Knowingly possess” means that the person possessing an article
knew or had reason to believe that it was spurious, or that it was used on or
in connection with spurious articles, or that it was reproduced without
authorization of, or in excess of any authorization granted by, the registrant.
(5) Notwithstanding Section 7, “person” includes, but is not limited to, a
business entity.
(6) “Registrant” means any person to whom the registration of a mark is
issued and that person’s legal representatives, successors, or assigns.
(7) “Sale” includes resale.
(8) “Value” has the following meanings:
(A) When counterfeit items of computer software are manufactured
or possessed for sale, the “value” of those items shall be equivalent to
the retail price or fair market price of the true items that are
counterfeited.
(B) When counterfeited but unassembled components of computer
745
software packages or any other articles described under subdivision (a)
are recovered, including, but not limited to, counterfeited digital disks,
instruction manuals, licensing envelopes, labels, patches, fabric,
stickers, wrappers, badges, emblems, medallions, charms, boxes,
containers, cans, cases, hangtags, documentation, or packaging, or any
other components of any type or nature that are designed, marketed, or
otherwise intended to be used on or in connection with any articles
described under subdivision (a), the “value” of those components shall
be equivalent to the retail price or fair market value of the number of
completed computer software packages or other completed articles
described under subdivision (a) that could have been made from those
components.
(C) “Retail or fair market value” of a counterfeit article means a
value equivalent to the retail price or fair market value, as of the last
day of the charged crime, of a completed similar genuine article
containing a genuine mark.
(f) This section shall not be enforced against any party who has adopted and
lawfully used the same or confusingly similar mark in the rendition of like
services or the manufacture or sale of like goods in this state from a date prior
to the earliest effective date of registration of the service mark or trademark
either with the Secretary of State or on the Principle Register of the United
States Patent and Trademark Office.
( g) An owner, officer, employee, or agent who provides, rents, leases,
licenses, or sells real property upon which a violation of subdivision (a) occurs
shall not be subject to a criminal penalty pursuant to this section, unless he or
she sells, or possesses for sale, articles bearing a counterfeit mark in violation
of this section. This subdivision shall not be construed to abrogate or limit any
civil rights or remedies for a trademark violation.
(h) This section shall not be enforced against any party who engages in fair
uses of a mark, as specified in Section 14247 of the Business and Professions
Code.
(i) When a person is convicted of an offense under this section, the court
shall order the person to pay restitution to the trademark owner and any other
victim of the offense pursuant to Section 1202.4.
Added Stats 1984 ch 1016 § 3. Amended Stats 1987 ch 828 § 23.3; Stats 1993 ch 703 §
1 (SB 862); Stats 1996 ch 861 § 2 (SB 1558); Stats 1997 ch 17 § 101 (SB 947); Stats 1998
ch 454 § 1 (AB 231). Amended Stats 1999 ch 83 § 142 (SB 966); Stats 2008 ch 431 § 1 (AB
1394), effective January 1, 2009; Stats 2009 ch 581 § 1 (SB 324), effective January 1, 2010;
Stats 2010 ch 351 § 2 (AB 819), effective September 27, 2010; Stats 2011 ch 15 § 333 (AB
109), effective April 4, 2011, operative October 1, 2011; Stats 2012 ch 867 § 19 (SB 1144),
746
Under certain circumstances, proceeding under state anti-counterfeiting statutes may be
more desirable than proceeding under the federal Lanham Act statutes. For example, state law
is preferable if the mark owner wants immediate publicity about the seizure because state law
does not prohibit immediately publicizing such a seizure, whereas federal law does.
We recommend that an experienced investigator be selected to carry out a citizen’s
arrest for violation of these penal statutes. This will reduce the risk of a successful suit for
false arrest. The usual procedure is for the investigator to make an undercover purchase and
then have an expert identify the counterfeit as such. The investigator then returns to make a
citizen’s arrest after arranging for a police officer or sheriff’s deputy to be present to take
custody of the suspect. The process can be shortened by properly training the investigator to
identify counterfeits and arranging for the police officer or sheriff’s deputy to stand by at the
time of the undercover purchase.

Any person who sells, attempts to sell, offers for sale or assists in the sale
of any goods, product or output, and who willfully and falsely represents such
goods, product or output to be the goods, product or output of any dealer,
manufacturer or producer, other than the true dealer, manufacturer or producer,
or any member of a firm or any officer of a corporation, who knowingly permits
any employee of such firm or corporation to sell, offer for sale or assist in the
sale of any goods, product or output or to falsely represent such goods, product
or output to be the goods, product or output of any dealer, manufacturer or
producer, other than the true dealer, manufacturer or producer, is guilty of a
misdemeanor and punishable by a fine of not less than one hundred dollars
($100) or more than six hundred dollars ($600), or by imprisonment in the
county jail for not less than 20 or more than 90 days, or both. This section shall
not apply to any person who sells or offers for sale under his own name or
brand the product or output of another manufacturer or producer with the written
consent of such manufacturer or producer.
Leg.H. 1917 ch. 487, 1983 ch. 1092, effective September 27, 1983.
Pen. Code § 351(a) can be a very effective tool against counterfeiters. The statute
appears to prohibit a false designation of origin or sponsorship and expressly provides for
criminal liability for corporate defendants. The challenge is to convince law enforcement
authorities that the crime at issue is worthy of priority action.
See also Consultant’s Comments to Penal Code § 350.
Annotations
747
Cases
People v. Weltsch (1st Dist. 1978), 84 Cal. App. 3d 959, 149 Cal. Rptr. 112 . Pen. Code
§ 351(a) does not require, as an element of the crime, that the person to whom the “goods,
product, or output” are “willfully and falsely” represented or offered for sale must rely upon
the willful and false representation. The legislative intent of the section is to prevent unfair
competition by penalizing those who intentionally sell goods by representing them “to be the
goods, product or output of any dealer, manufacturer or producer, other than the true [and
competing] dealer, manufacturer or producer.” The statute is intended to maintain fair
competition in the marketplace.
TITLE XIII
CRIMES AGAINST PROPERTY

CHAPTER 5
LARCENY
§ 484j. Publishing Access Card Number, Code to Avoid
Payment or Defraud—Misdemeanor.
Any person who publishes the number or code of an existing, canceled,
revoked, expired or nonexistent access card, personal identification number,
computer password, access code, debit card number, bank account number, or
the numbering or coding which is employed in the issuance of access cards,
with the intent that it be used or with knowledge or reason to believe that it will
be used to avoid the payment of any lawful charge, or with intent to defraud or
aid another in defrauding, is guilty of a misdemeanor. As used in this section,
“publishes” means the communication of information to any one or more
persons, either orally, in person or by telephone, radio or television, or on a
computer network or computer bulletin board, or in a writing of any kind,
including without limitation a letter or memorandum, circular or handbill,
newspaper or magazine article, or book.
Leg.H. 1971 ch. 1019, 1986 chs. 1436, 1437 § 2.
Annotations
Articles
748
BloomBecker, Computer Crime, L.A. Law., June, 1989, at 34.

One who finds lost property under circumstances which give him knowledge
of or means of inquiry as to the true owner, and who appropriates such property
to his own use, or to the use of another person not entitled thereto, without first
making reasonable and just efforts to find the owner and to restore the property
to him, is guilty of theft.
Leg.H. 1872, 1927 ch. 619 § 2.
§ 496. Receiving or Concealing Stolen Property; Duty

of Swap Meet Vendor or Personal Property Dealer or
Collector to Make Reasonable Inquiry; Action for
Damages; Attempts.
(a) Every person who buys or receives any property that has been stolen or
that has been obtained in any manner constituting theft or extortion, knowing the
property to be so stolen or obtained, or who conceals, sells, withholds, or aids
in concealing, selling, or withholding any property from the owner, knowing the
property to be so stolen or obtained, shall be punished by imprisonment in a
state prison, or in a county jail for not more than one year, or imprisonment
pursuant to subdivision (h) of Section 1170. However, if the district attorney
or the grand jury determines that this action would be in the interests of justice,
the district attorney or the grand jury, as the case may be, may, if the value of the
property does not exceed nine hundred fifty dollars ($950), specify in the
accusatory pleading that the offense shall be a misdemeanor, punishable only by
imprisonment in a county jail not exceeding one year.
A principal in the actual theft of the property may be convicted pursuant to
this section. However, no person may be convicted both pursuant to this section
and of the theft of the same property.
(b) Every swap meet vendor, as defined in Section 21661 of the Business
and Professions Code, and every person whose principal business is dealing in,
or collecting, merchandise or personal property, and every agent, employee, or
representative of that person, who buys or receives any property of a value in
excess of nine hundred fifty dollars ($950) that has been stolen or obtained in
any manner constituting theft or extortion, under circumstances that should cause
the person, agent, employee, or representative to make reasonable inquiry to
ascertain that the person from whom the property was bought or received had
the legal right to sell or deliver it, without making a reasonable inquiry, shall be
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punished by imprisonment in a state prison, or, in a county jail for not more
than one year, or imprisonment pursuant to subdivision (h) of Section 1170.
Every swap meet vendor, as defined in Section 21661 of the Business and
Professions Code, and every person whose principal business is dealing in, or
collecting, merchandise or personal property, and every agent, employee, or
representative of that person, who buys or receives any property of a value of
nine hundred fifty dollars ($950) or less that has been stolen or obtained in any
manner constituting theft or extortion, under circumstances that should cause the
person, agent, employee, or representative to make reasonable inquiry to
ascertain that the person from whom the property was bought or received had
the legal right to sell or deliver it, without making a reasonable inquiry, shall be
guilty of a misdemeanor.
(c) Any person who has been injured by a violation of subdivision (a) or (b)
may bring an action for three times the amount of actual damages, if any,
sustained by the plaintiff, costs of suit, and reasonable attorney’s fees.
(d) Notwithstanding Section 664, any attempt to commit any act prohibited
by this section, except an offense specified in the accusatory pleading as a
misdemeanor, is punishable by imprisonment in the state prison, or in a county
jail for not more than one year, or by imprisonment pursuant to subdivision
(h) of Section 1170.
Added Stats 1935 ch 434 § 1, as Pen C § 496bb. Amended and renumbered by Stats 1951
ch 97 § 2. Amended Stats 1959 ch 734 § 1; Stats 1963 ch 1605 § 1; Stats 1968 ch 1085 § 1;
Stats 1972 ch 963 § 1; Stats 1976 ch 1139 § 224, operative July 1, 1977; Stats 1980 ch 1163
§ 4; Stats 1982 ch 935 § 1; Stats 1992 ch 1146 § 1 (AB 3326); Stats 1997 ch 161 § 1 (AB
143); Stats 2009-2010 3d Ex Sess ch 28 § 23 (SB 18XXX), effective January 25, 2010;
Stats 2011 ch 15 § 372 (AB 109), effective April 4, 2011, operative October 1, 2011.
Annotations
Cases
People v. Gopal (1st Dist. 1985) 171 Cal. App. 3d 524, 540–541, 217 Cal. Rptr. 487 .
Defendants were convicted of theft of trade secrets from Silicon Valley firms manufacturing
semiconductors and computer chips. The Court of Appeal held that trade secrets could
constitute stolen property for the purposes of Pen. Code § 496.
Articles
Southard, To Catch a Thief, Cal. Law., December, 1986, at 23.
§ 499c. Trade Secrets; Theft or Unauthorized Copying;

Bribery.
750
( 1 ) “Access” means to approach, a way or means of approaching,
nearing, admittance to, including to instruct, communicate with, store
information in, or retrieve information from a computer system or computer
network.
(2) “Article” means any object, material, device, or substance or copy
thereof, including any writing, record, recording, drawing, sample,
specimen, prototype, model, photograph, micro-organism, blueprint, map, or
tangible representation of a computer program or information, including
both human and computer readable information and information while in
transit.
( 3) “Benefit” means gain or advantage, or anything regarded by the
beneficiary as gain or advantage, including benefit to any other person or
entity in whose welfare he or she is interested.
(4) “Computer system” means a machine or collection of machines, one
or more of which contain computer programs and information, that performs
functions, including, but not limited to, logic, arithmetic, information storage
and retrieval, communications, and control.
( 5 ) “Computer network” means an interconnection of two or more
computer systems.
( 6 ) “Computer program” means an ordered set of instructions or
statements, and related information that, when automatically executed in
actual or modified form in a computer system, causes it to perform specified
functions.
( 7 ) “Copy” means any facsimile, replica, photograph or other
reproduction of an article, and any note, drawing or sketch made of or from
an article.
(8) “Representing” means describing, depicting, containing, constituting,
reflecting or recording.
( 9 ) “Trade secret” means information, including a formula, pattern,
compilation, program, device, method, technique, or process, that:
(A) Derives independent economic value, actual or potential, from
not being generally known to the public or to other persons who can
obtain economic value from its disclosure or use; and
( B ) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
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(b) Every person is guilty of theft who, with intent to deprive or withhold
the control of a trade secret from its owner, or with an intent to appropriate a
trade secret to his or her own use or to the use of another, does any of the
following:
(1) Steals, takes, carries away, or uses without authorization, a trade
secret.
( 2) Fraudulently appropriates any article representing a trade secret
entrusted to him or her.
(3) Having unlawfully obtained access to the article, without authority
makes or causes to be made a copy of any article representing a trade secret.
(4) Having obtained access to the article through a relationship of trust
and confidence, without authority and in breach of the obligations created by
that relationship, makes or causes to be made, directly from and in the
presence of the article, a copy of any article representing a trade secret.
(c) Every person who promises, offers or gives, or conspires to promise or
offer to give, to any present or former agent, employee or servant of another, a
benefit as an inducement, bribe or reward for conveying, delivering or
otherwise making available an article representing a trade secret owned by his
or her present or former principal, employer or master, to any person not
authorized by the owner to receive or acquire the trade secret and every present
or former agent, employee, or servant, who solicits, accepts, receives or takes a
benefit as an inducement, bribe or reward for conveying, delivering or
otherwise making available an article representing a trade secret owned by his
or her present or former principal, employer or master, to any person not
authorized by the owner to receive or acquire the trade secret, shall be punished
by imprisonment in the state prison, or in a county jail not exceeding one year,
or by imprisonment pursuant to subdivision (h) of Section 1170, or by a fine
not exceeding five thousand dollars ($5,000), or by both that fine and
imprisonment.
(d) In a prosecution for a violation of this section, it shall be no defense that
the person returned or intended to return the article.
Added Stats 1967 ch 132 § 2. Amended Stats 1976 ch 1139 § 226, operative July 1,
1977; Stats 1983 ch 933 § 2, ch 1092 § 290, effective September 27, 1983, operative
January 1, 1984 (ch 933 prevails); Stats 1996 ch 121 § 1 (AB 2191); Stats 2011 ch 15 § 375
(AB 109), effective April 4, 2011, operative October 1, 2011.
Annotations
Cases
752
People v. Laiwala, 143 Cal. App. 4th 1065, 49 Cal. Rptr. 3d 639 (2006) . Defendant was
originally convicted of theft of a trade secret. He then petitioned to have a determination that
he was factually innocent of the crime. That petition was denied. On this second appeal, the
court again reversed. The alleged trade secret was source code that contained a “master key”
to assist in descrambling a DVD. Per the appellate court, however, actually the only part of
the program that worked was authentication of a DVD, not descrambling. Further, there was
apparently uncontradicted testimony that it was widely known how to authenticate a DVD, and
that the involved source code was widely disseminated. Accordingly, the code did not qualify
as a trade secret.
People v. Pribich (2d Dist. 1994) 21 Cal. App. 4th 1844, 27 Cal. Rptr. 2d 113 . An
engineer who was hired to develop a new type of water cooler using a thermal electric chip
was charged with the fraudulent appropriation of information representing trade secrets
entrusted to him. The engineer had refused to return the information on computer disks to his
employer. The court held that to convict the engineer defendant, the prosecution must show
that the information appropriated was, in fact, a “trade secret” within the meaning of Penal
Code § 499c. The prosecutor must show, among other things, that the information was a
source of competitive advantage for the employer. Mere conclusory and generalized
allegations that the information conferred a competitive advantage were not sufficient. Thus,
the employer’s testimony that he would not want his competitors to know of the information
and that the information would be of great interest to competitors was not enough.
Furthermore, the engineer’s expert witness had testified that such a formation would confer
no competitive advantage.
People v. Serrata (1st Dist. 1976) 62 Cal. App. 3d 9, 133 Cal. Rptr. 144 . A former IBM
employee was convicted of stealing trade secrets from IBM. The Court of Appeal held that
Pen. Code § 499c was not unconstitutional under the Supremacy Clause as being in conflict
with federal patent laws, nor was it unconstitutionally vague as applied to the defendant.
Articles

(a) It is the intent of the Legislature in enacting this section to expand the
degree of protection afforded to individuals, businesses, and governmental
agencies from tampering, interference, damage, and unauthorized access to
lawfully created computer data and computer systems. The Legislature finds and
declares that the proliferation of computer technology has resulted in a
concomitant proliferation of computer crime and other forms of unauthorized
access to computers, computer systems, and computer data.
The Legislature further finds and declares that protection of the integrity of
all types and forms of lawfully created computers, computer systems, and
computer data is vital to the protection of the privacy of individuals as well as
to the well-being of financial institutions, business concerns, governmental
agencies, and others within this state that lawfully utilize those computers,
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computer systems, and data.
(b) For the purposes of this section, the following terms have the following
meanings:
(1) “Access” means to gain entry to, instruct, or communicate with the
logical, arithmetical, or memory function resources of a computer, computer
system, or computer network.
( 2 ) “Computer network” means any system that provides
communications between one or more computer systems and input/output
devices including, but not limited to, display terminals and printers
connected by telecommunication facilities.
( 3) “Computer program or software” means a set of instructions or
statements, and related data, that when executed in actual or modified form,
cause a computer, computer system, or computer network to perform
specified functions.
(4) “Computer services” includes, but is not limited to, computer time,
data processing, or storage functions, or other uses of a computer, computer
( 5 ) “Computer system” means a device or collection of devices,
including support devices and excluding calculators that are not
programmable and capable of being used in conjunction with external files,
one or more of which contain computer programs, electronic instructions,
input data, and output data, that performs functions including, but not limited
to, logic, arithmetic, data storage and retrieval, communication, and control.
( 6) “Data” means a representation of information, knowledge, facts,
concepts, computer software, computer programs or instructions. Data may
be in any form, in storage media, or as stored in the memory of the computer
or in transit or presented on a display device.
( 7 ) “Supporting documentation” includes, but is not limited to, all
information, in any form, pertaining to the design, construction,
classification, implementation, use, or modification of a computer, computer
system, computer network, computer program, or computer software, which
information is not generally available to the public and is necessary for the
operation of a computer, computer system, computer network, computer
program, or computer software.
(8) “Injury” means any alteration, deletion, damage, or destruction of a
computer system, computer network, computer program, or data caused by
the access, or the denial of access to legitimate users of a computer system,
network, or program.
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( 9 ) “Victim expenditure” means any expenditure reasonably and
necessarily incurred by the owner or lessee to verify that a computer system,
computer network, computer program, or data was or was not altered,
deleted, damaged, or destroyed by the access.
(10) “Computer contaminant” means any set of computer instructions
that are designed to modify, damage, destroy, record, or transmit
information within a computer, computer system, or computer network
without the intent or permission of the owner of the information. They
include, but are not limited to, a group of computer instructions commonly
called viruses or worms, that are self-replicating or self-propagating and
are designed to contaminate other computer programs or computer data,
consume computer resources, modify, destroy, record, or transmit data, or in
some other fashion usurp the normal operation of the computer, computer
(11) “Internet domain name” means a globally unique, hierarchical
reference to an Internet host or service, assigned through centralized Internet
naming authorities, comprising a series of character strings separated by
periods, with the rightmost character string specifying the top of the
hierarchy.
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(c) Except as provided in subdivision (h), any person who commits any of
the following acts is guilty of a public offense:
( 1 ) Knowingly accesses and without permission alters, damages,
deletes, destroys, or otherwise uses any data, computer, computer system, or
computer network in order to either (A) devise or execute any scheme or
artifice to defraud, deceive, or extort, or (B) wrongfully control or obtain
money, property, or data.
(2) Knowingly accesses and without permission takes, copies, or makes
use of any data from a computer, computer system, or computer network, or
takes or copies any supporting documentation, whether existing or residing
internal or external to a computer, computer system, or computer network.
( 3 ) Knowingly and without permission uses or causes to be used
computer services.
(4) Knowingly accesses and without permission adds, alters, damages,
deletes, or destroys any data, computer software, or computer programs
which reside or exist internal or external to a computer, computer system, or
computer network.
(5) Knowingly and without permission disrupts or causes the disruption
of computer services or denies or causes the denial of computer services to
an authorized user of a computer, computer system, or computer network.
(6) Knowingly and without permission provides or assists in providing
a means of accessing a computer, computer system, or computer network in
violation of this section.
( 7 ) Knowingly and without permission accesses or causes to be
accessed any computer, computer system, or computer network.
(8) Knowingly introduces any computer contaminant into any computer,
computer system, or computer network.
(9) Knowingly and without permission uses the Internet domain name of
another individual, corporation, or entity in connection with the sending of
one or more electronic mail messages, and thereby damages or causes
damage to a computer, computer system, or computer network.
(d)
(1) Any person who violates any of the provisions of paragraph (1), (2),
(4), or (5) of subdivision (c) is punishable by a fine not exceeding ten
thousand dollars ($10,000), or by imprisonment in the state prison
pursuant to subdivision (h) of Section 1170 for 16 months, or two or three
years, or by both that fine and imprisonment, or by a fine not exceeding five
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thousand dollars ($5,000), or by imprisonment in a county jail not exceeding
one year, or by both that fine and imprisonment.
( 2 ) Any person who violates paragraph (3) of subdivision (c) is
punishable as follows:
(A) For the first violation that does not result in injury, and where
the value of the computer services used does not exceed nine hundred
fifty dollars ($950), by a fine not exceeding five thousand dollars
($5,000), or by imprisonment in a county jail not exceeding one year, or
by both that fine and imprisonment.
( B ) For any violation that results in a victim expenditure in an
amount greater than five thousand dollars ($5,000) or in an injury, or if
the value of the computer services used exceeds nine hundred fifty
dollars ($950), or for any second or subsequent violation, by a fine not
exceeding ten thousand dollars ($10,000), or by imprisonment in the
state prison pursuant to subdivision (h) of Section 1170 for 16
months, or two or three years, or by both that fine and imprisonment, or
by a fine not exceeding five thousand dollars ($5,000), or by
imprisonment in a county jail not exceeding one year, or by both that fine
and imprisonment.
(3) Any person who violates paragraph (6) or (7) of subdivision (c) is
(A) For a first violation that does not result in injury, an infraction
punishable by a fine not exceeding one thousand dollars ($1,000).
( B ) For any violation that results in a victim expenditure in an
amount not greater than five thousand dollars ($5,000), or for a second
or subsequent violation, by a fine not exceeding five thousand dollars
( C ) For any violation that results in a victim expenditure in an
amount greater than five thousand dollars ($5,000), by a fine not
exceeding ten thousand dollars ($10,000), or by imprisonment in the
state prison pursuant to subdivision (h) of Section 1170 for 16
months, or two or three years, or by both that fine and imprisonment, or
by a fine not exceeding five thousand dollars ($5,000), or by
and imprisonment.
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(A) For a first violation that does not result in injury, a misdemeanor
punishable by a fine not exceeding five thousand dollars ($5,000), or by
and imprisonment.
( B ) For any violation that results in injury, or for a second or
subsequent violation, by a fine not exceeding ten thousand dollars
($10,000), or by imprisonment in a county jail not exceeding one year,
or by imprisonment in the state prison pursuant to subdivision (h) of
Section 1170, or by both that fine and imprisonment.
(A) For a first violation that does not result in injury, an infraction
punishable by a fine not one thousand dollars.
( B ) For any violation that results in injury, or for a second or
subsequent violation, by a fine not exceeding five thousand dollars
(e)
(1) In addition to any other civil remedy available, the owner or lessee
of the computer, computer system, computer network, computer program, or
data who suffers damage or loss by reason of a violation of any of the
provisions of subdivision (c) may bring a civil action against the violator
for compensatory damages and injunctive relief or other equitable relief.
Compensatory damages shall include any expenditure reasonably and
necessarily incurred by the owner or lessee to verify that a computer system,
computer network, computer program, or data was or was not altered,
damaged, or deleted by the access. For the purposes of actions authorized
by this subdivision, the conduct of an unemancipated minor shall be imputed
to the parent or legal guardian having control or custody of the minor,
pursuant to the provisions of Section 1714.1 of the Civil Code.
( 2) In any action brought pursuant to this subdivision the court may
award reasonable attorney’s fees.
( 3 ) A community college, state university, or academic institution
accredited in this state is required to include computer-related crimes as a
specific violation of college or university student conduct policies and
regulations that may subject a student to disciplinary sanctions up to and
including dismissal from the academic institution. This paragraph shall not
apply to the University of California unless the Board of Regents adopts a
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resolution to that effect.
( 4 ) In any action brought pursuant to this subdivision for a willful
violation of the provisions of subdivision (c), where it is proved by clear
and convincing evidence that a defendant has been guilty of oppression,
fraud, or malice as defined in subdivision (c) of Section 3294 of the Civil
Code, the court may additionally award punitive or exemplary damages.
(5) No action may be brought pursuant to this subdivision unless it is
initiated within three years of the date of the act complained of, or the date
of the discovery of the damage, whichever is later.
(f) This section shall not be construed to preclude the applicability of any
other provision of the criminal law of this state which applies or may apply to
any transaction, nor shall it make illegal any employee labor relations activities
that are within the scope and protection of state or federal labor laws.
(g) Any computer, computer system, computer network, or any software or
data, owned by the defendant, that is used during the commission of any public
offense described in subdivision (c) or any computer, owned by the defendant,
which is used as a repository for the storage of software or data illegally
obtained in violation of subdivision (c) shall be subject to forfeiture, as
specified in Section 502.01.
(h)
( 1 ) Subdivision (c) does not apply to punish any acts which are
committed by a person within the scope of his or her lawful employment.
For purposes of this section, a person acts within the scope of his or her
employment when he or she performs acts which are reasonably necessary
to the performance of his or her work assignment.
(2) Paragraph (3) of subdivision (c) does not apply to penalize any acts
committed by a person acting outside of his or her lawful employment,
provided that the employee’s activities do not cause an injury, as defined in
paragraph (8) of subdivision (b), to the employer or another, or provided
that the value of supplies or computer services, as defined in paragraph (4)
of subdivision (b), which are used does not exceed an accumulated total of
two hundred fifty dollars ($250).
( i ) No activity exempted from prosecution under paragraph (2) of
subdivision (h) which incidentally violates paragraph (2), (4), or (7) of
subdivision (c) shall be prosecuted under those paragraphs.
(j) For purposes of bringing a civil or a criminal action under this section, a
person who causes, by any means, the access of a computer, computer system,
or computer network in one jurisdiction from another jurisdiction is deemed to
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have personally accessed the computer, computer system, or computer network
in each jurisdiction.
(k) In determining the terms and conditions applicable to a person convicted
of a violation of this section the court shall consider the following:
( 1 ) The court shall consider prohibitions on access to and use of
computers.
( 2 ) Except as otherwise required by law, the court shall consider
alternate sentencing, including community service, if the defendant shows
remorse and recognition of the wrongdoing, and an inclination not to repeat
the offense.
Added Stats 1987 ch 1499 § 3. Amended Stats 1989 ch 1076 § 1, ch 1110 § 1, ch 1357
§ 1.3; Stats 1998 ch 863 § 3 (AB 1629); Stats 1999 ch 254 § 3 (AB 451); Stats 2000 ch 634
§ 1 (AB 2232), ch 635 § 2 (AB 2727); Stats 2009 ch 70 § 1 (AB 22), effective January 1,
2010; Stats 2009–2010 3d Ex Sess ch 28 § 26 (SB 18XXX), effective January 25, 2010;
Stats 2011 ch 15 § 378 (AB 109), effective April 4, 2011, operative October 1, 2011.
Annotations
Cases
Chrisman v. City of Los Angeles, 155 Cal. App. 4th 29, 65 Cal. Rptr. 3d 701 (2007) . A
police officer was fired for using his computer at work for improper purposes, such as
getting information about celebrities, his former girlfriend, and himself. The City contended
that this violated Penal Code § 502(c)(1), which proscribes “access” without permission, and
Penal Code § 502(c)(3), which proscribes “use” without permission. The court held that
“access” refers to hacking a computer or computer system. This does not apply to use of a
computer that has been assigned to an employee. Further, Penal Code § 502(h) exempts this
type of conduct by an employee.
and Bus. & Prof. Code §§ 17529.4 and 17538.45, to which defendant demurred. The court
People v. Hawkins, 98 Cal. App. 4th 1428, 121 Cal. Rptr. 2d 627 (2002). Defendant was
convicted of violating Penal Code § 502(c)(2) for taking the source code of his former
employer, apparently for the purpose of creating a competing product. Commission of a
felony violation was affirmed on appeal. The court rejected numerous defense arguments.
Most notably, the court rejected a constitutional challenge that the statute was void for
vagueness.
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People v. Gentry (4th Dist. 1991) 234 Cal. App. 3d 131, 285 Cal. Rptr. 591 . Gaining
access to the confidential files of TRW, CBI, and Trans Union without their permission and
knowledge and then deliberately entering false information regarding individuals’ credit
histories is exactly the kind of manipulation of computer data files that Penal Code § 502
was designed to prohibit.
Mahru v. Superior Court (2d Dist. 1987) 191 Cal. App. 3d 545, 237 Cal. Rptr. 298 .
Mahru was employee and part owner of BHI. BHI contracted to provide on-site data
processing for a credit union. After a contract dispute, Mahru instructed that changes be
made in the computer program which made the credit union employees unable to run the
program without help from BHI. This case created an “employee” exception to computer
crime laws. The court stated that Pen. Code § 502 cannot be construed so as to make it a
criminal offense for an employee, with his employer’s approval, to operate the employer’s
computer in the scope of his employment in a way that inconveniences, annoys, or inflicts
expense on another person. (Note: Pen. Code § 502 was revised after Mahru. The current
version of Pen. Code § 502 exempts any employee who accesses the employer’s computer
while acting within the scope of lawful employment.)
Articles
§ 502.01. Forfeiture of Telecommunications and

Computer Property Used in Committing Specified
Crimes; Hearing; Claim of Interest in Property;
Distribution of Proceeds.
(1) “Property subject to forfeiture” means any property of the defendant
that is illegal telecommunications equipment as defined in subdivision (g) of
Section 502.8, or a computer, computer system, or computer network, and
any software or data residing thereon, if the telecommunications device,
computer, computer system, or computer network was used in committing a
violation of, or conspiracy to commit a violation of, subdivision (b) of
Section 272, Section 288, 288.2, 311.1, 311.2, 311.3, 311.4, 311.5, 311.10,
311.11, 422, 470, 470a, 472, 475, 476, 480, 483.5, 484g, or subdivision
(a), (b), or (d) of Section 484e, subdivision (a) of Section 484f, subdivision
(b) or (c) of Section 484j, subdivision (c) of Section 502, or Section 502.7,
502.8, 529, 529a, or 530.5, 537e, 593d, 593e, or 646.9, or was used as a
repository for the storage of software or data obtained in violation of those
provisions. Forfeiture shall not be available for any property used solely in
the commission of an infraction. If the defendant is a minor, it also includes
property of the parent or guardian of the defendant.
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(2) “Sentencing court” means the court sentencing a person found guilty
of violating or conspiring to commit a violation of subdivision (b) of
Section 272, Section 288, 288.2, 311.1, 311.2, 311.3, 311.4, 311.5, 311.10,
311.11, 422, 470, 470a, 472, 475, 476, 480, 483.5, 484g, or subdivision
(a), (b), or (d) of Section 484e, subdivision (d) of Section 484e,
subdivision (a) of Section 484f, subdivision (b) or (c) of Section 484j,
subdivision (c) of Section 502, or Section 502.7, 502.8, 529, 529a, 530.5,
537e, 593d, 593e, or 646.9, or, in the case of a minor, found to be a person
described in Section 602 of the Welfare and Institutions Code because of
a violation of those provisions, the juvenile court.
( 3) “Interest” means any property interest in the property subject to
forfeiture.
(4) “Security interest” means an interest that is a lien, mortgage, security
interest, or interest under a conditional sales contract.
(5) “Value” has the following meanings:
(A) When counterfeit items of computer software are manufactured
or possessed for sale, the “value” of those items shall be equivalent to
the retail price or fair market price of the true items that are
counterfeited.
(B) When counterfeited but unassembled components of computer
software packages are recovered, including, but not limited to,
counterfeited computer diskettes, instruction manuals, or licensing
envelopes, the “value” of those components of computer software
packages shall be equivalent to the retail price or fair market price of
the number of completed computer software packages that could have
been made from those components.
(b) The sentencing court shall, upon petition by the prosecuting attorney, at
any time following sentencing, or by agreement of all parties, at the time of
sentencing, conduct a hearing to determine whether any property or property
interest is subject to forfeiture under this section. At the forfeiture hearing, the
prosecuting attorney shall have the burden of establishing, by a preponderance
of the evidence, that the property or property interests are subject to forfeiture.
The prosecuting attorney may retain seized property that may be subject to
forfeiture until the sentencing hearing.
( c ) Prior to the commencement of a forfeiture proceeding, the law
enforcement agency seizing the property subject to forfeiture shall make an
investigation as to any person other than the defendant who may have an interest
in it. At least 30 days before the hearing to determine whether the property
should be forfeited, the prosecuting agency shall send notice of the hearing to
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any person who may have an interest in the property that arose before the
seizure.
A person claiming an interest in the property shall file a motion for the
redemption of that interest at least 10 days before the hearing on forfeiture,
and shall send a copy of the motion to the prosecuting agency and to the
probation department.
If a motion to redeem an interest has been filed, the sentencing court shall
hold a hearing to identify all persons who possess valid interests in the
property. No person shall hold a valid interest in the property if, by a
preponderance of the evidence, the prosecuting agency shows that the
person knew or should have known that the property was being used in
violation of, or conspiracy to commit a violation of, subdivision (b) of
Section 272, Section 288, 288.2, 311.1, 311.2, 311.3, 311.4, 311.5, 311.10,
311.11, 470, 470a, 472, 475, 476, 480, 483.5, 484g, or subdivision (a), (b),
or (d) of Section 484e, subdivision (a) of Section 484f, subdivision (b) or
(c) of Section 484i, subdivision (c) of Section 502, or Section 502.7, 502.8,
529, 529a, 530.5, 537e, 593d, 593e, or 646.9, and that the person did not
take reasonable steps to prevent that use, or if the interest is a security
interest, the person knew or should have known at the time that the security
interest was created that the property would be used for a violation.
(d) If the sentencing court finds that a person holds a valid interest in the
property, the following provisions shall apply:
(1) The court shall determine the value of the property.
(2) The court shall determine the value of each valid interest in the
property.
(3) If the value of the property is greater than the value of the interest,
the holder of the interest shall be entitled to ownership of the property upon
paying the court the difference between the value of the property and the
value of the valid interest.
If the holder of the interest declines to pay the amount determined under
paragraph (2), the court may order the property sold and designate the
prosecutor or any other agency to sell the property. The designated agency
shall be entitled to seize the property and the holder of the interest shall
forward any documentation underlying the interest, including any ownership
certificates for that property, to the designated agency. The designated
agency shall sell the property and pay the owner of the interest the proceeds,
up to the value of that interest.
(4) If the value of the property is less than the value of the interest, the
763
designated agency shall sell the property and pay the owner of the interest
the proceeds, up to the value of that interest.
(e) If the defendant was a minor at the time of the offense, this subdivision
shall apply to property subject to forfeiture that is the property of the parent or
guardian of the minor.
(1) The prosecuting agency shall notify the parent or guardian of the
forfeiture hearing at least 30 days before the date set for the hearing.
(2) The computer or telecommunications device shall not be subject to
forfeiture if the parent or guardian files a signed statement with the court at
least 10 days before the date set for the hearing that the minor shall not have
access to any computer or telecommunications device owned by the parent
or guardian for two years after the date on which the minor is sentenced.
(3) If the minor is convicted of a violation of Section 288, 288.2, 311.1,
311.2, 311.3, 311.4, 311.5, 311.10, 311.11, 470, 470a, 472, 476, 480, or
subdivision (b) of Section 484e, subdivision (d) of Section 484e,
subdivision (a) of Section 484f, subdivision (b) of Section 484e,
subdivision (c) of Section 502, or Section 502.7, 502.8, 529, 529a, or
530.5, within two years after the date on which the minor is sentenced, and
the violation involves a computer or telecommunications device owned by
the parent or guardian, the original property subject to forfeiture, and the
property involved in the new offense, shall be subject to forfeiture
notwithstanding paragraph (2).
(4) Notwithstanding paragraph (1), (2), or (3), or any other provision of
this chapter, if a minor’s parent or guardian makes full restitution to the
victim of a crime enumerated in this chapter in an amount or manner
determined by the court, the forfeiture provisions of this chapter do not
apply to the property of that parent or guardian if the property was located
in the family’s primary residence during the commission of the crime.
( f) Notwithstanding any other provision of this chapter, the court may
exercise its discretion to deny forfeiture where the court finds that the convicted
defendant, or minor adjudicated to come within the jurisdiction of the juvenile
court, is not likely to use the property otherwise subject to forfeiture for future
illegal acts.
(g) If the defendant is found to have the only valid interest in the property
subject to forfeiture, it shall be distributed as follows:
(1) First, to the victim, if the victim elects to take the property as full or
partial restitution for injury, victim expenditures, or compensatory damages,
as defined in paragraph (1) of subdivision (e) of Section 502. If the victim
764
elects to receive the property under this paragraph, the value of the property
shall be determined by the court and that amount shall be credited against
the restitution owed by the defendant. The victim shall not be penalized for
electing not to accept the forfeited property in lieu of full or partial
restitution.
(2) Second, at the discretion of the court, to one or more of the following
agencies or entities:
(A) The prosecuting agency.
(B) The public entity of which the prosecuting agency is a part.
(C) The public entity whose officers or employees conducted the
investigation resulting in forfeiture.
(D) Other state and local public entities, including school districts.
(E) Nonprofit charitable organizations.
(h) If the property is to be sold, the court may designate the prosecuting
agency or any other agency to sell the property at auction. The proceeds of the
sale shall be distributed by the court as follows:
(1) To the bona fide or innocent purchaser or encumbrancer, conditional
sales vendor, or mortgagee of the property up to the amount of his or her
interest in the property, if the court orders a distribution to that person.
( 2) The balance, if any, to be retained by the court, subject to the
provisions for distribution under subdivision (g).
Added Stats 1989 ch 1357 § 2. Amended Stats 1990 ch 22 § 1 (AB 1858); Stats 1996 ch
861 § 3 (SB 1558); Stats 1997 ch 906 § 1 (SB 438); Stats 1998 ch 555 § 1 (SB 1734),
effective January 1, 1999. Amended Stats 1999 ch 254 § 4 (AB 451); Stats 2000 ch 628 § 1
(AB 1767); Stats 2004 ch 751 § 1 (AB 1499); Stats 2005 ch 22 § 148 (SB 1108), ch 461 § 2
(AB 33), effective January 1, 2006 (ch 461 prevails).
Annotations
Articles
§ 502.6. Use of Scanning Device to Obtain Information

From Magnetic Strip of Payment Card.
(a) Any person who knowingly, willfully, and with the intent to defraud,
possesses a scanning device, or who knowingly, willfully, and with intent to
defraud, uses a scanning device to access, read, obtain, memorize or store,
765
temporarily or permanently, information encoded on the magnetic strip or stripe
of a payment card without the permission of the authorized user of the payment
card is guilty of a misdemeanor, punishable by a term in a county jail not to
exceed one year, or a fine of one thousand dollars ($1,000), or both the
imprisonment and fine.
(b) Any person who knowingly, willfully, and with the intent to defraud,
possesses a reencoder, or who knowingly, willfully, and with intent to defraud,
uses a reencoder to place encoded information on the magnetic strip or stripe of
a payment card or any electronic medium that allows an authorized transaction
to occur, without the permission of the authorized user of the payment card from
which the information is being reencoded is guilty of a misdemeanor, punishable
by a term in a county jail not to exceed one year, or a fine of one thousand
dollars ($1,000), or both the imprisonment and fine.
(c) Any scanning device or reencoder described in subdivision (e) owned
by the defendant and possessed or used in violation of subdivision (a) or (b)
may be seized and be destroyed as contraband by the sheriff of the county in
which the scanning device or reencoder was seized.
(d) Any computer, computer system, computer network, or any software or
data, owned by the defendant, which is used during the commission of any
public offense described in this section or any computer, owned by the
defendant, which is used as a repository for the storage of software or data
illegally obtained in violation of this section shall be subject to forfeiture.
(e) As used in this section, the following definitions apply:
(1) “Scanning device” means a scanner, reader, or any other electronic
device that is used to access, read, scan, obtain, memorize, or store,
temporarily or permanently, information encoded on the magnetic strip or
stripe of a payment card.
( 2 ) “Reencoder” means an electronic device that places encoded
information from the magnetic strip or stripe of a payment card on to the
magnetic strip or stripe of a different payment card.
(3) “Payment card” means a credit card, debit card, or any other card
that is issued to an authorized user and that allows the user to obtain,
purchase, or receive goods, services, money, or anything else of value.
( f ) Nothing in this section shall preclude prosecution under any other
provision of law.
Leg.H. 2002 ch. 861.
CHAPTER 8
766
FALSE PERSONATIONS AND CHEATS
§ 537e. Purchase, Possession or Sale of Item Having
Altered or Obliterated Serial Number or
Identification Mark.
(a) Any person who knowingly buys, sells, receives, disposes of, conceals,
or has in his or her possession any personal property from which the
manufacturer’s serial number, identification number, electronic serial number,
or any other distinguishing number or identification mark has been removed,
defaced, covered, altered, or destroyed, is guilty of a public offense, punishable
as follows:
( 1 ) If the value of the property does not exceed nine hundred fifty
dollars ($950), by imprisonment in a county jail not exceeding six months.
( 2 ) If the value of the property exceeds nine hundred fifty dollars
($950), by imprisonment in a county jail not exceeding one year.
(3) If the property is an integrated computer chip or panel of a value of
nine hundred fifty dollars ($950) or more, by imprisonment in the state
prison pursuant to subdivision (h) of Section 1170 for 16 months, or 2 or
3 two or three years or by imprisonment in a county jail not exceeding one
year.
(b) For purposes of this subdivision, “personal property” includes, but is
not limited to, the following:
(1) Any television, radio, recorder, phonograph, telephone, piano, or
any other musical instrument or sound equipment.
(2) Any washing machine, sewing machine, vacuum cleaner, or other
household appliance or furnishings.
( 3) Any typewriter, adding machine, dictaphone, or any other office
equipment or furnishings.
(4) Any computer, printed circuit, integrated chip or panel, or other part
of a computer.
( 5) Any tool or similar device, including any technical or scientific
equipment.
( 6 ) Any bicycle, exercise equipment, or any other entertainment or
767
recreational equipment.
(7) Any electrical or mechanical equipment, contrivance, material, or
piece of apparatus or equipment.
(8) Any clock, watch, watch case, or watch movement.
(9) Any vehicle or vessel, or any component part thereof.
(c) When property described in subdivision (a) comes into the custody of a
peace officer it shall become subject to the provision of Chapter 12
(commencing with Section 1407) of Title 10 of Part 2, relating to the disposal of
stolen or embezzled property. Property subject to this section shall be
considered stolen or embezzled property for the purposes of that chapter, and
prior to being disposed of, shall have an identification mark imbedded or
engraved in, or permanently affixed to it.
(d) This section does not apply to those cases or instances where any of the
changes or alterations enumerated in subdivision (a) have been customarily
made or done as an established practice in the ordinary and regular conduct of
business, by the original manufacturer, or by his or her duly appointed direct
representative, or under specific authorization from the original manufacturer.
Stats 1939 ch 397 § 1; Stats 1972 ch 526 § 1; Stats 1974 ch 269 § 1; Stats 1981 ch 1070 § 1;
Stats 1990 ch 408 § 1 (AB 3483); Stats 1997 ch 554 § 2 (AB 1127); Stats 2009-2010 3d Ex
Sess ch 28 § 28 (SB 18XXX), effective January 25, 2010; Stats 2011 ch 15 § 388 (AB 109),
effective April 4, 2011, operative October 1, 2011.
§ 538.5 Fraudulently Obtaining Information From

Public Utility.
Every person who transmits or causes to be transmitted by means of wire,
radio or television communication any words, sounds, writings, signs, signals,
or pictures for the purpose of furthering or executing a scheme or artifice to
obtain, from a public utility, confidential, privileged, or proprietary information,
trade secrets, trade lists, customer records, billing records, customer credit
data, or accounting data by means of false or fraudulent pretenses,
representations, personations, or promises is guilty of an offense punishable by
imprisonment in the state prison pursuant to subdivision (h) of Section 1170,
or by imprisonment in the county jail not exceeding one year.
April 4, 2011, operative October 1, 2011.
TITLE XV
768
MISCELLANEOUS CRIMES
CHAPTER 2
MISCELLANEOUS CRIMES
§ 653f. Soliciting Commission of Certain Crimes;
Punishment; Proof.
(a) Every person who, with the intent that the crime be committed, solicits
another to offer, accept, or join in the offer or acceptance of a bribe, or to
commit or join in the commission of carjacking, robbery, burglary, grand theft,
receiving stolen property, extortion, perjury, subornation of perjury, forgery,
kidnapping, arson or assault with a deadly weapon or instrument or by means of
force likely to produce great bodily injury, or, by the use of force or a threat of
force, to prevent or dissuade any person who is or may become a witness from
attending upon, or testifying at, any trial, proceeding, or inquiry authorized by
law, shall be punished by imprisonment in a county jail for not more than one
year or pursuant to subdivision (h) of Section 1170, or by a fine of not more than
ten thousand dollars ($10,000), or the amount which could have been assessed
for commission of the offense itself, whichever is greater, or by both the fine
and imprisonment.
(b) Every person who, with the intent that the crime be committed, solicits
another to commit or join in the commission of murder shall be punished by
imprisonment in the state prison for three, six, or nine years.
(c) Every person who, with the intent that the crime be committed, solicits
another to commit rape by force or violence, sodomy by force or violence, oral
copulation by force or violence, or any violation of Section 264.1, 288, or 289,
shall be punished by imprisonment pursuant to subdivision (h) of Section 1170
in the state prison for two, three, or four years.
(d)
( 1) Every person who, with the intent that the crime be committed,
solicits another to commit an offense specified in Section 11352, 11379,
11379.5, 11379.6, or 11391 of the Health and Safety Code shall be
punished by imprisonment in a county jail not exceeding six months. Every
person, who, having been convicted of soliciting another to commit an
769
offense specified in this subdivision, is subsequently convicted of the
proscribed solicitation, shall be punished by imprisonment in a county jail
not exceeding one year, or pursuant to subdivision (h) of Section 1170.
(2) This subdivision does not apply where the term of imprisonment
imposed under other provisions of law would result in a longer term of
imprisonment.
(e) Every person who, with the intent that the crime be committed, solicits
another to commit an offense specified in Section 14014 of the Welfare and
Institutions Code shall be punished by imprisonment in a county jail for not
exceeding six months. Every person who, having been convicted of soliciting
another to commit an offense specified in this subdivision, is subsequently
convicted of the proscribed solicitation, shall be punished by imprisonment in a
county jail not exceeding one year, or pursuant to subdivision (h) of Section
1170.
(f) An offense charged in violation of subdivision (a), (b), or (c) shall be
proven by the testimony of two witnesses, or of one witness and corroborating
circumstances. An offense charged in violation of subdivision (d) or (e) shall be
proven by the testimony of one witness and corroborating circumstances.
263, operative July 1, 1977; Stats 1977 ch 163 § 2; Stats 1978 ch 579 § 26; Stats 1979 ch
944 § 9; Stats 1982 ch 1096 § 1; Stats 1983 ch 1092 § 317, effective September 27, 1983,
operative January 1, 1984; Stats 1987 ch 1021 § 1, ch 1367 § 1, effective September 29,
1987; Stats 1989 ch 897 § 25; Stats 1993 ch 610 § 8 (AB 6), effective September 30, 1993,
ch 611 § 8 (SB 60), effective September 30, 1993, ch 821 § 1.5 (SB 1131); Stats 2011 ch 15
§ 432 (AB 109), effective April 4, 2011, operative October 1, 2011; Stats 2012 ch 43 § 21
(SB 1023), effective June 27, 2012.
§ 653h. Sound Recordings Transferred Without

Consent of Owner; Unauthorized Sale; Persons
Exempted.
(a) Every person is guilty of a public offense punishable as provided in
subdivisions (b) and (c), who:
(1) Knowingly and willfully transfers or causes 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.
(2) Transports for monetary or like consideration within this state or
770
causes to be transported within this state any such article with the
knowledge that the sounds thereon have been so transferred without the
consent of the owner.
(b) Any person who has been convicted of a violation of subdivision (a),
shall be punished by imprisonment in the county jail not to exceed one year, by
imprisonment in the state prison pursuant to subdivision (h) of Section 1170
for two, three, or five years, or by a fine not to exceed five hundred thousand
dollars ($500,000), or by both that fine and imprisonment, if the offense
involves the transfer or transportation, or conduct causing that transfer or
transportation, of not less than 1,000 of the articles described in subdivision (a).
( c ) Any person who has been convicted of any other violation of
subdivision (a) not described in subdivision (b), shall be punished by
imprisonment in the county jail not to exceed one year, or by a fine of not more
than fifty thousand dollars ($50,000), or by both that fine and imprisonment.
A second or subsequent conviction under subdivision (a) not described in
subdivision (b) shall be punished by imprisonment in the state prison pursuant
to subdivision (h) of Section 1170 or by a fine not to exceed two hundred
thousand dollars ($200,000), or by both that fine and imprisonment.
(d) 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 article
described in subdivision (a) with knowledge that the sounds thereon have been
so transferred without the consent of the owner is guilty of a public offense.
(1) A violation of subdivision (d) involving not less than 100 of those
articles shall be punishable by imprisonment in a county jail not to exceed
one year or by a fine not to exceed twenty thousand dollars ($20,000), or by
both that fine and imprisonment. A second or subsequent conviction for
the conduct described in this paragraph shall be punishable by imprisonment
in the county jail not to exceed one year or in the state prison pursuant to
subdivision (h) of Section 1170, or by a fine not to exceed fifty thousand
dollars ($50,000), or by both that fine and imprisonment.
( 2 ) A person who has been convicted of any violation of this
subdivision not described in paragraph (1) shall be punished by
imprisonment in the county jail not to exceed six months or by a fine not to
exceed ten thousand dollars ($10,000), or by both that fine and
imprisonment. A second conviction for the conduct described in this
paragraph shall be punishable by imprisonment in the county jail not to
exceed one year or by a fine not to exceed twenty thousand dollars
($20,000), or by both that fine and imprisonment. A third or subsequent
conviction for the conduct described in this paragraph shall be punishable
771
by imprisonment in the county jail not to exceed one year or in the state
prison pursuant to subdivision (h) of Section 1170, or by a fine not to
exceed fifty thousand dollars ($50,000), or by both that fine and
imprisonment.
( e ) As used in this section, “person” means any individual, partnership,
partnership’s member or employee, corporation, limited liability company,
association or corporation or association employee, officer or director;
“owner” means the person who owns the original master recording embodied in
the master phonograph record, master disc, master tape, master film or other
article used for reproducing recorded sounds on phonograph records, discs,
tapes, films or other articles on which sound is or can be recorded, and from
which the transferred recorded sounds are directly or indirectly derived; and
“master recording” means the original fixation of sounds upon a recording from
which copies can be made.
(f) This section shall neither enlarge nor diminish the right of parties in
private litigation.
(g) This section does not apply to any person engaged in radio or television
broadcasting who transfers, or causes to be transferred, any such sounds (other
than from the sound track of a motion picture) intended for, or in connection
with, broadcast transmission or related uses, or for archival purposes.
(h) This section does not apply to any not-for-profit educational institution
or any federal or state governmental entity, if the institution or entity has as a
primary purpose the advancement of the public’s knowledge and the
dissemination of information regarding America’s musical cultural heritage,
provided that this purpose is clearly set forth in the institution’s or entity’s
charter, bylaws, certificate of incorporation, or similar document, and the
institution or entity has, prior to the transfer, made a good faith effort to identify
and locate the owner or owners of the sound recordings to be transferred and,
provided that the owner or owners could not be and have not been located.
Nothing in this section shall be construed to relieve an institution or entity of its
contractual or other obligation to compensate the owners of sound recordings to
be transferred. In order to continue the exemption permitted by this subdivision,
the institution or entity shall make continuing efforts to locate such owners and
shall make an annual public notice of the fact of the transfers in newspapers of
general circulation serving the jurisdictions where the owners were
incorporated or doing business at the time of initial affixations. The institution
or entity shall keep on file a record of the efforts made to locate such owners for
inspection by appropriate governmental agencies.
( i ) This section applies only to such those articles that were initially
mastered prior to February 15, 1972.
772
Added Stats 1968 ch 585 § 1. Amended Stats 1975 ch 1132 § 1; Stats 1977 ch 165 § 10,
effective June 29, 1977, operative July 1, 1977; Stats 1982 ch 824 § 1; Stats 1984 ch 1078 §
1, ch 1432 § 5; Stats 1985 ch 364 § 1; Stats 1988 ch 1257 § 1; Stats 1994 ch 1010 § 197
(SB 2053); Stats 2010 ch 351 § 3 (AB 819), effective September 27, 2010; Stats 2011 ch 15
§ 433 (AB 109), effective April 4, 2011, operative October 1, 2011.
Penal Code §§ 653h, 653s, 653v, and 653w are effective tools against counterfeiters,
since counterfeiters ordinarily are not in the habit of disclosing on their packaging the true
origin of their recording of videocassettes, records, and other items. Persuading law
enforcement personnel to raid counterfeiters is usually less expensive and more effective
than proceeding under the cumbersome federal civil mechanism. The authorities are
resistant, however, when the complainant is large enough to secure relief in civil actions.
Penal Code § 653h(i) makes clear that this section applies only to sound recordings that
were initially mastered prior to February 15, 1972. Sound recordings mastered after that date
are protected through federal copyright law. Pre-1972 sound recordings are subject to
continuing protection by state law until February 15, 2047 (see Civ. Code § 980(2)).
Annotations
Cases
Goldstein v. California (1973) 412 U.S. 546, 93 S. Ct. 2303, 37 L. Ed. 2d 163, 178
U.S.P.Q. 129. The Supreme Court held that Pen. Code § 653h, criminalizing record piracy, is
not preempted by the 1909 federal Copyright Act.
§ 653s. Transportation of Sounds of Live Performance

Recorded Without Consent of Owner; Applicability;
Punishment.
(a) 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
is guilty of a public offense punishable as provided in subdivision (g) or (h).
(b) As used in this section and Section 653u:
(1) “Live performance” means the recitation, rendering, or playing of a
series of musical, spoken, or other sounds in any audible sequence thereof.
( 2 ) “Article” means the original disc, wire, tape, film, phonograph
record, or other recording device used to record or master the sounds of the
live performance and any copy or reproduction thereof which duplicates, in
whole or in part, the original.
773
(3) “Person” means any individual, partnership, partnership member or
employee, corporation, association, or corporation or association employee,
officer, or director, limited liability company, or limited liability company
manager or officer.
(c) In the absence of a written agreement or operation of law to the contrary,
the performer or performers of the sounds of a live performance shall be
presumed to own the right to record or master those sounds.
(d) For purposes of this section, a person who is authorized to maintain
custody and control over business records reflecting the consent of the owner to
the recordation or master recording of a live performance shall be a proper
witness in any proceeding regarding the issue of consent.
Any witness called pursuant to this section shall be subject to all rules of
evidence relating to the competency of a witness to testify and the relevance and
admissibility of the testimony offered.
(e) This section shall neither enlarge nor diminish the rights and remedies of
parties to a recording or master recording which they might otherwise possess
by law.
(f) This section shall not apply to persons engaged in radio or television
broadcasting or cablecasting who record or fix the sounds of a live performance
for, or in connection with, broadcast or cable transmission and related uses in
educational television or radio programs, for archival purposes, or for news
programs or purposes if the recordation or master recording is not commercially
distributed independent of the broadcast or cablecast by or through the
broadcasting or cablecasting entity to subscribers or the general public.
(g) Any person who has been convicted of a violation of subdivision (a),
shall be punished by imprisonment in the county jail not to exceed one year, or
by imprisonment in the state prison pursuant to subdivision (h) of Section
1170 for two, three, or five years, or by a fine not to exceed five hundred
thousand dollars ($500,000), or by both, if the offense involves the
transportation or causing to be transported of not less than 1,000 articles
described in subdivision (a).
( h ) Any person who has been convicted of any other violation of
subdivision (a) not described in subdivision (g) shall be punished by
imprisonment in the county jail not to exceed one year, or by a fine not to exceed
fifty thousand dollars ($50,000), or by both that fine and imprisonment. A
second or subsequent conviction under subdivision (a) not described in
subdivision (g) shall be punished by imprisonment in the county jail not to
exceed one year or in the state prison pursuant to subdivision (h) of Section
774
1170, or by a fine not to exceed two hundred thousand dollars ($200,000), or by
both that fine and imprisonment.
(i) 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 article
described in subdivision (a) 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 is guilty of a public offense.
(1) A violation of subdivision (i) involving not less than 100 of those
articles shall be punishable by imprisonment in a county jail not to exceed
one year or by a fine not to exceed twenty thousand dollars ($20,000), or by
both that fine and imprisonment. A second or subsequent conviction for
the conduct described in this paragraph shall be punishable by imprisonment
in the county jail not to exceed one year or in the state prison pursuant to
subdivision (h) of Section 1170, or by a fine not to exceed fifty thousand
dollars ($50,000), or by both.
( 2 ) A person who has been convicted of any violation of this
subdivision not described in paragraph (1) shall be punished by
imprisonment in the county jail not to exceed six months or by a fine not to
exceed ten thousand dollars ($10,000), or by both that fine and
imprisonment. A second conviction for the conduct described in this
paragraph shall be punishable by imprisonment in the county jail not to
exceed one year or by a fine not to exceed twenty thousand dollars
($20,000), or by both that fine and imprisonment. A third or subsequent
conviction for the conduct described in this paragraph shall be punishable
by imprisonment in the county jail not to exceed one year or in the state
prison pursuant to subdivision (h) of Section 1170, or by a fine not to
exceed fifty thousand dollars ($50,000), or by both that fine and
imprisonment.
2; Stats 1994 ch 1200 § 37 (SB 469), effective September 30, 1994; Stats 2010 ch 351 § 4
(AB 819), effective September 27, 2010; Stats 2010 ch 351 § 4 (AB 819), effective
September 27, 2010; Stats 2011 ch 15 § 435 (AB 109), effective April 4, 2011, operative
October 1, 2011.
See Consultant’s Comments to Penal Code § 653h.
§ 653u. Recording or Causing to Be Recorded Live

Performance Without Consent of Owner;
775
Punishment.
( a ) 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 is guilty of a public offense
punishable as provided in subdivisions (d) and (e).
(b) In the absence of a written agreement or operation of law to the contrary,
the performer or performers of the sounds of a live performance shall be
presumed to own the right to record or master those sounds.
(c)
(1) For purposes of this section, a person who is authorized to maintain
custody and control over business records reflecting the consent of the
owner to the recordation or master recording of a live performance shall be
a proper witness in any proceeding regarding the issue of consent.
(2) Any witness called pursuant to this section shall be subject to all
rules of evidence relating to the competency of a witness to testify and the
relevance and admissibility of the testimony offered.
(d) Any person who has been convicted of a violation of subdivision (a)
shall be punished by imprisonment in the county jail not to exceed one year, or
by imprisonment in the state prison pursuant to subdivision (h) of Section
1170 for two, three, or five years, or by a fine not to exceed five hundred
thousand dollars ($500,000), or by both that fine and imprisonment, if the
offense involves the recording, mastering, or causing to be recorded or mastered
at least 1,000 articles described in subdivision (a).
( e ) Any person who has been convicted of any other violation of
subdivision (a) not described in subdivision (d), shall be punished by
imprisonment in the county jail not to exceed one year, or by a fine not to exceed
fifty thousand dollars ($50,000), or by both that fine and imprisonment. A
second or subsequent conviction under subdivision (a) not described in
subdivision (d) shall be punished by imprisonment in the county jail not to
exceed one year or in the state prison pursuant to subdivision (h) of Section
1170 or by a fine not to exceed two hundred thousand dollars ($200,000), or by
(AB 819), effective September 27, 2010; Stats 2011 ch 15 § 437 (AB 109), effective April
4, 2011, operative October 1, 2011.
776
§ 653v. Court Order for Forfeiture and Destruction of
Articles.
Whenever any person is convicted of any violation of Section 653h, 653s,
653u, or 653w the court, in its judgment of conviction, shall, in addition to the
penalty therein prescribed, order the forfeiture and destruction or other
disposition of all articles, including, but not limited to, phonograph records,
discs, wires, tapes, films, or any other article upon which sounds or images can
be recorded or stored, and any and all electronic, mechanical, or other devices
for manufacturing, reproducing or assembling these articles, which were used in
connection with, or which were part of, any violation of Section 653h, 653s,
653u, or 653w.
Leg.H. 1984 ch. 1078, 1985 ch. 364.
See Consultant’s Comments to Penal Code § 653h.
§ 653w. Failure to Disclose Origin of Recording or

Audiovisual Work; Punishment.
(a)
(1) A person is guilty of failure 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 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 thereon. This section does not require the original
manufacturer or authorized licensees of software producers to disclose the
contributing authors or programmers.
(2) As used in this section, “recording” means any tangible medium
upon which information or sounds are recorded or otherwise stored,
including, but not limited to, any phonograph record, disc, tape, audio
cassette, wire, film, memory card, flash drive, hard drive, data storage
device, or other medium on which information or sounds are recorded or
otherwise stored, but does not include sounds accompanying a motion
picture or other audiovisual work.
(3) As used in this section, “audiovisual works” are the physical
777
embodiment of works that consist of related images that are intrinsically
intended to be shown using machines or devices, such as projectors,
viewers, or electronic equipment, together with accompanying sounds, if
any, regardless of the nature of the material objects, such as films, tapes,
discs, memory cards, flash drives, hard drives, data storage devices, or
other devices, on which the works are embodied.
(b) Any person who has been convicted of a violation of subdivision (a)
shall be punished as follows:
(1) If the offense 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 described
in subdivision (a), the person shall be punished by imprisonment in a county
jail not to exceed one year, or by imprisonment in the state prison
pursuant to subdivision (h) of Section 1170 for two, three, or five years,
or by a fine not to exceed five hundred thousand dollars ($500,000), or by
(2) Any other violation of subdivision (a) not described in paragraph
(1), shall, upon a first offense, be punished by imprisonment in a county jail
not to exceed one year, or by a fine not to exceed fifty thousand dollars
($50,000), or by both that fine and imprisonment.
( 3 ) A second or subsequent conviction under subdivision (a) not
described in paragraph (1), shall be punished by imprisonment in a county
jail not to exceed one year or in the state prison pursuant to subdivision
(h) of Section 1170, or by a fine not to exceed two hundred thousand
dollars ($200,000), or by both that fine and imprisonment.
Stats 1990 ch 942 § 1 (SB 2073); Stats 1997 ch 303 § 1 (AB 298); Stats 2006 ch 9 § 1 (AB
64), effective January 1, 2007; Stats 2010 ch 351 § 6 (AB 819), effective September 27,
2010, ch 480 § 1.5 (SB 830), effective January 1, 2011; Stats 2011 ch 15 § 438 (AB 109),
effective April 4, 2011, operative October 1, 2011.
Annotations
Cases
People v. Kelly, 189 Cal. App. 4th 73, 116 Cal. Rptr. 3d 646 (2010) . Defendant pleaded
guilty to a violation of section 653w for selling counterfeit compact discs. The trial court
ordered him to pay restitution to the RIAA as a representative of the copyright owners. The
appellate court reversed the restitution order because the RIAA was not a “direct victim” of
the piracy.
778
§ 653z. Operation of Recording Device in Theater
While Motion Picture Is Being Exhibited Without
Authority; Punishment.
( a ) 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, is guilty of a public offense and shall be punished
by imprisonment in a county jail not exceeding one year, by a fine not exceeding
five thousand dollars ($5,000), or by both that fine and imprisonment.
(b) For the purposes of this section, the following terms have the following
meanings:
(1) “Recording device” means a photographic, digital or video camera,
or other audio or video recording device capable of recording the sounds
and images of a motion picture or any portion of a motion picture.
(2) “Motion picture theater” means a theater or other premises in which
a motion picture is exhibited.
( c ) Nothing in this section shall preclude prosecution under any other
provision of law.
Added Stats 2003 ch 670 § 1 (SB 1032). Amended Stats 2010 ch 351 § 7 (AB 819),
effective September 27, 2010.
§ 653aa. Unauthorized Electronic Dissemination of

Commercial Recordings or Audiovisual Works as a
Crime; Punishment; Applicability.
(a) 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 is punishable
by a fine not exceeding five thousand dollars ($5,000), imprisonment in a county
jail for a period not exceeding one year, or by both that fine and imprisonment.
( b) Any minor who violates subdivision (a) is punishable by a fine not
exceeding five hundred dollars ($500). Any minor who commits a third or
subsequent violation of subdivision (a) is punishable by a fine not exceeding
two thousand dollars ($2,000), imprisonment in a county jail for a period not to
exceed one year, or by both that imprisonment and fine.
779
(c) Subdivisions (a) and (b) do not apply:
( 1 ) To a person who electronically disseminates a commercial
recording or audiovisual work to his or her immediate family, or within his
or her personal network, defined as a restricted access network controlled
by and accessible to only that person or people in his or her immediate
household.
(2) If the copyright owner, or a person acting under the authority of the
copyright owner, of a commercial recording or audiovisual work has
explicitly given permission for all or substantially all of that recording or
audiovisual work to be freely disseminated electronically by or to anyone
without limitation.
(3) To a person who has been licensed either by the copyright owner or
a person acting under the authority of the copyright owner to disseminate
electronically all or substantially all of a commercial audiovisual work or
recording.
( 4 ) To the licensed electronic dissemination of a commercial
audiovisual work or recording by means of a cable television service
offered over a cable system or direct to home satellite service as defined in
Title 47 of the United States Code.
( d ) Nothing in this section shall restrict the copyright owner from
disseminating his or her own copyrighted material.
(e) Upon conviction for a violation of this section, in addition to the penalty
prescribed, the court shall order the permanent deletion or destruction of any
electronic file containing a commercial recording or audiovisual work, the
dissemination of which was the basis of the violation. This subdivision shall not
apply to the copyright owner or to a person acting under the authority of the
copyright owner.
(f) An Internet service provider does not violate, and does not aid and abet
a violation of subdivision (a), and subdivision (a) shall not be enforced against
an Internet service provider, to the extent that the Internet service provider
enables a user of its service to electronically disseminate an audiovisual work
or sound recording, if the Internet service provider maintains its valid e-mail
address or other means of electronic notification on its Internet Web site in a
location that is accessible to the public.
For the purposes of this section, “Internet service provider” means an entity, to
the extent that the entity is transmitting, routing, or providing connections for
Internet communications initiated by or at the direction of another person,
between or among points specified by a user, of material placed online by a
780
user, storing or hosting that material at the direction of a user, or referring or
linking users to that material.
(g) For purposes of this section:
(1) “Recording” means the electronic or physical embodiment of any
recorded images, sounds, or images and sounds, but does not include
audiovisual works or sounds accompanying audiovisual works.
(2) “Audiovisual work” means the electronic or physical embodiment of
motion pictures, television programs, video or computer games, or other
audiovisual presentations that consist of related images that are intrinsically
intended to be shown by the use of machines or devices such as projectors,
viewers, or electronic equipment, or a computer program, software, or
system, as defined in Section 502, together with accompanying sounds, if
any.
(3) “Commercial recording or audiovisual work” means a recording or
audiovisual work whose copyright owner, or assignee, authorized agent, or
licensee, has made or intends to make available for sale, rental, or for
performance or exhibition to the public under license, but does not include
an excerpt consisting of less than substantially all of a recording or
audiovisual work. A recording or audiovisual work may be commercial
regardless of whether the person who electronically disseminates it seeks
commercial advantage or private financial gain from that dissemination.
( 4 ) “Electronic dissemination” means initiating a transmission of,
making available, or otherwise offering, a commercial recording or
audiovisual work for distribution on the Internet or other digital network,
regardless of whether someone else had previously electronically
disseminated the same commercial recording or audiovisual work.
(5) “E-mail address” means a valid e-mail address, or the valid e-mail
address of the holder of the account from which the dissemination took
place.
( 6 ) “Disclosing” means providing information in, attached to, or
discernable or available in or through the process of disseminating or
obtaining a commercial recording or audiovisual work in a manner that is
accessible by any person engaged in disseminating or receiving the
commercial recording or audiovisual work.
( h) Nothing in this section shall preclude prosecution under any other
provision of law.
Added Stats 2004 ch 617 § 1 (SB 1506). Inoperative January 1, 2010, by its own terms.
Amended Stats 2010 ch 351 § 8 (AB 819), effective September 27, 2010.
781
Articles
McFarlin, From the Fringes of Copyright Law: Examining California’s “True Name
and Address” Internet Piracy Statute, 35 Hastings Const. L.Q. 547 (2008).
PART III
Of Imprisonment and Death Penalty

TITLE 1
IMPRISONMENT OF MALE PRISONERS

IN STATE PRISONS
CHAPTER 5
EMPLOYMENT OF PRISONERS
ARTICLE 1
Employment of Prisoners Generally
§ 2702. Computer-Related Crimes—No Access to

Department Computer System.
No person imprisoned after conviction of a violation of Section 502 or of
subdivision (b) of Section 502.7 shall be permitted to work on or have access to
any computer system of the department.
Leg.H. 1989 ch. 1357.
Annotations
Articles
782

SYNOPSIS
Contents
DIVISION 9 TRUST LAW

PART 4 Trust Administration
CHAPTER 3 REVISED UNIFORM PRINCIPAL AND INCOME ACT
DIVISION 9
TRUST LAW
PART 4
Trust Administration
CHAPTER 3
REVISED UNIFORM PRINCIPAL AND

INCOME ACT
( a ) In this section, “liquidating asset” means an asset whose value will
diminish or terminate because the asset is expected to produce receipts for a
period of limited duration. The term includes a leasehold, patent, copyright,
royalty right, and right to receive payments under an arrangement that does not
provide for the payment of interest on the unpaid balance. The term does not
include a payment subject to Section 16361, resources subject to Section 16363,
timber subject to Section 16364, an activity subject to Section 16366, an asset
subject to Section 16367, or any asset for which the trustee establishes a reserve
783
for depreciation under Section 16372.
(b) A trustee shall allocate to income 10 percent of the receipts from a
liquidating asset and the balance to principal.
Leg.H. 1999 ch. 145.
CALIFORNIA REVENUE AND

TAXATION CODE
SYNOPSIS
Contents
DIVISION 1 PROPERTY TAXATION

PART 2 Assessment
CHAPTER 1 TAXATION BASE
ARTICLE 1 Taxable and Exempt Property
CHAPTER 5 SPECIAL TYPES OF PROPERTY
ARTICLE 1 Generally
§ 986. Full Value of Work of Art Neither Sold Nor Exhibited for Profit.
§ 988. Full Value of Motion Pictures; Exclusion of Intangible Rights.
PART 3 Equalization
CHAPTER 1 EQUALIZATION BY COUNTY BOARD OF EQUALIZATION
ARTICLE 1 Generally
DIVISION 2 OTHER TAXES
PART 1 Sales and Use Taxes
CHAPTER 1 GENERAL PROVISIONS AND DEFINITIONS
§ 6010.4. “Sale” and “Purchase”—Motion Picture Production.
ARTICLE 1 General Exemptions
§ 6365. Sale of Original Works of Art to Specified Entities.
§ 6366.3. Museums.
PART 11 Bank and Corporation Tax Law
CHAPTER 13 ACCOUNTING PERIODS AND METHODS OF ACCOUNTING
ARTICLE 3 Year of Inclusion
§ 24675. Compensatory Damages for Patent Infringement.
CHAPTER 17 ALLOCATION OF INCOME
ARTICLE 2 Uniform Division of Income for Tax Purposes Act
784
DIVISION 1
PROPERTY TAXATION
PART 2
Assessment
CHAPTER 1
TAXATION BASE
ARTICLE 1
Taxable and Exempt Property

(a) Except as provided in subdivision (d), the following articles of personal
property that have been made available for display in a publicly owned art
gallery or museum, or a museum that is regularly open to the public and that is
operated by a nonprofit organization that qualifies for exemption pursuant to
Section 23701d, shall be exempt from taxation:
(1) Original paintings in oil, mineral, water, vitreous enamel, or other
colors, pastels, original mosaics, original drawings and sketches in pen, ink,
pencil, or watercolors, or works of the free fine arts in any other media
including applied paper and other materials, manufactured or otherwise, that
are used on collages, artists’ proof etchings unbound, and engravings and
woodcuts unbound, lithographs, or prints made by other hand transfer
processes unbound, or original sculptures or statuary. As used in this
subdivision:
( A ) “Sculpture” and “statuary” shall include professional
productions of sculptors only whether in round or in relief, in bronze,
785
marble, stone, terra cotta, ivory, wood, metal, or other materials, or
whether cut, carved, or otherwise wrought by hand from the solid block
or mass of marble, stone, alabaster, or from metal, or other materials, or
cast in bronze or other metal or substance, or from wax or plaster, or
constructed from any material or made in any form as the professional
productions of sculptors, only.
( B) “Original” when used to modify the words “sculptures” and
“statuary” shall include the original work or model and the first 10
castings, replicas, or reproductions made from the sculptor’s original
work or model, with or without a change in scale, regardless of whether
or not the sculptor is alive at the time the castings, replicas, or
reproductions are completed.
(C) “Painting,” “mosaic,” “drawing,” “work of the free fine arts,”
“sketch,” “sculpture,” and “statuary” shall not include any articles of
utility, articles designed for industrial use, or any articles that are made
wholly or in part by stenciling or any other mechanical process.
(D) “Etchings,” “engravings,” “woodcuts,” “lithographs,” or “prints
made by other hand transfer processes,” shall include only works that
are printed by hand from plates, stones or blocks etched, drawn, or
engraved with handtools, and do not include works that are printed from
plates, stones or blocks etched, drawn, or engraved by photochemical or
other mechanical processes.
( 2 ) Original works of the free fine arts, that are not described in
paragraph (1), are subject to regulations, as the board may prescribe, to
prove that the article represents some school, kind, or medium of the free
fine arts. As used in this paragraph, “original works of the free fine arts”
shall not include any article of utility or any article designed for industrial
use.
(b) When making a claim for an exemption pursuant to this section, a person
claiming the exemption shall provide all information required and answer all
questions in an affidavit, under penalty of perjury. The assessor may require
other proof of the facts stated before allowing the exemption. The affidavit shall
be accompanied by a certificate of the director or other officer of the art gallery
or museum in which the property for which an exemption is claimed under this
section was made available for display that the property was available for
public display in the art gallery or museum for the period specified in
subdivision (e).
(c) Sections 255 and 260 shall be applicable to the exemption provided by
this section.
786
(d) The exemption provided by subdivision (a) shall not apply to any work
of art loaned by any person who holds works of art primarily for purposes of
sale.
( e ) The exemption provided by this section shall not apply unless the
property was made available for public display in the art gallery or museum for
a period of 90 days during the 12-month period immediately preceding the lien
date for the year for which the exemption is claimed.
If the property was first made available for public display less than 90 days
prior to the lien date, the exemption may be granted if the person claiming the
exemption certifies in writing that the property will be made available for
public display for at least 90 days during the 12-month period commencing with
the first day the property was made available for public display.
(f) For purposes of this section, “regularly open to the public” means that
the gallery or museum was open to the public not less than 20 hours per week
for not less than 35 weeks of the 12-month period immediately preceding the
lien date for the year for which the exemption is claimed. If the gallery or
museum has been open for less than 35 weeks during the 12-month period
immediately preceding the lien date or for less than 20 hours per week during
that period, the exemption may be granted if the director or other officer of the
gallery or museum certifies in writing that the gallery or museum will be open
for not less than 20 hours per week for not less than 35 weeks during the 12-
month period beginning with the day the gallery or museum was first opened.
(g) If a person certifies in writing that the property will be made available
and the gallery or museum open for the periods specified in subdivisions (e) and
(f), and the property is not so made available or the gallery or museum is not so
opened, the exemption shall be canceled, and an escape assessment may be
made as provided in Section 531.1.
Added Stats 1965 ch 1440 § 1. Amended Stats 1979 ch 1188 § 1.7, effective September
30, 1979. Amended Stats 2004 ch 200 § 2 (SB 1880); Stats 2005 ch 22 § 179 (SB 1108),
CHAPTER 5
SPECIAL TYPES OF PROPERTY

ARTICLE 1
787
Generally
§ 986. Full Value of Work of Art Neither Sold Nor

Exhibited for Profit.
The full value of a work of art, still owned by the artist who created it and
which has never been sold nor exhibited for profit, is the full value of the
materials which constitute the work of art.
Leg.H. 1939 ch. 307, 1974 ch. 311.
§ 988. Full Value of Motion Pictures; Exclusion of

Intangible Rights.
( a ) The full value of motion pictures, including the negatives and prints
thereof, is the full value of only the tangible materials upon which such motion
pictures are recorded. Such full value does not include the value of, or any
value based upon, any intangible rights, such as the copyright or the right to
reproduce, copy, exhibit or otherwise exploit motion pictures or the negatives
or prints thereof.
(b) As used in this section, “motion pictures” includes those intended for
transmission, exhibition, or exploitation, by any means or method and whether
or not production thereof has been completed.
(c) As used in this section, “negatives and prints” includes any film or other
tangible property, and reproductions thereof, upon which is recorded by any
means or method the sound or action of motion pictures, in positive, negative, or
any other form.
Leg.H. 1968 ch. 927, 1974 ch. 311.
PART 3
Equalization
CHAPTER 1
EQUALIZATION BY COUNTY BOARD OF

EQUALIZATION
788
ARTICLE 1
Generally

Equalization hearings shall be open and public except that, upon conclusion
of the taking of evidence, the county board may deliberate in private in reaching
a decision. An applicant may request the board to close to the public a portion
of the hearing by filing a declaration under penalty of perjury that evidence is to
be presented which relates to trade secrets the disclosure of which will be
detrimental to the business interests of the owner of the trade secrets. If the
board grants the request, only evidence relating to the trade secrets may be
presented during the time the hearing is closed.
Leg.H. 1974 ch. 180, effective April 24, 1974.
DIVISION 2
OTHER TAXES
PART 1
Sales and Use Taxes

CHAPTER 1
GENERAL PROVISIONS AND

DEFINITIONS
§ 6010.4. “Sale” and “Purchase”—Motion Picture
Production.
If two or more persons engaged in the production and distribution of motion
pictures for use in any media form a partnership for the purpose of reducing the
789
cost of producing motion pictures through the sharing of the use of equipment,
studio facilities and the services of personnel, the furnishing (without
transferring title to tangible personal property) of such equipment, facilities and
services by the partnership to its members for the purpose of the production of
motion pictures by its members shall not constitute either a “sale” or
“purchase.”
Leg.H. 1972 ch. 640, effective August 9, 1972, operative October 1, 1972.

(a) Except as provided in subdivision (c), “sale” and “purchase,” for the
purposes of this part, do not include any of the following:
(1) The performance of any qualified production services in connection
with the production of all or any part of any qualified motion picture.
Persons performing those qualified production services are consumers of
paintings, models, and art work used by those filming special effects, titles,
or credits, and of film, tape, or other embodiment upon which sound, visual
images, or computer-generated graphics are created or recorded,
notwithstanding that title to the property may be transferred pursuant to the
qualified production services contract.
(2) Any transfer of all or any part of any qualified motion picture, or any
interest therein or any rights relating thereto, under either of the following
circumstances:
(A) The transfer is made prior to the date that the qualified motion
picture is exhibited or broadcast to its general audience.
(B) The transfer is made to any person or persons holding, either
directly or indirectly, or by affiliation, any exploitation rights obtained
prior to the date that the qualified motion picture is exhibited or
broadcast to its general audience.
(b) For purposes of this section:
(1) “Motion picture” means any audiovisual work (at any stage of the
production thereof) consisting of a series of related images, either on film,
tape, or other embodiment, whether photographic, or otherwise, and for
these purposes, includes all physical materials comprising part of, or
synchronized with, the motion picture, including the original, duplicate, and
other negatives, intermediary film products, tapes, prints and original,
duplicate, and other sound or visual recordings created to accompany the
pictorial material depicted in the motion picture.
(2) “Produce or production of any qualified motion picture” means to
790
originate, create, invent, design, devise, develop, photograph, edit, record,
imprint, adapt, alter, make, process, fabricate, assemble, construct, or
manufacture all or any part of that qualified motion picture by any means,
method, or devise of any kind or character, whether before or after
commencement of principal photography.
(3) “Qualified motion picture” means any motion picture, whether or not
the production of that motion picture is completely finished, which is
produced, adapted, or altered for exploitation in, on, or through any medium
or by any device, including, but not limited to, a motion picture produced for
exploitation in movie theaters, through any form of television, or
videocassettes, videotapes, or videodiscs, in amusement parks, or on
commercial carriers, for any purpose, including, but not limited to, for any
entertainment, commercial, advertising, promotional, industrial, or
educational purpose. Qualified motion picture includes, but is not limited to,
all adapted versions thereof (whether adapted for exploitation in any
language, for any media, or otherwise) creative advertising, and publicity
materials, such as trailers, television spots, or featurettes. Qualified motion
picture does not include motion pictures produced for private
noncommercial use, such as weddings or graduations.
(4) “Qualified production services” means any fabrication performed by
any person in any capacity (whether as an employee, agent, independent
contractor, or otherwise) on film, tape, or other audiovisual embodiment in
connection with the production of all or any part of any qualified motion
picture, including, but not limited to, photography, sound, music, special
effects, animation, adaptation (language, media, electronic, or otherwise),
technological modifications, computer graphics, dubbing, mixing, editing, or
cutting services. “Qualified production services” do not include services or
other work to manufacture release prints or to duplicate tapes for exhibition
or broadcast.
(5) “Transfer” means any change of title or possession in any manner or
form by any means whatsoever, conditional or otherwise, including, but not
limited to, any sale, assignment, exchange, lease, license, or barter.
(6) “Rights relating to any qualified motion picture” includes, but is not
limited to, any and all rights to produce or exploit all or any part of the
qualified motion picture by any means and in or through any medium.
( 7) “Exploit” or “exploitation” with respect to any qualified motion
picture includes, but is not limited to, exhibiting, broadcasting, telecasting,
displaying, projecting, transmitting, duplicating, reproducing, distributing,
promoting, advertising, commercializing, merchandising, marketing, or
otherwise using all or any part of the qualified motion picture in any or all
791
media markets and territories and by any or all means, methods, modes,
processes, and devices or delivery systems of every kind and character.
“Exploitation” includes each and every act comprising part of any phase of
the process of exploiting all or any qualified motion picture, whether before
or after commencement of principal photography.
(c) Subdivision (a) shall not apply to any of the following:
(1) Any sale or purchase of raw film or videotape stock.
(2) Any sale or purchase of release prints or tapes for exhibition or
broadcast.
(3) Any rentals or leases of videocassettes, videotapes, or videodiscs
for private use, as described in paragraph (7) of subdivision (g) of Section
6006 and paragraph (7) of subdivision (e) of Section 6010.
Leg.H. 1988 ch. 1157, effective September 21, 1988.
CHAPTER 4
EXEMPTIONS
ARTICLE 1
General Exemptions

( a ) There are exempted from the taxes imposed by this part the gross
receipts from the sale or lease of, and the storage, use, or other consumption in
this state of, master tapes or master records embodying sound, except amounts
subject to the taxes imposed by other provisions of this part paid by a customer
in connection with the customer’s production of master tapes or master records
to a recording studio for the tangible elements of such master records or master
tapes.
(b) For purposes of this section:
(1) “Master tapes or master records embodying sound” means tapes,
records, and other devices utilized by the recording industry in making
recordings embodying sound.
792
(2) “Amounts paid for the furnishing of the tangible elements” shall not
include any amounts paid for the copyrightable, artistic or intangible
elements of such master tapes or master records, whether designated as
royalties or otherwise including, but not limited to, services rendered in
producing, fabricating, processing, or imprinting tangible personal property
or any other services or production expenses in connection therewith which
may otherwise be construed as constituting “sale” under Section 6006.
(3) “Recording studio” is a place where, by means of mechanical or
electronic devices, voices, music, or other sounds are transmitted to tapes,
records, or other devices capable of reproducing sound.
Leg.H. 1975 ch. 1116, effective September 27, 1975, 1982 ch. 951.
§ 6365. Sale of Original Works of Art to Specified

Entities.
receipts from the sale of, and the storage, use or other consumption in this state
of, original works of art, which are:
(1) Purchased by this state or any city, county, city and county, or other
local governmental entity;
( 2 ) Purchased by any nonprofit organization operating any public
museum for, and pursuant to contract with, any such governmental entity;
( 3) Purchased by any nonprofit organization which has qualified for
exemption pursuant to Section 23701d for one or more museums regularly
open to the public not less than 20 hours per week for not less than 35
weeks of the calendar year and operated by the purchaser of such art or
operated by another nonprofit organization which has qualified for
exemption pursuant to Section 23701d;
( 4) Purchased for donation and actually donated by delivery by the
retailer pursuant to the instructions of the buyer to any such governmental
entity, or nonprofit organization, and evidenced by a written transfer of title
from the buyer to such governmental entity or nonprofit organization; or
( 5 ) Leased from one nonprofit organization to another nonprofit
organization for 35 years or more, if both the lessor and lessee are nonprofit
organizations as defined in either paragraph (2) or (3).
(b) The exemption provided by this section shall apply only to works of art
purchased to become part of the permanent collection of any of the following:
(1) A museum.
793
(2) A nonprofit corporation which has qualified for exemption pursuant
to Section 23701d; regularly loans not less than 85 percent of the value of
its collection of works of art to one or more museums; and is required by its
articles of incorporation to loan its works of art and is otherwise prohibited
by its articles from making any private use of its works of art; provided, that
the work of art for which the exemption is claimed pursuant to this section
shall actually be placed on display at one or more museums in California for
not less than 24 months during the three-year period commencing from the
date of purchase.
(3) Any city, county, city and county, or other local governmental entity
and this state which purchases, commissions, or leases from any such
governmental entity public art for display to the public in buildings, parks,
plazas, or other public places. These areas shall be open to the public not
less than 20 hours per week for not less than 35 weeks of the calendar year.
(c) For purposes of this section, “work of art” means a work of visual art,
including, but not limited to, a drawing, painting, mural, fresco, sculpture,
mosaic, film, or photograph, a work of calligraphy, a work of graphic art
(including, but not limited to, an etching, lithograph, offset print, silk screen, or
a work of graphic art of like nature), crafts (including, but not limited to, crafts
in clay, textile, fiber, wood, metal, plastic, glass, costume, dress, clothing,
personal adornment, and like materials), or mixed media (including, but not
limited to, a collage, assemblage, or any combination of the foregoing art
media).
(d) For purposes of this section, a “museum” shall only include:
(1) A museum which has a significant portion of its space open to the
public without charge;
(2) A museum open to the public without charge for not less than six
hours during any month the museum is open to the public; or
( 3 ) A museum which is open to a segment of the student or adult
population without charge.
(e) For the purposes of this section, “permanent collection” as it applies to
leases of original works of art, means a collection with a lease term of 35 years
or more.
( f ) Any public entity or nonprofit organization claiming an exemption
pursuant to this section shall maintain records, in such forms as prescribed by
the board, sufficient to substantiate its claim. Such records shall include, but not
be limited to, the date of purchase, the purchase price, the date the property was
first brought into this state, and the dates and locations the work of art was on
794
display at a museum.
Added Stats 1978 ch 1019 § 1, effective September 22, 1978, operative January 1,
1979. Amended Stats 1979 ch 260 § 1.5, effective July 17, 1979; Stats 1987 ch 1266 § 1,
effective September 28, 1987; Stats 2006 ch 281 § 1 (AB 2533), effective September 14,
2006, operative January 1, 2007.
§ 6366.3. Museums.
receipts from the sale of and the storage, use or other consumption in this state
of tangible personal property purchased by the state or any local government
entity as part of a public art collection which shall be considered a museum
pursuant to paragraph (4) of subdivision (d) or a nonprofit museum regularly
open to the public which is operated by or for a local or state government entity,
or operated by a nonprofit organization which has qualified for exemption
pursuant to Section 23701d, provided:
( 1 ) The property is purchased to replace property which has been
physically destroyed by fire, flood, earthquake, or other calamity;
(2) The property is purchased and used exclusively for display purposes
within such museum; and
( 3 ) The property is purchased within three years from the date the
calamity occurred.
(b) The aggregate amount of the exemption provided by this section shall not
exceed the value of the property destroyed on the date the calamity occurred.
(c) The exemption provided by this section extends only to items which
have value as museum pieces and does not extend to display cases, shelving,
lamps, lighting fixtures, or other items of tangible personal property utilized in
the operation of a museum.
(d) For purposes of this section, a “museum” shall only include:
(1) A museum which has a significant portion of its space open to the
public without charge; or
(2) A museum open to the public without charge for not less than six
hours during any month the museum is open to the public; or
( 3 ) A museum which is open to a segment of the student or adult
population without charge; or
(4) A public art collection if that art work is on display in a space
which is open to the public without charge.
Leg.H. 1978 ch. 1019, effective September 22, 1978, 1987 ch. 1266, effective
795
September 28, 1987, operative January 1, 1988.
PART 11
Bank and Corporation Tax Law

CHAPTER 13
ACCOUNTING PERIODS AND METHODS

OF ACCOUNTING
ARTICLE 3
Year of Inclusion
§ 24675. Compensatory Damages for Patent

Infringement.
If an amount representing compensatory damages is received or accrued by
a taxpayer during a taxable year as the result of an award in a civil action for
infringement of a patent issued by the United States, then the tax attributable to
the inclusion of such amount in gross income for the taxable year shall not be
greater than the aggregate of the increases in taxes which would have resulted if
such amount had been included in gross income in equal installments for each
month during which such infringement occurred.
Leg.H. 1957 ch. 166, effective April 23, 1957, 2000 ch. 862.
Rev. & Tax. Code § 24675 sets forth an alternative maximum taxation scheme. It
provides that the tax due as a result of an award in a civil action for infringement of a patent
cannot exceed the sum of the increases in taxes that would have resulted if the award was
prorated in equal installments for each month during which the infringement occurred. This
provision is often overlooked by winning plaintiffs in patent infringement actions, with the
result that taxes are overpaid. The award must be substantial, however, in order to warrant the
exercise of calculating the so-called alternative maximum tax.
796
CHAPTER 17
ALLOCATION OF INCOME
ARTICLE 2
Uniform Division of Income for Tax Purposes Act

(a) Patent and copyright royalties are allocable to this state:
(1) If and to the extent that the patent or copyright is utilized by the payor
in this state, or
(2) If and to the extent that the patent or copyright is utilized by the payor
in a state in which the taxpayer is not taxable and the taxpayer’s commercial
domicile is in this state.
( b ) A patent is utilized in a state to the extent that it is employed in
production, fabrication, manufacturing, or other processing in the state or to the
extent that a patented product is produced in the state. If the basis of receipts
from patent royalties does not permit allocation to states or if the accounting
procedures do not reflect states of utilization, the patent is utilized in the state in
which the taxpayer’s commercial domicile is located.
( c ) A copyright is utilized in a state to the extent that printing or other
publication originates in the state. If the basis of receipts from copyright
royalties does not permit allocation to states or if the accounting procedures do
not reflect states of utilization, the copyright is utilized in the state in which the
taxpayer’s commercial domicile is located.
Leg.H. 1966 ch. 2.
Rev. & Tax. Code § 25127 permits allocation of royalty income according to the extent
of use of a patent or copyright in any particular state. This provision is overlooked by many
practitioners and businesses in calculating state tax liabilities.
CALIFORNIA UNEMPLOYMENT INSURANCE
797
CODE
SYNOPSIS
Contents
DIVISION 1 UNEMPLOYMENT AND DISABILITY COMPENSATION

PART 1 Unemployment Compensation
CHAPTER 3 SCOPE OR COVERAGE
ARTICLE 1 Employment
§ 601.5. “Employment” Includes Service in Artistic or Literary Capacity.
ARTICLE 1.5 Employee
§ 621.5. “Employee” Includes Employees of Licensed Contractors.
§ 622. “Employee” Does Not Include Director of Corporation or
Association Acting in That Capacity.
ARTICLE 3 Subject Employers
§ 686. “Employer” Includes Persons Contracting for Work Made for Hire.
DIVISION 1
UNEMPLOYMENT AND DISABILITY

COMPENSATION
PART 1
Unemployment Compensation
CHAPTER 3
SCOPE OR COVERAGE
ARTICLE 1
798
Employment
§ 601.5. “Employment” Includes Service in Artistic or

Literary Capacity.
For the purpose of this division only, “employment” includes any service in
an artistic or literary capacity performed by an individual pursuant to a
collective bargaining agreement between an employer and a labor organization
in the motion picture, radio or television industry where the employer has the
right to control and direct the services to be performed and the individual is
defined as an employee under the terms of the collective bargaining agreement.
Leg.H. 1965 ch. 1786.
ARTICLE 1.5
Employee

“Employee” means all of the following:
(a) Any officer of a corporation.
(b) Any individual who, under the usual common law rules applicable
in determining the employer-employee relationship, has the status of an
employee.
(c)
( 1) Any individual, other than an individual who is an employee
under subdivision (a) or (b), who performs services for remuneration
for any employing unit if the contract of service contemplates that
substantially all of those services are to be performed personally by that
individual either:
799
( A ) As an agent-driver or commission-driver engaged in
distributing meat products, vegetable products, fruit products, bakery
products, beverages (other than milk), or laundry or drycleaning
services, for his or her principal.
(B) As a traveling or city salesperson, other than as an agent-
driver or commission-driver, engaged upon a full-time basis in the
solicitation on behalf of, and the transmission to, his or her principal
(except for sideline sales activities on behalf of some other person)
of orders from wholesalers, retailers, contractors, or operators of
hotels, restaurants, or other similar establishments for merchandise
for resale or supplies for use in their business operations.
( C ) As a home worker performing work, according to
specifications furnished by the person for whom the services are
performed, on materials or goods furnished by that person that are
required to be returned to that person or a person designated by him
or her.
(2) An individual shall not be included in the term “employee” under
the provisions of this subdivision if that individual has a substantial
investment in facilities used in connection with the performance of those
services, other than in facilities for transportation, or if the services are
in the nature of a single transaction not part of a continuing relationship
with the employing unit for whom the services are performed.
(d) Any individual who is an employee pursuant to Section 601.5 or
686.
(e) Any individual whose services are in subject employment pursuant
to an election for coverage under any provision of Article 4 (commencing
with Section 701) of this chapter.
( f) Any member of a limited liability company that is treated as a
corporation for federal income tax purposes.
Added Stats 1971 ch 1107 § 14, effective October 18, 1971. Amended Stats 1972 ch
833 § 1; Stats 1974 ch 738 § 1; Stats 1977 ch 629 § 1; Stats 1979 ch 456 § 2; Stats 1982 ch
1215 § 1, ch 1332 § 2.3; Stats 2010 ch 522 § 1 (SB 1244), effective January 1, 2011.
800
§ 621.5. “Employee” Includes Employees of Licensed
Contractors.
(a) “Employee” also means any individual who is an employee, pursuant to
Section 2750.5 of the Labor Code, of a person who holds a valid state
contractor’s license pursuant to Chapter 9 (commencing with Section 7000) of
Division 3 of the Business and Professions Code.
(b) When subdivision (a) does not apply, “employee” shall also mean any
individual who is an employee, pursuant to Section 2750.5 of the Labor Code,
of a person who is required to obtain a valid state contractor’s license pursuant
to Chapter 9 (commencing with Section 7000) of Division 3 of the Business and
Professions Code.
Leg.H. 1982 ch. 1427, 1990 ch. 719.
§ 622. “Employee” Does Not Include Director of

Corporation or Association Acting in That Capacity.
(a) “Employee” does not include a director of a corporation or association
performing services in his or her capacity as a director. This section shall not
apply to service included in “employment” pursuant to Sections 605, 608, 709,
and 710.
(b) “Services in his or her capacity as a director” includes either:
( 1 ) Presence at meetings of the board of directors, even though no
further service is performed at the meeting.
(2) Services customarily performed by directors in attending meetings
of the board of directors such as prescribing, regulating, and guiding the
policies and administration of the corporation or association.
(c) “Services in his or her capacity as a director” does not include services
performed by a director in addition to, or other than those described in
subdivision (b) of this section. For example, services performed as an officer of
the corporation or association, or as a member of a committee which executes
the policies and administrative decisions adopted by the board of directors such
as advisory, appraisal, auditing, credit, examining, executive, loan or similar
committees are not “services in his or her capacity as a director”.
Leg.H. 1971 ch. 1107, effective October 18, 1971, 1978 ch. 2, operative January 1,
1978, effective January 30, 1978.
See Consultant’s Comments to Unemp. Ins. Code § 621.
801
“Employee” does not include any member of a limited liability company that is
treated as a partnership for federal income tax purposes.
Added Stats 2010 ch. 522 § 2 (SB 1244), effective January 1, 2011.
ARTICLE 3
Subject Employers
§ 686. “Employer” Includes Persons Contracting for

Work Made for Hire.
“Employer” also means any person contracting for the creation of a
specially ordered or commissioned work of authorship when the parties
expressly agree in a written instrument signed by them that the work shall be
considered a work made for hire, as defined in Section 101 of Title 17 of the
United States Code, and the ordering or commissioning party obtains ownership
of all of the rights comprised in the copyright in the work. The ordering or
commissioning party shall be the employer of the author of the work for the
purposes of this part.
Leg.H. 1982 ch. 1332.
Footnotes:
* Stats 2013 ch 353 (SB 820) § 45 enacts the statutory changes necessary to reflect the
changes made by 2012 Governor’s Reorganization Plan No. 2 § 41.
802
CONSTITUTIONAL PROVISIONS AND FEDERAL
STATUTES
GENERAL SYNOPSIS
TITLE 7
AGRICULTURE
TITLE 10
ARMED FORCES
TITLE 11
BANKRUPTCY
TITLE 15
COMMERCE AND TRADE
TITLE 17
COPYRIGHTS
TITLE 18
CRIMES AND CRIMINAL PROCEDURE
TITLE 19
CUSTOMS DUTIES
TITLE 20
EDUCATION
TITLE 21
FOOD AND DRUGS
803
TITLE 22
FOREIGN RELATIONS AND
INTERCOURSE
TITLE 25
INDIANS
TITLE 26
INTERNAL REVENUE CODE
TITLE 28
JUDICIARY AND JUDICIAL PROCEDURE
TITLE 30
MINERAL LANDS AND MINING
TITLE 35
PATENTS
TITLE 42
THE PUBLIC HEALTH AND WELFARE
UNITED STATES CODE
TABLE OF 2013 AMENDMENTS
(Public Laws 112-208 through 113-74, with a gap of 113-
66 and 113-73, approved 01/16 /2014)
Section Effect P.L.
Title 15
2218 Amended 112-239
Title 18
2314 Amended 112-239
Title 21
355 Amended 113-5
804
355-1 Amended 113-5
355a Amended 113-5

Title 26
45c Amended 112-240
Title 35
5 Amended 112-274
27 Amended 112-211
41 Amended 112-211
42 Amended 112-274
100 Prospective 112-211
Amendment
Amendment
111 Amended 112-211
Amendment
115 Amended 112-274
Amendment
119 Amended 112-211
120 Amended 112-211
Amendment
122 Amended 112-211
123 Amended 112-274
133 Amended 112-211
135 Amended 112-274
151 Amended 112-211
154 Amended 112-274
Amendment
171 Amended 112-211
261 Amended 112-211
299 Amended 112-274
311 Amended 112-274
361 Amended 112-211
364 Amended 112-211
365 Amended 112-211
Amendment
371 Amended 112-211
373 Repealed 112-274
805
NOTE: Below list the added Title 35 Sections
under PART V THE HAGUE AGREEMENT
CONCERNING INTERNATIONAL
REGISTRATION OF INDUSTRIAL DESIGNS
in CHAPTER 38 INTERNATIONAL DESIGN
APPLICATIONS.
These Sections take effect on the later of Dec. 18,

2013, or the date of entry into force of the
Geneva Act of the Hague Agreement Concerning
the International Registration of Industrial
Designs with respect to the United States,
pursuant to § 103 of Act Dec. 18, 2012, P.L. 112-
211, which appears as 35 USCS § 100 note:
381 Added 112-211

382 Added 112-211
383 Added 112-211
384 Added 112-211
385 Added 112-211
386 Added 112-211
387 Added 112-211
388 Added 112-211
389 Added 112-211
390 Added 112-211

Contents
ARTICLE I § 8
Clause 8. Federal Power to Issue Patents and Copyrights.
AMENDMENTS
ARTICLE I § 8
The Congress shall have Power
806
To regulate Commerce with foreign Nations, and among the several States,
and with the Indian Tribes;
Clause 8. Federal Power to Issue Patents and

Copyrights.
To promote the Progress of Science and useful Arts, by securing for limited
Times to Authors and Inventors the exclusive Right to their respective Writings
and Discoveries;
AMENDMENTS

Congress shall make no law respecting an establishment of religion, or
prohibiting the free exercise thereof; or abridging the freedom of speech, or of
the press; or the right of the people peaceably to assemble, and to petition the
Government for a redress of grievances.
UNITED STATES CODE

TITLE 5
GOVERNMENT ORGANIZATION AND
EMPLOYEES
Contents
PART 1 The Agencies Generally

CHAPTER 5 ADMINISTRATIVE PROCEDURE
PART 1
The Agencies Generally

CHAPTER 5
807
ADMINISTRATIVE PROCEDURE
SUBCHAPTER I
General Provisions

(a) For the purpose of this section—
(1) “agency” has the meaning given it by section 551 of this title; and
(2) “State” means a State, a territory or possession of the United States
including a Commonwealth, or the District of Columbia.
(b) An individual who is a member in good standing of the bar of the highest
court of a State may represent a person before an agency on filing with the
agency a written declaration that he is currently qualified as provided by this
subsection and is authorized to represent the particular person in whose behalf
he acts.
(c) An individual who is duly qualified to practice as a certified public
accountant in a State may represent a person before the Internal Revenue
Service of the Treasury Department on filing with that agency a written
declaration that he is currently qualified as provided by this subsection and is
authorized to represent the particular person in whose behalf he acts.
(d) This section does not—
(1) grant or deny to an individual who is not qualified as provided by
subsection (b) or (c) of this section the right to appear for or represent a
person before an agency or in an agency proceeding;
(2) authorize or limit the discipline, including disbarment, of individuals
who appear in a representative capacity before an agency;
(3) authorize an individual who is a former employee of an agency to
represent a person before an agency when the representation is prohibited
by statute or regulation; or
(4) prevent an agency from requiring a power of attorney as a condition
to the settlement of a controversy involving the payment of money.
808
(e) Subsections (b)–(d) of this section do not apply to practice before the
United States Patent and Trademark Office with respect to patent matters that
continue to be covered by chapter 3 (sections 31–33) of title 35.
(f) When a participant in a matter before an agency is represented by an
individual qualified under subsection (b) or (c) of this section, a notice or other
written communication required or permitted to be given the participant in the
matter shall be given to the representative in addition to any other service
specifically required by statute. When a participant is represented by more than
one such qualified representative, service on any one of the representatives is
sufficient.
Leg.H. Added Sept. 11, 1967, P.L. 90-83, § 1(1)(A), 81 Stat. 195; Nov. 29, 1999, P.L.
106-113, Div B, § 1000(a)(9), 113 Stat. 1536.

An individual, firm, or corporation practicing before an agency of the
United States may not use the name of a Member of either House of Congress or
of an individual in the service of the United States in advertising the business.
Leg.H. September 6, 1966, P.L. 89-554 § 1, 80 Stat. 381.
TITLE 7
AGRICULTURE
Contents
CHAPTER 6 INSECTICIDES AND ENVIRONMENTAL PESTICIDE CONTROL

SUBCHAPTER II Environmental Pesticide Control
§ 136h. Protection of Trade Secrets and Other Information.
CHAPTER 57 PLANT VARIETY PROTECTION
SUBCHAPTER I Plant Variety Protection Office
PART A Organization and Publications
§ 2322. Seal.
§ 2324. Restrictions on Employees as to Interest in Plant Variety Protection.
§ 2328. Library.
PART B Legal Provisions as to the Plant Variety Protection Office
809
§ 2351. Day for Taking Action Falling on Saturday, Sunday, or Holiday.
§ 2353. Testimony in Plant Variety Protection Office Cases.
PART C Plant Variety Protection Fees
§ 2372. Payment of Plant Variety Protection Fees; Return of Excess Amounts.
SUBCHAPTER II Protectability of Plant Varieties and Certificates of Protection
PART D Protectability of Plant Varieties
§ 2402. Right to Plant Variety Protection; Plant Varieties Protectable.
PART E Applications; Form; Who May File; Relating Back; Confidentiality
§ 2421. Application for Recognition of Plant Variety Rights.
PART F Examination; Response Time; Initial Appeals
PART G Appeals to Courts and Other Review
§ 2461. Appeals.
PART H Certificates of Plant Variety Protection
§ 2484. Correction of Plant Variety Protection Office Mistake.
PART I Reexamination After Issue, and Contested Proceedings
SUBCHAPTER III Plant Variety Protection and Rights
PART J Ownership and Assignment
810
PART K Infringement of Plant Variety Protection
PART L Remedies for Infringement of Plant Variety Protection, and Other Actions
§ 2561. Remedy for Infringement of Plant Variety Protection.
§ 2564. Damages.
§ 2570. Liability of States, Instrumentalities of States, and State Officials for
Infringement of Plant Variety Protection.
PART M Intent and Severability
§ 2581. Intent.
CHAPTER 6
INSECTICIDES AND ENVIRONMENTAL

PESTICIDE CONTROL
SUBCHAPTER II
Environmental Pesticide Control
§ 136h. Protection of Trade Secrets and Other

Information.
(a) In General. In submitting data required by this subchapter, the applicant
may (1) clearly mark any portions thereof which in the applicant’s opinion are
trade secrets or commercial or financial information and (2) submit such marked
material separately from other material required to be submitted under this
811
subchapter.
(b) Disclosure. Notwithstanding any other provision of this subchapter and
subject to the limitations in subsections (d) and (e) of this section, the
Administrator shall not make public information which in the Administrator’s
judgment contains or relates to trade secrets or commercial or financial
information obtained from a person and privileged or confidential, except that,
when necessary to carry out the provisions of this subchapter, information
relating to formulas of products acquired by authorization of this subchapter may
be revealed to any Federal agency consulted and may be revealed at a public
hearing or in findings of fact issued by the Administrator.
(c) Disputes. If the Administrator proposes to release for inspection
information which the applicant or registrant believes to be protected from
disclosure under subsection (b) of this section, the Administrator shall notify the
applicant or registrant, in writing, by certified mail. The Administrator shall not
thereafter make available for inspection such data until thirty days after receipt
of the notice by the applicant or registrant. During this period, the applicant or
registrant may institute an action in an appropriate district court for a
declaratory judgment as to whether such information is subject to protection
under subsection (b) of this section.
(d) Limitations.
(1) All information concerning the objectives, methodology, results, or
significance of any test or experiment performed on or with a registered or
previously registered pesticide or its separate ingredients, impurities, or
degradation products, and any information concerning the effects of such
pesticide on any organism or the behavior of such pesticide in the
environment, including, but not limited to, data on safety to fish and wildlife,
humans and other mammals, plants, animals, and soil, and studies on
persistence, translocation and fate in the environment, and metabolism, shall
be available for disclosure to the public. The use of such data for any
registration purpose shall be governed by section 136a of this title. This
paragraph does not authorize the disclosure of any information that—
(A) discloses manufacturing or quality control processes,
(B) discloses the details of any methods for testing, detecting, or
measuring the quantity of any deliberately added inert ingredient of a
pesticide, or
(C) discloses the identity or percentage quantity of any deliberately
added inert ingredient of a pesticide, unless the Administrator has first
determined that disclosure is necessary to protect against an
unreasonable risk of injury to health or the environment.
812
(2) Information concerning production, distribution, sale, or inventories
of a pesticide that is otherwise entitled to confidential treatment under
subsection (b) of this section may be publicly disclosed in connection with a
public proceeding to determine whether a pesticide, or any ingredient of a
pesticide, causes unreasonable adverse effects on health or the environment,
if the Administrator determines that such disclosure is necessary in the
public interest.
(3) If the Administrator proposes to disclose information described in
clause (A), (B), or (C) of paragraph (1) or in paragraph (2) of this
subsection, the Administrator shall notify by certified mail the submitter of
such information of the intent to release such information. The Administrator
may not release such information, without the submitter’s consent, until
thirty days after the submitter has been furnished such notice. Where the
Administrator finds that disclosure of information described in clause (A),
(B), or (C) of paragraph (1) of this subsection is necessary to avoid or
lessen an imminent and substantial risk of injury to the public health, the
Administrator may set such shorter period of notice (but not less than ten
days) and such method of notice as the Administrator finds appropriate.
During such period the data submitter may institute an action in an
appropriate district court to enjoin or limit the proposed disclosure. The
court may enjoin disclosure, or limit the disclosure or the parties to whom
disclosure shall be made, to the extent that—
(A) in the case of information described in clause (A), (B), or (C) of
paragraph (1) of this subsection, the proposed disclosure is not required
to protect against an unreasonable risk of injury to health or the
environment; or
(B) in the case of information described in paragraph (2) of this
subsection, the public interest in availability of the information in the
public proceeding does not outweigh the interests in preserving the
confidentiality of the information.
(e) Disclosure to Contractors. Information otherwise protected from
disclosure to the public under subsection (b) of this section may be disclosed to
contractors with the United States and employees of such contractors if, in the
opinion of the Administrator, such disclosure is necessary for the satisfactory
performance by the contractor of a contract with the United States for the
performance of work in connection with this subchapter and under such
conditions as the Administrator may specify. The Administrator shall require as
a condition to the disclosure of information under this subsection that the person
receiving it take such security precautions respecting the information as the
Administrator shall by regulation prescribe.
813
(f) Penalty for Disclosure by Federal Employees.
(1) Any officer or employee of the United States or former officer or
employee of the United States who, by virtue of such employment or official
position, has obtained possession of, or has access to, material the
disclosure of which is prohibited by subsection (b) of this section, and who,
knowing that disclosure of such material is prohibited by such subsection,
willfully discloses the material in any manner to any person not entitled to
receive it, shall be fined not more than $10,000 or imprisoned for not more
than one year, or both. Section 1905 of title 18 of the United States Code
shall not apply with respect to the publishing, divulging, disclosure, or
making known of, or making available, information reported or otherwise
obtained under this subchapter. Nothing in this subchapter shall preempt any
civil remedy under State or Federal law for wrongful disclosure of trade
secrets.
( 2) For the purposes of this section, any contractor with the United
States who is furnished information as authorized by subsection (e) of this
section, or any employee of any such contractor, shall be considered to be
an employee of the United States.
(g) Disclosure to Foreign and Multinational Pesticide Producers.
( 1 ) The Administrator shall not knowingly disclose information
submitted by an applicant or registrant under this subchapter to any
employee or agent of any business or other entity engaged in the production,
sale, or distribution of pesticides in countries other than the United States or
in addition to the United States or to any other person who intends to deliver
such data to such foreign or multinational business or entity unless the
applicant or registrant has consented to such disclosure. The Administrator
shall require an affirmation from any person who intends to inspect data that
such person does not seek access to the data for purposes of delivering it or
offering it for sale to any such business or entity or its agents or employees
and will not purposefully deliver or negligently cause the data to be
delivered to such business or entity or its agents or employees.
Notwithstanding any other provision of this subsection, the Administrator
may disclose information to any person in connection with a public
proceeding under law or regulation, subject to restrictions on the
availability of information contained elsewhere in this subchapter, which
information is relevant to a determination by the Administrator with respect
to whether a pesticide, or any ingredient of a pesticide, causes unreasonable
adverse effects on health or the environment.
(2) The Administrator shall maintain records of the names of persons to
whom data are disclosed under this subsection and the persons or
814
organizations they represent and shall inform the applicant or registrant of
the names and affiliations of such persons.
(3) Section 1001 of title 18 of the United States Code shall apply to any
affirmation made under paragraph (1) of this subsection.
Leg.H. June 25, 1947, ch. 125 § 10, as added October 21, 1972, P.L. 92-516 § 2, 86
Stat. 989; September 30, 1978, P.L. 95-396 § 15, 92 Stat. 829-32; November 8, 1984, P.L.
98-620 § 402(4)(B), 98 Stat. 3357; October 25, 1988, P.L. 100-532 § 801(f), 102 Stat.
2682; December 13, 1991, P.L. 102-237 § 1006(b)(1), (2), (3)(J), 105 Stat. 1895, 1896.
CHAPTER 57
PLANT VARIETY PROTECTION

SUBCHAPTER I
Plant Variety Protection Office

PART A
Organization and Publications
There is hereby established in the Department of Agriculture an office to be
known as the Plant Variety Protection Office, which shall have the functions set
forth in this Act.
Leg.H. December 24, 1970, P.L. 91-577 § 1, 84 Stat. 1542; December 22, 1980, P.L.
96-574 § 1, 94 Stat. 3350.
§ 2322. Seal.
The Plant Variety Protection Office shall have a seal with which documents
and certificates evidencing plant variety protection shall be authenticated.
Leg.H. December 24, 1970, P.L. 91-577 § 2, 84 Stat. 1542.
815
The organization of the Plant Variety Protection Office shall, except as
provided herein, be determined by the Secretary of Agriculture (hereinafter
called the Secretary). The office shall devote itself substantially exclusively to
the administration of this Act.
§ 2324. Restrictions on Employees as to Interest in

Plant Variety Protection.
Employees of the Plant Variety Protection Office shall be ineligible during
the periods of their employment, to apply for plant variety protection and to
acquire directly or indirectly, except by inheritance or bequest, any right or
interest in any matters before that office. This section shall not apply to
members of the Plant Variety Protection Board who are not otherwise
employees of the Plant Variety Protection Office.
The Secretary may establish regulations, not inconsistent with law, for the
conduct of proceedings in the Plant Variety Protection Office after consultations
with the Plant Variety Protection Board.

(a) Appointment. The Secretary shall appoint a Plant Variety Protection
Board. The Board shall consist of individuals who are experts in various areas
of varietal development covered by this Act. Membership of the Board shall
include farmer representation and shall be drawn approximately equally from
the private or seed industry sector and from the sector of government or the
public. The Secretary or the designee of the Secretary shall act as chairperson
of the Board without voting rights except in the case of ties.
(b) Functions of Board. The functions of the Plant Variety Protection Board
shall include:
( 1 ) Advising the Secretary concerning the adoption of Rules and
Regulations to facilitate the proper administration of this Act;
(2) Making advisory decisions on all appeals from the examiner. The
Board shall determine whether to act as a full Board or by panels it selects;
and whether to review advisory decisions made by a panel. For service on
816
such appeals, the Board may select, as temporary members, experts in the
area to which the particular appeal relates; and
(3) Advising the Secretary on all questions under section 44.
(c) Compensation of Board. The members of the Plant Variety Protection
Board shall serve without compensation except for standard government
reimbursable expenses.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title I, ch 1, § 7, 84 Stat. 1543; Oct. 6, 1994, P.L.
103-349, § 13(a), 108 Stat. 3142.
§ 2328. Library.
The Secretary shall maintain a library of scientific and other works and
periodicals, both foreign and domestic, in the Plant Variety Protection Office to
aid the examiners in the discharge of their duties.
96-574 § 3, 94 Stat. 3350.

The Secretary shall maintain a register of descriptions of United States
protected plant varieties.
96-574 § 4, 94 Stat. 3350.
(a) The Secretary may publish, or cause to be published, in such format as
the Secretary shall determine to be suitable, the following:
(1) The descriptions of plant varieties protected including drawings and
photographs.
(2) The Official Journal of the Plant Variety Protection Office, including
annual indices.
(3) Pamphlet copies of the plant variety protection laws and rules of
practice and circulars or other publications relating to the business of the
Office.
(b) The Secretary may (1) establish public facilities for the searching of
plant variety protection records and materials, and (2) from time to time, as
through an information service, disseminate to the public those portions of the
technological and other public information available to or within the Plant
Variety Protection Office to encourage innovation and promote the progress of
817
plant breeding.
( c ) The Secretary may exchange any of the publications specified for
publications desirable for the use of the Plant Variety Protection Office. The
Secretary may exchange copies of descriptions, drawings, and photographs of
United States protected plant varieties for copies of drawings, and photographs
of applications and protected plant varieties of foreign countries.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title I, ch 1, § 10, 84 Stat. 1543; Dec. 22, 1980,
P.L. 96-574, Title §§ 5–8, 94 Stat. 3350; Oct. 6, 1994, P.L. 103-349, § 13(b), 108 Stat.
3142.

The Secretary may supply printed copies of descriptions, drawings, and
photographs of protected plant varieties to public libraries in the United States
which shall maintain such copies for the use of the public.
96-574 § 9, 94 Stat. 3350.
PART B
Legal Provisions as to the Plant Variety Protection

Office
§ 2351. Day for Taking Action Falling on Saturday,

Sunday, or Holiday.
When the day, or the last day, for taking any action or paying any fee in the
United States Plant Variety Protection Office falls on Saturday, Sunday, a
holiday within the District of Columbia, or on any other day the Plant Variety
Protection Office is closed for the receipt of papers, the action may be taken or
the fee paid, on the next succeeding business day.

The Secretary may by regulations prescribe the form of papers to be filed in
the Plant Variety Protection Office.
818
§ 2353. Testimony in Plant Variety Protection Office
Cases.
The Secretary may establish regulations for taking affidavits, depositions,
and other evidence required in cases before the Plant Variety Protection Office.
Any officer authorized by law to take depositions to be used in the courts of the
United States, or of the State where the officer resides, may take such affidavits
and depositions, and swear the witnesses. If any person acts as a hearing officer
by authority of the Secretary, the person shall have like power.
103-349, § 13(c), 108 Stat. 3143.

(a) The clerk of any United States court for the district wherein testimony is
to be taken in accordance with regulations established by the Secretary for use
in any contested case in the Plant Variety Protection Office shall, upon the
application of any party thereof, issue a subpoena for any witness residing or
being within such district or within one hundred miles of the stated place in such
district, commanding the witness to appear and testify before an officer in such
district authorized to take depositions and affidavits, at the time and place stated
in the subpoena. The provisions of the Federal Rules of Civil Procedure relating
to the attendance of witnesses and the production of documents and things shall
apply to contested cases in the Plant Variety Protection Office insofar as
consistent with such regulations.
(b) Every witness subpoenaed or testifying shall be allowed the fees and
traveling expenses allowed to witnesses attending the United States district
courts.
( c ) A judge of a court whose clerk issued a subpoena may enforce
obedience to the process or punish disobedience as in other like cases, on proof
that a witness, served with such subpoena, neglected or refused to appear or to
testify. No witness shall be deemed guilty of contempt for disobeying such
subpoena unless the fees and traveling expenses of the witness in going to, and
returning from, one day’s attendance at the place of examination, are paid or
tendered the witness at the time of the service of the subpoena; nor for refusing
to disclose any secret matter except upon appropriate order of the court which
issued the subpoena or of the Secretary.
103-349, § 13(d), 108 Stat. 3143.
819
Any document to be filed in the Plant Variety Protection Office and which is
required by any law or regulation to be executed in a specified manner may be
provisionally accepted by the Secretary despite a defective execution, provided
a properly executed document is submitted within such time as may be
prescribed.

The Secretary shall prescribe regulations governing the admission to
practice and conduct of persons representing applicants or other parties before
the Plant Variety Protection Office. The Secretary may, after notice and
opportunity for a hearing, suspend or exclude, either generally or in any
particular case, from further practice before the Office of Plant Variety
Protection any person shown to be incompetent or disreputable or guilty of
gross misconduct.

Anyone who in the United States engages in direct or indirect practice
before the Office of Plant Variety Protection while suspended or excluded under
section 26, or without being admitted to practice before the Office, shall be
liable in a civil action for the return of all money received, and for
compensation for damage done by such person and also may be enjoined from
such practice. However, there shall be no liability for damage if such person
establishes that the work was done competently and without negligence. This
section does not apply to anyone who, without a claim of self-sufficiency, works
under the supervision of another who stands admitted and is the responsible
party; nor to anyone who establishes that the person acted only on behalf of any
employer by whom the person was regularly employed.
103-349, § 13(e), 108 Stat. 3143.
PART C
Plant Variety Protection Fees

(a) In General. The Secretary shall, under such regulations as the Secretary
820
may prescribe, charge and collect reasonable fees for services performed under
this chapter.
(b) Late Payment Penalty. On failure to pay such fees, the Secretary shall
assess a late payment penalty. Such overdue fees shall accrue interest as
required by section 3717 of title 31, United States Code.
(c) Disposition of Funds. Such fees, late payment penalties, and accrued
interest collected shall be credited to the account that incurs the cost and shall
remain available without fiscal year limitation to pay the expenses incurred by
the Secretary in carrying out this chapter. Such funds collected (including late
payment penalties and any interest earned) may be invested by the Secretary in
insured or fully collateralized, interest-bearing accounts or, at the discretion of
the Secretary, by the Secretary of the Treasury in United States Government debt
instruments.
(d) Actions for Nonpayment. The Attorney General may bring an action for
the recovery of charges that have not been paid in accordance with this chapter
against any person obligated for payment of such charges under this chapter in
any United States district court or other United States court for any territory or
possession in any jurisdiction in which the person is found, resides, or transacts
business. The court shall have jurisdiction to hear and decide the action.
(e) Authorization of Appropriations. There are authorized to be
appropriated such sums as are necessary to carry out this chapter.
96-574 § 10, 94 Stat. 3350; December 22, 1987, P.L. 100-203 § 1505, 101 Stat. 1330-28.
§ 2372. Payment of Plant Variety Protection Fees;

Return of Excess Amounts.
All fees shall be paid to the Secretary, and the Secretary may refund any
sum paid by mistake or in excess of the fee required.
SUBCHAPTER II
Protectability of Plant Varieties and Certificates of

Protection
PART D
821
Protectability of Plant Varieties

(a) Definitions. As used in this Act:
(1) Basic Seed. The term “basic seed” means the seed planted to
produce certified or commercial seed.
(2) Breeder. The term “breeder” means the person who directs the
final breeding creating a variety or who discovers and develops a variety. If
the actions are conducted by an agent on behalf of a principal, the principal,
rather than the agent, shall be considered the breeder. The term does not
include a person who redevelops or rediscovers a variety the existence of
which is publicly known or a matter of common knowledge.
(3) Essentially Derived Variety.
(A) In General. The term “essentially derived variety” means a
variety that—
(i) is predominantly derived from another variety (referred to in
this paragraph as the “initial variety”) or from a variety that is
predominantly derived from the initial variety, while retaining the
expression of the essential characteristics that result from the
genotype or combination of genotypes of the initial variety;
(ii) is clearly distinguishable from the initial variety; and
(iii) except for differences that result from the act of derivation,
conforms to the initial variety in the expression of the essential
characteristics that result from the genotype or combination of
genotypes of the initial variety.
(B) Methods. An essentially derived variety may be obtained by
the selection of a natural or induced mutant or of a somaclonal variant,
the selection of a variant individual from plants of the initial variety,
backcrossing, transformation by genetic engineering, or other method.
(4) Kind. The term “kind” means one or more related species or
subspecies singly or collectively known by one common name, such as
soybean, flax, or radish.
(5) Seed. The term “seed”, with respect to a tuber propagated variety,
means the tuber or the part of the tuber used for propagation.
822
(6) Sexually Reproduced. The term “sexually reproduced” includes
any production of a variety by seed, but does not include the production of a
variety by tuber propagation.
(7) Tuber Propagated. The term “tuber propagated” means propagated
by a tuber or a part of a tuber.
(8) United States. The terms “United States” and “this country” mean
the United States, the territories and possessions of the United States, and
the Commonwealth of Puerto Rico.
(9) Variety. The term “variety” means a plant grouping within a single
botanical taxon of the lowest known rank, that, without regard to whether the
conditions for plant variety protection are fully met, can be defined by the
expression of the characteristics resulting from a given genotype or
combination of genotypes, distinguished from any other plant grouping by
the expression of at least one characteristic and considered as a unit with
regard to the suitability of the plant grouping for being propagated
unchanged. A variety may be represented by seed, transplants, plants,
tubers, tissue culture plantlets, and other matter.
(b) Rules of Construction. For the purposes of this Act:
(1) Sale or Disposition for Nonreproductive Purposes. The sale or
disposition, for other than reproductive purposes, of harvested material
produced as a result of experimentation or testing of a variety to ascertain
the characteristics of the variety, or as a by-product of increasing a variety,
shall not be considered to be a sale or disposition for purposes of
exploitation of the variety.
(2) Sale or Disposition for Reproductive Purposes. The sale or
disposition of a variety for reproductive purposes shall not be considered to
be a sale or disposition for the purposes of exploitation of the variety if the
sale or disposition is done as an integral part of a program of
experimentation or testing to ascertain the characteristics of the variety, or
to increase the variety on behalf of the breeder or the successor in interest of
the breeder.
(3) Sale or Disposition of Hybrid Seed. The sale or disposition of
hybrid seed shall be considered to be a sale or disposition of harvested
material of the varieties from which the seed was produced.
(4) Application for Protection or Entering into a Register of Varieties.
The filing of an application for the protection or for the entering of a variety
in an official register of varieties, in any country, shall be considered to
render the variety a matter of common knowledge from the date of the
823
application, if the application leads to the granting of protection or to the
entering of the variety in the official register of varieties, as the case may
be.
(5) Distinctness. The distinctness of one variety from another may be
based on one or more identifiable morphological, physiological, or other
characteristics (including any characteristics evidenced by processing or
product characteristics, such as milling and baking characteristics in the
case of wheat) with respect to which a difference in genealogy may
contribute evidence.
(6) Publicly Known Varieties.
(A) In General. A variety that is adequately described by a
publication reasonably considered to be a part of the public technical
knowledge in the United States shall be considered to be publicly known
and a matter of common knowledge.
(B) Description. A description that meets the requirements of
subparagraph (A) shall include a disclosure of the principal
characteristics by which a variety is distinguished.
(C) Other Means. A variety may become publicly known and a
matter of common knowledge by other means.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title II, ch 4, § 41, 84 Stat. 1546; Oct. 6, 1994, P.L.
103-349, § 2, 108 Stat. 3136.
§ 2402. Right to Plant Variety Protection; Plant

Varieties Protectable.
(a) In General. The breeder of any sexually reproduced or tuber
propagated plant variety (other than fungi or bacteria) who has so reproduced
the variety, or the successor in interest of the breeder, shall be entitled to plant
variety protection for the variety, subject to the conditions and requirements of
this Act, if the variety is—
(1) new, in the sense that, on the date of filing of the application for
plant variety protection, propagating or harvested material of the variety has
not been sold or otherwise disposed of to other persons, by or with the
consent of the breeder, or the successor in interest of the breeder, for
purposes of exploitation of the variety—
(A) in the United States, more than 1 year prior to the date of filing;
or
(B) in any area outside of the United States—
824
(i) more than 4 years prior to the date of filing, except that in the
case of a tuber propagated plant variety the Secretary may waive the
4-year limitation for a period ending 1 year after the date of
enactment of the Federal Agriculture Improvement and Reform Act
of 1996; or
(ii) in the case of a tree or vine, more than 6 years prior to the
date of filing;
(2) distinct, in the sense that the variety is clearly distinguishable from
any other variety the existence of which is publicly known or a matter of
common knowledge at the time of the filing of the application;
( 3 ) uniform, in the sense that any variations are describable,
predictable, and commercially acceptable; and
(4) stable, in the sense that the variety, when reproduced, will remain
unchanged with regard to the essential and distinctive characteristics of the
variety with a reasonable degree of reliability commensurate with that of
varieties of the same category in which the same breeding method is
employed.
(b) Multiple Applicants.
(1) In General. If 2 or more applicants submit applications on the same
effective filing date for varieties that cannot be clearly distinguished from
one another, but that fulfill all other requirements of subsection (a), the
applicant who first complies with all requirements of this Act shall be
entitled to a certificate of plant variety protection, to the exclusion of any
other applicant.
(2) Requirements completed on same date.
(A) In General. Except as provided in subparagraph (B), if 2 or
more applicants comply with all requirements for protection on the same
date, a certificate shall be issued for each variety.
(B) Varieties Indistinguishable. If the varieties that are the subject
of the applications cannot be distinguished in any manner, a single
certificate shall be issued jointly to the applicants.
Leg.H. December 24, 1970, P.L. 91-577 § 42, 84 Stat. 1547; October 6, 1994, P.L.
103-349 § 3, 108 Stat. 3138, effective April 4, 1995; April 4, 1996, P.L. 104-127 § 913(a),
110 Stat. 1186.

Protection under the Act may, by regulation, be limited to nationals of the
825
United States, except where this limitation would violate a treaty and except that
nationals of a foreign state in which they are domiciled shall be entitled to so
much of the protection here afforded as is afforded by said foreign state to
nationals of the United States for the same genus and species.

The Secretary may declare a protected variety open to use on a basis of
equitable remuneration to the owner, not less than a reasonable royalty, when
the Secretary determines that such declaration is necessary in order to insure an
adequate supply of fiber, food, or feed in this country and that the owner is
unwilling or unable to supply the public needs for the variety at a price which
may reasonably be deemed fair. Such declaration may be, with or without
limitation, with or without designation of what the remuneration is to be; and
shall be subject to review as under section 71 or 72 (any finding that the price is
not reasonable being reviewable), and shall remain in effect not more than two
years. In the event litigation is required to collect such remuneration, a higher
rate may be allowed by the court.
103-349, § 13(f), 108 Stat. 3143.
PART E
Applications; Form; Who May File; Relating Back;

Confidentiality
§ 2421. Application for Recognition of Plant Variety

Rights.
(a) An application for a certificate of plant variety protection may be filed
by the owner of the variety sought to be protected. The application shall be
made in writing to the Secretary, shall be signed by or on behalf of the
applicant, and shall be accompanied by the prescribed fee.
(b) An error as to the naming of the breeder, without deceptive intent, may
be corrected at any time, in accordance with regulations established by the
Secretary.
826
An application for a certificate recognizing plant variety rights shall
contain:
(1) The name of the variety except that a temporary designation will
suffice until the certificate is to be issued. The variety shall be named in
accordance with regulations issued by the Secretary.
( 2 ) A description of the variety setting forth its distinctiveness,
uniformity, and stability and a description of the genealogy and breeding
procedure, when known. The Secretary may require amplification,
including the submission of adequate photographs or drawings or plant
specimens, if the description is not adequate or as complete as is
reasonably possible, and submission of records or proof of ownership
or of allegations made in the application. An applicant may add to or
correct the description at any time, before the certificate is issued, upon
a showing acceptable to the Secretary that the revised description is
retroactively accurate. Courts shall protect others from any injustice
which would result. The Secretary may accept records of the breeder
and of any official seed certifying agency in this country as evidence of
stability where applicable.
(3) A statement of the basis of the claim of the applicant that the
variety is new.
(4) A declaration that a viable sample of basic seed (including any
propagating material) necessary for propagation of the variety will be
deposited and replenished periodically in a public repository in
accordance with regulations to be established hereunder.
(5) A statement of the basis of applicant’s ownership.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title II, ch 5, § 52, 84 Stat. 1548; Dec. 22, 1980,
P.L. 96-574, § 11, 94 Stat. 3350; Oct. 6, 1994, P.L. 103-349, § 4, 108 Stat. 3139.

( a ) When two or more persons are the breeders, one person (or the
successor of the person) may apply, naming the others.
(b) The Secretary, after such notice as the Secretary may prescribe, may
issue a certificate of plant variety protection to the applicant and such of the
other breeders (or their successors in interest) as may have subsequently joined
in the application.
103-349, § 13(g), 108 Stat. 3143.
827
Legal representatives of deceased breeders and of those under legal
incapacity may make application for plant variety protection upon compliance
with the requirements and on the same terms and conditions applicable to the
breeder or the successor in interest of the breeder.
103-349, § 13(h), 108 Stat. 3143.

(a)
(1) An application for a certificate of plant variety protection filed in
this country based on the same variety, and on rights derived from the same
breeder, on which there has previously been filed an application for plant
variety protection in a foreign country which affords similar privileges in
the case of applications filed in the United States by nationals of the United
States, shall have the same effect as the same application would have if
filed in the United States on the date on which the application for plant
variety protection for the same variety was first filed in such foreign
country, if the application in this country is filed within twelve months from
the earliest date on which such foreign application was filed, not including
the date on which the application is filed in the foreign country.
( 2) No application shall be entitled to a right of priority under this
section, unless the applicant designates the foreign application in the
application filed in the United States or by amendment thereto and, if
required by the Secretary, furnishes such copy, translation or both, as the
Secretary may specify.
(3)
(A) An applicant entitled to a right of priority under this subsection
shall be allowed to furnish any necessary information, document, or
material required for the purpose of the examination of the application
during—
(i) the 2-year period beginning on the date of the expiration of
the period of priority; or
( i i ) if the first application is rejected or withdrawn, an
appropriate period after the rejection or withdrawal, to be
determined by the Secretary.
(B) An event occurring within the period of priority (such as the
828
filing of another application or use of the variety that is the subject of the
first application) shall not constitute a ground for rejecting the
application or give rise to any third party right.
(b) An application for a certificate of plant variety protection for the same
variety as was the subject of an application previously filed in the United States
by or on behalf of the same person, or by the predecessor in title of the person,
shall have the same effect as to such variety as though filed on the date of the
prior application if filed before the issuance of the certificate or other
termination of proceedings on the first application or on an application similarly
entitled to the benefit of the filing date of the first application and if it contains
or is amended to contain a specific reference to the earlier filed application.
( c ) A later application shall not by itself establish that a characteristic
newly described was in the variety at the time of the earlier application.
103-349, §§ 5, 13(i), 108 Stat. 3139, 3143.

Applications for plant variety protection and their contents shall be kept in
confidence by the Plant Variety Protection Office, by the Board, and by the
offices in the Department of Agriculture to which access may be given under
regulations. No information concerning the same shall be given without the
authority of the owner, unless necessary under special circumstances as may be
determined by the Secretary, except that the Secretary may publish the variety
names designated in applications, stating the kind to which each applies, the
name of the applicant, and whether the applicant specified that the variety is to
be sold by variety name only as a class of certified seed.
96-574 § 12, 94 Stat. 3350.
The Secretary may establish regulations for the publication of information
regarding any pending application when publication is requested by the owner.
96-574 § 13, 94 Stat. 3350.
PART F
Examination; Response Time; Initial Appeals
829
The Secretary shall cause an examination to be made of the application and
if on such examination it is determined that the applicant is entitled to plant
variety protection under the law, the Secretary shall issue a notice of allowance
of plant variety protection therefor as hereinafter provided.

(a) Whenever an application is refused, or any objection or requirement
made by the examiner, the Secretary shall notify the applicant thereof, stating the
reasons therefor, together with such information and references as may be useful
in judging the propriety of continuing the prosecution of the application; and if
after receiving such notice the applicant requests reconsideration, with or
without amendment, the application shall be reconsidered.
(b) For taking appropriate action after the mailing to an applicant of an
action other than allowance, the applicant shall be allowed at least 30 days, and
not more than 180 days, or such other time as the Secretary shall set in the
refusal, or such time as the Secretary may allow as an extension. Without such
extension, action may be taken up to three months late by paying an additional
fee to be prescribed by the Secretary.
103-349, §§ 6, 13(j), 108 Stat. 3140, 3143.

When an application for plant variety protection has been refused by the
Plant Variety Protection Office, the applicant may appeal to the Secretary. The
Secretary shall seek the advice of the Plant Variety Protection Board on all
appeals, before deciding the appeal.
PART G
Appeals to Courts and Other Review
§ 2461. Appeals.
From the decisions made under sections 44, 63, 91, and 128 appeal may,
830
within sixty days or such further times as the Secretary allows, be taken under
the Federal Rules of Appellate Procedure. The United States Court of Appeals
for the Federal Circuit shall have jurisdiction of any such appeal.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title II, ch 7, § 71, 84 Stat. 1550; April 2, 1982,
P.L. 97-164, Title I, Part B, § 145, 96 Stat. 45; Oct. 6, 1994, P.L. 103-349, § 8(d)(1), 108
Stat. 3141.

An applicant dissatisfied with a decision under section 63 or 91 of this title,
may, as an alternative to appeal, have remedy by civil action against the
Secretary in the United States District Court for the District of Columbia. Such
action shall be commenced within sixty days after such decision or within such
further time as the Secretary allows. The court may, in the case of review of a
decision by the Secretary refusing plant variety protection, adjudge that such
applicant is entitled to receive a certificate of plant variety protection for the
variety as specified in the application as the facts of the case may appear, on
compliance with the requirements of this Act.
103-349, § 13(k), 108 Stat. 3143.
PART H
Certificates of Plant Variety Protection

(a) If it appears that a certificate of plant variety protection should be issued
on an application, a written notice of allowance shall be given or mailed to the
owner. The notice shall specify the sum, constituting the issue fee, which shall
be paid within one month thereafter.
(b) Upon timely payment of this sum, and provided that deposit of seed has
been made in accordance with section 52(3), the certificate of plant variety
protection shall issue.
( c ) If any payment required by this section is not timely made, but is
submitted with an additional fee prescribed by the Secretary within nine months
after the due date or within such further time as the Secretary may allow, it shall
be accepted.
831
A certificate of plant variety protection shall be issued in the name of the
United States of America under the seal of the Plant Variety Protection Office,
and shall be signed by the Secretary or have the signature of the Secretary
placed thereon, and shall be recorded in the Plant Variety Protection Office.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title II, Ch 8, § 82, 84 Stat. 1551; Oct. 6, 1994,
P.L. 103-349, § 13(l), 108 Stat. 3143.

(a) Certificate.
( 1) Every certificate of plant variety protection shall certify that the
breeder (or the successor in interest of the breeder), has the right, during the
term of the plant variety protection, to exclude others from selling the
variety, or offering it for sale, or reproducing it, or importing it, or exporting
it, or using it in producing (as distinguished from developing) a hybrid or
different variety therefrom, to the extent provided by this chapter.
(2) If the owner so elects, the certificate shall—
(A) specify that seed of the variety shall be sold in the United States
only as a class of certified seed; and
(B) if so specified, conform to the number of generations designated
by the owner.
(3) An owner may waive a right provided under this subsection, other
than a right that is elected by the owner under paragraph (2)(A).
(4) The Secretary may at the discretion of the Secretary permit such
election or waiver to be made after certificating and amend the certificate
accordingly, without retroactive effect.
(b) Term.
(1) In General. Except as provided in paragraph (2), the term of plant
variety protection shall expire 20 years from the date of issue of the
certificate in the United States, except that—
( A) in the case of a tuber propagated plant variety subject to a
waiver granted under section 42(a)(1)(B)(i), the term of the plant
variety protection shall expire 20 years after the date of the original
grant of the plant breeder’s rights to the variety outside the United
States; and
( B ) in the case of a tree or vine, the term of the plant variety
832
protection shall expire 25 years from the date of issue of the certificate.
(2) Exceptions. If the certificate is not issued within three years from
the effective filing date, the Secretary may shorten the term by the amount of
delay in the prosecution of the application attributed by the Secretary to the
applicant.
(c) Expiration Upon Failure to Comply With Regulations; Notice. The term
of plant variety protection shall also expire if the owner fails to comply with
regulations, in force at the time of certificating, relating to replenishing seed in a
public repository, or requiring the submission of a different name for the
variety, except that this expiration shall not occur unless notice is mailed to the
last owner recorded as provided in section 101(d) and the last owner fails,
within the time allowed thereafter, not less than three months, to comply with
said regulations, paying an additional fee to be prescribed by the Secretary.
96-574 § 14, 94 Stat. 3350; October 6, 1994, P.L. 103-349 §§ 7, 13(m), 108 Stat. 3140,
3143, effective April 4, 1995; April 4, 1996, P.L. 104-127 § 913(b), 110 Stat. 1186.
§ 2484. Correction of Plant Variety Protection Office

Mistake.
Whenever a mistake in a certificate of plant variety protection incurred
through the fault of the Plant Variety Protection Office is clearly disclosed by
the records of the Office, the Secretary may issue, without charge, a corrected
certificate of plant variety protection, stating the fact and nature of such mistake.
Such certificate of plant variety protection shall have the same effect and
operation in law as if the same had been originally issued in such corrected
form.
96-574 § 15, 94 Stat. 3350.

Whenever a mistake of a clerical or typographical nature, or of minor
character, or in the description of the variety, which was not the fault of the
Plant Variety Protection Office, appears in a certificate of plant variety
protection and a showing has been made that such mistake occurred in good
faith, the Secretary may, upon payment of the required fee, issue a corrected
certificate if the correction could have been made before the certificate issued.
Such certificate of plant variety protection shall have the same effect and
operation in law as if the same had been originally issued in such corrected
form.
833
96-574 § 16, 94 Stat. 3351.

An error as to the naming of a breeder in the application, without deceptive
intent, shall not affect validity of plant variety protection and may be corrected
at any time by the Secretary in accordance with regulations established by the
Secretary or upon order of a federal court before which the matter is called in
question. Upon such correction the Secretary shall issue a certificate
accordingly. Such correction shall not deprive any person of any rights the
person otherwise would have had.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title II, Ch 8, § 86, 84 Stat. 1552; Oct. 6, 1994,
P.L. 103-349, § 13(n), 108 Stat. 3143.
PART I
Reexamination After Issue, and Contested Proceedings

(a) Any person may, within five years after the issuance of a certificate of
plant variety protection, notify the Secretary in writing of facts which may have
a bearing on the protectability of the variety, and the Secretary may cause such
plant variety protection to be reexamined in the light thereof.
(b) Reexamination of plant variety protection under this section and appeals
shall be pursuant to the same procedures and with the same rights as for original
examinations. Abandonment of the procedure while subject to a ruling against
the retention of the certificate shall result in cancellation of the plant variety
certificate thereon and notice thereof shall be endorsed on copies of the
description of the protected plant variety thereafter distributed by the Plant
Variety Protection Office.
(c) If a person acting under subsection (a) makes a prima facie showing of
facts needing proof, the Secretary may direct that the reexamination include such
interparty proceedings as the Secretary shall establish.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title II, ch 9, § 91, 84 Stat. 1552; Dec. 22, 1980,
P.L. 96-574, § 17, 94 Stat. 3351; Oct. 6, 1994, P.L. 103-349, § 13(o), 108 Stat. 3144.

(a) The owner of a certificate of plant variety protection may have relief
834
against another owner of a certificate of the same variety by civil action, and the
court may adjudge the question of validity of the respective certificates, or the
ownership of the certificate.
(b) Such suit may be instituted against the party in interest as shown by the
record of the Plant Variety Protection Office at the time of the decision
complained of, but any party in interest may become a party to the action. If
there be adverse parties residing in a plurality of districts not embraced within
the same State, or an adverse party residing in a foreign country, the United
States District Court for the District of Columbia, or any United States district
court to which it may transfer the case, shall have jurisdiction and may issue
summons against the adverse parties directed to the marshal of any district in
which any adverse party resides. Summons against adverse parties residing in
foreign countries may be served by publication or otherwise as the court directs.
The Secretary shall not be made a party but the Secretary shall have the right to
intervene. Judgment of the court in favor of the right of an applicant to plant
variety protection shall authorize the Secretary to issue a certificate of plant
variety protection on the filing in the Plant Variety Protection Office of a
certified copy of the judgment and on compliance with the requirements of this
Act.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title II, Ch 9, § 92 [94], 84 Stat. 1553; Oct. 6,
1994, P.L. 103-349, §§ 8(b), (c)(1), 13(p), 108 Stat. 3140, 3144.
SUBCHAPTER III
Plant Variety Protection and Rights

PART J
Ownership and Assignment

(a) Subject to the provisions of this title, plant variety protection shall have
the attributes of personal property.
(b) Applications for certificates of plant variety protection, or any interest
in a variety, shall be assignable by an instrument in writing. The owner may in
like manner license or grant and convey an exclusive right to use of the variety
in the whole or any specified part of the United States.
835
(c) A certificate of acknowledgment under the hand and official seal of a
person authorized to administer oaths within the United States, or in a foreign
country, of a diplomatic or consular officer of the United States or an officer
authorized to administer oaths whose authority is proved by a certificate of a
diplomatic or consular officer of the United States, shall be prima facie
evidence of the execution of an assignment, grant, license, or conveyance of
plant variety protection or application for plant variety protection.
(d) An assignment, grant, conveyance or license shall be void as against any
subsequent purchaser or mortgagee for a valuable consideration, without notice,
unless it, or an acknowledgment thereof by the person giving such encumbrance
that there is such encumbrance, is filed for recording in the Plant Variety
Protection Office within one month from its date or at least one month prior to
the date of such subsequent purchase or mortgage.

An owner who, with notice that release is for testing only, releases
possession of seed or other sexually reproducible or tuber propagable plant
material for testing retains ownership with respect thereto; and any diversion
from authorized testing, or any unauthorized retention, of such material by
anyone who has knowledge that it is under such notice, or who is chargeable
with notice, is prohibited, and violates the property rights of the owner. Anyone
receiving the material tagged or labeled with the notice is chargeable with the
notice. The owner is entitled to remedy and redress in a civil action hereunder.
No remedy available by State or local law is hereby excluded. No such notice
shall be used, or if used be effective, when the owner has made identical
sexually reproducible or tuber propagable plant material available to the public,
as by sale thereof.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title III, ch 10, § 102, 84 Stat. 1554; Oct. 6, 1994,
P.L. 103-349, § 8(d)(2), 108 Stat. 3141.
PART K
Infringement of Plant Variety Protection

(a) Acts Constituting Infringement. Except as otherwise provided in this
title, it shall be an infringement of the rights of the owner of a protected variety
836
to perform without authority, any of the following acts in the United States, or in
commerce which can be regulated by Congress or affecting such commerce,
prior to expiration of the right to plant variety protection but after either the
issue of the certificate or the distribution of a protected plant variety with the
notice under section 127:
(1) sell or market the protected variety, or offer it or expose it for sale,
deliver it, ship it, consign it, exchange it, or solicit an offer to buy it, or any
other transfer of title or possession of it;
(2) import the variety into, or export it from, the United States;
(3) sexually multiply, or propagate by a tuber or a part of a tuber, the
variety as a step in marketing (for growing purposes) the variety;
(4) use the variety in producing (as distinguished from developing) a
hybrid or different variety therefrom;
( 5 ) use seed which had been marked “Unauthorized Propagation
Prohibited” or “Unauthorized Seed Multiplication Prohibited” or progeny
thereof to propagate the variety;
(6) dispense the variety to another, in a form which can be propagated,
without notice as to being a protected variety under which it was received;
(7) condition the variety for the purpose of propagation, except to the
extent that the conditioning is related to the activities permitted under
section 113;
(8) stock the variety for any of the purposes referred to in paragraphs
(1) through (7);
(9) perform any of the foregoing acts even in instances in which the
variety is multiplied other than sexually, except in pursuance of a valid
United States plant patent; or
(10) instigate or actively induce performance of any of the foregoing
acts.
(b) Uses Authorized by Owner.
( 1) Subject to paragraph (2), the owner of a protected variety may
authorize the use of the variety under this section subject to conditions and
limitations specified by the owner.
(2) In the case of a contract between a seed producer and the owner of a
protected variety of lawn, turf, or forage grass seed, or alfalfa or clover
seed for the production of seed of the protected variety, the producer shall
be deemed to be authorized by the owner to sell such seed and to use the
837
variety if—
(A) the producer has fulfilled the terms of the contract;
(B) the owner refuses to take delivery of the seed or refuses to pay
any amounts due under the contract within 30 days of the payment date
specified in the contract; and
(C) after the expiration of the period specified in subparagraph (B),
the producer notifies the owner of the producer’s intent to sell the seed
and unless the owner fails to pay the amounts due under the contract and
take delivery of the seed within 30 days of such notification. For the
purposes of this paragraph, the term “owner” shall include any licensee
of the owner.
(3) Paragraph (2) shall apply to contracts entered into with respect to
plant varieties protected under this Act (7 U.S.C. 2321 et seq.) as in effect
on the day before the effective date of this provision as well as plant
varieties protected under this Act as amended by the Plant Variety
Protection Act Amendments of 1994.
(4) Nothing in this subsection shall affect any other rights or remedies of
producers or owners that may exist under other Federal or State laws.
(c) Applicability to Certain Plant Varieties. This section shall apply
equally to—
( 1) any variety that is essentially derived from a protected variety,
unless the protected variety is an essentially derived variety;
( 2 ) any variety that is not clearly distinguishable from a protected
variety;
( 3 ) any variety whose production requires the repeated use of a
protected variety; and
( 4 ) harvested material (including entire plants and parts of plants)
obtained through the unauthorized use of propagating material of a protected
variety, unless the owner of the variety has had a reasonable opportunity to
exercise the rights provided under this Act with respect to the propagating
material.
(d) Acts Not Considered Infringing. It shall not be an infringement of the
rights of the owner of a variety to perform any act concerning propagating
material of any kind, or harvested material, including entire plants and parts of
plants, of a protected variety that is sold or otherwise marketed with the consent
of the owner in the United States, unless the act involves further propagation of
the variety or involves an export of material of the variety, that enables the
838
propagation of the variety, into a country that does not protect varieties of the
plant genus or species to which the variety belongs, unless the exported material
is for final consumption purposes.
(e) Private Noncommercial Uses. It shall not be an infringement of the
rights of the owner of a variety to perform any act done privately and for
noncommercial purposes.
(f) Definition of “Perform Without Authority”. As used in this section, the
term “perform without authority” includes performance without authority by any
State, any instrumentality of a State, and any officer or employee of a State or
instrumentality of a State acting in the official capacity of the officer or
employee. Any State, and any such instrumentality, officer, or employee, shall
be subject to the provisions of this Act in the same manner and to the same
extent as any nongovernmental entity.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title III, ch 11, § 111, 84 Stat. 1554; Dec. 22,
1980, P.L. 96-574, § 19(a), 94 Stat. 3351; Oct. 28, 1992, P.L. 102-560, § 3(a), 106 Stat.
4231; Oct. 6, 1994, P.L. 103-349, §§ 9, 13(q), 108 Stat. 3141, 3144.

Nothing in this Act shall abridge the right of any person, or the successor in
interest of the person, to reproduce or sell a variety developed and produced by
such person more than one year prior to the effective filing date of an adverse
application for a certificate of plant variety protection.
P.L. 103-349, § 13(r), 108 Stat. 3144.

Except to the extent that such action may constitute an infringement under
subsections (3) and (4) of section 111, it shall not infringe any right hereunder
for a person to save seed produced by the person from seed obtained, or
descended from seed obtained, by authority of the owner of the variety for
seeding purposes and use such saved seed in the production of a crop for use on
the farm of the person, or for sale as provided in this section. A bona fide sale
for other than reproductive purposes, made in channels usual for such other
purposes, of seed produced on a farm either from seed obtained by authority of
the owner for seeding purposes or from seed produced by descent on such farm
from seed obtained by authority of the owner for seeding purposes shall not
constitute an infringement. A purchaser who diverts seed from such channels to
seeding purposes shall be deemed to have notice under section 127 that the
actions of the purchaser constitute an infringement.
839
P.L. 103-349, §§ 10, 13(s), 108 Stat. 3142, 3144.

The use and reproduction of a protected variety for plant breeding or other
bona fide research shall not constitute an infringement of the protection
provided under this Act.

Transportation or delivery by a carrier in the ordinary course of its business
as a carrier, or advertising by a person in the advertising business in the
ordinary course of that business, shall not constitute an infringement of the
protection provided under this Act.
PART L
Remedies for Infringement of Plant Variety Protection,

and Other Actions
§ 2561. Remedy for Infringement of Plant Variety

Protection.
An owner shall have remedy by civil action for infringement of plant variety
protection under section 111. If a variety is sold under the name of a variety
shown in a certificate, there is a prima facie presumption that it is the same
variety.
Leg.H. Dec. 24 1970, P.L. 91-577, Title III, ch 12, § 121, 84 Stat. 1556; Oct. 6, 1994,
P.L. 103-349, § 13(t), 108 Stat. 3144.

(a) Certificates of plant variety protection shall be presumed valid. The
burden of establishing invalidity of a plant variety protection shall rest on the
party asserting invalidity.
(b) The following shall be defenses in any action charging infringement and
shall be pleaded: (1) noninfringement, absence of liability for infringement, or
unenforceability; (2) invalidity of the plant variety protection in suit on any
840
ground specified in section 42 of this title as a condition for protectability; (3)
invalidity of the plant variety protection in suit for failure to comply with any
requirement of section 52; (4) that the asserted infringement was performed
under an existing certificate adverse to that asserted and prior to notice of the
infringement; and (5) any other fact or act made a defense by this Act.
The several courts having jurisdiction of cases under this title may grant
injunctions in accordance with the principles of equity to prevent the violation
of any right hereunder on such terms as the court deems reasonable.
§ 2564. Damages.
(a) Upon finding an infringement the court shall award damages adequate to
compensate for the infringement but in no event less than a reasonable royalty
for the use made of the variety by the infringer, together with interest and costs
as fixed by the court.
( b ) When the damages are not determined by the jury, the court shall
determine them. In either event the court may increase the damages up to three
times the amount determined.
(c) The court may receive expert testimony as an aid to the determination of
damages or of what royalty would be reasonable under the circumstances.
( d ) As to infringement prior to, or resulting from a planting prior to,
issuance of a certificate for the infringed variety, a court finding the infringer to
have established innocent intentions, shall have discretion as to awarding
damages.

The court in exceptional cases may award reasonable attorney fees to the
prevailing party.

(a) No recovery shall be had for that part of any infringement committed
more than six years (or known to the owner more than one year) prior to the
841
filing of the complaint or counterclaim for infringement in the action.
( b ) In the case of claims against the United States Government for
unauthorized use of a protected variety, the period between the date of receipt of
written claim for compensation by the department or agency of the Government
having authority to settle such claim, and the date of mailing by the Government
of a notice to the claimant that the claim has been denied shall not be counted as
part of the period referred to in the preceding paragraph.
P.L. 103-349, § 13(u), 108 Stat. 3144.

Owners may give notice to the public by physically associating with or
affixing to the container of seed of a variety or by fixing to the variety, a label
containing either the words “Unauthorized Propagation Prohibited” or the words
“Unauthorized Seed Multiplication Prohibited” and after the certificate issues,
such additional words as “U.S. Protected Variety”. In the event the variety is
distributed by authorization of the owner and is received by the infringer
without such marking, no damages shall be recovered against such infringer by
the owner in any action for infringement, unless the infringer has actual notice or
knowledge that propagation is prohibited or that the variety is a protected
variety, in which event damages may be recovered only for infringement
occurring after such notice. As to both damages and injunction, a court shall
have discretion to be lenient as to disposal of materials acquired in good faith
by acts prior to such notice.
1980, P.L. 96-574, § 19(b), 94 Stat. 3351; Oct. 6, 1994, P.L. 103-349, § 11, 108 Stat. 3142.

(a) Each of the following acts, if performed in connection with the sale,
offering for sale, or advertising of sexually reproducible plant material or tubers
or parts of tubers, is prohibited, and the Secretary may, if the Secretary
determines after an opportunity for hearing that the act is being so performed,
issue an order to cease and desist, said order being binding unless appealed
under section 71:
(1) Use of the words “U.S. Protected Variety” or any word or number
importing that the material is a variety protected under certificate, when it is
not.
(2) Use of any wording importing that the material is a variety for which
an application for plant variety protection is pending, when it is not.
842
(3) Use of either the phrase “Unauthorized Propagation Prohibited” or
“Unauthorized Seed Multiplication Prohibited” or similar phrase without
reasonable basis. Any reasonable basis expires one year after the first sale
of the variety except as justified thereafter by a pending application or a
certificate still in force.
( 4 ) Failure to use the name of a variety for which a certificate of
protection has been issued under this Act, even after the expiration of the
certificate, except that lawn, turf, or forage grass seed, or alfalfa or clover
seed may be sold without a variety name unless use of the name of a variety
for which a certificate of protection has been issued under this Act is
required under State law.
(b) Anyone convicted of violating a binding cease and desist order, or of
performing any act prohibited in subsection (a) of this section for the purpose of
deceiving the public, shall be fined not more than $10,000 and not less than
$500.
(c) Anyone whose business is damaged or is likely to be damaged by an act
prohibited in subsection (a) of this section, or is subjected to competition in
connection with which such act is performed, may have remedy by civil action.
1980, P.L. 96-574, § 19(c), 94 Stat. 3352; Oct. 6, 1994, P.L. 103-349, §§ 12, 13(v), 108
Stat. 3142, 3144.

Every owner not residing in the United States may file in the Plant Variety
Protection Office a written designation stating the name and address of a person
residing within the United States on whom may be served process or notice of
proceedings affecting the plant variety protection or rights thereunder. If the
person designated cannot be found at the address given in the last designation,
or if no person has been designated, the United States District Court for the
District of Columbia shall have jurisdiction and summons shall be served by
publication or otherwise as the court directs. The court shall have the same
jurisdiction to take any action respecting the plant variety protection, or rights
thereunder that it would have if the owner were personally within the
jurisdiction of the court.
§ 2570. Liability of States, Instrumentalities of States,

and State Officials for Infringement of Plant Variety
Protection.
843
(a) Any State, any instrumentality of a State, and any officer or employee of
a State or instrumentality of a State acting in the official capacity of the officer
or employee, shall not be immune, under the eleventh amendment of the
Constitution of the United States or under any other doctrine of sovereign
immunity, from suit in Federal court by any person, including any governmental
or nongovernmental entity, for infringement of plant variety protection under
section 111, or for any other violation under this title.
(b) In a suit described in subsection (a) for a violation described in that
subsection, remedies (including remedies both at law and in equity) are
available for the violation to the same extent as such remedies are available for
such a violation in a suit against any private entity. Such remedies include
damages, interest, costs, and treble damages under section 124, and attorney
fees under section 125.
Leg.H. Dec. 24, 1970, P.L. 91-577, Title III, ch 12, § 130, as added Oct. 28, 1992, P.L.
102-560, § 3(b), 106 Stat. 4231; Oct. 6, 1994, P.L. 103-349, § 13(w), 108 Stat. 3144.
PART M
Intent and Severability
§ 2581. Intent.
It is the intent of Congress to provide the indicated protection for new
varieties by exercise of any constitutional power needed for that end, so as to
afford adequate encouragement for research, and for marketing when
appropriate, to yield for the public the benefits of new varieties. Constitutional
clauses 3 and 8 of article I, section 8 are both relied upon.
If this Act is held unconstitutional as to some provisions or circumstances, it
shall remain in force as to the remaining provisions and other circumstances.
TITLE 10
ARMED FORCES
Contents
844
SUBTITLE A General Military Law
PART IV Service, Supply, and Procurement
CHAPTER 141 MISCELLANEOUS PROCUREMENT PROVISIONS
SUBTITLE A
General Military Law
PART IV
Service, Supply, and Procurement

CHAPTER 141
MISCELLANEOUS PROCUREMENT
PROVISIONS
Funds appropriated for a military department available for making or
procuring supplies may be used to acquire any of the following if the acquisition
relates to supplies or processes produced or used by or for, or useful to, that
department:
(1) Copyrights, patents, and applications for patents.
(2) Licenses under copyrights, patents, and applications for patents.
(3) Design and process data, technical data, and computer software.
(4) Releases for past infringement of patents or copyrights or for
unauthorized use of technical data or computer software.
Leg.H. August 10, 1956, ch. 1041 § 1, 70A Stat. 137; September 8, 1960, P.L. 86-726 §
3, 74 Stat. 855; October 13, 1994, P.L. 103-355 § 3063, 108 Stat. 3337; February 10, 1996,
P.L. 104-106 § 813, 110 Stat. 395.
TITLE 11
BANKRUPTCY
845
Contents
CHAPTER 3 CASE ADMINISTRATION

SUBCHAPTER IV Administrative Powers
CHAPTER 3
CASE ADMINISTRATION
SUBCHAPTER IV
Administrative Powers

(a) Except as provided in sections 765 and 766 of this title [11 USCS §§
765 and 766] and in subsections (b), (c), and (d) of this section, the trustee,
subject to the court’s approval, may assume or reject any executory contract or
unexpired lease of the debtor.
(b)
(1) If there has been a default in an executory contract or unexpired
lease of the debtor, the trustee may not assume such contract or lease unless,
at the time of assumption of such contract or lease, the trustee—
( A ) cures, or provides adequate assurance that the trustee will
promptly cure, such default other than a default that is a breach of a
provision relating to the satisfaction of any provision (other than a
penalty rate or penalty provision) relating to a default arising from any
failure to perform nonmonetary obligations under an unexpired lease of
real property, if it is impossible for the trustee to cure such default by
performing nonmonetary acts at and after the time of assumption, except
that if such default arises from a failure to operate in accordance with a
nonresidential real property lease, then such default shall be cured by
performance at and after the time of assumption in accordance with such
lease, and pecuniary losses resulting from such default shall be
compensated in accordance with the provisions of this paragraph;
846
( B) compensates, or provides adequate assurance that the trustee
will promptly compensate, a party other than the debtor to such contract
or lease, for any actual pecuniary loss to such party resulting from such
default; and
(C) provides adequate assurance of future performance under such
contract or lease.
(2) Paragraph (1) of this subsection does not apply to a default that is a
breach of a provision relating to—
(A) the insolvency or financial condition of the debtor at any time
before the closing of the case;
(B) the commencement of a case under this title;
(C) the appointment of or taking possession by a trustee in a case
under this title or a custodian before such commencement; or
(D) the satisfaction of any penalty rate or penalty provision relating
to a default arising from any failure by the debtor to perform
nonmonetary obligations under the executory contract or unexpired
lease.
(3) For the purposes of paragraph (1) of this subsection and paragraph
(2)(B) of subsection (f), adequate assurance of future performance of a lease
of real property in a shopping center includes adequate assurance—
(A) of the source of rent and other consideration due under such
lease, and in the case of an assignment, that the financial condition and
operating performance of the proposed assignee and its guarantors, if
any, shall be similar to the financial condition and operating
performance of the debtor and its guarantors, if any, as of the time the
debtor became the lessee under the lease;
(B) that any percentage rent due under such lease will not decline
substantially;
(C) that assumption or assignment of such lease is subject to all the
provisions thereof, including (but not limited to) provisions such as a
radius, location, use, or exclusivity provision, and will not breach any
such provision contained in any other lease, financing agreement, or
master agreement relating to such shopping center; and
(D) that assumption or assignment of such lease will not disrupt any
tenant mix or balance in such shopping center.
(4) Notwithstanding any other provision of this section, if there has been
847
a default in an unexpired lease of the debtor, other than a default of a kind
specified in paragraph (2) of this subsection, the trustee may not require a
lessor to provide services or supplies incidental to such lease before
assumption of such lease unless the lessor is compensated under the terms of
such lease for any services and supplies provided under such lease before
assumption of such lease.
( c ) The trustee may not assume or assign any executory contract or
unexpired lease of the debtor, whether or not such contract or lease prohibits or
restricts assignment of rights or delegation of duties, if—
(1)
(A) applicable law excuses a party, other than the debtor, to such
contract or lease from accepting performance from or rendering
performance to an entity other than the debtor or the debtor in
possession, whether or not such contract or lease prohibits or
restricts assignment of rights or delegation of duties; and
( B ) such party does not consent to such assumption or
assignment; or
(2) such contract is a contract to make a loan, or extend other
debt financing or financial accommodations, to or for the benefit of
the debtor, or to issue a security of the debtor; or
(3) such lease is of nonresidential real property and has been
terminated under applicable nonbankruptcy law prior to the order for
relief.
(4) [Deleted]
(d)
(1) In a case under chapter 7 of this title [11 USCS §§ 701 et seq.], if the
trustee does not assume or reject an executory contract or unexpired lease of
residential real property or of personal property of the debtor within 60
days after the order for relief, or within such additional time as the court, for
cause, within such 60-day period, fixes, then such contract or lease is
deemed rejected.
(2) In a case under chapter 9, 11, 12, or 13 of this title [11 USCS §§ 901
et seq., 1101 et seq., 1201 et seq., or 1301 et seq.], the trustee may assume
or reject an executory contract or unexpired lease of residential real
property or of personal property of the debtor at any time before the
confirmation of a plan but the court, on the request of any party to such
contract or lease, may order the trustee to determine within a specified
period of time whether to assume or reject such contract or lease.
848
(3) The trustee shall timely perform all the obligations of the debtor,
except those specified in section 365(b)(2) [11 USCS § 365(b)(2)] [subsec.
(b)(2) of this section], arising from and after the order for relief under any
unexpired lease of nonresidential real property, until such lease is assumed
or rejected, notwithstanding section 503(b)(1) of this title [11 USCS §
503(b)(1)]. The court may extend, for cause, the time for performance of any
such obligation that arises within 60 days after the date of the order for
relief, but the time for performance shall not be extended beyond such 60-
day period. This subsection shall not be deemed to affect the trustee’s
obligations under the provisions of subsection (b) or (f) of this section.
Acceptance of any such performance does not constitute waiver or
relinquishment of the lessor’s rights under such lease or under this title.
(4)
( A ) Subject to subparagraph (B), an unexpired lease of
nonresidential real property under which the debtor is the lessee shall
be deemed rejected, and the trustee shall immediately surrender that
nonresidential real property to the lessor, if the trustee does not assume
or reject the unexpired lease by the earlier of—
(i) the date that is 120 days after the date of the order for relief; or
(ii) the date of the entry of an order confirming a plan.
(B)
( i ) The court may extend the period determined under
subparagraph (A), prior to the expiration of the 120-day period, for
90 days on the motion of the trustee or lessor for cause.
(ii) If the court grants an extension under clause (i), the court may
grant a subsequent extension only upon prior written consent of the
lessor in each instance.
(5) The trustee shall timely perform all of the obligations of the debtor,
except those specified in section 365(b)(2) [11 USCS § 365(b)(2)], first
arising from or after 60 days after the order for relief in a case under
chapter 11 of this title [11 USCS §§ 1101 et seq.] under an unexpired lease
of personal property (other than personal property leased to an individual
primarily for personal, family, or household purposes), until such lease is
assumed or rejected notwithstanding section 503(b)(1) of this title [11
USCS § 503(b)(1)], unless the court, after notice and a hearing and based on
the equities of the case, orders otherwise with respect to the obligations or
timely performance thereof. This subsection shall not be deemed to affect
the trustee’s obligations under the provisions of subsection (b) or (f).
Acceptance of any such performance does not constitute waiver or
849
relinquishment of the lessor’s rights under such lease or under this title.
(6)–(9) [Deleted]
(10) [Redesignated]
(e)
(1) Notwithstanding a provision in an executory contract or unexpired
lease, or in applicable law, an executory contract or unexpired lease of the
debtor may not be terminated or modified, and any right or obligation under
such contract or lease may not be terminated or modified, at any time after
the commencement of the case solely because of a provision in such contract
or lease that is conditioned on—
(A) the insolvency or financial condition of the debtor at any time
before the closing of the case;
(B) the commencement of a case under this title; or
(C) the appointment of or taking possession by a trustee in a case
under this title or a custodian before such commencement.
( 2) Paragraph (1) of this subsection does not apply to an executory
contract or unexpired lease of the debtor, whether or not such contract or
lease prohibits or restricts assignment of rights or delegation of duties, if—
(A)
(i) applicable law excuses a party, other than the debtor, to such
contract or lease from accepting performance from or rendering
performance to the trustee or to an assignee of such contract or lease,
whether or not such contract or lease prohibits or restricts
assignment of rights or delegation of duties; and
(ii) such party does not consent to such assumption or assignment;
or
(B) such contract is a contract to make a loan, or extend other debt
financing or financial accommodations, to or for the benefit of the
debtor, or to issue a security of the debtor.
(f)
(1) Except as provided in subsections (b) and (c) of this section,
notwithstanding a provision in an executory contract or unexpired lease
of the debtor, or in applicable law, that prohibits, restricts, or conditions
the assignment of such contract or lease, the trustee may assign such
contract or lease under paragraph (2) of this subsection.
850
(2) The trustee may assign an executory contract or unexpired lease of
the debtor only if—
(A) the trustee assumes such contract or lease in accordance with the
provisions of this section; and
( B) adequate assurance of future performance by the assignee of
such contract or lease is provided, whether or not there has been a
default in such contract or lease.
(3) Notwithstanding a provision in an executory contract or unexpired
lease of the debtor, or in applicable law that terminates or modifies, or
permits a party other than the debtor to terminate or modify, such contract or
lease or a right or obligation under such contract or lease on account of an
assignment of such contract or lease, such contract, lease, right, or
obligation may not be terminated or modified under such provision because
of the assumption or assignment of such contract or lease by the trustee.
(g) Except as provided in subsections (h)(2) and (i)(2) of this section, the
rejection of an executory contract or unexpired lease of the debtor constitutes a
breach of such contract or lease—
(1) if such contract or lease has not been assumed under this section or
under a plan confirmed under chapter 9, 11, 12, or 13 of this title [11 USCS
§§ 901 et seq., 1101 et seq., 1201 et seq., or 1301 et seq.], immediately
before the date of the filing of the petition; or
(2) if such contract or lease has been assumed under this section or
under a plan confirmed under chapter 9, 11, 12, or 13 of this title [11 USCS
§§ 901 et seq., 1101 et seq., 1201 et seq., or 1301 et seq.]—
(A) if before such rejection the case has not been converted under
section 1112, 1208, or 1307 of this title [ 11 USCS § 1112 , 1208, or
1307], at the time of such rejection; or
( B ) if before such rejection the case has been converted under
section 1112, 1208, or 1307 of this title [ 11 USCS § 1112 , 1208, or
1307]—
( i ) immediately before the date of such conversion, if such
contract or lease was assumed before such conversion; or
(ii) at the time of such rejection, if such contract or lease was
assumed after such conversion.
(h)
(1)
851
(A) If the trustee rejects an unexpired lease of real property under
which the debtor is the lessor and—
(i) if the rejection by the trustee amounts to such a breach as
would entitle the lessee to treat such lease as terminated by virtue of
its terms, applicable nonbankruptcy law, or any agreement made by
the lessee, then the lessee under such lease may treat such lease as
terminated by the rejection; or
(ii) if the term of such lease has commenced, the lessee may
retain its rights under such lease (including rights such as those
relating to the amount and timing of payment of rent and other
amounts payable by the lessee and any right of use, possession, quiet
enjoyment, subletting, assignment, or hypothecation) that are in or
appurtenant to the real property for the balance of the term of such
lease and for any renewal or extension of such rights to the extent
that such rights are enforceable under applicable nonbankruptcy law.
(B) If the lessee retains its rights under subparagraph (A)(ii), the
lessee may offset against the rent reserved under such lease for the
balance of the term after the date of the rejection of such lease and for
the term of any renewal or extension of such lease, the value of any
damage caused by the nonperformance after the date of such rejection, of
any obligation of the debtor under such lease, but the lessee shall not
have any other right against the estate or the debtor on account of any
damage occurring after such date caused by such nonperformance.
(C) The rejection of a lease of real property in a shopping center
with respect to which the lessee elects to retain its rights under
subparagraph (A)(ii) does not affect the enforceability under applicable
nonbankruptcy law of any provision in the lease pertaining to radius,
location, use, exclusivity, or tenant mix or balance.
(D) In this paragraph, “lessee” includes any successor, assign, or
mortgagee permitted under the terms of such lease.
(2)
(A) If the trustee rejects a timeshare interest under a timeshare plan
under which the debtor is the timeshare interest seller and—
(i) if the rejection amounts to such a breach as would entitle the
timeshare interest purchaser to treat the timeshare plan as terminated
under its terms, applicable nonbankruptcy law, or any agreement
made by timeshare interest purchaser, the timeshare interest
purchaser under the timeshare plan may treat the timeshare plan as
terminated by such rejection; or
852
(ii) if the term of such timeshare interest has commenced, then the
timeshare interest purchaser may retain its rights in such timeshare
interest for the balance of such term and for any term of renewal or
extension of such timeshare interest to the extent that such rights are
enforceable under applicable nonbankruptcy law.
( B ) If the timeshare interest purchaser retains its rights under
subparagraph (A), such timeshare interest purchaser may offset against
the moneys due for such timeshare interest for the balance of the term
after the date of the rejection of such timeshare interest, and the term of
any renewal or extension of such timeshare interest, the value of any
damage caused by the nonperformance after the date of such rejection, of
any obligation of the debtor under such timeshare plan, but the timeshare
interest purchaser shall not have any right against the estate or the debtor
on account of any damage occurring after such date caused by such
nonperformance.
(i)
(1) If the trustee rejects an executory contract of the debtor for the sale
of real property or for the sale of a timeshare interest under a timeshare
plan, under which the purchaser is in possession, such purchaser may treat
such contract as terminated, or, in the alternative, may remain in possession
of such real property or timeshare interest.
(2) If such purchaser remains in possession—
(A) such purchaser shall continue to make all payments due under
such contract, but may, offset against such payments any damages
occurring after the date of the rejection of such contract caused by the
nonperformance of any obligation of the debtor after such date, but such
purchaser does not have any rights against the estate on account of any
damages arising after such date from such rejection, other than such
offset; and
(B) the trustee shall deliver title to such purchaser in accordance
with the provisions of such contract, but is relieved of all other
obligations to perform under such contract.
( j ) A purchaser that treats an executory contract as terminated under
subsection (i) of this section, or a party whose executory contract to purchase
real property from the debtor is rejected and under which such party is not in
possession, has a lien on the interest of the debtor in such property for the
recovery of any portion of the purchase price that such purchaser or party has
paid.
853
(k) Assignment by the trustee to an entity of a contract or lease assumed
under this section relieves the trustee and the estate from any liability for any
breach of such contract or lease occurring after such assignment.
(l) If an unexpired lease under which the debtor is the lessee is assigned
pursuant to this section, the lessor of the property may require a deposit or other
security for the performance of the debtor’s obligations under the lease
substantially the same as would have been required by the landlord upon the
initial leasing to a similar tenant.
(m) For purposes of this section 365 [11 USCS § 365] and sections 541(b)
(2) and 362(b)(10) [11 USCS §§ 541(b)(2) and 362(b)(10)], leases of real
property shall include any rental agreement to use real property.
(n)
(1) If the trustee rejects an executory contract under which the debtor is
a licensor of a right to intellectual property, the licensee under such contract
may elect—
(A) to treat such contract as terminated by such rejection if such
rejection by the trustee amounts to such a breach as would entitle the
licensee to treat such contract as terminated by virtue of its own terms,
applicable nonbankruptcy law, or an agreement made by the licensee
with another entity; or
( B ) to retain its rights (including a right to [to] enforce any
exclusivity provision of such contract, but excluding any other right
under applicable nonbankruptcy law to specific performance of such
contract) under such contract and under any agreement supplementary to
such contract, to such intellectual property (including any embodiment of
such intellectual property to the extent protected by applicable
nonbankruptcy law), as such rights existed immediately before the case
commenced, for—
(i) the duration of such contract; and
(ii) any period for which such contract may be extended by the
licensee as of right under applicable nonbankruptcy law.
(2) If the licensee elects to retain its rights, as described in paragraph
(1)(B) of this subsection, under such contract—
(A) the trustee shall allow the licensee to exercise such rights;
( B) the licensee shall make all royalty payments due under such
contract for the duration of such contract and for any period described in
paragraph (1)(B) of this subsection for which the licensee extends such
854
contract; and
(C) the licensee shall be deemed to waive—
(i) any right of setoff it may have with respect to such contract
under this title or applicable nonbankruptcy law; and
(ii) any claim allowable under section 503(b) of this title [11
USCS § 503(b)] arising from the performance of such contract.
(3) If the licensee elects to retain its rights, as described in paragraph
(1)(B) of this subsection, then on the written request of the licensee the
trustee shall—
( A ) to the extent provided in such contract, or any agreement
supplementary to such contract, provide to the licensee any intellectual
property (including such embodiment) held by the trustee; and
(B) not interfere with the rights of the licensee as provided in such
contract, or any agreement supplementary to such contract, to such
intellectual property (including such embodiment) including any right to
obtain such intellectual property (or such embodiment) from another
entity.
( 4) Unless and until the trustee rejects such contract, on the written
request of the licensee the trustee shall—
( A ) to the extent provided in such contract or any agreement
supplementary to such contract—
(i) perform such contract; or
(ii) provide to the licensee such intellectual property (including
any embodiment of such intellectual property to the extent protected
by applicable nonbankruptcy law) held by the trustee; and
(B) not interfere with the rights of the licensee as provided in such
contract, or any agreement supplementary to such contract, to such
intellectual property (including such embodiment), including any right to
obtain such intellectual property (or such embodiment) from another
entity.
(o) In a case under chapter 11 of this title [11 USCS §§ 1101 et seq.], the
trustee shall be deemed to have assumed (consistent with the debtor’s other
obligations under section 507 [11 USCS § 507]), and shall immediately cure
any deficit under, any commitment by the debtor to a Federal depository
institutions regulatory agency (or predecessor to such agency) to maintain the
capital of an insured depository institution, and any claim for a subsequent
breach of the obligations thereunder shall be entitled to priority under section
855
507 [11 USCS § 507]. This subsection shall not extend any commitment that
would otherwise be terminated by any act of such an agency.
(p)
(1) If a lease of personal property is rejected or not timely assumed by
the trustee under subsection (d), the leased property is no longer property of
the estate and the stay under section 362(a) [11 USCS § 362(a)] is
automatically terminated.
(2)
(A) If the debtor in a case under chapter 7 [11 USCS §§ 701 et seq.]
is an individual, the debtor may notify the creditor in writing that the
debtor desires to assume the lease. Upon being so notified, the creditor
may, at its option, notify the debtor that it is willing to have the lease
assumed by the debtor and may condition such assumption on cure of any
outstanding default on terms set by the contract.
( B ) If, not later than 30 days after notice is provided under
subparagraph (A), the debtor notifies the lessor in writing that the lease
is assumed, the liability under the lease will be assumed by the debtor
and not by the estate.
(C) The stay under section 362 [11 USCS § 362] and the injunction
under section 524(a)(2) [11 USCS § 524(a)(2)] shall not be violated by
notification of the debtor and negotiation of cure under this subsection.
(3) In a case under chapter 11 [11 USCS §§ 1101 et seq.] in which the
debtor is an individual and in a case under chapter 13 [11 USCS §§ 1301 et
seq.], if the debtor is the lessee with respect to personal property and the
lease is not assumed in the plan confirmed by the court, the lease is deemed
rejected as of the conclusion of the hearing on confirmation. If the lease is
rejected, the stay under section 362 [11 USCS § 362] and any stay under
section 1301 [11 USCS § 1301] is automatically terminated with respect to
the property subject to the lease.
Leg.H. November 6, 1978, P.L. 95-598 § 101, 92 Stat. 2574; July 10, 1984, P.L. 98-
353 §§ 362, 402–404, 98 Stat. 361, 367; October 27, 1986, P.L. 99-554 §§ 257(j), (m),
283(e), 100 Stat. 3115, 3117; October 18, 1988, P.L. 100-506 § 1(b), 102 Stat. 2538;
November 29, 1990, P.L. 101-647 § 2522(c), 104 Stat. 4866; September 3, 1992, P.L. 102-
365 § 19(b)-(e), 106 Stat. 983; October 22, 1994, P.L. 103-394 §§ 205(a), 219(a), (b),
501(d)(10), 108 Stat. 4122, 4128, 4145; October 31, 1994, P.L. 103-429 § 1, 108 Stat.
4377; April 20, 2005, P.L. 109-8 §§ 309(b), 328(a), 404, 119 Stat. 82, 100, 104.
TITLE 15
COMMERCE AND TRADE
856
Contents
CHAPTER 22 TRADEMARKS
SUBCHAPTER I The Principal Register
§ 1052. [Lanham Act § 2] Trademarks Registrable on the Principal Register;
Concurrent Registration.
§ 1054. [Lanham Act § 4] Collective Marks and Certification Marks Registrable.
§ 1055. [Lanham Act § 5] Use by Related Companies Affecting Validity and
Registration.
§ 1056. [Lanham Act § 6] Disclaimer of Unregistrable Matter.
§ 1061. [Lanham Act § 11] Execution of Acknowledgments and Verifications.
§ 1065. [Lanham Act § 15] Incontestability of Right to Use Mark Under Certain
Conditions.
§ 1066. [Lanham Act § 16] Interference; Declaration by Director.
§ 1067. [Lanham Act § 17] Interference, Opposition, and Proceedings for
Concurrent Use Registration or for Cancellation; Notice; Trademark Trial and
Appeal Board.
§ 1068. [Lanham Act § 18] Action of Director in Interference, Opposition, and
Proceedings for Concurrent Use Registration or for Cancellation.
§ 1069. [Lanham Act § 19] Application of Equitable Principles in Inter Partes
Proceedings.
§ 1070. [Lanham Act § 20] Appeals to Trademark Trial and Appeal Board From
Decisions of Examiners.
§ 1072. [Lanham Act § 22] Registration as Constructive Notice of Claim of
Ownership.
SUBCHAPTER II The Supplemental Register
§ 1092. [Lanham Act § 24] Publication; not Subject to Opposition; Cancellation.
§ 1093. [Lanham Act § 25] Registration Certificates for Marks on Principal and
Supplemental Registers to be Different.
§ 1094. [Lanham Act § 26] Provisions of Chapter Applicable to Registrations on
Supplemental Register.
§ 1095. [Lanham Act § 27] Registration on Principal Register not Precluded.
§ 1096. [Lanham Act § 28] Registration on Supplemental Register not Used to Stop
Importations.
857
§ 1111. [Lanham Act § 29] Notice of Registration; Display With Mark; Recovery of
Profits and Damages in Infringement Suit.
§ 1112. [Lanham Act § 30] Classification of Goods and Services; Registration in
Plurality of Classes.
§ 1114. [Lanham Act § 32] Remedies; Infringement; Innocent Infringement by
Printers and Publishers.
§ 1115. [Lanham Act § 33] Registration on Principal Register as Evidence of
Exclusive Right to Use Mark; Defenses.
§ 1117. [Lanham Act § 35] Recovery for Violation of Rights.
§ 1118. [Lanham Act § 36] Destruction of Infringing Articles.
§ 1119. [Lanham Act § 37] Power of Court Over Registration.
§ 1120. [Lanham Act § 38] Civil Liability for False or Fraudulent Registration.
§ 1121. [Lanham Act § 39] Jurisdiction of Federal Courts; State and Local
Requirements That Registered Trademarks Be Altered or Displayed Differently;
Prohibition.
§ 1122. [Lanham Act § 40] Liability of States, Instrumentalities of States, and State
Officials.
§ 1123. [Lanham Act § 41] Rules and Regulations for Conduct of Proceedings in
Patent and Trademark Office.
§ 1124. [Lanham Act § 42] Importation of Goods Bearing Infringing Marks or
Names Forbidden.
§ 1125. [Lanham Act § 43] False Designations of Origin, False Descriptions, and
Dilution Forbidden.
§ 1127. [Lanham Act § 45] Construction and Definitions; Intent of Chapter.
§ 1128. National Intellectual Property Law Enforcement Coordination Council [See
SUBCHAPTER IV The Madrid Protocol
§ 1141a. [Lanham Act § 61] International Applications Based on United States
Applications or Registrations.
§ 1141b. [Lanham Act § 62] Certification of the International Application.
§ 1141c. [Lanham Act § 63] Restriction, Abandonment, Cancellation, or Expiration
of a Basic Application or Basic Registration.
§ 1141d. [Lanham Act § 64] Request for Extension of Protection Subsequent to
§ 1141e. [Lanham Act § 65] Extension of Protection of an International Registration
to the United States Under the Madrid Protocol.
§ 1141f. [Lanham Act § 66] Effect of Filing a Request for Extension of Protection
of an International Registration to the United States.
§ 1141g. [Lanham Act § 67] Right of Priority for Request for Extension of
Protection to the United States.
§ 1141h. [Lanham Act § 68] Examination of and Opposition to Request for
858
Extension of Protection; Notification of Refusal.
§ 1141i. [Lanham Act § 69] Effect of Extension of Protection.
§ 1141j. [Lanham Act § 70] Dependence of Extension of Protection to the United
States on the Underlying International Registration.
§ 1141k. [Lanham Act § 71] Duration, Affidavits and Fees.
§ 1141l. [Lanham Act § 72] Assignment of an Extension of Protection.
§ 1141n. [Lanham Act § 74] Rights of Extension of Protection.
CHAPTER 23 DISSEMINATION OF TECHNICAL, SCIENTIFIC, AND ENGINEERING
INFORMATION
§ 1155. General Standards and Limitations; Preservation of Security Classification.
CHAPTER 40 DEPARTMENT OF COMMERCE
CHAPTER 47 CONSUMER PRODUCT SAFETY
CHAPTER 49 FIRE PREVENTION AND CONTROL
CHAPTER 107 PROTECTION OF INTELLECTUAL PROPERTY RIGHTS—
CYBERSQUATTING PROTECTION
CHAPTER 22
TRADEMARKS
SUBCHAPTER I
The Principal Register

(a)
( 1 ) The owner of a trademark used in commerce may request
registration of its trademark on the principal register hereby established by
paying the prescribed fee and filing in the Patent and Trademark Office an
application and a verified statement, in such form as may be prescribed by
the Director, and such number of specimens or facsimiles of the mark as
used as may be required by the Director.
859
( 2 ) The application shall include specification of the applicant’s
domicile and citizenship, the date of the applicant’s first use of the mark, the
date of the applicant’s first use of the mark in commerce, the goods in
connection with which the mark is used, and a drawing of the mark.
(3) The statement shall be verified by the applicant and specify that—
(A) the person making the verification believes that he or she, or the
juristic person in whose behalf he or she makes the verification, to be
the owner of the mark sought to be registered;
( B) to the best of the verifier’s knowledge and belief, the facts
recited in the application are accurate;
(C) the mark is in use in commerce; and
( D) to the best of the verifier’s knowledge and belief, no other
person has the right to use such mark in commerce either in the identical
form thereof or in such near resemblance thereto as to be likely, when
used on or in connection with the goods of such other person, to cause
confusion, or to cause mistake, or to deceive, except that, in the case of
every application claiming concurrent use, the applicant shall—
(i) state exceptions to the claim of exclusive use; and
(ii) shall specify, to the extent of the verifier’s knowledge—
(I) any concurrent use by others;
(II) the goods on or in connection with which and the areas in
which each concurrent use exists;
(III) the periods of each use; and
( IV) the goods and area for which the applicant desires
registration.
(4) The applicant shall comply with such rules or regulations as may be
prescribed by the Director. The Director shall promulgate rules prescribing
the requirements for the application and for obtaining a filing date herein.
(b)
( 1 ) A person who has a bona fide intention, under circumstances
showing the good faith of such person, to use a trademark in commerce may
request registration of its trademark on the principal register hereby
established by paying the prescribed fee and filing in the Patent and
Trademark Office an application and a verified statement, in such form as
may be prescribed by the Director.
860
( 2 ) The application shall include specification of the applicant’s
domicile and citizenship, the goods in connection with which the applicant
has a bona fide intention to use the mark, and a drawing of the mark.
(3) The statement shall be verified by the applicant and specify—
(A) that the person making the verification believes that he or she, or
the juristic person in whose behalf he or she makes the verification, to
be entitled to use the mark in commerce;
(B) the applicant’s bona fide intention to use the mark in commerce;
(C) that, to the best of the verifier’s knowledge and belief, the facts
recited in the application are accurate; and
(D) that, to the best of the verifier’s knowledge and belief, no other
person has the right to use such mark in commerce either in the identical
form thereof or in such near resemblance thereto as to be likely, when
used on or in connection with the goods of such other person, to cause
confusion, or to cause mistake, or to deceive.
Except for applications filed pursuant to section 44 [15 USCS §
1126], no mark shall be registered until the applicant has met the
requirements of subsections (c) and (d) of this section.
(4) The applicant shall comply with such rules or regulations as may be
prescribed by the Director. The Director shall promulgate rules prescribing
the requirements for the application and for obtaining a filing date herein.
( c ) Amendment of application under subsection (b) to conform to
requirements under subsection (a). At any time during examination of an
application filed under subsection (b), an applicant who has made use of the
mark in commerce may claim the benefits of such use for purposes of this Act,
by amending his or her application to bring it into conformity with the
requirements of subsection (a).
(d) Verified statement that trademark is used in commerce.
(1) Within six months after the date on which the notice of allowance
with respect to a mark is issued under section 13(b)(2) [15 USCS § 1063(b)
(2)] to an applicant under subsection (b) of this section, the applicant shall
file in the Patent and Trademark Office, together with such number of
specimens or facsimiles of the mark as used in commerce as may be
required by the Director and payment of the prescribed fee, a verified
statement that the mark is in use in commerce and specifying the date of the
applicant’s first use of the mark in commerce and those goods or services
specified in the notice of allowance on or in connection with which the mark
861
is used in commerce. Subject to examination and acceptance of the statement
of use, the mark shall be registered in the Patent and Trademark Office, a
certificate of registration shall be issued for those goods or services recited
in the statement of use for which the mark is entitled to registration, and
notice of registration shall be published in the Official Gazette of the Patent
and Trademark Office. Such examination may include an examination of the
factors set forth in subsections (a) through (e) of section 2 [15 USCS §
1052]. The notice of registration shall specify the goods or services for
which the mark is registered.
(2) The Director shall extend, for one additional 6-month period, the
time for filing the statement of use under paragraph (1), upon written request
of the applicant before the expiration of the 6-month period provided in
paragraph (1). In addition to an extension under the preceding sentence, the
Director may, upon a showing of good cause by the applicant, further extend
the time for filing the statement of use under paragraph (1) for periods
aggregating not more than 24 months, pursuant to written request of the
applicant made before the expiration of the last extension granted under this
paragraph. Any request for an extension under this paragraph shall be
accompanied by a verified statement that the applicant has a continued bona
fide intention to use the mark in commerce and specifying those goods or
services identified in the notice of allowance on or in connection with
which the applicant has a continued bona fide intention to use the mark in
commerce. Any request for an extension under this paragraph shall be
accompanied by payment of the prescribed fee. The Director shall issue
regulations setting forth guidelines for determining what constitutes good
cause for purposes of this paragraph.
(3) The Director shall notify any applicant who files a statement of use
of the acceptance or refusal thereof and, if the statement of use is refused,
the reasons for the refusal. An applicant may amend the statement of use.
(4) The failure to timely file a verified statement of use under paragraph
(1) or an extension request under paragraph (2) shall result in abandonment
of the application, unless it can be shown to the satisfaction of the Director
that the delay in responding was unintentional, in which case the time for
filing may be extended, but for a period not to exceed the period specified in
paragraphs (1) and (2) for filing a statement of use.
(e) If the applicant is not domiciled in the United States the applicant may
designate, by a document filed in the United States Patent and Trademark Office,
the name and address of a person resident in the United States on whom may be
served notices or process in proceedings affecting the mark. Such notices or
process may be served upon the person so designated by leaving with that
person or mailing to that person a copy thereof at the address specified in the
862
last designation so filed. If the person so designated cannot be found at the
address given in the last designation, or if the registrant does not designate by a
document filed in the United States Patent and Trademark Office the name and
address of a person resident in the United States on whom may be served
notices or process in proceedings affecting the mark, such notices or process
may be served on the Director.
History:
(July 5, 1946, ch 540, Title I, § 1, 60 Stat. 427; Oct. 9, 1962, P.L. 87-772, § 1, 76 Stat.
769; Jan. 2, 1975, P.L. 93-596, § 1, 88 Stat. 1949; Nov. 16, 1988, P.L. 100-667, Title I, §
103, 102 Stat. 3935.)
(As amended Oct. 30, 1998, P.L. 105-330, Title I, § 103, Title II, § 201(a)(1), 112 Stat.
3064, 3069; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Nov. 2,
2002, P.L. 107-273, Div C, Title III, Subtitle B, § 13207(b)(1), (2), 116 Stat. 1906.)
Act Oct. 6, 2006, P.L. 109-312, § 1(a), 120 Stat. 1730, provides: “This Act [amending
15 USCS §§ 1052, 1063, 1064, 1092, 1125, and 1127] may be cited as the ‘Trademark
Dilution Revision Act of 2006’ ”.
2010 Note: Act March 17, 2010, P.L. 111-146 , § 1, 124 Stat. 66, provides: “This Act
may be cited as the ‘Trademark Technical and Conforming Amendment Act of 2010.’. For
full classification of such Act, consult USCS Tables volumes.
§ 1052. [Lanham Act § 2] Trademarks Registrable on

the Principal Register; Concurrent Registration.
No trademark by which the goods of the applicant may be distinguished
from the goods of others shall be refused registration on the principal register on
account of its nature unless it—
(a) Consists of or comprises immoral, deceptive, or scandalous matter;
or matter which may disparage or falsely suggest a connection with persons,
living or dead, institutions, beliefs, or national symbols, or bring them into
contempt, or disrepute; or a geographical indication which, when used on or
in connection with wines or spirits, identifies a place other than the origin of
the goods and is first used on or in connection with wines or spirits by the
applicant on or after one year after the date on which the WTO Agreement
(as defined in section 2(9) of the Uruguay Round Agreements Act [ 19 USCS
§ 3501(9)]) enters into force with respect to the United States.
(b) Consists of or comprises the flag or coat of arms or other insignia of
the United States, or of any State or municipality, or of any foreign nation, or
any simulation thereof.
(c) Consists of or comprises a name, portrait, or signature identifying a
particular living individual except by his written consent, or the name,
signature, or portrait of a deceased President of the United States during the
863
life of his widow, if any, except by the written consent of the widow.
( d ) Consists of or comprises a mark which so resembles a mark
registered in the Patent and Trademark Office, or a mark or trade name
previously used in the United States by another and not abandoned, as to be
likely, when used on or in connection with the goods of the applicant, to
cause confusion, or to cause mistake, or to deceive: Provided, That if the
Director determines that confusion, mistake, or deception is not likely to
result from the continued use by more than one person of the same or similar
marks under conditions and limitations as to the mode or place of use of the
marks or the goods on or in connection with which such marks are used,
concurrent registrations may be issued to such persons when they have
become entitled to use such marks as a result of their concurrent lawful use
in commerce prior to (1) the earliest of the filing dates of the applications
pending or of any registration issued under this Act; (2) July 5, 1947, in the
case of registrations previously issued under the Act of March 3, 1881, or
February 20, 1905, and continuing in full force and effect on that date; or (3)
July 5, 1947, in the case of applications filed under the Act of February 20,
1905, and registered after July 5, 1947. Use prior to the filing date of any
pending application or a registration shall not be required when the owner
of such application or registration consents to the grant of a concurrent
registration to the applicant. Concurrent registrations may also be issued by
the Director when a court of competent jurisdiction has finally determined
that more than one person is entitled to use the same or similar marks in
commerce. In issuing concurrent registrations, the Director shall prescribe
conditions and limitations as to the mode or place of use of the mark or the
goods on or in connection with which such mark is registered to the
respective persons.
(e) Consists of a mark which (1) when used on or in connection with the
goods of the applicant is merely descriptive or deceptively misdescriptive
of them, (2) when used on or in connection with the goods of the applicant is
primarily geographically descriptive of them, except as indications of
regional origin may be registrable under section 4 [15 USCS § 1054], (3)
when used on or in connection with the goods of the applicant is primarily
geographically deceptively misdescriptive of them, (4) is primarily merely
a surname, or (5) comprises any matter that, as a whole, is functional.
(f) Except as expressly excluded in subsections (a), (b), (c), (d), (e)(3),
and (e)(5) of this section, nothing herein shall prevent the registration of a
mark used by the applicant which has become distinctive of the applicant’s
goods in commerce. The Director may accept as prima facie evidence that
the mark has become distinctive, as used on or in connection with the
applicant’s goods in commerce, proof of substantially exclusive and
864
continuous use thereof as a mark by the applicant in commerce for the five
years before the date on which the claim of distinctiveness is made. Nothing
in this section shall prevent the registration of a mark which, when used on
or in connection with the goods of the applicant, is primarily geographically
deceptively misdescriptive of them, and which became distinctive of the
applicant’s goods in commerce before the date of the enactment of the North
American Free Trade Agreement Implementation Act [enacted Dec. 8,
1993]. A mark which would be likely to cause dilution by blurring or
dilution by tarnishment under section 43(c) [15 USCS § 1125(c)], may be
refused registration only pursuant to a proceeding brought under section 13
[15 USCS § 1063]. A registration for a mark which would be likely to cause
dilution by blurring or dilution by tarnishment under section 43(c) [15 USCS
§ 1125(c)], may be canceled pursuant to a proceeding brought under either
section 14 or section 24 [15 USCS § 1064 or 1092].
History:
(July 5, 1946, ch 540, Title I, § 2, 60 Stat. 428; Oct. 9, 1962, P.L. 87-772 § 2, 76 Stat.
769; Jan. 2, 1975, P.L. 93-596, § 1, 88 Stat. 1949; Nov. 16, 1988, P.L. 100-667, Title I, §
104, 102 Stat. 3037.)
(As amended Dec. 8, 1993, P.L. 103-182, Title III, Subtitle C, § 333(a), 107 Stat. 2114;
Dec. 8, 1994, P.L. 103-465, Title V, Subtitle B, § 522, 108 Stat. 4982; Oct. 30, 1998, P.L.
105-330, Title II, § 201(a)(2), (12), 112 Stat. 3069, 3070; Aug. 5, 1999, P.L. 106-43, § 2(a),
113 Stat. 218; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Oct. 6,
2006, P.L. 109-312, § 3(a), 120 Stat. 1732.)

Subject to the provisions relating to the registration of trademarks, so far as
they are applicable, service marks shall be registrable, in the same manner and
with the same effect as are trademarks, and when registered they shall be
entitled to the protection provided in this chapter in the case of trademarks.
Applications and procedure under this section shall conform as nearly as
practicable to those prescribed for the registration of trademarks.
Leg.H. July 5, 1946, ch. 540 § 3, 60 Stat. 429; November 16, 1988, P.L. 100-667 §
105, 102 Stat. 3938; August 5, 1999, P.L. 106-43 § 6(b), 113 Stat. 220.
§ 1054. [Lanham Act § 4] Collective Marks and

Certification Marks Registrable.
Subject to the provisions relating to the registration of trademarks, so far as
they are applicable, collective and certification marks, including indications of
regional origin, shall be registrable under this chapter, in the same manner and
with the same effect as are trademarks, by persons, and nations, States,
municipalities, and the like, exercising legitimate control over the use of the
865
marks sought to be registered, even though not possessing an industrial or
commercial establishment, and when registered they shall be entitled to the
protection provided in this chapter in the case of trademarks, except in the case
of certification marks when used so as to represent falsely that the owner or a
user thereof makes or sells the goods or performs the services on or in
connection with which such mark is used. Applications and procedure under this
section shall conform as nearly as practicable to those prescribed for the
registration of trademarks.
106, 102 Stat. 3938; August 5, 1999, P.L. 106-43 § 6(b), 113 Stat. 220.
§ 1055. [Lanham Act § 5] Use by Related Companies

Affecting Validity and Registration.
Where a registered mark or a mark sought to be registered is or may be used
legitimately by related companies, such use shall inure to the benefit of the
registrant or applicant for registration, and such use shall not affect the validity
of such mark or of its registration, provided such mark is not used in such
manner as to deceive the public. If first use of a mark by a person is controlled
by the registrant or applicant for registration of the mark with respect to the
nature and quality of the goods or services, such first use shall inure to the
benefit of the registrant or applicant, as the case may be.
107, 102 Stat. 3938.
§ 1056. [Lanham Act § 6] Disclaimer of Unregistrable

Matter.
( a ) The Director may require the applicant to disclaim an unregistrable
component of a mark otherwise registrable. An applicant may voluntarily
disclaim a component of a mark sought to be registered.
(b) No disclaimer, including those made under subsec. (e) of section 7 of
this Act, shall prejudice or affect the applicant’s or registrant’s rights then
existing or thereafter arising in the disclaimed matter, or his right of registration
on another application if the disclaimed matter be or shall have become
distinctive of his goods or services.
Leg.H. July 5, 1946, ch. 540 § 6, 60 Stat. 429; October 9, 1962, P.L. 87-772 § 3, 76
Stat. 769; November 16, 1988, P.L. 100-667 § 108, 102 Stat. 3938; November 29, 1999,
P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B)], 113 Stat. 1536.
866
(a) Issuance and Form. Certificates of registration of marks registered upon
the principal register shall be issued in the name of the United States of
America, under the seal of the United States Patent and Trademark Office, and
shall be signed by the Director or have his signature placed thereon, and a
record thereof shall be kept in the United States Patent and Trademark Office.
The registration shall reproduce the mark, and state that the mark is registered
on the principal register under this Act, the date of the first use of the mark, the
date of the first use of the mark in commerce, the particular goods or services
for which it is registered, the number and date of the registration, the term
thereof, the date on which the application for registration was received in the
United States Patent and Trademark Office, and any conditions and limitations
that may be imposed in the registration.
(b) Certificate as Prima Facie Evidence. A certificate of registration of a
mark upon the principal register provided by this Act shall be prima facie
evidence of the validity of the registered mark and of the registration of the
mark, of the owner’s ownership of the mark, and of the owner’s exclusive right
to use the registered mark in commerce on or in connection with the goods or
services specified in the certificate, subject to any conditions or limitations
stated in the certificate.
(c) Application to Register Mark Considered Constructive Use. Contingent
on the registration of a mark on the principal register provided by this Act, the
filing of the application to register such mark shall constitute constructive use of
the mark, conferring a right of priority, nationwide in effect, on or in connection
with the goods or services specified in the registration against any other person
except for a person whose mark has not been abandoned and who, prior to such
filing—
(1) has used the mark;
(2) has filed an application to register the mark which is pending or has
resulted in registration of the mark; or
(3) has filed a foreign application to register the mark on the basis of
which he or she has acquired a right of priority, and timely files an
application under section 44(d) [15 USCS § 1126(d)] to register the mark
which is pending or has resulted in registration of the mark.
(d) Issuance to Assignee. A certificate of registration of a mark may be
issued to the assignee or the applicant, but the assignment must first be recorded
in the United States Patent and Trademark Office. In case of change of
ownership the Director shall, at the request of the owner and upon a proper
showing and the payment of the prescribed fee, issue to such assignee a new
certificate of registration of the said mark in the name of such assignee, and for
the unexpired part of original period.
867
(e) Surrender, Cancellation, or Amendment by Owner. Upon application of
the owner the Director may permit any registration to be surrendered for
cancelation, and upon cancelation appropriate entry shall be made in the records
of the United States Patent and Trademark Office. Upon application of the
owner and payment of the prescribed fee, the Director for good cause may
permit any registration to be amended or to be disclaimed in part: Provided,
That the amendment or disclaimer does not alter materially the character of the
mark. Appropriate entry shall be made in the records of the United States Patent
and Trademark Office and upon the certificate of registration.
(f) Copies of United States Patent and Trademark Office records as
evidence. Copies of any records, books, papers, or drawings belonging to the
United States Patent and Trademark Office relating to marks, and copies of
registrations, when authenticated by the seal of the United States Patent and
Trademark Office and certified by the Director, or in his name by an employee
of the Office duly designated by the Director, shall be evidence in all cases
wherein the originals would be evidence; and any person making application
therefor and paying the prescribed fee shall have such copies.
(g) Correction of Patent and Trademark Office Mistake. Whenever a
material mistake in a registration, incurred through the fault of the United States
Patent and Trademark Office, is clearly disclosed by the records of the Office a
certificate stating the fact and nature of such mistake shall be issued without
charge and recorded and a printed copy thereof shall be attached to each printed
copy of the registration and such corrected registration shall thereafter have the
same effect as if the same had been originally issued in such corrected form, or
in the discretion of the Director a new certificate of registration may be issued
without charge. All certificates of correction heretofore issued in accordance
with the rules of the United States Patent and Trademark Office and the
registrations to which they are attached shall have the same force and effect as if
such certificates and their issue had been specifically authorized by statute.
(h) Correction of Applicant’s Mistake. Whenever a mistake has been made
in a registration and a showing has been made that such mistake occurred in
good faith through the fault of the applicant, the Director is authorized to issue a
certificate of correction or, in his discretion, a new certificate upon the payment
of the prescribed fee: Provided, That the correction does not involve such
changes in the registration as to require republication of the mark.
Leg. H. July 5, 1946, ch. 540, Title I, § 7, 60 Stat. 430; Aug. 17, 1950, ch. 733, 64 Stat.
459; Oct. 9, 1962, P.L. 87-772, § 4, 76 Stat. 769; Jan. 2, 1975, P.L. 93-596, § 1, 88 Stat.
1949; Nov. 16, 1988, P.L. 100-667, Title I, § 109, 102 Stat. 3938; Oct. 30, 1998, P.L. 105-
330, Title II, § 201(a)(3), 112 Stat. 3070; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9),
113 Stat. 1536; March 17, 2010, P.L. 111-146, § 3(a), 124 Stat. 66.
868
(a) Time Periods for Required Affidavits. Each registration shall remain in
force for 10 years, except that the registration of any mark shall be canceled by
the Director unless the owner of the registration files in the United States Patent
and Trademark Office affidavits that meet the requirements of subsection (b),
within the following time periods:
(1) Within the 1-year period immediately preceding the expiration of 6
years following the date of registration under this Act or the date of the
publication under section 12(c) [15 USCS § 1062(c)].
years following the date of registration, and each successive 10-year period
following the date of registration.
(3) The owner may file the affidavit required under this section within
the 6-month grace period immediately following the expiration of the
periods established in paragraphs (1) and (2), together with the fee
described in subsection (b) and the additional grace period surcharge
prescribed by the Director.
(b) Requirements for Affidavit. The affidavit referred to in subsection (a)
shall—
(1)
(A) state that the mark is in use in commerce;
(B) set forth the goods and services recited in the registration on or
in connection with which the mark is in use in commerce;
( C) be accompanied by such number of specimens or facsimiles
showing current use of the mark in commerce as may be required by the
Director; and
(D) be accompanied by the fee prescribed by the Director; or
(2)
(A) set forth the goods and services recited in the registration on or
in connection with which the mark is not in use in commerce;
( B ) include a showing that any nonuse is due to special
circumstances which excuse such nonuse and is not due to any intention
to abandon the mark; and
(C) be accompanied by the fee prescribed by the Director.
869
(c) Deficient Affidavit. If any submission filed within the period set forth
in subsection (a) is deficient, including that the affidavit was not filed in the
name of the owner of the registration, the deficiency may be corrected after the
statutory time period, within the time prescribed after notification of the
deficiency. Such submission shall be accompanied by the additional deficiency
surcharge prescribed by the Director.
(d) Notice of Requirement. Special notice of the requirement for such
affidavit shall be attached to each certificate of registration and notice of
publication under section 12(c) [15 USCS § 1062(c)].
(e) Notification of Acceptance or Refusal. The Director shall notify any
owner who files any affidavit required by this section of the Director’s
acceptance or refusal thereof and, in the case of a refusal, the reasons therefor.
(f) Designation of Resident for Service of Process and Notices. If the
owner is not domiciled in the United States, the owner may designate, by a
document filed in the United States Patent and Trademark Office, the name and
notices or process in proceedings affecting the mark. Such notices or process
may be served upon the person so designated by leaving with that person or
mailing to that person a copy thereof at the address specified in the last
designation so filed. If the person so designated cannot be found at the last
designated address, or if the owner does not designate by a document filed in
the United States Patent and Trademark Office the name and address of a person
resident in the United States on whom may be served notices or process in
proceedings affecting the mark, such notices or process may be served on the
Director.
Leg. H. July 5, 1946, ch. 540, Title I, § 8, 60 Stat. 431; Jan. 2, 1975, P.L. 93-596, § 1,
88 Stat. 1949; Aug. 27, 1982, P.L. 97-247, § 8, 96 Stat. 320; Nov. 16, 1988, P.L. 100-667,
Title I, § 110, 102 Stat. 3939; Oct. 30, 1998, P.L. 105-330, Title I, § 105, 112 Stat. 3066;
Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Nov. 2, 2002, P.L. 107-
273, Div C, Title III, Subtitle B, § 13207(b)(3), 116 Stat. 1906; March 17, 2010, P.L. 111-
146, § 3(d)(1), 124 Stat. 67.

(a) Subject to the provisions of section 8, each registration may be renewed
for periods of 10 years at the end of each successive 10-year period following
the date of registration upon payment of the prescribed fee and the filing of a
written application, in such form as may be prescribed by the Director. Such
application may be made at any time within 1 year before the end of each
successive 10-year period for which the registration was issued or renewed, or
it may be made within a grace period of 6 months after the end of each
successive 10-year period, upon payment of a fee and surcharge prescribed
870
therefor. If any application filed under this section is deficient, the deficiency
may be corrected within the time prescribed after notification of the deficiency,
upon payment of a surcharge prescribed therefor.
(b) If the Director refuses to renew the registration, the Director shall notify
the registrant of the Director’s refusal and the reasons therefor.
(c) If the registrant is not domiciled in the United States the registrant may
designate, by a document filed in the United States Patent and Trademark Office,
the name and address of a person resident in the United States on whom may be
served notices or process in proceedings affecting the mark. Such notices or
process may be served upon the person so designated by leaving with that
person or mailing to that person a copy thereof at the address specified in the
last designation so filed. If the person so designated cannot be found at the
address given in the last designation, or if the registrant does not designate by a
Stat. 770; November 16, 1988, P.L. 100-667 § 111, 102 Stat. 3939; October 30, 1998, P.L.
105-330 § 106, 112 Stat. 3067, effective October 30, 1999 or upon the entry into force of
the Trademark Law Treaty with respect to the United States, whichever comes first [see P.L.
105-330 § 110]; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B), (C)], 113
Stat. 1536; November 2, 2002, P.L. 107-273 § 13207(b)(4), 116 Stat. 1907.

(a)
(1) A registered mark or a mark for which an application to register has
been filed shall be assignable with the good will of the business in which
the mark is used, or with that part of the good will of the business connected
with the use of and symbolized by the mark. Notwithstanding the preceding
sentence, no application to register a mark under section 1(b) shall be
assignable prior to the filing of an amendment under section 1(c) to bring the
application into conformity with section 1(a) or the filing of the verified
statement of use under section 1(d), except for an assignment to a successor
to the business of the applicant, or portion thereof, to which the mark
pertains, if that business is ongoing and existing.
(2) In any assignment authorized by this section, it shall not be necessary
to include the good will of the business connected with the use of and
symbolized by any other mark used in the business or by the name or style
under which the business is conducted.
871
( 3 ) Assignments shall be by instruments in writing duly executed.
Acknowledgment shall be prima facie evidence of the execution of an
assignment, and when the prescribed information reporting the assignment is
recorded in the United States Patent and Trademark Office, the record shall
be prima facie evidence of execution.
(4) An assignment shall be void against any subsequent purchaser for
valuable consideration without notice, unless the prescribed information
reporting the assignment is recorded in the United States Patent and
Trademark Office within 3 months after the date of the assignment or prior
to the subsequent purchase.
( 5) The United States Patent and Trademark Office shall maintain a
record of information on assignments, in such form as may be prescribed by
the Director.
( b) An assignee not domiciled in the United States may designate by a
notices or process in proceedings affecting the mark. Such notices or process
may be served upon the person so designated by leaving with that person or
mailing to that person a copy thereof at the address specified in the last
designation so filed. If the person so designated cannot be found at the address
given in the last designation, or if the assignee does not designate by a document
filed in the United States Patent and Trademark Office the name and address of a
person resident in the United States on whom may be served notices or process
in proceedings affecting the mark, such notices or process may be served upon
the Director.
Stat. 770; January 2, 1975, P.L. 93-596 § 1, 88 Stat. 1949; November 16, 1988, P.L. 100-
667 § 112, 102 Stat. 3937; October 30, 1998, P.L. 105-330 § 107, 112 Stat. 3068, effective
October 30, 1999 or upon the entry into force of the Trademark Law Treaty with respect to
the United States, whichever comes first [see P.L. 105-330 § 110]; August 5, 1999, P.L.
106-43 § 6(a), 113 Stat. 220; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)
(B)], 113 Stat. 1536; November 2, 2002, P.L. 107-273 § 13207(b)(5), 116 Stat. 1907.
§ 1061. [Lanham Act § 11] Execution of

Acknowledgments and Verifications.
Acknowledgments and verifications required under this chapter may be
made before any person within the United States authorized by law to administer
oaths, or, when made in a foreign country, before any diplomatic or consular
officer of the United States or before any official authorized to administer oaths
in the foreign country concerned whose authority shall be proved by a certificate
872
of a diplomatic or consular officer of the United States, or apostille of an
official designated by a foreign country which, by treaty or convention, accords
like effect to apostilles of designated officials in the United States, and is valid
if they comply with the laws of the state or country where made.
Leg.H. July 5, 1946, ch. 540 § 11, 60 Stat. 432; August 27, 1982, P.L. 97-247 § 14(c),
96 Stat. 321.

(a) Examination and Publication. Upon the filing of an application for
registration and payment of the prescribed fee, the Director shall refer the
application to the examiner in charge of the registration of marks, who shall
cause an examination to be made and, if on such examination it shall appear that
the applicant is entitled to registration, or would be entitled to registration upon
the acceptance of the statement of use required by section 1(d) of this Act, the
Director shall cause the mark to be published in the Official Gazette of the
Patent and Trademark Office; Provided, That in the case of an applicant
claiming concurrent use, or in the case of an application to be placed in an
interference as provided in section 16 of this Act, the mark if otherwise
registrable, may be published subject to the determination of the rights of the
parties to such proceedings.
(b) Refusal of Registration; Amendment of Application; Abandonment. If
the applicant is found not entitled to registration, the examiner shall advise the
applicant thereof and of the reasons therefor. The applicant shall have a period
of six months in which to reply or amend his application, which shall then be
reexamined. This procedure may be repeated until (1) the examiner finally
refuses registration of the mark or (2) the applicant fails for a period of six
months to reply or amend or appeal, whereupon the application shall be deemed
to have been abandoned, unless it can be shown to the satisfaction of the
Director that the delay in responding was unintentional, whereupon such time
may be extended.
(c) Republication of Marks Registered Under Prior Acts. A registrant of a
mark registered under the provisions of the Act of March 3, 1881, or the Act of
February 20, 1905, may, at any time prior to the expiration of the registration
thereof, upon the payment of the prescribed fee file with the Director an
affidavit setting forth those goods stated in the registration on which said mark
is in use in commerce and that the registrant claims the benefits of this Act for
said mark. The Director shall publish notice thereof with a reproduction of said
mark in the Official Gazette, and notify the registrant of such publication and of
the requirement for the affidavit of use or nonuse as provided for in subsection
(b) of Section 8 of this Act. Marks published under this subsection shall not be
subject to the provisions of section 13 of this Act.
873
Leg.H. July 5, 1946, ch. 540 § 12, 60 Stat. 432; October 9, 1962, P.L. 87772 § 7, 76
the United States, whichever comes first [see P.L. 105-330 § 110]; November 29, 1999, P.L.
106-113 § 1000(a)(9) [4732(b)(1)(B)], 113 Stat. 1536.

(a) Any person who believes that he would be damaged by the registration
of a mark upon the principal register, including the registration of any mark
which would be likely to cause dilution by blurring or dilution by tarnishment
under section 43(c) [15 USCS § 1125(c)], may, upon payment of the prescribed
fee, file an opposition in the Patent and Trademark Office, stating the grounds
therefor, within thirty days after the publication under subsection (a) of section
12 of this Act [15 USCS § 1062] of the mark sought to be registered. Upon
written request prior to the expiration of the thirty-day period, the time for filing
opposition shall be extended for an additional thirty days, and further extensions
of time for filing opposition may be granted by the Director for good cause
when requested prior to the expiration of an extension. The Director shall notify
the applicant of each extension of the time for filing opposition. An opposition
may be amended under such conditions as may be prescribed by the Director.
(b) Unless registration is successfully opposed—
(1) a mark entitled to registration on the principal register based on an
application filed under section 1(a) [15 USCS § 1051(a)] or pursuant to
section 44 [15 USCS § 1126] shall be registered in the Patent and
Trademark Office, a certificate of registration shall be issued, and notice of
the registration shall be published in the Official Gazette of the Patent and
Trademark Office; or
(2) a notice of allowance shall be issued to the applicant if the applicant
applied for registration under section 1(b) [15 USCS § 1051(b)].
History:
(July 5, 1946, ch 540, Title 1, § 13, 60 Stat. 433; Oct. 9, 1962, P.L. 87-772, § 8, 76 Stat.
771; Jan. 2, 1975, P.L. 93-596, § 1, 88 Stat. 1949; Jan. 2, 1975, P.L. 93-600, § 1, 88 Stat.
1955; Aug. 27, 1982, P.L. 97-247, § 9(a), 96 Stat. 320; Nov. 16, 1988, P.L. 100-667, Title I,
§ 114, 102 Stat. 3940.)
(As amended Aug. 5, 1999, P.L. 106-43, § 2(b), 113 Stat. 218; Nov. 29, 1999, P.L. 106-
113, Div B, § 1000(a)(9), 113 Stat. 1536; Oct. 6, 2006, P.L. 109-312, § 3(b), 120 Stat.
1732.)
874
A petition to cancel a registration of a mark, stating the grounds relied upon,
may, upon payment of the prescribed fee, be filed as follows by any person who
believes that he is or will be damaged, including as a result of a likelihood of
dilution by blurring or dilution by tarnishment under section 43(c) [15 USCS §
1125(c)], by the registration of a mark on the principal register established by
this Act, or under the Act of March 3, 1881, or the Act of February 20, 1905:
(1) Within five years from the date of the registration of the mark under
this Act.
(2) Within five years from the date of publication under section 12(c)
hereof [15 USCS § 1062(c)] of a mark registered under the Act of March 3,
1881, or the Act of February 20, 1905.
(3) At any time if the registered mark becomes the generic name for the
goods or services, or a portion thereof, for which it is registered, or is
functional, or has been abandoned, or its registration was obtained
fraudulently or contrary to the provisions of section 4 [15 USCS § 1054] or
of subsection (a), (b), or (c) of section 2 [15 USCS § 1052] for a
registration under this Act, or contrary to similar prohibitory provisions of
such prior Acts for a registration under such Acts, or if the registered mark
is being used by, or with the permission of, the registrant so as to
misrepresent the source of the goods or services on or in connection with
which the mark is used. If the registered mark becomes the generic name for
less than all of the goods or services for which it is registered, a petition to
cancel the registration for only those goods or services may be filed. A
registered mark shall not be deemed to be the generic name of goods or
services solely because such mark is also used as a name of or to identify a
unique product or service. The primary significance of the registered mark
to the relevant public rather than purchaser motivation shall be the test for
determining whether the registered mark has become the generic name of
goods or services on or in connection with which it has been used.
(4) At any time if the mark is registered under the Act of March 3, 1881,
or the Act of February 20, 1905, and has not been published under the
provisions of subsection (c) of section 12 of this Act [15 USCS § 1062].
(5) At any time in the case of a certification mark on the ground that the
registrant (A) does not control, or is not able legitimately to exercise control
over, the use of such mark, or (B) engages in the production or marketing of
any goods or services to which the certification mark is applied, or (C)
permits the use of the certification mark for purposes other than to certify, or
(D) discriminately refuses to certify or to continue to certify the goods or
services of any person who maintains the standards or conditions which
such mark certifies:
875
Provided, That the Federal Trade Commission may apply to cancel on the
grounds specified in paragraphs (3) and (5) of this section any mark registered
on the principal register established by this Act, and the prescribed fee shall not
be required. Nothing in paragraph (5) shall be deemed to prohibit the registrant
from using its certification mark in advertising or promoting recognition of the
certification program or of the goods or services meeting the certification
standards of the registrant. Such uses of the certification mark shall not be
grounds for cancellation under paragraph (5), so long as the registrant does not
itself produce, manufacture, or sell any of the certified goods or services to
which its identical certification mark is applied.
History:
(July 5, 1946, ch 540, Title I, § 14, 60 Stat. 433; Oct. 9, 1962, P.L. 87-772, § 9, 76 Stat.
771; Aug. 27, 1982, P.L. 97-247, 9(b), 96 Stat. 320; Nov. 8, 1984, P.L. 98-620, Title I, §
102, 98 Stat. 3335; Nov. 16, 1988, P.L. 100-667, Title I, § 115, 102 Stat. 3940.)
(As amended Oct. 30, 1998, P.L. 105-330, Title II, § 201(a)(4), Title III, § 301, 112 Stat.
3070; Aug. 5, 1999, P.L. 106-43, § 2(c), 113 Stat. 218; Oct. 6, 2006, P.L. 109-312, § 3(c),
120 Stat. 1732.)
§ 1065. [Lanham Act § 15] Incontestability of Right to

Use Mark Under Certain Conditions.
Except on a ground for which application to cancel may be filed at any time
under paragraphs (3) and (5) of section 14 of this Act [15 USCS § 1064(3),
(5)], and except to the extent, if any, to which the use of a mark registered on the
principal register infringes a valid right acquired under the law of any State or
Territory by use of a mark or trade name continuing from a date prior to the date
of registration under this Act of such registered mark, the right of the owner to
use such registered mark in commerce for the goods or services on or in
connection with which such registered mark has been in continuous use for five
consecutive years subsequent to the date of such registration and is still in use in
commerce, shall be incontestable: Provided, That—
(1) there has been no final decision adverse to the owner’s claim of
ownership of such mark for such goods or services, or to the owner’s right
to register the same or to keep the same on the register; and
(2) there is no proceeding involving said rights pending in the United
States Patent and Trademark Office or in a court and not finally disposed of;
and
( 3) an affidavit is filed with the Director within one year after the
expiration of any such five-year period setting forth those goods or services
stated in the registration on or in connection with which such mark has been
in continuous use for such five consecutive years and is still in use in
876
commerce, and the other matters specified in paragraphs (1) and (2) of this
section; and
( 4) no incontestable right shall be acquired in a mark which is the
generic name for the goods or services or a portion thereof, for which it is
registered.
Subject to the conditions above specified in this section, the
incontestable right with reference to a mark registered under this shall apply
to a mark registered under the Act of March 3, 1881, or the Act of February
20, 1905, upon the filing of the required affidavit with the Director within
one year after the expiration of any period of five consecutive years after the
date of publication of a mark under the provisions of subsection (c) of
section 12 of this Act [15 USCS § 1062(c)].
The Director shall notify any registrant who files the above-prescribed
affidavit of the filing thereof.
Leg. H. July 5, 1946, ch. 540, Title I, § 15, 60 Stat. 433; Oct. 9, 1962, P.L. 87-772, §
10, 76 Stat. 771; Jan. 2, 1975, P.L. 93-596, § 1, 88 Stat. 1949; Aug. 27, 1982, P.L. 97-247, §
10, 96 Stat. 320; Nov. 16, 1988, P.L. 100-667, Title I, § 116, 102 Stat. 3941; Nov. 29, 1999,
P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; March 17, 2010, P.L. 111-146, § 3(b),
124 Stat. 67.
§ 1066. [Lanham Act § 16] Interference; Declaration by

Director.
Upon petition showing extraordinary circumstances, the Director may
declare that an interference exists when application is made for the registration
of a mark which so resembles a mark previously registered by another, or for
the registration of which another has previously made application, as to be
likely when used on or in connection with the goods or services of the applicant
to cause confusion or mistake or to deceive. No interference shall be declared
between an application and the registration of a mark the right to the use of
which has become incontestable.
Stat. 771; August 27, 1982, P.L. 97-247 § 11, 96 Stat. 321; November 16, 1988, P.L. 100-
667 § 117, 102 Stat. 3941; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B)],
113 Stat. 1536.
§ 1067. [Lanham Act § 17] Interference, Opposition,

and Proceedings for Concurrent Use Registration or
for Cancellation; Notice; Trademark Trial and
Appeal Board.
877
(a) In every case of interference, opposition to registration, application to
register as a lawful concurrent user, or application to cancel the registration of a
mark, the Director shall give notice to all parties and shall direct a Trademark
Trial and Appeal Board to determine and decide the respective rights of
registration.
( b) The Trademark Trial and Appeal Board shall include the Director,
Deputy Director of the United States Patent and Trademark Office[,] the
Commissioner for Patents, the Commissioner for Trademarks, and
administrative trademark judges who are appointed by the Secretary of
Commerce, in consultation with the Director.
(c) Authority of the Secretary. The Secretary of Commerce may, in his or
her discretion, deem the appointment of an administrative trademark judge who,
before the date of the enactment of this subsection [enacted Aug. 12, 2008], held
office pursuant to an appointment by the Director to take effect on the date on
which the Director initially appointed the administrative trademark judge.
(d) Defense to challenge of appointment. It shall be a defense to a challenge
to the appointment of an administrative trademark judge on the basis of the
judge’s having been originally appointed by the Director that the administrative
trademark judge so appointed was acting as a de facto officer.
Leg.H. Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Nov. 2,
2002, P.L. 107-273, Div C, Title V, Subtitle B, § 13203(a)(2), 116 Stat. 1902; Aug. 12,
2008, P.L. 110-313, § 1(a)(1), 122 Stat. 3014.
§ 1068. [Lanham Act § 18] Action of Director in

Interference, Opposition, and Proceedings for
Concurrent Use Registration or for Cancellation.
In such proceedings the Director may refuse to register the opposed mark,
may cancel the registration, in whole or in part, may modify the application or
registration by limiting the goods or services specified therein, may otherwise
restrict or rectify with respect to the register the registration of a registered
mark, may refuse to register any or all of several interfering marks, or may
register the mark or marks for the person or persons entitled thereto, as the
rights of the parties hereunder may be established in the proceedings: Provided,
That in the case of the registration of any mark based on concurrent use, the
Director shall determine and fix the conditions and limitations provided for in
subsection (d) of section 2 of this Act. However, no final judgment shall be
entered in favor of an applicant under section 1(b) before the mark is registered,
if such applicant cannot prevail without establishing constructive use pursuant to
section 7(c).
878
118, 102 Stat. 3941; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B)], 113
Stat. 1536.
§ 1069. [Lanham Act § 19] Application of Equitable

Principles in Inter Partes Proceedings.
In all inter partes proceedings equitable principles of laches, estoppel, and
acquiescence, where applicable may be considered and applied.
Leg.H. July 5, 1946, ch. 540 § 19, 60 Stat. 435; January 2, 1975, P.L. 93-596 § 1, 88
Stat. 1949; November 16, 1988, P.L. 100-667 § 119, 102 Stat. 3941.
§ 1070. [Lanham Act § 20] Appeals to Trademark Trial

and Appeal Board From Decisions of Examiners.
An appeal may be taken to the Trademark Trial and Appeal Board from any
final decision of the examiner in charge of the registration of marks upon the
payment of the prescribed fee.
Leg.H. July 5, 1946, ch. 540 § 20, 60 Stat. 435; August 8, 1958, P.L. 85-609 § 1(b), 72
Stat. 540.

( a ) Persons entitled to appeal; United States Court of Appeals for the
Federal Circuit; waiver of civil action; election of civil action by adverse party;
procedure.
( 1) An applicant for registration of a mark, party to an interference
proceeding, party to an opposition proceeding, party to an application to
register as a lawful concurrent user, party to a cancellation proceeding, a
registrant who has filed an affidavit as provided in section 8 [15 USCS §
1058] or section 71 [15 USCS § 1141k], or an applicant for renewal, who is
dissatisfied with the decision of the Director or Trademark Trial and
Appeal Board, may appeal to the United States Court of Appeals for the
Federal Circuit thereby waiving his right to proceed under subsection (b) of
this section: Provided, That such appeal shall be dismissed if any adverse
party to the proceeding, other than the Director, shall, within twenty days
after the appellant has filed notice of appeal according to paragraph (2) of
this subsection, files notice with the Director that he elects to have all
further proceedings conducted as provided in subsection (b) of this section.
Thereupon the appellant shall have thirty days thereafter within which to file
a civil action under subsection (b) of this section, in default of which the
decision appealed from shall govern the further proceedings in the case.
879
(2) When an appeal is taken to the United States Court of Appeals for
the Federal Circuit, the appellant shall file in the United States Patent and
Trademark Office a written notice of appeal directed to the Director, within
such time after the date of the decision from which the appeal is taken as the
Director prescribes, but in no case less than 60 days after that date.
(3) The Director shall transmit to the United States Court of Appeals for
the Federal Circuit a certified list of the documents comprising the record in
the United States Patent and Trademark Office. The court may request that
the Director forward the original or certified copies of such documents
during pendency of the appeal. In an ex parte case, the Director shall submit
to that court a brief explaining the grounds for the decision of the United
States Patent and Trademark Office, addressing all the issues involved in
the appeal. The court shall, before hearing an appeal, give notice of the time
and place of the hearing to the Director and the parties in the appeal.
(4) The United States Court of Appeals for the Federal Circuit shall
review the decision from which the appeal is taken on the record before the
United States Patent and Trademark Office. Upon its determination the court
shall issue its mandate and opinion to the Director, which shall be entered
of record in the United States Patent and Trademark Office and shall govern
the further proceedings in the case. However, no final judgment shall be
entered in favor of an applicant under section 1(b) [15 USCS § 1051(b)]
before the mark is registered, if such applicant cannot prevail without
establishing constructive use pursuant to section 7(c) [15 USCS § 1057(c)].
(b) Civil action; persons entitled to; jurisdiction of court; status of Director;
procedure.
(1) Whenever a person authorized by subsection (a) of this section to
appeal to the United States Court of Appeals for the Federal Circuit is
dissatisfied with the decision of the Director or Trademark Trial and
Appeal Board, said person may, unless appeal has been taken to said United
States Court of Appeals for the Federal Circuit, have remedy by a civil
action if commenced within such time after such decision, not less than sixty
days, as the Director appoints or as provided in subsection (a) of this
section. The court may adjudge that an applicant is entitled to a registration
upon the application involved, that a registration involved should be
canceled, or such other matter as the issues in the proceeding require, as the
facts in the case may appear. Such adjudication shall authorize the Director
to take any necessary action, upon compliance with the requirements of law.
However, no final judgment shall be entered in favor of an applicant under
section 1(b) [15 USCS § 1051(b)] before the mark is registered, if such
applicant cannot prevail without establishing constructive use pursuant to
section 7(c) [15 USCS § 1057(c)].
880
(2) The Director shall not be made a party to an inter partes proceeding
under this subsection, but he shall be notified of the filing of the complaint
by the clerk of the court in which it is filed and shall have the right to
intervene in the action.
(3) In any case where there is no adverse party, a copy of the complaint
shall be served on the Director, and, unless the court finds the expenses to
be unreasonable, all the expenses of the proceeding shall be paid by the
party bringing the case, whether the final decision is in favor of such party
or not. In suits brought hereunder, the record in the United States Patent and
Trademark Office shall be admitted on motion of any party, upon such terms
and conditions as to costs, expenses, and the further cross-examination of
the witnesses as the court imposes, without prejudice to the right of any
party to take further testimony. The testimony and exhibits of the record in
the United States Patent and Trademark Office, when admitted, shall have
the same effect as if originally taken and produced in the suit.
(4) Where there is an adverse party, such suit may be instituted against
the party in interest as shown by the records of the United States Patent and
Trademark Office at the time of the decision complained of, but any party in
interest may become a party to the action. If there are adverse parties
residing in a plurality of districts not embraced within the same State, or an
adverse party residing in a foreign country, the United States District Court
for the Eastern District of Virginia shall have jurisdiction and may issue
summons against the adverse parties directed to the marshal of any district
in which any adverse party resides. Summons against adverse parties
residing in foreign countries may be served by publication or otherwise as
the court directs.
Leg.H. (July 5, 1946, ch 540, Title I, § 21, 60 Stat. 435; July 19, 1952, ch 950, § 2, 66
Stat. 814; Aug. 8, 1958, P.L. 85-609, § 1(c), 72 Stat. 540; Oct. 9, 1962, P.L. 87-772, § 12,
76 Stat. 771; Jan 2, 1975, P.L. 93-596, § 1, 88 Stat. 1949; Jan. 2, 1975, P.L. 93-600, § 2, 88
Stat. 1955; April 2, 1982, P.L. 97-164, Title I, Part B, § 162(1), 96 Stat. 49; Nov. 8, 1984,
P.L. 98-620, Title IV, Subtitle C, § 414(b), 98 Stat. 3363; Nov. 16, 1988, P.L. 100-667, Title
I, § 120, 102 Stat. 3942.)
(As amended Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; March
17, 2010, P.L. 111-146, § 3(c), 124 Stat. 67; Sept. 16, 2011, P.L. 112-29, § 9(a), 125 Stat.
316.)
2011 Note: Effective date and application of amendments made by § 9 of Act Sept.
16, 2011. Act Sept. 16, 2011, P.L. 112-29, § 9(b), 125 Stat. 316, provides: “The amendments
made by this section [amending 15 USCS § 1071 and 35 USCS §§ 32, 145, 146, 154, and
293] shall take effect on the date of the enactment of this Act and shall apply to any civil
action commenced on or after that date.”.
2011. Act Sept. 16, 2011 (effective on enactment and applicable to any civil action
commenced on or after that date, as provided by § 9(b) of such Act, which appears as a note
881
to this section), in subsec. (b)(4), substituted “United States District Court for the Eastern
District of Virginia” for “United States District Court for the District of Columbia”.
§ 1072. [Lanham Act § 22] Registration as Constructive

Notice of Claim of Ownership.
Registration of a mark on the principal register provided by this chapter or
under the Act of March 3, 1981, or the Act of February 20, 1905, shall be
constructive notice of the registrant’s claim of ownership thereof.
Leg.H. July 5, 1946, ch. 540 § 22, 60 Stat. 435.
SUBCHAPTER II
The Supplemental Register

(a) Marks Registrable. In addition to the principal register, the Director
shall keep a continuation of the register provided in paragraph (b) of section 1
of the Act of March 19, 1920, entitled “An Act to give effect to certain
provisions of the convention for the protection of trademarks and commercial
names, made and signed in the city of Buenos Aires, in the Argentine Republic,
August 20, 1910, and for other purposes,” to be called the supplemental
register. All marks capable of distinguishing applicant’s goods or services and
not registrable on the principal register herein provided, except those declared
to be unregistrable under subsections (a), (b), (c), (d), and (e)(3) of section 2 of
this Act, which are in lawful use in commerce by the owner thereof, on or in
connection with any goods or services may be registered on the supplemental
register upon the payment of the prescribed fee and compliance with the
provisions of subsections (a) and (e) of section 1 so far as they are applicable.
Nothing in this section shall prevent the registration on the supplemental register
of a mark, capable of distinguishing the applicant’s goods or services and not
registrable on the principal register under this Act, that is declared to be
unregistrable under section 2(e)(3), if such mark has been in lawful use in
commerce by the owner thereof, on or in connection with any goods or services,
since before the date of the enactment of the North American Free Trade
Agreement Implementation Act.
(b) Application and Proceedings for Registration. Upon the filing of an
application for registration on the supplemental register and payment of the
prescribed fee the Director shall refer the application to the examiner in charge
882
of the registration of marks, who shall cause an examination to be made and if
on such examination it shall appear that the applicant is entitled to registration,
the registration shall be granted. If the applicant is found not entitled to
registration the provisions of subsection (b) of section 12 of this Act shall
apply.
(c) Nature of Mark. For the purposes of registration on the supplemental
register, a mark may consist of any trade-mark [trademark], symbol, label,
package, configuration of goods, name, word, slogan, phrase, surname,
geographical name, numeral, device, any matter that as a whole is not functional,
or any combination of any of the foregoing, but such mark must be capable of
distinguishing the applicant’s goods or services.
Stat. 773; November 16, 1988, P.L. 100-667 § 121, 102 Stat. 3942; December 8, 1993, P.L.
103-182 § 333(b), 107 Stat. 2114; October 30, 1998, P.L. 105-330 § 201(a)(5), 112 Stat.
3070; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B)], 113 Stat. 1536;
November 2, 2002, P.L. 107-273 § 13207(b)(6), 116 Stat. 1908.
§ 1092. [Lanham Act § 24] Publication; not Subject to

Opposition; Cancellation.
Marks for the supplemental register shall not be published for or be subject
to opposition, but shall be published on registration in the Official Gazette of the
Patent and Trademark Office. Whenever any person believes that such person is
or will be damaged by the registration of a mark on the supplemental register—
(1) for which the effective filing date is after the date on which such
person’s mark became famous and which would be likely to cause dilution
by blurring or dilution by tarnishment under section 43(c) [15 USCS §
1125(c)]; or
(2) on grounds other than dilution by blurring or dilution by tarnishment,
such person may at any time, upon payment of the prescribed fee and the
filing of a petition stating the ground therefor, apply to the Director to cancel
such registration.
The Director shall refer such application to the Trademark Trial and
Appeal Board which shall give notice thereof to the registrant. If it is found
after a hearing before the Board that the registrant is not entitled to
registration, or that the mark has been abandoned, the registration shall be
canceled by the Director. However, no final judgment shall be entered in
favor of an applicant under section 1(b) [15 USCS § 1051(b)] before the
mark is registered, if such applicant cannot prevail without establishing
constructive use pursuant to section 7(c) [15 USCS § 1057(c)].
883
History:
(July 5, 1946, ch 540, Title II, § 24, 60 Stat. 436; Aug. 8, 1958, P.L. 85609, § 1(d), 72
Stat. 540; Oct. 9, 1962, P.L. 87-772, § 14, 76 Stat. 773; Jan. 2, 1975, P.L. 93-596, § 1, 88
Stat. 1949; Nov. 16, 1988, P.L. 100-667, Title I, § 122, 102 Stat. 3943.)
(As amended Aug. 5, 1999, P.L. 106-43, § 2(d), 113 Stat. 218; Nov. 29, 1999, P.L. 106-
113, Div B, § 1000(a)(9), 113 Stat. 1536; Oct. 6, 2006, P.L. 109-312, § 3(d), 120 Stat.
1732.)
§ 1093. [Lanham Act § 25] Registration Certificates for

Marks on Principal and Supplemental Registers to
be Different.
The certificates of registration for marks registered on the supplemental
register shall be conspicuously different from certificates issued for marks
registered on the principal register.
Leg.H. July 5, 1946, ch. 540 § 25, 60 Stat. 436.
§ 1094. [Lanham Act § 26] Provisions of Chapter

Applicable to Registrations on Supplemental
Register.
The provisions of this chapter shall govern so far as applicable applications
for registration and registrations on the supplemental register as well as those
on the principal register, but applications for and registrations on the
supplemental register shall not be subject to or receive the advantages of
sections 1(b), 2(e), 2(f), 7(b), 7(c), 12(a), 13 to 18, inclusive, 22, 33, and 42 of
this Act.
123, 102 Stat. 3943; October 30, 1998, P.L. 105-330 § 201(a)(6), 112 Stat. 3070.
§ 1095. [Lanham Act § 27] Registration on Principal

Register not Precluded.
Registration of a mark on the supplemental register, or under the Act of
March 19, 1920, shall not preclude registration by the registrant on the principal
register established by this chapter. Registration of a mark on the supplemental
register shall not constitute an admission that the mark has not acquired
distinctiveness.
124, 102 Stat. 3943.
884
§ 1096. [Lanham Act § 28] Registration on
Supplemental Register not Used to Stop
Importations.
Registration on the supplemental register or under the Act of March 19,
1920, shall not be filed in the Department of the Treasury or be used to stop
importations.
Leg.H. July 5, 1946, ch. 540 § 28, 60 Stat. 436.
SUBCHAPTER III
General Provisions
§ 1111. [Lanham Act § 29] Notice of Registration;

Display With Mark; Recovery of Profits and
Damages in Infringement Suit.
Notwithstanding the provisions of section 1072 of this title, a registrant of a
mark registered in the Patent and Trademark Office, may give notice that his
mark is registered by displaying with the mark the words “Registered in U.S.
Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.” or the letter R
enclosed within a circle, thus ®; and in any suit for infringement under this
chapter by such a registrant failing to give such notice of registration, no profits
and no damages shall be recovered under the provisions of this chapter unless
the defendant had actual notice of the registration.
Stat. 773; January 2, 1975, P.L. 93-596 §§ 1, 2, 88 Stat. 1949; November 16, 1988, P.L.
100-667 § 125, 102 Stat. 3943.
§ 1112. [Lanham Act § 30] Classification of Goods and

Services; Registration in Plurality of Classes.
The Director may establish a classification of goods and services, for
convenience of Patent and Trademark Office administration, but not to limit or
extend the applicant’s or registrant’s rights. The applicant may apply to register
a mark for any or all of the goods and services upon or in connection with which
he or she is using or has a bona fide intention to use the mark in commerce:
Provided, That if the Director by regulation permits the filing of an application
for the registration of a mark for goods or services which fall within a plurality
885
of classes, a fee equaling the sum of the fees for filing an application in each
class shall be paid, and the Director may issue a single certificate of registration
for such mark.
667 § 126, 102 Stat. 3943; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B)],
113 Stat. 1536.

(a) Applications; Services; Materials. The Director shall establish fees for
the filing and processing of an application for the registration of a trademark or
other mark and for all other services performed by and materials furnished by
the Patent and Trademark Office related to trademarks and other marks. Fees
established under this subsection may be adjusted by the Director once each
year to reflect, in the aggregate, any fluctuations during the preceding 12 months
in the Consumer Price Index, as determined by the Secretary of Labor. Changes
of less than 1 percent may be ignored. No fee established under this section
shall take effect until at least 30 days after notice of the fee has been published
in the Federal Register and in the Official Gazette of the Patent and Trademark
Office.
(b) Waiver; Indian Products. The Director may waive the payment of any
fee for any service or material related to trademarks or other marks in
connection with an occasional request made by a department or agency of the
Government, or any officer thereof. The Indian Arts and Crafts Board will not
be charged any fee to register Government trademarks of genuineness and
quality for Indian products or for products of particular Indian tribes and
groups.
Leg.H. July 5, 1946, ch. 540 § 31, 60 Stat. 437; August 8, 1958, P.L. 85-609 § 1(e), 72
Stat. 540; July 24, 1965, P.L. 89-83 § 3, 79 Stat. 260; January 2, 1975, P.L. 93-596 § 1, 88
Stat. 1949; December 12, 1980, P.L. 96-517 § 5, 94 Stat. 3018; August 27, 1982, P.L. 97-
247 § 3(f), 96 Stat. 319; September 8, 1982, P.L. 97-256 § 103, 96 Stat. 256; December 10,
1991, P.L. 102-204 § 5(f)(1), 105 Stat. 1640; October 30, 1998, P.L. 105-330 § 201(a)(7),
112 Stat. 3070; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B)], 113 Stat.
1536.
§ 1114. [Lanham Act § 32] Remedies; Infringement;

Innocent Infringement by Printers and Publishers.
(1) Any person who shall, without the consent of the registrant—
(a) use in commerce any reproduction, counterfeit, copy, or colorable
imitation of a registered mark in connection with the sale, offering for sale,
886
distribution, or advertising of any goods or services on or in connection
with which such use is likely to cause confusion, or to cause mistake, or to
deceive; or
(b) reproduce, counterfeit, copy, or colorably imitate a registered mark
and apply such reproduction, counterfeit, copy, or colorable imitation to
labels, signs, prints, packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in connection with the sale,
offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause
mistake, or to deceive, shall be liable in a civil action by the registrant for
the remedies hereinafter provided. Under subsection (b) hereof, the
registrant shall not be entitled to recover profits or damages unless the acts
have been committed with knowledge that such imitation is intended to be
used to cause confusion, or to cause mistake, or to deceive. As used in this
paragraph, the term “any person” includes the United States, all agencies
and instrumentalities thereof, and all individuals, firms, corporations, or
other persons acting for the United States and with the authorization and
consent of the United States, and any State, any instrumentality of a State,
and any officer or employee of a State or instrumentality of a State acting in
his or her official capacity. The United States, all agencies and
instrumentalities thereof, and all individuals, firms, corporations, other
persons acting for the United States and with the authorization and consent
of the United States, and any State, and any such instrumentality, officer, or
employee, shall be subject to the provisions of this Act in the same manner
and to the same extent as any nongovernmental entity.
(2) Notwithstanding any other provision of this Act, the remedies given to
the owner of a right infringed under this Act or to a person bringing an action
under section 43(a) or (d) [15 USCS § 1125(a) or (d)] shall be limited as
follows:
(A) Where an infringer or violator is engaged solely in the business of
printing the mark or violating matter for others and establishes that he or she
was an innocent infringer or innocent violator, the owner of the right
infringed or person bringing the action under section 43(a) [15 USCS §
1125(a)] shall be entitled as against such infringer or violator only to an
injunction against future printing.
(B) Where the infringement or violation complained of is contained in
or is part of paid advertising matter in a newspaper, magazine, or other
similar periodical or in an electronic communication as defined in section
2510(12) of title 18, United States Code, the remedies of the owner of the
right infringed or person bringing the action under section 43(a) [15 USCS §
1125(a)] as against the publisher or distributor of such newspaper,
887
magazine, or other similar periodical or electronic communication shall be
limited to an injunction against the presentation of such advertising matter in
future issues of such newspapers, magazines, or other similar periodicals or
in future transmissions of such electronic communications. The limitations
of this subparagraph shall apply only to innocent infringers and innocent
violators.
(C) Injunctive relief shall not be available to the owner of the right
infringed or person bringing the action under section 43(a) [15 USCS §
1125(a)] with respect to an issue of a newspaper, magazine, or other similar
periodical or an electronic communication containing infringing matter or
violating matter where restraining the dissemination of such infringing
matter or violating matter in any particular issue of such periodical or in an
electronic communication would delay the delivery of such issue or
transmission of such electronic communication after the regular time for
such delivery or transmission, and such delay would be due to the method
by which publication and distribution of such periodical or transmission of
such electronic communication is customarily conducted in accordance with
sound business practice, and not due to any method or device adopted to
evade this section or to prevent or delay the issuance of an injunction or
restraining order with respect to such infringing matter or violating matter.
(D)
(i)
(I) A domain name registrar, a domain name registry, or other
domain name registration authority that takes any action described
under clause (ii) affecting a domain name shall not be liable for
monetary relief or, except as provided in subclause (II), for
injunctive relief, to any person for such action, regardless of whether
the domain name is finally determined to infringe or dilute the mark.
(II) A domain name registrar, domain name registry, or other
domain name registration authority described in subclause (I) may be
subject to injunctive relief only if such registrar, registry, or other
registration authority has—
(aa) not expeditiously deposited with a court, in which an
action has been filed regarding the disposition of the domain
name, documents sufficient for the court to establish the court’s
control and authority regarding the disposition of the registration
and use of the domain name;
( b b ) transferred, suspended, or otherwise modified the
domain name during the pendency of the action, except upon
888
order of the court; or
(cc) willfully failed to comply with any such court order.
(ii) An action referred to under clause (i)(I) is any action of refusing
to register, removing from registration, transferring, temporarily
disabling, or permanently canceling a domain name—
( I) in compliance with a court order under section 43(d) [15
USCS § 1125(d)]; or
( I I ) in the implementation of a reasonable policy by such
registrar, registry, or authority prohibiting the registration of a
domain name that is identical to, confusingly similar to, or dilutive of
another’s mark.
(iii) A domain name registrar, a domain name registry, or other
domain name registration authority shall not be liable for damages under
this section for the registration or maintenance of a domain name for
another absent a showing of bad faith intent to profit from such
registration or maintenance of the domain name.
(iv) If a registrar, registry, or other registration authority takes an
action described under clause (ii) based on a knowing and material
misrepresentation by any other person that a domain name is identical to,
confusingly similar to, or dilutive of a mark, the person making the
knowing and material misrepresentation shall be liable for any damages,
including costs and attorney’s fees, incurred by the domain name
registrant as a result of such action. The court may also grant injunctive
relief to the domain name registrant, including the reactivation of the
domain name or the transfer of the domain name to the domain name
registrant.
( v ) A domain name registrant whose domain name has been
suspended, disabled, or transferred under a policy described under
clause (ii)(II) may, upon notice to the mark owner, file a civil action to
establish that the registration or use of the domain name by such
registrant is not unlawful under this Act. The court may grant injunctive
relief to the domain name registrant, including the reactivation of the
domain name or transfer of the domain name to the domain name
registrant.
(E) As used in this paragraph—
(i) the term “violator” means a person who violates section 43(a)
[15 USCS § 1125(a)]; and
(ii) the term “violating matter” means matter that is the subject of a
889
violation under section 43(a) [15 USCS § 1125(a)].
(3)
(A) Any person who engages in the conduct described in paragraph (11)
of section 110 of title 17, United States Code [17 USCS § 110], and who
complies with the requirements set forth in that paragraph is not liable on
account of such conduct for a violation of any right under this Act. This
subparagraph does not preclude liability, nor shall it be construed to restrict
the defenses or limitations on rights granted under this Act, of a person for
conduct not described in paragraph (11) of section 110 of title 17, United
States Code [17 USCS § 110], even if that person also engages in conduct
described in paragraph (11) of section 110 of such title [17 USCS § 110].
(B) A manufacturer, licensee, or licensor of technology that enables the
making of limited portions of audio or video content of a motion picture
imperceptible as described in subparagraph (A) is not liable on account of
such manufacture or license for a violation of any right under this Act, if
such manufacturer, licensee, or licensor ensures that the technology provides
a clear and conspicuous notice at the beginning of each performance that the
performance of the motion picture is altered from the performance intended
by the director or copyright holder of the motion picture. The limitations on
liability in subparagraph (A) and this subparagraph shall not apply to a
manufacturer, licensee, or licensor of technology that fails to comply with
this paragraph.
( C) The requirement under subparagraph (B) to provide notice shall
apply only with respect to technology manufactured after the end of the 180-
day period beginning on the date of the enactment of the Family Movie Act
of 2005 [enacted April 27, 2005].
(D) Any failure by a manufacturer, licensee, or licensor of technology to
qualify for the exemption under subparagraphs (A) and (B) shall not be
construed to create an inference that any such party that engages in conduct
described in paragraph (11) of section 110 of title 17, United States Code
[17 USCS § 110], is liable for trademark infringement by reason of such
conduct.
Stat. 773; November 16, 1988, P.L. 100-667 § 127, 102 Stat. 3943; October 27, 1992, P.L.
102-542 § 3(a), 106 Stat. 3567; October 30, 1998, P.L. 105-330 § 201(a)(8), 112 Stat.
3070; August 5, 1999, P.L. 106-43 § 4(a), 113 Stat. 219; November 29, 1999, P.L. 106-113
§ 1000(a)(9) [3004], 113 Stat. 1536; April 27, 2005, P.L. 109-9 § 202(b), 119 Stat. 223.
§ 1115. [Lanham Act § 33] Registration on Principal

Register as Evidence of Exclusive Right to Use
890
Mark; Defenses.
(a) Evidentiary value; Defenses. Any registration issued under the Act of
March 3, 1881, or the Act of February 20, 1905, or of a mark registered on the
principal register provided by this chapter and owned by a party to an action
shall be admissible in evidence and shall be prima facie evidence of the
validity of the registered mark and of the registration of the mark, of the
registrant’s ownership of the mark, and of the registrant’s exclusive right to use
the registered mark in commerce on or in connection with the goods or services
specified in the registration subject to any conditions or limitations stated
therein, but shall not preclude another person from proving any legal or
equitable defense or defect, including those set forth in subsection (b) of this
section, which might have been asserted if such mark had not been registered.
(b) Incontestability; Defenses. To the extent that the right to use the
registered mark has become incontestable under section 1065 of this title, the
registration shall be conclusive evidence of the validity of the registered mark
and of the registration of the mark, of the registrant’s ownership of the mark, and
of the registrant’s exclusive right to use the registered mark in commerce. Such
conclusive evidence shall relate to the exclusive right to use the mark on or in
connection with the goods or services specified in the affidavit filed under the
provisions of section 1065 of this title, or in the renewal application filed under
the provisions of section 1059 of this title if the goods or services specified in
the renewal are fewer in number, subject to any conditions or limitations in the
registration or in such affidavit or renewal application. Such conclusive
evidence of the right to use the registered mark shall be subject to proof of
infringement as defined in section 1114 of this title, and shall be subject to the
following defenses or defects:
(1) That the registration or the incontestable right to use the mark was
obtained fraudulently; or
(2) That the mark has been abandoned by the registrant; or
(3) That the registered mark is being used, by or with the permission of
the registrant or a person in privity with the registrant, so as to misrepresent
the source of the goods or services on or in connection with which the mark
is used; or
( 4 ) That the use of the name, term, or device charged to be an
infringement is a use, otherwise than as a mark, of the party’s individual
name in his own business, or of the individual name of anyone in privity
with such party, or of a term or device which is descriptive of and used
fairly and in good faith only to describe the goods or services of such party,
or their geographic origin; or
891
(5) That the mark whose use by a party is charged as an infringement
was adopted without knowledge of the registrant’s prior use and has been
continuously used by such party or those in privity with him from a date
prior to (A) the date of constructive use of the mark established pursuant to
section 1057(c) of this title, (B) the registration of the mark under this
chapter if the application for registration is filed before the effective date of
the Trademark Law Revision Act of 1988, or (C) publication of the
registered mark under subsection (c) of section 1062 of this title: Provided,
however, That this defense or defect shall apply only for the area in which
such continuous prior use is proved; or
( 6 ) That the mark whose use is charged as an infringement was
registered and used prior to the registration under this chapter or publication
under subsection (c) of section 1062 of this title of the registered mark of the
registrant, and not abandoned: Provided, however, That this defense or
defect shall apply only for the area in which the mark was used prior to such
registration or such publication of the registrant’s mark; or
(7) That the mark has been or is being used to violate the antitrust laws
of the United States; or
(8) That the mark is functional; or
( 9 ) That equitable principles, including laches, estoppel, and
acquiescence, are applicable.
Stat. 774; November 16, 1988, P.L. 100-667 § 128(a), 102 Stat. 3944; October 30, 1998,
P.L. 105-330 § 201(a)(9), 112 Stat. 3070; November 2, 2002, P.L. 107-273 § 13207(b)(7),
116 Stat. 1908.

(a) Jurisdiction; Service. Jurisdiction; service. The several courts vested
with jurisdiction of civil actions arising under this Act shall have power to grant
injunctions, according to the principles of equity and upon such terms as the
court may deem reasonable, to prevent the violation of any right of the registrant
of a mark registered in the Patent and Trademark Office or to prevent a violation
under subsection (a), (c), or (d) of section 43 [15 USCS § 1125]. Any such
injunction may include a provision directing the defendant to file with the court
and serve on the plaintiff within thirty days after the service on the defendant of
such injunction, or such extended period as the court may direct, a report in
writing under oath setting forth in detail the manner and form in which the
defendant has complied with the injunction. Any such injunction granted upon
hearing, after notice to the defendant, by any district court of the United States,
may be served on the parties against whom such injunction is granted anywhere
892
in the United States where they may be found, and shall be operative and may be
enforced by proceedings to punish for contempt, or otherwise, by the court by
which such injunction was granted, or by any other United States district court in
whose jurisdiction the defendant may be found.
(b) Transfer of Certified Copies of Court Papers. The said courts shall
have jurisdiction to enforce said injunction, as herein provided, as fully as if the
injunction had been granted by the district court in which it is sought to be
enforced. The clerk of the court or judge granting the injunction shall, when
required to do so by the court before which application to enforce said
injunction is made, transfer without delay to said court a certified copy of all
papers on file in his office upon which said injunction was granted.
(c) Notice to Director. It shall be the duty of the clerks of such courts
within one month after the filing of any action, suit, or proceeding involving a
mark registered under the provisions of this Act to give notice thereof in writing
to the Director setting forth in order so far as known the names and addresses of
the litigants and the designating number or numbers of the registration or
registrations upon which the action, suit, or proceeding has been brought, and in
the event any other registration be subsequently included in the action, suit, or
proceeding by amendment, answer, or other pleading, the clerk shall give like
notice thereof to the Director, and within one month after the judgment is entered
or an appeal is taken the clerk of the court shall give notice thereof to the
Director, and it shall be the duty of the Director on receipt of such notice
forthwith to endorse the same upon the file wrapper of the said registration or
registrations and to incorporate the same as a part of the contents of said file
wrapper.
(d) Civil Actions Arising Out of Use of Counterfeit Marks.
(1)
(A) In the case of a civil action arising under section 32(1)(a) of this
Act (15 U.S.C. 1114) [15 USCS § 1114(1)(a)] or section 220506 of title
36, United States Code, with respect to a violation that consists of using
a counterfeit mark in connection with the sale, offering for sale, or
distribution of goods or services, the court may, upon ex parte
application, grant an order under subsection (a) of this section pursuant
to this subsection providing for the seizure of goods and counterfeit
marks involved in such violation and the means of making such marks,
and records documenting the manufacturer, sale, or receipt of things
involved in such violation.
(B) As used in this subsection the term “counterfeit mark” means—
( i ) a counterfeit of a mark that is registered on the principal
893
register in the United States Patent and Trademark Office for such
goods or services sold, offered for sale, or distributed and that is in
use, whether or not the person against whom relief is sought knew
such mark was so registered; or
(ii) a spurious designation that is identical with, or substantially
indistinguishable from, a designation as to which the remedies of this
Act are made available by reason of section 220506 of title 36,
United States Code; but such term does not include any mark or
designation used on or in connection with goods or services of
which the manufacture [manufacturer] or producer was, at the time of
the manufacture or production in question authorized to use the mark
or designation for the type of goods or services so manufactured or
produced, by the holder of the right to use such mark or designation.
( 2) The court shall not receive an application under this subsection
unless the applicant has given such notice of the application as is reasonable
under the circumstances to the United States attorney for the judicial district
in which such order is sought. Such attorney may participate in the
proceedings arising under such application if such proceedings may affect
evidence of an offense against the United States. The court may deny such
application if the court determines that the public interest in a potential
prosecution so requires.
(3) The application for an order under this subsection shall—
(A) be based on an affidavit or the verified complaint establishing
facts sufficient to support the findings of fact and conclusions of law
required for such order; and
(B) contain the additional information required by paragraph (5) of
this subsection to be set forth in such order.
(4) The court shall not grant such an application unless—
(A) the person obtaining an order under this subsection provides the
security determined adequate by the court for the payment of such
damages as any person may be entitled to recover as a result of a
wrongful seizure or wrongful attempted seizure under this subsection;
and
(B) the court finds that it clearly appears from specific facts that—
(i) an order other than an ex parte seizure order is not adequate to
achieve the purposes of section 32 of this Act (15 U.S.C. 1114);
(ii) the applicant has not publicized the requested seizure;
894
(iii) the applicant is likely to succeed in showing that the person
against whom seizure would be ordered used a counterfeit mark in
connection with the sale, offering for sale, or distribution of goods or
services; (iv) an immediate and irreparable injury will occur if such
seizure is not ordered;
(iv) the matter to be seized will be located at the place identified
in the application;
(v) the matter to be seized will be located at the place identified
in the application;
( v i ) the harm to the applicant of denying the application
outweighs the harm to the legitimate interests of the person against
whom seizure would be ordered of granting the application; and
(vii) the person against whom seizure would be ordered, or
persons acting in concert with such person, would destroy, move,
hide, or otherwise make such matter inaccessible to the court, if the
applicant were to proceed on notice to such person.
(5) An order under this subsection shall set forth—
( A) the findings of fact and conclusions of law required for the
order;
( B ) a particular description of the matter to be seized, and a
description of each place at which such matter is to be seized;
(C) the time period, which shall end not later than seven days after
the date on which such order is issued, during which the seizure is to be
made;
( D ) the amount of security required to be provided under this
subsection; and
( E) a date for the hearing required under paragraph (10) of this
subsection.
(6) The court shall take appropriate action to protect the person against
whom an order under this subsection is directed from publicity, by or at the
behest of the plaintiff, about such order and any seizure under such order.
(7) Any materials seized under this subsection shall be taken into the
custody of the court. For seizures made under this section, the court shall
enter an appropriate protective order with respect to discovery and use of
any records or information that has been seized. The protective order shall
provide for appropriate procedures to ensure that confidential, private,
proprietary, or privileged information contained in such records is not
895
improperly disclosed or used.
( 8 ) An order under this subsection, together with the supporting
documents, shall be sealed until the person against whom the order is
directed has an opportunity to contest such order, except that any person
against whom such order is issued shall have access to such order and
supporting documents after the seizure has been carried out.
(9) The court shall order that service of a copy of the order under this
subsection shall be made by a Federal law enforcement officer (such as a
United States marshal or an officer or agent of the United States Customs
Service, Secret Service, Federal Bureau of Investigation, or Post Office) or
may be made by a State or local law enforcement officer, who, upon making
service, shall carry out the seizure under the order. The court shall issue
orders, when appropriate, to protect the defendant from undue damage from
the disclosure of trade secrets or other confidential information during the
course of the seizure, including, when appropriate, orders restricting the
access of the applicant (or any agent or employee of the applicant) to such
secrets or information.
(10)
(A) The court shall hold a hearing, unless waived by all the parties,
on the date set by the court in the order of seizure. That date shall be not
sooner than ten days after the order is issued and not later than fifteen
days after the order is issued, unless the applicant for the order shows
good cause for another date or unless the party against whom such order
is directed consents to another date for such hearing. At such hearing the
party obtaining the order shall have the burden to prove that the facts
supporting findings of fact and conclusions of law necessary to support
such order are still in effect. If that party fails to meet that burden, the
seizure order shall be dissolved or modified appropriately.
(B) In connection with a hearing under this paragraph, the court
may make such orders modifying the time limits for discovery under
the Rules of Civil Procedure as may be necessary to prevent the
frustration of the purposes of such hearing.
(11) A person who suffers damage by reason of a wrongful seizure
under this subsection has a cause of action against the applicant for the order
under which such seizure was made, and shall be entitled to recover such
relief as may be appropriate, including damages for lost profits, cost of
materials, loss of good will, and punitive damages in instances where the
seizure was sought in bad faith, and, unless the court finds extenuating
circumstances, to recover a reasonable attorney’s fee. The court in its
discretion may award prejudgment interest on relief recovered under this
896
paragraph, at an annual interest rate established under section 6621(a)(2) of
the Internal Revenue Code of 1986 [26 USCS § 6621(a)(2)], commencing
on the date of service of the claimant’s pleading setting forth the claim under
this paragraph and ending on the date such recovery is granted, or for such
shorter time as the court deems appropriate.
Leg.H. July 5, 1946, ch 540, Title VI, § 34, 60 Stat. 439; Jan. 2, 1975, P.L. 93-596, § 1,
88 Stat. 1949; Oct. 12, 1984, P.L. 98-473, Title II, Ch XV, § 1503(1), 98 Stat. 2179; Nov.
16, 1988, P.L. 100-667, Title I, § 128(c)–(e), 102 Stat. 3945; July 2, 1996, P.L. 104-153, §
6, 110 Stat. 1388; Aug. 5, 1999, P.L. 106-43, § 3(a)(1), 113 Stat. 218; Nov. 29, 1999, P.L.
106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Nov. 2, 2002, P.L. 107-273, Div C, Title III,
Subtitle B, § 13207(b)(8)–(10), 116 Stat. 1908; Oct. 13, 2008, P.L. 110-403, Title I, §
102(b), 122 Stat. 4258.
§ 1117. [Lanham Act § 35] Recovery for Violation of

Rights.
(a) Profits, Damages and Costs; Attorney Fees. When a violation of any
right of the registrant of a mark registered in the Patent and Trademark Office, a
violation under section 43(a) or (d) [15 USCS § 1125(a) or (d)], or a willful
violation under section 43(c) [15 USCS § 1125(c)], shall have been established
in any civil action arising under this Act, the plaintiff shall be entitled, subject to
the provisions of sections 29 and 32 [15 USCS §§ 1111 , 1114], and subject to
the principles of equity, to recover (1) defendant’s profits, (2) any damages
sustained by the plaintiff, and (3) the costs of the action. The court shall assess
such profits and damages or cause the same to be assessed under its direction. In
assessing profits the plaintiff shall be required to prove defendant’s sales only;
defendant must prove all elements of cost or deduction claimed. In assessing
damages the court may enter judgment, according to the circumstances of the
case, for any sum above the amount found as actual damages, not exceeding
three times such amount. If the court shall find that the amount of the recovery
based on profits is either inadequate or excessive the court may in its discretion
enter judgment for such sum as the court shall find to be just, according to the
circumstances of the case. Such sum in either of the above circumstances shall
constitute compensation and not a penalty. The court in exceptional cases may
award reasonable attorney fees to the prevailing party.
(b) In assessing damages under subsection (a) for any violation of section
32(1)(a) of this Act [15 USCS § 1114(1)(a) ] or section 220506 of title 36,
United States Code, in a case involving use of a counterfeit mark or designation
(as defined in section 34(d) of this Act [15 USCS § 1116(d) ]), the court shall,
unless the court finds extenuating circumstances, enter judgment for three times
such profits or damages, whichever amount is greater, together with a
reasonable attorney’s fee, if the violation consists of—
897
( 1) intentionally using a mark or designation, knowing such mark or
designation is a counterfeit mark (as defined in section 34(d) of this Act [15
USCS § 1116(d) ]), in connection with the sale, offering for sale, or
distribution of goods or services; or
( 2 ) providing goods or services necessary to the commission of a
violation specified in paragraph (1), with the intent that the recipient of the
goods or services would put the goods or services to use in committing the
violation.
In such a case, the court may award prejudgment interest on such amount
at an annual interest rate established under section 6621(a)(2) of the Internal
Revenue Code of 1986 [26 USCS§ 6621(a)(2)], beginning on the date of the
service of the claimant’s pleadings setting forth the claim for such entry of
judgment and ending on the date such entry is made, or for such shorter time
as the court considers appropriate.
(c) Statutory Damages for Use of Counterfeit Marks. In a case involving
the use of a counterfeit mark (as defined in section 34(d) (15 U.S.C. 1116(d)) in
connection with the sale, offering for sale, or distribution of goods or services,
the plaintiff may elect, at any time before final judgment is rendered by the trial
court, to recover, instead of actual damages and profits under subsection (a), an
award of statutory damages for any such use in connection with the sale, offering
for sale, or distribution of goods or services in the amount of—
(1) not less than $1,000 or more than $200,000 per counterfeit mark per
type of goods or services sold, offered for sale, or distributed, as the court
considers just; or
(2) if the court finds that the use of the counterfeit mark was willful, not
more than $2,000,000 per counterfeit mark per type of goods or services
sold, offered for sale, or distributed, as the court considers just.
( d ) Statutory damages for violation of section 1125(d)(1). In a case
involving a violation of section 43(d)(1) [15 USCS § 1125(d)(1)], the plaintiff
may elect, at any time before final judgment is rendered by the trial court, to
recover, instead of actual damages and profits, an award of statutory damages in
the amount of not less than $1,000 and not more than $100,000 per domain
name, as the court considers just.
(e) Rebuttable presumption of willful violation. In the case of a violation
referred to in this section, it shall be a rebuttable presumption that the violation
is willful for purposes of determining relief if the violator, or a person acting in
concert with the violator, knowingly provided or knowingly caused to be
provided materially false contact information to a domain name registrar,
domain name registry, or other domain name registration authority in registering,
898
maintaining, or renewing a domain name used in connection with the violation.
Nothing in this subsection limits what may be considered a willful violation
under this section.
Leg.H. July 5, 1946, ch 540, Title VI, § 35, 60 Stat. 439; Oct. 9, 1962, P.L. 87-772, §
19, 76 Stat. 774; Jan. 2, 1975, P.L. 93-596, § 1, 88 Stat. 1949; Jan. 2, 1975, P.L. 93-600, §
3, 88 Stat. 600; Oct. 12, 1984, P.L. 98-473, Title II, Ch XV, § 1503(2), 98 Stat. 2182; Nov.
16, 1988, P.L. 100-667, Title I, § 129, 102 Stat. 3945; July 2, 1996, P.L. 104-153, § 7, 110
Stat. 1388; Aug. 5, 1999, P.L. 106-43, § 3(b), 113 Stat. 219; Nov. 29, 1999, P.L. 106-113,
Div B, § 1000(a)(9), 113 Stat. 1536; Nov. 2, 2002, P.L. 107-273, Div C, Title III, Subtitle B,
§ 13207(a), (b)(11), 116 Stat. 1906, 1908; Dec. 23, 2004, P.L. 108-482, Title II, § 202, 118
Stat. 3916; Oct. 13, 2008, P.L. 110-403, Title I, §§ 103, 104, 122 Stat. 4259.
§ 1118. [Lanham Act § 36] Destruction of Infringing

Articles.
In any action arising under this chapter, in which a violation of any right of
the registrant of a mark registered in the Patent and Trademark Office, a
violation under section 1125(a), or a willful violation under section 1125(c), of
this title, shall have been established, the court may order that all labels, signs,
prints, packages, wrappers, receptacles, and advertisements in the possession of
the defendant, bearing the registered mark or, in the case of a violation of
section 1125(a) or a willful violation under section 1125(c) of this title, the
word, term, name, symbol, device, combination thereof, designation,
description, or representation that is the subject of the violation, or any
reproduction, counterfeit, copy, or colorable imitation thereof, and all plates,
molds, matrices, and other means of making the same, shall be delivered up and
destroyed. The party seeking an order under this section for destruction of
articles seized under section 1116(d) of this title shall give ten days’ notice to
the United States attorney for the judicial district in which such order is sought
(unless good cause is shown for lesser notice) and such United States attorney
may, if such destruction may affect evidence of an offense against the United
States, seek a hearing on such destruction or participate in any hearing
otherwise to be held with respect to such destruction.
Stat. 1949; October 12, 1984, P.L. 98-473 § 1503(3), 98 Stat. 2182; November 16, 1988,
P.L. 100-667 § 130, 102 Stat. 3945; August 5, 1999, P.L. 106-43 § 3(c), 113 Stat. 219.
§ 1119. [Lanham Act § 37] Power of Court Over

Registration.
In any action involving a registered mark the court may determine the right
to registration, order the cancelation of registrations, in whole or in part, restore
canceled registrations, and otherwise rectify the register with respect to the
899
registrations of any party to the action. Decrees and orders shall be certified by
the court to the Director, who shall make appropriate entry upon the records of
the Patent and Trademark Office, and shall be controlled thereby.
Stat. 1949; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B)], 113 Stat. 1536.
§ 1120. [Lanham Act § 38] Civil Liability for False or

Fraudulent Registration.
Any person who shall procure registration in the Patent and Trademark
Office of a mark by a false or fraudulent declaration or representation, oral or in
writing, or by any false means, shall be liable in a civil action by any person
injured thereby for any damages sustained in consequence thereof.
Stat. 1949.
§ 1121. [Lanham Act § 39] Jurisdiction of Federal

Courts; State and Local Requirements That
Registered Trademarks Be Altered or Displayed
Differently; Prohibition.
(a) The district and territorial courts of the United States shall have original
jurisdiction and the courts of appeal of the United States (other than the United
States Court of Appeals for the Federal Circuit) shall have appellate
jurisdiction, of all actions arising under this chapter, without regard to the
amount in controversy or to diversity or lack of diversity of the citizenship of
the parties.
( b) No State or other jurisdiction of the United States or any political
subdivision or any agency thereof may require alteration of a registered mark, or
require that additional trademarks, service marks, trade names, or corporate
names that may be associated with or incorporated into the registered mark be
displayed in the mark in a manner differing from the display of such additional
trademarks, service marks, trade names, or corporate names contemplated by
the registered mark as exhibited in the certificate of registration issued by the
United States Patent and Trademark Office.
Leg.H. July 5, 1946, ch. 540 § 39, 60 Stat. 440; June 25, 1948, ch. 646 § 32, 62 Stat.
907; May 24, 1949, ch. 139 § 127, 63 Stat. 107; April 2, 1982, P.L. 97-164 § 148, 96 Stat.
46; October 12, 1982, P.L. 97-296, 96 Stat. 1316; November 16, 1988, P.L. 100-667 § 131,
102 Stat. 3946; October 30, 1998, P.L. 105-330 § 201(a)(10), 112 Stat. 3070.
§ 1122. [Lanham Act § 40] Liability of States,

900
Instrumentalities of States, and State Officials.
(a) Waiver of Sovereign Immunity by the United States. The United States,
all agencies and instrumentalities thereof, and all individuals, firms,
corporations, other persons acting for the United States and with the
authorization and consent of the United States, shall not be immune from suit in
Federal or State court by any person, including any governmental or
nongovernmental entity, for any violation under this Act.
(b) Waiver of Sovereign Immunity by States. Any State, instrumentality of
a State or any officer or employee of a State or instrumentality of a State acting
in his or her official capacity, shall not be immune, under the eleventh
amendment of the Constitution of the United States or under any other doctrine of
sovereign immunity, from suit in Federal court by any person, including any
governmental or nongovernmental entity for any violation under this Act.
(c) Remedies. In a suit described in subsection (a) or (b) for a violation
described therein, remedies (including remedies both at law and in equity) are
available for the violation to the same extent as such remedies are available for
such a violation in a suit against any person other than the United States or any
agency or instrumentality thereof, or any individual, firm, corporation, or other
person acting for the United States and with authorization and consent of the
United States, or a State, instrumentality of a State, or officer or employee of a
State or instrumentality of a State acting in his or her official capacity. Such
remedies include injunctive relief under section 34, actual damages, profits,
costs and attorney’s fees under section 35, destruction of infringing articles
under section 36, the remedies provided for under sections 32, 37, 38, 42 and
43, and for any other remedies provided under this Act.
Leg.H. July 5, 1946, ch. 540 § 40; October 27, 1992, P.L. 102-542 § 3(b), 106 Stat.
3567; August 5, 1999, P.L. 106-43 § 4(b), 113 Stat. 219.
§ 1123. [Lanham Act § 41] Rules and Regulations for

Conduct of Proceedings in Patent and Trademark
Office.
The Director shall make rules and regulations, not inconsistent with law, for
the conduct of proceedings in the Patent and Trademark Office under this Act.
Stat. 1949; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)(B)], 113 Stat. 1536.
§ 1124. [Lanham Act § 42] Importation of Goods

Bearing Infringing Marks or Names Forbidden.
901
Except as provided in subsection (d) of section 1526 of Title 19, no article
of imported merchandise which shall copy or simulate the name of any domestic
manufacture, or manufacturer, or trader, or of any manufacturer or trader located
in any foreign country which, by treaty, convention, or law affords similar
privileges to citizens of the United States, or which shall copy or simulate a
trademark registered in accordance with the provisions of this chapter or shall
bear a name or mark calculated to induce the public to believe that the article is
manufactured in the United States, or that it is manufactured in any foreign
country or locality other than the country or locality in which it is in fact
manufactured, shall be admitted to entry at any customhouse of the United States;
and, in order to aid the officers of the customs in enforcing this prohibition, any
domestic manufacturer or trader, and any foreign manufacturer or trader, who is
entitled under the provisions of a treaty, convention, declaration, or agreement
between the United States and any foreign country to the advantages afforded by
law to citizens of the United States in respect to trademarks and commercial
names, may require his name and residence, and the name of the locality in
which his goods are manufactured, and a copy of the certificate of registration of
his trademark, issued in accordance with the provisions of this chapter, to be
recorded in books which shall be kept for this purpose in the Department of the
Treasury, under such regulations as the Secretary of the Treasury shall
prescribe, and may furnish to the Department facsimiles of his name, the name of
the locality in which his goods are manufactured, or of his registered trademark,
and thereupon the Secretary of the Treasury shall cause one or more copies of
the same to be transmitted to each collector or other proper officer of customs.
Leg.H. July 5, 1946, ch. 540 § 42, 60 Stat. 440; October 3, 1978, P.L. 95-410 § 211(b),
92 Stat. 903; October 30, 1998, P.L. 105-330 § 201(a)(11), (12), 112 Stat. 3070; August 5,
1999, P.L. 106-43 § 6(b), 113 Stat. 220.
§ 1125. [Lanham Act § 43] False Designations of Origin,

False Descriptions, and Dilution Forbidden.
(a) Civil action.
(1) Any person who, on or in connection with any goods or services, or
any container for goods, uses in commerce any word, term, name, symbol,
or device, or any combination thereof, or any false designation of origin,
false or misleading description of fact, or false or misleading representation
of fact, which—
(A) is likely to cause confusion, or to cause mistake, or to deceive
as to the affiliation, connection, or association of such person with
another person, or as to the origin, sponsorship, or approval of his or
her goods, services, or commercial activities by another person, or
902
( B ) in commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his or her or
another person’s goods, services, or commercial activities, shall be
liable in a civil action by any person who believes that he or she is or is
likely to be damaged by such act.
(2) As used in this subsection, the term “any person” includes any State,
instrumentality of a State or employee of a State or instrumentality of a State
acting in his or her official capacity. Any State, and any such instrumentality,
officer, or employee, shall be subject to the provisions of this Act in the
same manner and to the same extent as any nongovernmental entity.
(3) In a civil action for trade dress infringement under this Act for trade
dress not registered on the principal register, the person who asserts trade
dress protection has the burden of proving that the matter sought to be
protected is not functional.
(b) Importation. Any goods marked or labeled in contravention of the
provisions of this section shall not be imported into the United States or
admitted to entry at any customhouse of the United States. The owner, importer,
or consignee of goods refused entry at any customhouse under this section may
have any recourse by protest or appeal that is given under the customs revenue
laws or may have the remedy given by this Act in cases involving goods refused
entry or seized.
(c) Dilution by blurring; dilution by tarnishment.
(1) Injunctive relief. Subject to the principles of equity, the owner of a
famous mark that is distinctive, inherently or through acquired
distinctiveness, shall be entitled to an injunction against another person
who, at any time after the owner’s mark has become famous, commences use
of a mark or trade name in commerce that is likely to cause dilution by
blurring or dilution by tarnishment of the famous mark, regardless of the
presence or absence of actual or likely confusion, of competition, or of
actual economic injury.
(2) Definitions.
(A) For purposes of paragraph (1), a mark is famous if it is widely
recognized by the general consuming public of the United States as a
designation of source of the goods or services of the mark’s owner. In
determining whether a mark possesses the requisite degree of
recognition, the court may consider all relevant factors, including the
following:
(i) The duration, extent, and geographic reach of advertising and
publicity of the mark, whether advertised or publicized by the owner
903
or third parties.
(ii) The amount, volume, and geographic extent of sales of goods
or services offered under the mark.
(iii) The extent of actual recognition of the mark.
(iv) Whether the mark was registered under the Act of March 3,
1881, or the Act of February 20, 1905, or on the principal register.
( B ) For purposes of paragraph (1), “dilution by blurring” is
association arising from the similarity between a mark or trade name
and a famous mark that impairs the distinctiveness of the famous mark.
In determining whether a mark or trade name is likely to cause dilution
by blurring, the court may consider all relevant factors, including the
following:
(i) The degree of similarity between the mark or trade name and
the famous mark.
(ii) The degree of inherent or acquired distinctiveness of the
famous mark.
(iii) The extent to which the owner of the famous mark is
engaging in substantially exclusive use of the mark.
(iv) The degree of recognition of the famous mark.
(v) Whether the user of the mark or trade name intended to create
an association with the famous mark.
(vi) Any actual association between the mark or trade name and
the famous mark.
( C ) For purposes of paragraph (1), “dilution by tarnishment” is
association arising from the similarity between a mark or trade name
and a famous mark that harms the reputation of the famous mark.
(3) Exclusions. The following shall not be actionable as dilution by
blurring or dilution by tarnishment under this subsection:
(A) Any fair use, including a nominative or descriptive fair use, or
facilitation of such fair use, of a famous mark by another person other
than as a designation of source for the person’s own goods or services,
including use in connection with—
(i) advertising or promotion that permits consumers to compare
goods or services; or
(ii) identifying and parodying, criticizing, or commenting upon
904
the famous mark owner or the goods or services of the famous mark
owner.
(B) All forms of news reporting and news commentary.
(C) Any noncommercial use of a mark.
(4) Burden of proof. In a civil action for trade dress dilution under this
Act for trade dress not registered on the principal register, the person who
asserts trade dress protection has the burden of proving that—
(A) the claimed trade dress, taken as a whole, is not functional and
is famous; and
(B) if the claimed trade dress includes any mark or marks registered
on the principal register, the unregistered matter, taken as a whole, is
famous separate and apart from any fame of such registered marks.
(5) Additional remedies. In an action brought under this subsection, the
owner of the famous mark shall be entitled to injunctive relief as set forth in
section 34. The owner of the famous mark shall also be entitled to the
remedies set forth in sections 35(a) and 36 [15 USCS § 1117(a) and 1118],
subject to the discretion of the court and the principles of equity if—
(A) the mark or trade name that is likely to cause dilution by blurring
or dilution by tarnishment was first used in commerce by the person
against whom the injunction is sought after the date of enactment of the
Trademark Dilution Revision Act of 2006 [enacted Oct. 6, 2006]; and
(B) in a claim arising under this subsection—
(i) by reason of dilution by blurring, the person against whom the
injunction is sought willfully intended to trade on the recognition of
the famous mark; or
(ii) by reason of dilution by tarnishment, the person against whom
the injunction is sought willfully intended to harm the reputation of
the famous mark.
(6) Ownership of valid registration a complete bar to action. The
ownership by a person of a valid registration under the Act of March 3,
1881, or the Act of February 20, 1905, or on the principal register under this
Act shall be a complete bar to an action against that person, with respect to
that mark, that—
(A) is brought by another person under the common law or a statute
of a State; and
(B)
905
( i ) seeks to prevent dilution by blurring or dilution by
tarnishment; or
(ii) asserts any claim of actual or likely damage or harm to the
distinctiveness or reputation of a mark, label, or form of
advertisement.
(7) Savings clause. Nothing in this subsection shall be construed to
impair, modify, or supersede the applicability of the patent laws of the
United States.
(d) Cyberpiracy prevention.
(1)
(A) A person shall be liable in a civil action by the owner of a mark,
including a personal name which is protected as a mark under this
section, if, without regard to the goods or services of the parties, that
person—
(i) has a bad faith intent to profit from that mark, including a
personal name which is protected as a mark under this section; and
(ii) registers, traffics in, or uses a domain name that—
( I) in the case of a mark that is distinctive at the time of
registration of the domain name, is identical or confusingly
similar to that mark;
(II) in the case of a famous mark that is famous at the time of
registration of the domain name, is identical or confusingly
similar to or dilutive of that mark; or
(III) is a trademark, word, or name protected by reason of
section 706 of title 18, United States Code, or section 220506 of
title 36, United States Code.
(B)
( i ) In determining whether a person has a bad faith intent
described under subparagraph (A), a court may consider factors such
as, but not limited to—
(I) the trademark or other intellectual property rights of the
person, if any, in the domain name;
(II) the extent to which the domain name consists of the legal
name of the person or a name that is otherwise commonly used to
identify that person;
(III) the person’s prior use, if any, of the domain name in
906
connection with the bona fide offering of any goods or services;
(IV) the person’s bona fide noncommercial or fair use of the
mark in a site accessible under the domain name;
( V) the person’s intent to divert consumers from the mark
owner’s online location to a site accessible under the domain
name that could harm the goodwill represented by the mark,
either for commercial gain or with the intent to tarnish or
disparage the mark, by creating a likelihood of confusion as to the
source, sponsorship, affiliation, or endorsement of the site;
(VI) the person’s offer to transfer, sell, or otherwise assign
the domain name to the mark owner or any third party for
financial gain without having used, or having an intent to use, the
domain name in the bona fide offering of any goods or services,
or the person’s prior conduct indicating a pattern of such conduct;
(VII) the person’s provision of material and misleading false
contact information when applying for the registration of the
domain name, the person’s intentional failure to maintain accurate
contact information, or the person’s prior conduct indicating a
pattern of such conduct;
(VIII) the person’s registration or acquisition of multiple
domain names which the person knows are identical or
confusingly similar to marks of others that are distinctive at the
time of registration of such domain names, or dilutive of famous
marks of others that are famous at the time of registration of such
domain names, without regard to the goods or services of the
parties; and
(IX) the extent to which the mark incorporated in the person’s
domain name registration is or is not distinctive and famous
within the meaning of subsection (c).
(ii) Bad faith intent described under subparagraph (A) shall not
be found in any case in which the court determines that the person
believed and had reasonable grounds to believe that the use of the
domain name was a fair use or otherwise lawful.
(C) In any civil action involving the registration, trafficking, or use
of a domain name under this paragraph, a court may order the forfeiture
or cancellation of the domain name or the transfer of the domain name to
the owner of the mark.
( D ) A person shall be liable for using a domain name under
907
subparagraph (A) only if that person is the domain name registrant or
that registrant’s authorized licensee.
( E ) As used in this paragraph, the term “traffics in” refers to
transactions that include, but are not limited to, sales, purchases, loans,
pledges, licenses, exchanges of currency, and any other transfer for
consideration or receipt in exchange for consideration.
(2)
(A) The owner of a mark may file an in rem civil action against a
domain name in the judicial district in which the domain name registrar,
domain name registry, or other domain name authority that registered or
assigned the domain name is located if—
(i) the domain name violates any right of the owner of a mark
registered in the Patent and Trademark Office, or protected under
subsection (a) or (c); and
(ii) the court finds that the owner—
(I) is not able to obtain in personam jurisdiction over a person
who would have been a defendant in a civil action under
paragraph (1); or
(II) through due diligence was not able to find a person who
would have been a defendant in a civil action under paragraph
(1) by—
(aa) sending a notice of the alleged violation and intent to
proceed under this paragraph to the registrant of the domain
name at the postal and e-mail address provided by the
registrant to the registrar; and
(bb) publishing notice of the action as the court may direct
promptly after filing the action.
(B) The actions under subparagraph (A)(ii) shall constitute service
of process.
(C) In an in rem action under this paragraph, a domain name shall be
deemed to have its situs in the judicial district in which—
( i ) the domain name registrar, registry, or other domain name
authority that registered or assigned the domain name is located; or
( i i ) documents sufficient to establish control and authority
regarding the disposition of the registration and use of the domain
name are deposited with the court.
908
(D)
(i) The remedies in an in rem action under this paragraph shall be
limited to a court order for the forfeiture or cancellation of the
domain name or the transfer of the domain name to the owner of the
mark. Upon receipt of written notification of a filed, stamped copy of
a complaint filed by the owner of a mark in a United States district
court under this paragraph, the domain name registrar, domain name
registry, or other domain name authority shall—
(I) expeditiously deposit with the court documents sufficient
to establish the court’s control and authority regarding the
disposition of the registration and use of the domain name to the
court; and
(II) not transfer, suspend, or otherwise modify the domain
name during the pendency of the action, except upon order of the
court.
(ii) The domain name registrar or registry or other domain name
authority shall not be liable for injunctive or monetary relief under
this paragraph except in the case of bad faith or reckless disregard,
which includes a willful failure to comply with any such court order.
( 3) The civil action established under paragraph (1) and the in rem
action established under paragraph (2), and any remedy available under
either such action, shall be in addition to any other civil action or remedy
otherwise applicable.
(4) The in rem jurisdiction established under paragraph (2) shall be in
addition to any other jurisdiction that otherwise exists, whether in rem or in
personam.
Leg.H. (July 5, 1946, ch 540, Title VIII, § 43, 60 Stat. 441; Nov. 16, 1988, P.L. 100-
667, Title I, § 132, 102 Stat. 3946; Oct. 27, 1992, P.L. 102-542, § 3(c), 106 Stat. 3568; Jan.
16, 1996, P.L. 104-98, § 3(a), 109 Stat. 985; Aug. 5, 1999, P.L. 106-43, §§ 3(a)(2), 5, 113
Stat. 219, 220; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536.)
(As amended Oct. 6, 2006, P.L. 109-312, § 2, 120 Stat. 1730; Oct. 5, 2012, P.L. 112-
190, § 1(a), 126 Stat. 1436.)
Amendments
2012. Act Oct. 5, 2012 (applicable to actions commenced on or after enactment, as provided
by § 1(b) of such Act, which appears as a note to this section), in subsec. (c)(6), substituted
subparas. (A) and (B) for ones which read:
“(A)
“(i) is brought by another person under the common law or a statute of a State;
909
and
“(ii) seeks to prevent dilution by blurring or dilution by tarnishment; or
“(B) asserts any claim of actual or likely damage or harm to the distinctiveness or
reputation of a mark, label, or form of advertisement.”
Other Provisions:
Application of Oct. 5, 2012 amendments. Act Oct. 5, 2012, P.L. 112-190, § 1(b), 126 Stat.
1436, provides: “The amendment made by subsection (a) [amending subsec. (c)(6) of this
section] shall apply to any action commenced on or after the date of the enactment of this
Act.”.

(a) Register of Marks Communicated by International Bureaus. The
Director shall keep a register of all marks communicated to him by the
international bureaus provided for by the conventions for the protection of
industrial property, trademarks, trade and commercial names, and the repression
of unfair competition to which the United States is or may become a party, and
upon the payment of the fees required by such conventions and the fees required
in this Act may place the marks so communicated upon such register. This
register shall show a facsimile of the mark or trade or commercial name; the
name, citizenship, and address of the registrant; the number, date, and place of
the first registration of the mark, including the dates on which application for
such registration was filed and granted and the term of such registration; a list of
goods or services to which the mark is applied as shown by the registration in
the country of origin, and such other data as may be useful concerning the mark.
This register shall be a continuation of the register provided in section 1(a) of
the Act of March 19, 1920.
(b) Benefits of Section to Persons Whose Country of Origin is Party to
Convention or Treaty. Any person whose country of origin is a party to any
convention or treaty relating to trademarks, trade or commercial names, or the
repression of unfair competition, to which the United States is also a party, or
extends reciprocal rights to nationals of the United States by law, shall be
entitled to the benefits of this section under the conditions expressed herein to
the extent necessary to give effect to any provision of such convention, treaty or
reciprocal law, in addition to the rights to which any owner of a mark is
otherwise entitled by this Act.
(c) Prior Registration in Country of Origin; Country of Origin Defined. No
registration of a mark in the United States by a person described in subsection
(b) of this section shall be granted until such mark has been registered in the
country of origin of the applicant, unless the applicant alleges use in commerce.
910
For the purposes of this section, the country of origin of the applicant is the
country in which he has a bona fide and effective industrial or commercial
establishment, or if he has not such an establishment the country in which he is
domiciled, or if he has not a domicile in any of the countries described in
subsection (b) of this section, the country of which he is a national.
(d) Right of Priority. An application for registration of a mark under
sections 1, 3, 4, or 23 of this Act or under subsection (e) of this section filed by
a person described in subsection (b) of this section who has previously duly
filed an application for registration of the same mark in one of the countries
described in subsection (b) shall be accorded the same force and effect as
would be accorded to the same application if filed in the United States on the
same date on which the application was first filed in such foreign country:
Provided, that—
(1) the application in the United States is filed within six months from
the date on which the application was first filed in the foreign country;
(2) the application conforms as nearly as practicable to the requirements
of this Act, including a statement that the applicant has a bona fide intention
to use the mark in commerce;
(3) the rights acquired by third parties before the date of the filing of the
first application in the foreign country shall in no way be affected by a
registration obtained on an application filed under this subsection;
(4) nothing in this subsection shall entitle the owner of a registration
granted under this section to sue for acts committed prior to the date on
which his mark was registered in this country unless the registration is
based on use in commerce. In like manner and subject to the same conditions
and requirements, the right provided in this section may be based upon a
subsequent regularly filed application in the same foreign country, instead of
the first filed foreign application: Provided, That any foreign application
filed prior to such subsequent application has been withdrawn, abandoned,
or otherwise disposed of, without having been laid open to public
inspection and without leaving any rights outstanding, and has not served,
nor thereafter shall serve, as a basis for claiming a right of priority.
(e) Registration on Principal or Supplemental Register; Copy of Foreign
Registration. A mark duly registered in the country of origin of the foreign
applicant may be registered on the principal register if eligible, otherwise on
the supplemental register herein provided. Such applicant shall submit, within
such time period as may be prescribed by the Commissioner, a true copy, a
photocopy, a certification, or a certified copy of the registration in the country of
origin of the applicant. The application must state the applicant’s bona fide
intention to use the mark in commerce, but use in commerce shall not be
911
required prior to registration.
(f) Domestic Registration Independent of Foreign Registration. The
registration of a mark under the provisions of subsections (c), (d), and (e) of this
section by a person described in subsection (b) shall be independent of the
registration in the country of origin and the duration, validity, or transfer in the
United States of such registration shall be governed by the provisions of this
Act.
(g) Trade or Commercial Names of Foreign Nationals Protected Without
Registration. Trade names or commercial names of persons described in
subsection (b) of this section shall be protected without the obligation of filing
or registration whether or not they form parts of marks.
(h) Protection of Foreign Nationals Against Unfair Competition. Any
person designated in subsection (b) of this section as entitled to the benefits and
subject to the provisions of this Act shall be entitled to effective protection
against unfair competition, and the remedies provided herein for infringement of
marks shall be available so far as they may be appropriate in repressing acts of
unfair competition.
(i) Citizens or Residents of United States Entitled to Benefits of Section.
Citizens or residents of the United States shall have the same benefits as are
granted by this section to persons described in subsection (b) of this section.
Stat. 748; October 9, 1962, P.L. 87-772 § 20, 76 Stat. 774; November 16, 1988, P.L. 100-
the United States, whichever comes first [see P.L. 105-330 § 110]; August 5, 1999, P.L.
106-43 § 6(b), 113 Stat. 220; November 29, 1999, P.L. 106-113 § 1000(a)(9) [4732(b)(1)
(B)], 113 Stat. 1536; November 2, 2002, P.L. 107-273 § 13207(b)(12), 116 Stat. 1908.
§ 1127. [Lanham Act § 45] Construction and

Definitions; Intent of Chapter.
In the construction of this Act, unless the contrary is plainly apparent from
the context—
The United States includes and embraces all territory which is under its
jurisdiction and control.
The word “commerce” means all commerce which may lawfully be
regulated by Congress.
The term “principal register” refers to the register provided for by sections
1 through 22 hereof [15 USCS §§ 1051–1072], and the term “supplemental
912
register” refers to the register provided for by sections 23 through 28 thereof
[15 USCS §§ 1091–1096].
The term “person” and any other word or term used to designate the
applicant or other entitled to a benefit or privilege or rendered liable under the
provisions of this Act includes a juristic person as well as a natural person. The
term “juristic person” includes a firm, corporation, union, association, or other
organization capable of suing and being sued in a court of law.
The term “person” also includes the United States, any agency or
instrumentality thereof, or any individual, firm, or corporation acting for the
United States and with the authorization and consent of the United States. The
United States, any agency or instrumentality thereof, and any individual, firm, or
corporation acting for the United States and with the authorization and consent
of the United States, shall be subject to the provisions of this Act in the same
manner and to the same extent as any nongovernmental entity.
The term “person” also includes any State, any instrumentality of a State,
and any officer or employee of a State or instrumentality of a State acting in his
or her official capacity. Any State, and any such instrumentality, officer, or
employee, shall be subject to the provisions of this Act in the same manner and
to the same extent as any nongovernmental entity.
The terms “applicant” and “registrant” embrace the legal representatives,
predecessors, successors and assigns of such applicant or registrant.
The term “Director” means the Under Secretary of Commerce for
Intellectual Property and Director of the United States Patent and Trademark
Office.
The term “related company” means any person whose use of a mark is
controlled by the owner of the mark with respect to the nature and quality of the
goods or services on or in connection with which the mark is used.
The terms “trade name” and “commercial name” mean any name used by a
person to identify his or her business or vocation.
The term “trademark” includes any word, name, symbol, or device, or any
combination thereof—
(1) used by a person, or
(2) which a person has a bona fide intention to use in commerce and
applies to register on the principal register established by this Act,
to identify and distinguish his or her goods, including a unique product, from
those manufactured or sold by others and to indicate the source of the goods,
even if that source is unknown.
913
The term “service mark” means any word, name, symbol, or device, or any
combination thereof—
(1) used by a person, or
(2) which a person has a bona fide intention to use in commerce and
applies to register on the principal register established by this Act,
to identify and distinguish the services of one person, including a unique
service, from the services of others and to indicate the source of the services,
even if that source is unknown. Titles, character names, and other distinctive
features of radio or television programs may be registered as service marks
notwithstanding that they, or the programs, may advertise the goods of the
sponsor.
The term “certification mark” means any word, name, symbol, or device, or
any combination thereof—
(1) used by a person other than its owner, or
(2) which its owner has a bona fide intention to permit a person other
than the owner to use in commerce and files an application to register on the
principal register established by this Act,
to certify regional or other origin, material, mode of manufacture, quality,
accuracy, or other characteristics of such person’s goods or services or that the
work or labor on the goods or services was performed by members of a union
or other organization.
The term “collective mark” means a trademark or service mark—
( 1) used by the members of a cooperative, an association, or other
collective group or organization, or
(2) which such cooperative, association, or other collective group or
organization has a bona fide intention to use in commerce and applies to
register on the principal register established by this Act, and includes marks
indicating membership in a union, an association, or other organization.
The term “mark” includes any trademark, service mark, collective mark, or
certification mark.
The term “use in commerce” means the bona fide use of a mark in the
ordinary course of trade, and not made merely to reserve a right in a mark. For
purposes of this Act, a mark shall be deemed to be in use in commerce—
(1) on goods when—
(A) it is placed in any manner on the goods or their containers or the
914
displays associated therewith or on the tags or labels affixed thereto, or
if the nature of the goods makes such placement impracticable, then on
documents associated with the goods or their sale, and
(B) the goods are sold or transported in commerce, and
(2) on services when it is used or displayed in the sale or advertising of
services and the services are rendered in commerce, or the services are
rendered in more than one State or in the United States and a foreign country
and the person rendering the services is engaged in commerce in connection
with the services.
A mark shall be deemed to be “abandoned” if either of the following
occurs:
(1) When its use has been discontinued with intent not to resume such
use. Intent not to resume may be inferred from circumstances. Nonuse for 3
consecutive years shall be prima facie evidence of abandonment. “Use” of a
mark means the bona fide use of such mark made in the ordinary course of
trade, and not made merely to reserve a right in a mark.
(2) When any course of conduct of the owner, including acts of omission
as well as commission, causes the mark to become the generic name for the
goods or services on or in connection with which it is used or otherwise to
lose its significance as a mark. Purchaser motivation shall not be a test for
determining abandonment under this paragraph.
The term “colorable imitation” includes any mark which so resembles a
registered mark as to be likely to cause confusion or mistake or to deceive.
The term “registered mark” means a mark registered in the United States
Patent and Trademark Office under this Act or under the Act of March 3, 1881,
or the Act of February 20, 1905, or the Act of March 19, 1920. The phrase
“marks registered in the Patent and Trademark Office” means registered marks.
The term “Act of March 3, 1881,” “Act of February 20, 1905,” or “Act of
March 19, 1920,” means the respective Act as amended.
A “counterfeit” is a spurious mark which is identical with, or substantially
indistinguishable from, a registered mark.
The term “domain name” means any alphanumeric designation which is
registered with or assigned by any domain name registrar, domain name
registry, or other domain name registration authority as part of an electronic
address on the Internet.
The term “Internet” has the meaning given that term in section 230(f)(1) of
the Communications Act of 1934 (47 U.S.C. 230(f)(1)).
915
Words used in the singular include the plural and vice versa.
The intent of this Act is to regulate commerce within the control of Congress
by making actionable the deceptive and misleading use of marks in such
commerce; to protect registered marks used in such commerce from interference
by State, or territorial legislation; to protect persons engaged in such commerce
against unfair competition; to prevent fraud and deception in such commerce by
the use of reproductions, copies, counterfeits, or colorable imitations of
registered marks; and to provide rights and remedies stipulated by treaties and
conventions respecting trademarks, trade names, and unfair competition entered
into between the United States and foreign nations.
History:
(July 5, 1946, ch 540, Title X, § 45, 60 Stat. 443; Oct. 9, 1962, P.L. 87-772, § 21, 76
Stat. 774; Jan. 2, 1975, P.L. 93-596, § 1, 88 Stat. 1949; Nov. 8, 1984, P.L. 98-620, Title I, §
103, 98 Stat. 3335; Nov. 16, 1988, P.L. 100-667, Title I, § 134, 102 Stat. 3946; Oct. 27,
1992, P.L. 102-542, § 3(d), 106 Stat. 3568; Dec. 8, 1994, P.L. 103-465, Title V, Subtitle B,
§ 521, 108 Stat. 4981; Jan. 16, 1996, P.L. 104-98, § 4, 109 Stat. 986; Aug. 5, 1999, P.L.
106-43, §§ 4(c), 6(b), 113 Stat. 219, 220; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9),
113 Stat. 1536.)
(As amended Oct. 6, 2006, P.L. 109-312, § 3(e), 120 Stat. 1733.)
§ 1128. National Intellectual Property Law

Enforcement Coordination Council [See prospective
(a) Establishment. There is established the National Intellectual Property
Law Enforcement Coordination Council (in this section referred to as the
“Council”). The Council shall consist of the following members—
(1) The Assistant Secretary of Commerce and Commissioner of Patents
and Trademarks [Under Secretary of Commerce for Intellectual Property
and Director of the United States Patent and Trademark Office], who shall
serve as co-chair of the Council.
(2) The Assistant Attorney General, Criminal Division, who shall serve
as co-chair of the Council.
(3) The Under Secretary of State for Economic and Agricultural Affairs.
(4) The Ambassador, Deputy United States Trade Representative.
(5) The Commissioner of Customs.
(6) The Under Secretary of Commerce for International Trade.
(7) The Coordinator for International Intellectual Property Enforcement.
916
(b) Duties. The Council established in subsection (a) shall coordinate
domestic and international intellectual property law enforcement among federal
[Federal] and foreign entities.
(c) Consultation Required. The Council shall consult with the Register of
Copyrights on law enforcement matters relating to copyright and related rights
and matters.
(d) Non-Derogation. Nothing in this section shall derogate from the duties
of the Secretary of State or from the duties of the United States Trade
Representative as set forth in section 141 of the Trade Act of 1974 ( 19 U.S.C.
2171), or from the duties and functions of the Register of Copyrights, or
otherwise alter current authorities relating to copyright matters.
(e) Report. The Council shall report annually on its coordination activities
to the President, and to the Committees on Appropriations and on the Judiciary
of the Senate and the House of Representatives.
(f) Funding. Notwithstanding section 1346 of title 31, United States Code,
or section 610 of this Act [unclassified], funds made available for fiscal year
2000 and hereafter by this or any other Act shall be available for interagency
funding of the National Intellectual Property Law Enforcement Coordination
Council.
Leg.H. Sept.29, 1999, P.L. 106-58, Title VI, § 653, 113 Stat. 480; Dec. 8, 2004, P.L.
108-447, Div B, Title II, § 210, 118 Stat. 2884; Oct. 13, 2008, P.L. 110-403, Title III, §
305(a)(1), 122 Stat. 4270.
Prospective amendment:
Repeal of section, effective upon confirmation of the IPEC by the Senate and
publication of such appointment in the Congressional Record. Act Oct. 13, 2008, P.L.
110-403, Title III, § 305(a)(1), 122 Stat. 4270, provides: “Section 653 of the Treasury and
General Government Appropriations Act, 2000 ( 15 U.S.C. 1128) is repealed effective upon
confirmation of the IPEC by the Senate and publication of such appointment in the
Congressional Record.”
This section (Act Nov. 29, 1999, P.L. 106-113 , Div B, § 1000(a)(9), 113
Stat. 1536 [§ 3002(b) of Title III of S. 1948 (113 Stat. 1501A-548), as
introduced on Nov. 17, 1999]) was transferred to 15 USCS § 8131 by the
compilers of the official United States Code. It related to cyberpiracy
protections for individuals.
SUBCHAPTER IV
917
The Madrid Protocol

In this title:
( 1 ) Basic application. The term “basic application” means the
application for the registration of a mark that has been filed with an Office
of a Contracting Party and that constitutes the basis for an application for the
international registration of that mark.
( 2 ) Basic registration. The term “basic registration” means the
registration of a mark that has been granted by an Office of a Contracting
Party and that constitutes the basis for an application for the international
registration of that mark.
(3) Contracting party. The term “Contracting Party” means any country
or inter-governmental organization that is a party to the Madrid Protocol.
(4) Date of recordal. The term “date of recordal” means the date on
which a request for extension of protection, filed after an international
registration is granted, is recorded on the International Register.
(5) Declaration of bona fide intention to use the mark in commerce. The
term “declaration of bona fide intention to use the mark in commerce” means
a declaration that is signed by the applicant for, or holder of, an
international registration who is seeking extension of protection of a mark to
the United States and that contains a statement that—
(A) the applicant or holder has a bona fide intention to use the mark
in commerce;
(B) the person making the declaration believes himself or herself, or
the firm, corporation, or association in whose behalf he or she makes the
declaration, to be entitled to use the mark in commerce; and
(C) no other person, firm, corporation, or association, to the best of
his or her knowledge and belief, has the right to use such mark in
commerce either in the identical form of the mark or in such near
resemblance to the mark as to be likely, when used on or in connection
with the goods of such other person, firm, corporation, or association, to
cause confusion, mistake, or deception.
(6) Extension of protection. The term “extension of protection” means
the protection resulting from an international registration that extends to the
918
United States at the request of the holder of the international registration, in
accordance with the Madrid Protocol.
( 7 ) Holder of an international registration. A “holder” of an
international registration is the natural or juristic person in whose name the
international registration is recorded on the International Register.
(8) International application. The term “international application” means
an application for international registration that is filed under the Madrid
Protocol.
( 9 ) International bureau. The term “International Bureau” means the
International Bureau of the World Intellectual Property Organization.
(10) International register. The term “International Register” means the
official collection of data concerning international registrations maintained
by the International Bureau that the Madrid Protocol or its implementing
regulations require or permit to be recorded.
( 11 ) International registration. The term “international registration”
means the registration of a mark granted under the Madrid Protocol.
(12) International registration date. The term “international registration
date” means the date assigned to the international registration by the
International Bureau.
(13) Madrid Protocol. The term “Madrid Protocol” means the Protocol
Relating to the Madrid Agreement Concerning the International Registration
of Marks, adopted at Madrid, Spain, on June 27, 1989.
(14) Notification of refusal. The term “notification of refusal” means the
notice sent by the United States Patent and Trademark Office to the
International Bureau declaring that an extension of protection cannot be
granted.
(15) Office of a Contracting Party. The term “Office of a Contracting
Party” means—
(A) the office, or governmental entity, of a Contracting Party that is
responsible for the registration of marks; or
( B ) the common office, or governmental entity, of more than 1
Contracting Party that is responsible for the registration of marks and is
so recognized by the International Bureau.
(16) Office of origin. The term “office of origin” means the Office of a
Contracting Party with which a basic application was filed or by which a
basic registration was granted.
919
(17) Opposition period. The term “opposition period” means the time
allowed for filing an opposition in the United States Patent and Trademark
Office, including any extension of time granted under section 13.
Leg.H. November 2, 2002, P.L. 107-273 § 13402, 116 Stat. 1913.
2002 Note: Effective Date.
This subtitle and the amendments made by this subtitle shall take effect on the later of—
( 1 ) the date on which the Madrid Protocol (as defined in section 60 of the
Trademark Act of 1946) enters into force with respect to the United States; or
(2) the date occurring 1 year after the date of enactment of this Act. [P.L. 107-273 §
13403.]
[The Madrid Protocol entered into force with respect to the United States on
November 2, 2003.]
§ 1141a. [Lanham Act § 61] International Applications

Based on United States Applications or
Registrations.
(a) In general. The owner of a basic application pending before the United
States Patent and Trademark Office, or the owner of a basic registration granted
by the United States Patent and Trademark Office may file an international
application by submitting to the United States Patent and Trademark Office a
written application in such form, together with such fees, as may be prescribed
by the Director.
(b) Qualified owners. A qualified owner, under subsection (a), shall—
(1) be a national of the United States;
(2) be domiciled in the United States; or
(3) have a real and effective industrial or commercial establishment in
the United States.
§ 1141b. [Lanham Act § 62] Certification of the

International Application.
( a ) Certification procedure. Upon the filing of an application for
international registration and payment of the prescribed fees, the Director shall
examine the international application for the purpose of certifying that the
information contained in the international application corresponds to the
information contained in the basic application or basic registration at the time of
920
the certification.
( b ) Transmittal. Upon examination and certification of the international
application, the Director shall transmit the international application to the
International Bureau.
§ 1141c. [Lanham Act § 63] Restriction, Abandonment,

Cancellation, or Expiration of a Basic Application or
Basic Registration.
With respect to an international application transmitted to the International
Bureau under section 62, the Director shall notify the International Bureau
whenever the basic application or basic registration which is the basis for the
international application has been restricted, abandoned, or canceled, or has
expired, with respect to some or all of the goods and services listed in the
international registration—
(1) within 5 years after the international registration date; or
( 2) more than 5 years after the international registration date if the
restriction, abandonment, or cancellation of the basic application or basic
registration resulted from an action that began before the end of that 5-year
period.
§ 1141d. [Lanham Act § 64] Request for Extension of

Protection Subsequent to International Registration.
The holder of an international registration that is based upon a basic
application filed with the United States Patent and Trademark Office or a basic
registration granted by the Patent and Trademark Office may request an
extension of protection of its international registration by filing such a request—
(1) directly with the International Bureau; or
(2) with the United States Patent and Trademark Office for transmittal to
the International Bureau, if the request is in such form, and contains such
transmittal fee, as may be prescribed by the Director.
§ 1141e. [Lanham Act § 65] Extension of Protection of

an International Registration to the United States
921
Under the Madrid Protocol.
(a) In general. Subject to the provisions of section 68, the holder of an
international registration shall be entitled to the benefits of extension of
protection of that international registration to the United States to the extent
necessary to give effect to any provision of the Madrid Protocol.
(b) If the United States is office of origin. Where the United States Patent
and Trademark Office is the office of origin for a trademark application or
registration, any international registration based on such application or
registration cannot be used to obtain the benefits of the Madrid Protocol in the
United States.
§ 1141f. [Lanham Act § 66] Effect of Filing a Request

for Extension of Protection of an International
Registration to the United States.
( a ) Requirement for request for extension of protection. A request for
extension of protection of an international registration to the United States that
the International Bureau transmits to the United States Patent and Trademark
Office shall be deemed to be properly filed in the United States if such request,
when received by the International Bureau, has attached to it a declaration of
bona fide intention to use the mark in commerce that is verified by the applicant
for, or holder of, the international registration.
(b) Effect of proper filing. Unless extension of protection is refused under
section 68, the proper filing of the request for extension of protection under
subsection (a) shall constitute constructive use of the mark, conferring the same
rights as those specified in section 7(c), as of the earliest of the following:
(1) The international registration date, if the request for extension of
protection was filed in the international application.
(2) The date of recordal of the request for extension of protection, if the
request for extension of protection was made after the international
registration date.
(3) The date of priority claimed pursuant to section 67.
§ 1141g. [Lanham Act § 67] Right of Priority for

Request for Extension of Protection to the United
922
States.
The holder of an international registration with a request for an extension of
protection to the United States shall be entitled to claim a date of priority based
on a right of priority within the meaning of Article 4 of the Paris Convention for
the Protection of Industrial Property if—
(1) the request for extension of protection contains a claim of priority;
and
(2) the date of international registration or the date of the recordal of the
request for extension of protection to the United States is not later than 6
months after the date of the first regular national filing (within the meaning
of Article 4(A)(3) of the Paris Convention for the Protection of Industrial
Property) or a subsequent application (within the meaning of Article 4(C)
(4) of the Paris Convention for the Protection of Industrial Property).
§ 1141h. [Lanham Act § 68] Examination of and

Opposition to Request for Extension of Protection;
Notification of Refusal.
(a) Examination and opposition.
( 1) A request for extension of protection described in section 66(a)
shall be examined as an application for registration on the Principal
Register under this Act, and if on such examination it appears that the
applicant is entitled to extension of protection under this title, the Director
shall cause the mark to be published in the Official Gazette of the United
States Patent and Trademark Office.
(2) Subject to the provisions of subsection (c), a request for extension of
protection under this title shall be subject to opposition under section 13.
(3) Extension of protection shall not be refused on the ground that the
mark has not been used in commerce.
(4) Extension of protection shall be refused to any mark not registrable
on the Principal Register.
(b) Notification of refusal. If, a request for extension of protection is refused
under subsection (a), the Director shall declare in a notification of refusal (as
provided in subsection (c)) that the extension of protection cannot be granted,
together with a statement of all grounds on which the refusal was based.
(c) Notice to International Bureau.
923
(1) Within 18 months after the date on which the International Bureau
transmits to the Patent and Trademark Office a notification of a request for
extension of protection, the Director shall transmit to the International
Bureau any of the following that applies to such request:
(A) A notification of refusal based on an examination of the request
for extension of protection.
(B) A notification of refusal based on the filing of an opposition to
the request.
(C) A notification of the possibility that an opposition to the request
may be filed after the end of that 18-month period.
(2) If the Director has sent a notification of the possibility of opposition
under paragraph (1)(C), the Director shall, if applicable, transmit to the
International Bureau a notification of refusal on the basis of the opposition,
together with a statement of all the grounds for the opposition, within 7
months after the beginning of the opposition period or within 1 month after
the end of the opposition period, whichever is earlier.
(3) If a notification of refusal of a request for extension of protection is
transmitted under paragraph (1) or (2), no grounds for refusal of such
request other than those set forth in such notification may be transmitted to
the International Bureau by the Director after the expiration of the time
periods set forth in paragraph (1) or (2), as the case may be.
(4) If a notification specified in paragraph (1) or (2) is not sent to the
International Bureau within the time period set forth in such paragraph, with
respect to a request for extension of protection, the request for extension of
protection shall not be refused and the Director shall issue a certificate of
extension of protection pursuant to the request.
( d ) Designation of agent for service of process. In responding to a
notification of refusal with respect to a mark, the holder of the international
registration of the mark may designate, by a document filed in the United States
Patent and Trademark Office, the name and address of a person residing in the
United States on whom notices or process in proceedings affecting the mark may
be served. Such notices or process may be served upon the person designated
by leaving with that person, or mailing to that person, a copy thereof at the
address specified in the last designation filed. If the person designated cannot be
found at the address given in the last designation, or if the holder does not
designate by a document filed in the United States Patent and Trademark Office
the name and address of a person residing in the United States for service of
notices or process in proceedings affecting the mark, the notice or process may
be served on the Director.
924
§ 1141i. [Lanham Act § 69] Effect of Extension of

Protection.
(a) Issuance of extension of protection. Unless a request for extension of
protection is refused under section 68, the Director shall issue a certificate of
extension of protection pursuant to the request and shall cause notice of such
certificate of extension of protection to be published in the Official Gazette of
the United States Patent and Trademark Office.
(b) Effect of extension of protection. From the date on which a certificate of
extension of protection is issued under subsection (a)—
(1) such extension of protection shall have the same effect and validity
as a registration on the Principal Register; and
(2) the holder of the international registration shall have the same rights
and remedies as the owner of a registration on the Principal Register.
§ 1141j. [Lanham Act § 70] Dependence of Extension of

Protection to the United States on the Underlying
(a) Effect of cancellation of international registration. If the International
Bureau notifies the United States Patent and Trademark Office of the
cancellation of an international registration with respect to some or all of the
goods and services listed in the international registration, the Director shall
cancel any extension of protection to the United States with respect to such
goods and services as of the date on which the international registration was
canceled.
(b) Effect of failure to renew international registration. If the International
Bureau does not renew an international registration, the corresponding extension
of protection to the United States shall cease to be valid as of the date of the
expiration of the international registration.
( c ) Transformation of an extension of protection into a United States
application. The holder of an international registration canceled in whole or in
part by the International Bureau at the request of the office of origin, under
article 6(4) of the Madrid Protocol, may file an application, under section 1 or
44 of this Act, for the registration of the same mark for any of the goods and
services to which the cancellation applies that were covered by an extension of
925
protection to the United States based on that international registration. Such an
application shall be treated as if it had been filed on the international
registration date or the date of recordal of the request for extension of protection
with the International Bureau, whichever date applies, and, if the extension of
protection enjoyed priority under section 67 of this title, shall enjoy the same
priority. Such an application shall be entitled to the benefits conferred by this
subsection only if the application is filed not later than 3 months after the date
on which the international registration was canceled, in whole or in part, and
only if the application complies with all the requirements of this Act which
apply to any application filed pursuant to section 1 or 44.
§ 1141k. [Lanham Act § 71] Duration, Affidavits and

Fees.
(a) Time periods for required affidavits. Each extension of protection for
which a certificate has been issued under section 69 [15 USCS § 1141i] shall
remain in force for the term of the international registration upon which it is
based, except that the extension of protection of any mark shall be canceled by
the Director unless the holder of the international registration files in the United
States Patent and Trademark Office affidavits that meet the requirements of
subsection (b), within the following time periods:
years following the date of issuance of the certificate of extension of
protection.
years following the date of issuance of the certificate of extension of
protection, and each successive 10-year period following the date of
issuance of the certificate of extension of protection.
(3) The holder may file the affidavit required under this section within a
grace period of 6 months after the end of the applicable time period
established in paragraph (1) or (2), together with the fee described in
subsection (b) and the additional grace period surcharge prescribed by the
Director.
(b) Requirements for Affidavit. The affidavit referred to in subsection (a)
shall—
(1)
(A) state that the mark is in use in commerce;
( B ) set forth the goods and services recited in the extension of
926
protection on or in connection with which the mark is in use in
commerce;
( C) be accompanied by such number of specimens or facsimiles
showing current use of the mark in commerce as may be required by the
Director; and
(D) be accompanied by the fee prescribed by the Director; or
(2)
( A) set forth the goods and services recited in the extension of
protection on or in connection with which the mark is not in use in
commerce;
( B ) include a showing that any nonuse is due to special
circumstances which excuse such nonuse and is not due to any intention
to abandon the mark; and
(C) be accompanied by the fee prescribed by the Director.
(c) Deficient Affidavit. If any submission filed within the period set forth
in subsection (a) is deficient, including that the affidavit was not filed in the
name of the holder of the international registration, the deficiency may be
corrected after the statutory time period, within the time prescribed after
notification of the deficiency. Such submission shall be accompanied by the
additional deficiency surcharge prescribed by the Director.
(d) Notice of Requirement. Special notice of the requirement for such
affidavit shall be attached to each certificate of extension of protection.
(e) Notification of Acceptance or Refusal. The Director shall notify the
holder of the international registration who files any affidavit required by this
section of the Director’s acceptance or refusal thereof and, in the case of a
refusal, the reasons therefor.
(f) Designation of Resident for Service of Process and Notices. If the
holder of the international registration of the mark is not domiciled in the United
States, the holder may designate, by a document filed in the United States Patent
and Trademark Office, the name and address of a person resident in the United
States on whom may be served notices or process in proceedings affecting the
mark. Such notices or process may be served upon the person so designated by
leaving with that person or mailing to that person a copy thereof at the address
specified in the last designation so filed. If the person so designated cannot be
found at the last designated address, or if the holder does not designate by a
927
Leg. H. July 5, 1946, ch. 540, Title XII, § 71, as added Nov. 2, 2002, P.L. 107-273, Div
C, Title III, Subtitle D, § 13402, 116 Stat. 1919; March 17, 2010, P.L. 111-146, § 3(d)(2),
124 Stat. 68.
§ 1141l. [Lanham Act § 72] Assignment of an Extension

of Protection.
An extension of protection may be assigned, together with the goodwill
associated with the mark, only to a person who is a national of, is domiciled in,
or has a bona fide and effective industrial or commercial establishment either in
a country that is a Contracting Party or in a country that is a member of an
intergovernmental organization that is a Contracting Party.

The period of continuous use prescribed under section 15 for a mark
covered by an extension of protection issued under this title may begin no
earlier than the date on which the Director issues the certificate of the extension
of protection under section 69, except as provided in section 74.
§ 1141n. [Lanham Act § 74] Rights of Extension of

Protection.
When a United States registration and a subsequently issued certificate of
extension of protection to the United States are owned by the same person,
identify the same mark, and list the same goods or services, the extension of
protection shall have the same rights that accrued to the registration prior to
issuance of the certificate of extension of protection.
CHAPTER 23
DISSEMINATION OF TECHNICAL,
SCIENTIFIC, AND ENGINEERING
928
INFORMATION
§ 1155. General Standards and Limitations;
Preservation of Security Classification.
Notwithstanding any other provision of this chapter, the Secretary shall
respect and preserve the security classification of any scientific or technical
information, data, patents, inventions, or discoveries in, or coming into, the
possession or control of the Department of Commerce, the classified status of
which the President or his designee or designees certify as being essential in the
interest of national defense, and nothing in this chapter shall be construed as
modifying or limiting any other statute relating to the classification of
information for reasons of national defense or security.
Leg.H. September 9, 1950, ch. 936 § 5, 64 Stat. 824.
CHAPTER 40
DEPARTMENT OF COMMERCE
The following named bureaus, administrations, services, offices, and
programs of the public service, and all that pertains thereto, shall be under the
jurisdiction and subject to the control of the Secretary of Commerce:
(1) National Oceanic and Atmospheric Administration;
(2) United States Travel and Tourism Administration;
(3) National Institute of Standards and Technology;
(4) United States Patent and Trademark Office;
(5) Bureau of the Census; and
(6) such other bureaus or other organizational units as the Secretary of
Commerce may from time to time establish in accordance with law.
Leg.H. February 14, 1903, ch. 552 §§ 4, 12, 32 Stat. 826, 830; August 23, 1912, ch. 350
§ 1, 37 Stat. 407; March 4, 1913, ch. 141 § 3, 37 Stat. 737; January 5, 1923, ch. 23 § 1, 42
Stat. 1109; June 30, 1932, ch. 314 § 501, 47 Stat. 415; February 22, 1934, Ex. Or. No. 6611;
May 27, 1936, ch. 463 § 1, 49 Stat. 1380; 1939 Reorg. Plan No. II, §§ 2(a), 4(e), 6; 1940
Reorg. Plan No. IV, §§ 7, 8, 54 Stat. 1235, 1236; 1946 Reorg. Plan No. 3, §§ 101–104, 60
Stat. 1097; June 30, 1949, ch. 288 § 103(a), 63 Stat. 380; August 4, 1949, ch. 393 § 20, 63
929
Stat. 561; 1949 Reorg. Plan No. 7, § 1, 63 Stat. 1070; 1950 Reorg. Plan No. 21, §§ 101, 106,
201, 64 Stat. 1273; October 29, 1974, P.L. 93-498 § 23, 88 Stat. 1549; 1965 Reorg. Plan
No. 2, 79 Stat. 1318; October 15, 1966, P.L. 89-670 § 6, 80 Stat. 937; 1970 Reorg. Plan No.
3, 35 Fed. Reg. 15627; October 29, 1974, P.L. 93-498 § 23, 88 Stat. 1549; October 5, 1978,
P.L. 95-422 § 2(c), 92 Stat. 932; August 6, 1981, P.L. 97-31 § 12(6), 95 Stat. 154;
September 13, 1982, P.L. 97-258 § 5(b), 96 Stat. 1074; November 29, 1999, P.L. 106-113 §
1000(a)(9) [4732(b)(6)], 113 Stat. 1536; November 13, 2000, P.L. 106-503 § 110(b), 114
Stat. 2302.
CHAPTER 47
CONSUMER PRODUCT SAFETY

(a) Injury Information Clearinghouse; duties. The Commission shall—
(1) maintain an Injury Information Clearinghouse to collect, investigate,
analyze, and disseminate injury data, and information, relating to the causes
and prevention of death, injury, and illness associated with consumer
products;
( 2 ) conduct such continuing studies and investigations of deaths,
injuries, diseases, other health impairments, and economic losses resulting
from accidents involving consumer products as it deems necessary;
( 3 ) following publication of a notice of proposed rulemaking for a
product safety rule under any rulemaking authority administered by the
Commission, assist public and private organizations or groups of
manufacturers, administratively and technically, in the development of safety
standards addressing the risk of injury identified in such notice; and
(4) to the extent practicable and appropriate (taking into account the
resources and priorities of the Commission), assist public and private
organizations or groups of manufacturers, administratively and technically,
in the development of product safety standards and test methods.
(b) Research, investigation and testing of consumer products. The
Commission may—
( 1 ) conduct research, studies, and investigations on the safety of
consumer products and on improving the safety of such products;
(2) test consumer products and develop product safety test methods and
testing devices; and
930
(3) offer training in product safety investigation and test methods.
(c) Grants and contracts for conduct of functions. In carrying out its
functions under this section, the Commission may make grants or enter into
contracts for the conduct of such functions with any person (including a
governmental entity).
(d) Availability to public of information. Whenever the Federal
contribution for any information, research, or development activity authorized
by this Act is more than minimal, the Commission shall include in any contract,
grant, or other arrangement for such activity, provisions effective to insure that
the rights to all information, uses, processes, patents, and other developments
resulting from that activity will be made available to the public without charge
on a nonexclusive basis. Nothing in this subsection shall be construed to deprive
any person of any right which he may have had, prior to entering into any
arrangement referred to in this subsection, to any patent, patent application, or
invention.
Leg.H. (Oct. 27, 1972, P.L. 92-573, § 5, 86 Stat. 1211; Aug. 13, 1981, P.L. 97-35, Title
XII, Subtitle A, § 1209(a),(b), 95 Stat. 720.)
(As amended Aug. 14, 2008, P.L. 110-314, Title II, Subtitle A, § 204(a)(2), 122 Stat.
3041.)
CHAPTER 49
FIRE PREVENTION AND CONTROL

( a ) Assistance to Administrator. Each department, agency, and
instrumentality of the executive branch of the Federal Government and each
independent regulatory agency of the United States is authorized and directed to
furnish to the Administrator, upon written request, on a reimbursable basis or
otherwise, such assistance as the Administrator deems necessary to carry out his
functions and duties pursuant to this Act, including, but not limited to, transfer of
personnel with their consent and without prejudice to their position and ratings.
(b) Powers of Administrator. With respect to this Act, the Administrator
is authorized to—
(1) enter into, without regard to section 3709 of the Revised Statutes, as
amended (41 U.S.C. 5) [41 USCS § 6101] such contracts, grants, leases,
cooperative agreements, or other transactions as may be necessary to carry
931
out the provisions of this Act;
( 2 ) accept gifts and voluntary and uncompensated services,
notwithstanding the provisions of section 3679 of the Revised Statutes (31
U.S.C. 665(b)) [31 USCS § 1342];
(3) purchase, lease, or otherwise acquire, own, hold, improve, use, or
deal in and with any property (real, personal, or mixed, tangible or
intangible), or interest in property, wherever situated; and sell, convey,
mortgage, pledge, lease, exchange, or otherwise dispose of property and
assets;
(4) procure temporary and intermittent services to the same extent as is
authorized under section 3109 of title 5, United States Code, but at rates not
to exceed the daily equivalent of the maximum annual rate of basic pay then
in effect for grade GS-15 of the General Schedule (5 U.S.C. 5332(a)) for
qualified experts; and
(5) establish such rules, regulations, and procedures as are necessary to
carry out the provisions of this Act.
(c) Audit. The Administrator of FEMA and the Comptroller General of the
United States, or any of their duly authorized representatives, shall have access
to any books, documents, papers, and records of the recipients of contracts,
grants, or other forms of assistance that are pertinent to its activities under this
Act for the purpose of audit or to determine if a proposed activity is in the
public interest.
( d ) Inventions and discoveries. All property rights with respect to
inventions and discoveries, which are made in the course of or under contract
with any government agency pursuant to this Act, shall be subject to the basic
policies set forth in the President’s Statement of Government Patent Policy
issued August 23, 1971, or such revisions of that statement of policy as may
subsequently be promulgated and published in the Federal Register.
(e) Coordination.
(1) In general. To the extent practicable, the Administrator shall use
existing programs, data, information, and facilities already available in
other Federal Government departments and agencies and, where
appropriate, existing research organizations, centers, and universities.
(2) Coordination of fire prevention and control programs. The
Administrator shall provide liaison at an appropriate organizational level to
assure coordination of the activities of the Administrator with Federal,
State, and local government agencies and departments and nongovernmental
organizations concerned with any matter related to programs of fire
932
prevention and control.
(3) Coordination of emergency medical services programs. The
Administrator shall provide liaison at an appropriate organizational level to
assure coordination of the activities of the Administrator related to
emergency medical services provided by fire service-based systems with
Federal, State, and local government agencies and departments and
nongovernmental organizations so concerned, as well as those entities
concerned with emergency medical services generally.
Leg.H. Oct. 29, 1974, P. L. 93-498, § 21, 88 Stat. 1548; Nov. 16, 1979, P. L. 96-121, §
2, 93 Stat. 863; Nov. 13, 2000, P. L. 106-503, Title I, § 110(a)(2)(B)(ix), 114 Stat. 2302;
Oct. 8, 2008, P. L. 110-376, § 9(a), 122 Stat. 4061; Jan. 2, 2013, P. L. 112-239, Div A, Title
XVIII, Subtitle A, § 1802(b)(1), 126 Stat. 2100.
Amendments:
2013. Act Jan. 2, 2013, in subsec. (c), substituted “Administrator of FEMA” for “Director”.
CHAPTER 107
PROTECTION OF INTELLECTUAL
PROPERTY RIGHTS—
CYBERSQUATTING PROTECTION
(1) In General.
(A) Civil Liability.
Any person who registers a domain name that consists of the name of
another living person, or a name substantially and confusingly similar
thereto, without that person’s consent, with the specific intent to profit from
such name by selling the domain name for financial gain to that person or
any third party, shall be liable in a civil action by such person.
(B) Exception.
A person who in good faith registers a domain name consisting of the
name of another living person, or a name substantially and confusingly
similar thereto, shall not be liable under this paragraph if such name is used
in, affiliated with, or related to a work of authorship protected under title
17, United States Code, including a work made for hire as defined in section
933
101 of title 17, United States Code, and if the person registering the domain
name is the copyright owner or licensee of the work, the person intends to
sell the domain name in conjunction with the lawful exploitation of the
work, and such registration is not prohibited by a contract between the
registrant and the named person. The exception under this subparagraph
shall apply only to a civil action brought under paragraph (1) and shall in no
manner limit the protections afforded under the Trademark Act of 1946 ( 15
U.S.C. 1051 et seq.) or other provision of Federal or State law.
(2) Remedies.
In any civil action brought under paragraph (1), a court may award
injunctive relief, including the forfeiture or cancellation of the domain name or
the transfer of the domain name to the plaintiff. The court may also, in its
discretion, award costs and attorneys fees to the prevailing party.
(3) Definition.
In this subsection, the term “domain name” has the meaning given that term
in section 45 of the Trademark Act of 1946 (15 U.S.C. 1127).
(4) Effective Date.
This subsection shall apply to domain names registered on or after the date
of the enactment of this Act [enacted Nov. 29, 1999].
Leg.H. Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536.
TITLE 17
COPYRIGHTS
Contents
CHAPTER 1 SUBJECT MATTER AND SCOPE OF COPYRIGHT

§ 103. Subject Matter of Copyright: Compilations and Derivative Works.
§ 105. Subject Matter of Copyright: United States Government Works.
§ 106A. Rights of Certain Authors to Attribution and Integrity.
§ 108. Limitations on Exclusive Rights: Reproduction by Libraries and Archives.
§ 109. Limitations on Exclusive Rights: Effect of Transfer of Particular Copy or
Phonorecord.
934
§ 110. Limitations on Exclusive Rights: Exemption of Certain Performances and
Displays.
§ 111. Limitations on Exclusive Rights: Secondary Transmissions of Broadcasting by
Cable.
§ 112. Limitations on Exclusive Rights: Ephemeral Recordings.
§ 113. Scope of Exclusive Rights in Pictorial, Graphic, and Sculptural Works.
§ 115. Scope of Exclusive Rights in Nondramatic Musical Works: Compulsory License
for Making and Distributing Phonorecords.
§ 116. Negotiated Licenses for Public Performances by Means of Coin-Operated
Phonorecord Players.
§ 117. Limitation on Exclusive Rights: Computer Programs.
§ 118. Scope of Exclusive Rights: Use of Certain Works in Connection With
Noncommercial Broadcasting.
§ 119. Limitations on Exclusive Rights: Secondary Transmissions of Distant Television
Programming by Satellite [Caution: See prospective amendment note below.]
§ 120. Scope of Exclusive Rights in Architectural Works.
§ 121. Limitations on Exclusive Rights: Reproduction for Blind or Other People With
Disabilities.
§ 122. Limitations on Exclusive Rights: Secondary Transmissions of Local Television
Programming by Satellite.
CHAPTER 2 COPYRIGHT OWNERSHIP AND TRANSFER
§ 202. Ownership of copyright as distinct from ownership of material object.
§ 203. Termination of Transfers and Licenses Granted by the Author.
CHAPTER 3 DURATION OF COPYRIGHT
§ 302. Duration of Copyright: Works Created on or After January 1, 1978.
§ 303. Duration of Copyright: Works Created But Not Published or Copyrighted Before
January 1, 1978.
CHAPTER 4 COPYRIGHT NOTICE, DEPOSIT, AND REGISTRATION
§ 402. Notice of Copyright: Phonorecords of Sound Recordings.
§ 403. Notice of Copyright: Publications Incorporating United States Government
Works.
§ 404. Notice of Copyright: Contributions to Collective Works.
§ 405. Notice of Copyright: Omission of Notice on Certain Copies and Phonorecords.
§ 406. Notice of Copyright: Error in Name or Date on Certain Copies and
Phonorecords.
§ 407. Deposit of Copies or Phonorecords for Library of Congress.
935
§ 410. Registration of Claim and Issuance of Certificate.
§ 412. Registration as Prerequisite to Certain Remedies for Infringement.
CHAPTER 5 COPYRIGHT INFRINGEMENT AND REMEDIES
UNITED STATES SUPREME COURT COPYRIGHT PRACTICE RULES (1909)
§ 503. Remedies for Infringement: Impounding and Disposition of Infringing Articles.
§ 504. Remedies for Infringement: Damages and Profits.
§ 505. Remedies for Infringement: Costs and Attorney’s Fees.
§ 508. Notification of Filing and Determination of Actions.
§ 509. [Repealed]
§ 510. Remedies for Alteration of Programming by Cable Systems.
§ 511. Liability of States, Instrumentalities of States, and State Officials for
Infringement of Copyright.
§ 512. Limitations on Liability Relating to Material Online.
§ 513. Determination of Reasonable License Fees for Individual Proprietors.
CHAPTER 6 IMPORTATION AND EXPORTATION
§ 602. Infringing Importation or Exportation of Copies or Phonorecords.
§ 603. Importation Prohibitions: Enforcement and Disposition of Excluded Articles.
CHAPTER 7 COPYRIGHT OFFICE
§ 701. The Copyright Office: General Responsibilities and Organization.
§ 704. Retention and Disposition of Articles Deposited in Copyright Office.
§ 705. Copyright Office Records: Preparation, Maintenance, Public Inspection, and
Searching.
§ 709. Delay in Delivery Caused by Disruption of Postal or Other Services.
CHAPTER 8 PROCEEDINGS BY COPYRIGHT ROYALTY JUDGES
§ 801. Copyright Royalty Judges; Appointment and Functions.
§ 805. General Rule for Voluntarily Negotiated Agreements.
936
CHAPTER 9 PROTECTION OF SEMICONDUCTOR CHIP PRODUCTS
§ 903. Ownership, Transfer, Licensing, and Recordation.
§ 906. Limitation on Exclusive Rights: Reverse Engineering; First Sale.
§ 907. Limitation on Exclusive Rights: Innocent Infringement.
CHAPTER 10 DIGITAL AUDIO RECORDING DEVICES AND MEDIA
SUBCHAPTER A Definitions
SUBCHAPTER B Copying Controls
SUBCHAPTER C Royalty Payments
§ 1005. Deposit of Royalty Payments and Deduction of Expenses.
SUBCHAPTER D Prohibition on Certain Infringement Actions, Remedies, and
Arbitration
CHAPTER 11 SOUND RECORDINGS AND MUSIC VIDEOS
§ 1101. Unauthorized Fixation and Trafficking in Sound Recordings and Music Videos.
CHAPTER 12 COPYRIGHT PROTECTION AND MANAGEMENT SYSTEMS
§ 1201. Circumvention of Copyright Protection Systems.
§ 1202. Integrity of Copyright Management Information.
CHAPTER 13 PROTECTION OF ORIGINAL DESIGNS
937
§ 1311. Benefit of Earlier Filing Date in Foreign Country.
§ 1313. Examination of Application and Issue or Refusal of Registration.
§ 1316. Fees.
§ 1325. Liability for Action on Registration Fraudulently Obtained.
CHAPTER 1
SUBJECT MATTER AND SCOPE OF

COPYRIGHT
Except as otherwise provided in this title, as used in this title, the following
terms and their variant forms mean the following:
938
An “anonymous work” is a work on the copies or phonorecords of which no
natural person is identified as author.
An “architectural work” is the design of a building as embodied in any
tangible medium of expression, including a building, architectural plans, or
drawings. The work includes the overall form as well as the arrangement and
composition of spaces and elements in the design, but does not include
individual standard features.
“Audiovisual works” are works that consist of a series of related images
which are intrinsically intended to be shown by the use of machines or devices
such as projectors, viewers, or electronic equipment, together with
accompanying sounds, if any, regardless of the nature of the material objects,
such as films or tapes, in which the works are embodied.
The “Berne Convention” is the Convention for the Protection of Literary and
Artistic Works, signed at Berne, Switzerland, on September 9, 1886, and all
acts, protocols, and revisions thereto.
The “best edition” of a work is the edition, published in the United States at
any time before the date of deposit, that the Library of Congress determines to
be most suitable for its purposes.
A person’s “children” are that person’s immediate offspring, whether
legitimate or not, and any children legally adopted by that person.
A “collective work” is a work, such as a periodical issue, anthology, or
encyclopedia, in which a number of contributions, constituting separate and
independent works in themselves, are assembled into a collective whole.
A “compilation” is a work formed by the collection and assembling of
preexisting materials or of data that are selected, coordinated, or arranged in
such a way that the resulting work as a whole constitutes an original work of
authorship. The term “compilation” includes collective works.
A “computer program” is a set of statements or instructions to be used
directly or indirectly in a computer in order to bring about a certain result.
“Copies” are material objects, other than phonorecords, in which a work is
fixed by any method now known or later developed, and from which the work
can be perceived, reproduced, or otherwise communicated, either directly or
with the aid of a machine or device. The term “copies” includes the material
object, other than a phonorecord, in which the work is first fixed.
“Copyright owner”, with respect to any one of the exclusive rights
comprised in a copyright, refers to the owner of that particular right.
A “Copyright Royalty Judge” is a Copyright Royalty Judge appointed under
939
section 802 of this title [17 USCS § 802], and includes any individual serving as
an interim Copyright Royalty Judge under such section.
A work is “created” when it is fixed in a copy or phonorecord for the first
time; where a work is prepared over a period of time, the portion of it that has
been fixed at any particular time constitutes the work as of that time, and where
the work has been prepared in different versions, each version constitutes a
separate work.
A “derivative work” is a work based upon one or more preexisting works,
such as a translation, musical arrangement, dramatization, fictionalization,
motion picture version, sound recording, art reproduction, abridgment,
condensation, or any other form in which a work may be recast, transformed, or
adapted. A work consisting of editorial revisions, annotations, elaborations, or
other modifications which, as a whole, represent an original work of authorship,
is a “derivative work”.
A “device”, “machine”, or “process” is one now known or later developed.
A “digital transmission” is a transmission in whole or in part in a digital or
other non-analog format.
To “display” a work means to show a copy of it, either directly or by means
of a film, slide, television image, or any other device or process or, in the case
of a motion picture or other audiovisual work, to show individual images
nonsequentially.
An “establishment” is a store, shop, or any similar place of business open to
the general public for the primary purpose of selling goods or services in which
the majority of the gross square feet of space that is nonresidential is used for
that purpose, and in which nondramatic musical works are performed publicly.
The term “financial gain” includes receipt, or expectation of receipt, of
anything of value, including the receipt of other copyrighted works.
A work is “fixed” in a tangible medium of expression when its embodiment
in a copy or phonorecord, by or under the authority of the author, is sufficiently
permanent or stable to permit it to be perceived, reproduced, or otherwise
communicated for a period of more than transitory duration. A work consisting
of sounds, images, or both, that are being transmitted, is “fixed” for purposes of
this title if a fixation of the work is being made simultaneously with its
transmission.
A “food service or drinking establishment” is a restaurant, inn, bar, tavern,
or any other similar place of business in which the public or patrons assemble
for the primary purpose of being served food or drink, in which the majority of
the gross square feet of space that is nonresidential is used for that purpose, and
940
in which nondramatic musical works are performed publicly.
The “Geneva Phonograms Convention” is the Convention for the Protection
of Producers of Phonograms Against Unauthorized Duplication of Their
Phonograms, concluded at Geneva, Switzerland, on October 29, 1971.
The “gross square feet of space” of an establishment means the entire
interior space of that establishment, and any adjoining outdoor space used to
serve patrons, whether on a seasonal basis or otherwise.
The terms “including” and “such as” are illustrative and not limitative.
An “international agreement” is—
(1) the Universal Copyright Convention;
(2) the Geneva Phonograms Convention;
(3) the Berne Convention;
(4) the WTO Agreement;
(5) the WIPO Copyright Treaty;
(6) the WIPO Performances and Phonograms Treaty; and
(7) any other copyright treaty to which the United States is a party.
A “joint work” is a work prepared by two or more authors with the intention
that their contributions be merged into inseparable or interdependent parts of a
unitary whole.
“Literary works” are works, other than audiovisual works, expressed in
words, numbers, or other verbal or numerical symbols or indicia, regardless of
the nature of the material objects, such as books, periodicals, manuscripts,
phonorecords, film, tapes, disks, or cards, in which they are embodied.
The term “motion picture exhibition facility” means a movie theater,
screening room, or other venue that is being used primarily for the exhibition of
a copyrighted motion picture, if such exhibition is open to the public or is made
to an assembled group of viewers outside of a normal circle of a family and its
social acquaintances.
“Motion pictures” are audiovisual works consisting of a series of related
images which, when shown in succession, impart an impression of motion,
together with accompanying sounds, if any.
To “perform” a work means to recite, render, play, dance, or act it, either
directly or by means of any device or process or, in the case of a motion picture
or other audiovisual work, to show its images in any sequence or to make the
941
sounds accompanying it audible.
A “performing rights society” is an association, corporation, or other entity
that licenses the public performance of nondramatic musical works on behalf of
copyright owners of such works, such as the American Society of Composers,
Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), and SESAC,
Inc.
“Phonorecords” are material objects in which sounds, other than those
accompanying a motion picture or other audiovisual work, are fixed by any
method now known or later developed, and from which the sounds can be
perceived, reproduced, or otherwise communicated, either directly or with the
aid of a machine or device. The term “phonorecords” includes the material
object in which the sounds are first fixed.
“Pictorial, graphic, and sculptural works” include two-dimensional and
three-dimensional works of fine, graphic, and applied art, photographs, prints
and art reproductions, maps, globes, charts, diagrams, models, and technical
drawings, including architectural plans. Such works shall include works of
artistic craftsmanship insofar as their form but not their mechanical or utilitarian
aspects are concerned; the design of a useful article, as defined in this section,
shall be considered a pictorial, graphic, or sculptural work only if, and only to
the extent that, such design incorporates pictorial, graphic, or sculptural features
that can be identified separately from, and are capable of existing independently
of, the utilitarian aspects of the article.
For purposes of section 513, a “proprietor” is an individual, corporation,
partnership, or other entity, as the case may be, that owns an establishment or a
food service or drinking establishment, except that no owner or operator of a
radio or television station licensed by the Federal Communications
Commission, cable system or satellite carrier, cable or satellite carrier service
or programmer, provider of online services or network access or the operator of
facilities therefor, telecommunications company, or any other such audio or
audiovisual service or programmer now known or as may be developed in the
future, commercial subscription music service, or owner or operator of any
other transmission service, shall under any circumstances be deemed to be a
proprietor.
A “pseudonymous work” is a work on the copies or phonorecords of which
the author is identified under a fictitious name.
“Publication” is the distribution of copies or phonorecords of a work to the
public by sale or other transfer of ownership, or by rental, lease, or lending. The
offering to distribute copies or phonorecords to a group of persons for purposes
of further distribution, public performance, or public display, constitutes
publication. A public performance or display of a work does not of itself
942
constitute publication.
To perform or display a work “publicly” means—
(1) to perform or display it at a place open to the public or at any place
where a substantial number of persons outside of a normal circle of a family
and its social acquaintances is gathered; or
(2) to transmit or otherwise communicate a performance or display of
the work to a place specified by clause (1) or to the public, by means of any
device or process, whether the members of the public capable of receiving
the performance or display receive it in the same place or in separate places
and at the same time or at different times.
“Registration”, for purposes of sections 205(c)(2), 405, 406, 410(d), 411,
412, and 506(e) [17 USCS §§ 205(c)(2), 405, 406, 410(d), 411, 412, and
506(e)], means a registration of a claim in the original or the renewed and
extended term of copyright.
“Sound recordings” are works that result from the fixation of a series of
musical, spoken, or other sounds, but not including the sounds accompanying a
motion picture or other audiovisual work, regardless of the nature of the
material objects, such as disks, tapes, or other phonorecords, in which they are
embodied.
“State” includes the District of Columbia and the Commonwealth of Puerto
Rico, and any territories to which this title is made applicable by an Act of
Congress.
A “transfer of copyright ownership” is an assignment, mortgage, exclusive
license, or any other conveyance, alienation, or hypothecation of a copyright or
of any of the exclusive rights comprised in a copyright, whether or not it is
limited in time or place of effect, but not including a nonexclusive license.
A “transmission program” is a body of material that, as an aggregate, has
been produced for the sole purpose of transmission to the public in sequence
and as a unit.
To “transmit” a performance or display is to communicate it by any device
or process whereby images or sounds are received beyond the place from which
they are sent.
A “treaty party” is a country or intergovernmental organization other than the
United States that is a party to an international agreement.
The “United States”, when used in a geographical sense, comprises the
several States, the District of Columbia and the Commonwealth of Puerto Rico,
and the organized territories under the jurisdiction of the United States
943
Government.
For purposes of section 411 [17 USCS § 411], a work is a “United States
work” only if—
(1) in the case of a published work, the work is first published—
(A) in the United States;
(B) simultaneously in the United States and another treaty party or
parties, whose law grants a term of copyright protection that is the same
as or longer than the term provided in the United States;
(C) simultaneously in the United States and a foreign nation that is
not a treaty party; or
(D) in a foreign nation that is not a treaty party, and all of the authors
of the work are nationals, domiciliaries, or habitual residents of, or in
the case of an audiovisual work legal entities with headquarters in, the
United States;
(2) in the case of an unpublished work, all the authors of the work are
nationals, domiciliaries, or habitual residents of the United States, or, in the
case of an unpublished audiovisual work, all the authors are legal entities
with headquarters in the United States; or
(3) in the case of a pictorial, graphic, or sculptural work incorporated in
a building or structure, the building or structure is located in the United
States.
A “useful article” is an article having an intrinsic utilitarian function that is
not merely to portray the appearance of the article or to convey information. An
article that is normally a part of a useful article is considered a “useful article”.
The author’s “widow” or “widower” is the author’s surviving spouse under
the law of the author’s domicile at the time of his or her death, whether or not
the spouse has later remarried.
The “WIPO Copyright Treaty” is the WIPO Copyright Treaty concluded at
Geneva, Switzerland, on December 20, 1996.
The “WIPO Performances and Phonograms Treaty” is the WIPO
Performances and Phonograms Treaty concluded at Geneva, Switzerland, on
December 20, 1996.
A “work of visual art” is—
(1) a painting, drawing, print, or sculpture, existing in a single copy, in a
limited edition of 200 copies or fewer that are signed and consecutively
944
numbered by the author, or, in the case of a sculpture, in multiple cast,
carved, or fabricated sculptures of 200 or fewer that are consecutively
numbered by the author and bear the signature or other identifying mark of
the author; or
(2) a still photographic image produced for exhibition purposes only,
existing in a single copy that is signed by the author, or in a limited edition
of 200 copies or fewer that are signed and consecutively numbered by the
author.
A work of visual art does not include—
(A)
(i) any poster, map, globe, chart, technical drawing, diagram, model,
applied art, motion picture or other audiovisual work, book, magazine,
newspaper, periodical, data base, electronic information service,
electronic publication, or similar publication;
(ii) any merchandising item or advertising, promotional, descriptive,
covering, or packaging material or container;
(iii) any portion or part of any item described in clause (i) or (ii);
(B) any work made for hire; or
(C) any work not subject to copyright protection under this title.
A “work of the United States Government” is a work prepared by an officer
or employee of the United States Government as part of that person’s official
duties.
A “work made for hire” is—
(1) a work prepared by an employee within the scope of his or her
employment; or
(2) a work specially ordered or commissioned for use as a contribution
to a collective work, as a part of a motion picture or other audiovisual
work, as a translation, as a supplementary work, as a compilation, as an
instructional text, as a test, as answer material for a test, or as an atlas, if the
parties expressly agree in a written instrument signed by them that the work
shall be considered a work made for hire. For the purpose of the foregoing
sentence, a “supplementary work” is a work prepared for publication as a
secondary adjunct to a work by another author for the purpose of
introducing, concluding, illustrating, explaining, revising, commenting upon,
or assisting in the use of the other work, such as forewords, afterwords,
pictorial illustrations, maps, charts, tables, editorial notes, musical
945
arrangements, answer material for tests, bibliographies, appendixes, and
indexes, and an “instructional text” is a literary, pictorial, or graphic work
prepared for publication and with the purpose of use in systematic
instructional activities.
In determining whether any work is eligible to be considered a work made
for hire under paragraph (2), neither the amendment contained in section
1011(d) of the Intellectual Property and Communications Omnibus Reform Act
of 1999, as enacted by section 1000(a)(9) of Public Law 106-113, nor the
deletion of the words added by that amendment—
(A) shall be considered or otherwise given any legal significance, or
( B ) shall be interpreted to indicate congressional approval or
disapproval of, or acquiescence in, any judicial determination,
by the courts or the Copyright Office. Paragraph (2) shall be interpreted as
if both section 2(a)(1) of the Work Made For Hire and Copyright Corrections
Act of 2000 and section 1011(d) of the Intellectual Property and
Communications Omnibus Reform Act of 1999, as enacted by section 1000(a)
(9) of Public Law 106-113, were never enacted, and without regard to any
inaction or awareness by the Congress at any time of any judicial
determinations.
The terms “WTO Agreement” and “WTO member country” have the
meanings given those terms in paragraphs (9) and (10), respectively, of section
2 of the Uruguay Round Agreements Act [19 USCS § 3501].
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat 2541; Dec. 12, 1980, P.L.
96-517, § 10(a), 94 Stat. 3028; Oct. 31, 1988, P.L. 100-568, § 4(a)(1), 102 Stat. 2854; Dec.
1, 1990, P.L. 101-650, Title VI, § 602, Title VII, § 702, 104 Stat. 5128, 5133; June 26, 1992,
P.L. 102-307, Title I, § 102(b)(2), 106 Stat. 266; Oct. 28, 1992, P.L. 102-563, § 3(b), 106
Stat. 4248; Nov. 1, 1995, P.L. 104-39, § 5(a), 109 Stat. 348; Nov. 13, 1997, P.L. 105-80, §
12(a)(3), 111 Stat. 1534; Dec. 16, 1997, P.L. 105-147, § 2(a), 111 Stat. 2678; Oct. 27,
1998, P.L. 105-298, Title II, § 205, 112 Stat. 2833; Oct. 28, 1998, P.L. 105-304, Title I, §
102(a), 112 Stat. 2861; Aug. 5, 1999, P.L. 106-44, § 1(g)(1), 113 Stat. 222; Nov. 29, 1999,
P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Oct. 27, 2000, P.L. 106-379, § 2(a), 114
Stat. 1444; Nov. 2, 2002, P.L. 107-273, Div C, Title III, Subtitle B, § 13210(5), 116 Stat.
1909; Nov. 30, 2004, P.L. 108-419, § 4, 118 Stat. 2361; April 27, 2005, P.L. 109-9, Title I,
§ 102(c), 119 Stat. 220; Dec. 9, 2010, P.L. 111-295, § 6(a), 124 Stat. 3181.
2010 Notes: Act March 26, 2010, P.L. 111-151 , § 1, 124 Stat. 1027, provides: “This
Act [amending 17 USCS § 119, § 119 note, and 47 USCS § 325] may be cited as the ‘Satellite
Television Extension Act of 2010’.”.
Act May 27, 2010, P.L. 111-175 , § 1(a), 124 Stat. 1218, provides: “This Act may be
cited as the ‘Satellite Television Extension and Localism Act of 2010’.”. For full
classification of such Act, consult USCS Tables volumes.
Act Dec. 9, 2010, P.L. 111-295, § 1, 124 Stat. 3180, provides: “This Act may be cited as
946
the ‘Copyright Cleanup, Clarification, and Corrections Act of 2010’.”. For full classification
of such Act, consult USCS Tables volumes.
2009 Note: Act June 30, 2009, P.L. 111-36 , § 1, 123 Stat. 1926, provides: “This Act
[amending 17 USCS § 114] may be cited as the ‘Webcaster Settlement Act of 2009’ ”.
2008 Notes: Act Oct. 16, 2008, P.L. 110-434 , § 1(a), 122 Stat. 4972, provides: “This
Act [amending 17 USCS § 1301] may be cited as the ‘Vessel Hull Design Protection
Amendments of 2008’ ”.
Act Oct. 16, 2008, P.L. 110-435, § 1, 122 Stat. 4974, provides: “This Act [amending 17
USCS § 114] may be cited as the ‘Webcaster Settlement Act of 2008’ ”.
2006 Note: Act Oct. 6, 2006, P.L. 109-303 , § 1, 120 Stat. 1478, provides: “This Act
may be cited as the ‘Copyright Royalty Judges Program Technical Corrections Act’ ”. For
full classification of such Act, consult USCS Tables volumes.

(a) Copyright protection subsists, in accordance with this title, in original
works of authorship fixed in any tangible medium of expression, now known or
later developed, from which they can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of a machine or device. Works of
authorship include the following categories:
(1) literary works;
(2) musical works, including any accompanying words;
(3) dramatic works, including any accompanying music;
(4) pantomimes and choreographic works;
(5) pictorial, graphic, and sculptural works;
(6) motion pictures and other audiovisual works;
(7) sound recordings; and
(8) architectural works.
(b) In no case does copyright protection for an original work of authorship
extend to any idea, procedure, process, system, method of operation, concept,
principle, or discovery, regardless of the form in which it is described,
explained, illustrated, or embodied in such work.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat. 2544; December 1, 1990, P.L.
101-650 § 703, 104 Stat. 5133.
1990 Note: Effective Date.
The amendments made by this title apply to—
947
(1) any architectural work created on or after the date of the enactment of this Act;
and
( 2 ) any architectural work that, on the date of the enactment of this Act, is
unconstructed and embodied in unpublished plans or drawings, except that protection for
such architectural work under title 17, United States Code, by virtue of the amendments
made by this title, shall terminate on December 31, 2002, unless the work is constructed
by that date. P.L. 101-650 § 706.
§ 103. Subject Matter of Copyright: Compilations and

Derivative Works.
(a) The subject matter of copyright as specified by section 102 includes
compilations and derivative works, but protection for a work employing
preexisting material in which copyright subsists does not extend to any part of
the work in which such material has been used unlawfully.
(b) The copyright in a compilation or derivative work extends only to the
material contributed by the author of such work, as distinguished from the
preexisting material employed in the work, and does not imply any exclusive
right in the preexisting material. The copyright in such work is independent of,
and does not affect or enlarge the scope, duration, ownership, or subsistence of,
any copyright protection in the preexisting material.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat. 2545.

(a) Unpublished Works. The works specified by sections 102 and 103,
while unpublished, are subject to protection under this title without regard to the
nationality or domicile of the author.
(b) Published Works. The works specified by sections 102 and 103, when
published, are subject to protection under this title if—
( 1) on the date of first publication, one or more of the authors is a
national or domiciliary of the United States, or is a national, domiciliary, or
sovereign authority of a treaty party, or is a stateless person, wherever that
person may be domiciled; or
(2) the work is first published in the United States or in a foreign nation
that, on the date of first publication, is a treaty party; or
(3) the work is a sound recording that was first fixed in a treaty party; or
( 4 ) the work is a pictorial, graphic, or sculptural work that is
incorporated in a building or other structure, or an architectural work that is
embodied in a building and the building or structure is located in the United
948
States or a treaty party; or
( 5) the work is first published by the United Nations or any of its
specialized agencies, or by the Organization of American States; or
(6) the work comes within the scope of a Presidential proclamation.
Whenever the President finds that a particular foreign nation extends, to
works by authors who are nationals or domiciliaries of the United States or
to works that are first published in the United States, copyright protection on
substantially the same basis as that on which the foreign nation extends
protection to works of its own nationals and domiciliaries and works first
published in that nation, the President may by proclamation extend
protection under this title to works of which one or more of the authors is,
on the date of first publication, a national, domiciliary, or sovereign
authority of that nation, or which was first published in that nation. The
President may revise, suspend, or revoke any such proclamation or impose
any conditions or limitations on protection under a proclamation. For
purposes of paragraph (2), a work that is published in the United States or a
treaty party within 30 days after publication in a foreign nation that is not a
treaty party shall be considered to be first published in the United States or
such treaty party, as the case may be.
(c) Effect of Berne Convention. No right or interest in a work eligible for
protection under this title may be claimed by virtue of, or in reliance upon, the
provisions of the Berne Convention, or the adherence of the United States
thereto. Any rights in a work eligible for protection under this title that derive
from this title, other Federal or State statutes, or the common law, shall not be
expanded or reduced by virtue of, or in reliance upon, the provisions of the
Berne Convention, or the adherence of the United States thereto.
(d) Effect of Phonograms Treaties. Notwithstanding the provisions of
subsection (b), no works other than sound recordings shall be eligible for
protection under this title solely by virtue of the adherence of the United States
to the Geneva Phonograms Convention or the WIPO Performances and
Phonograms Treaty.
Leg.H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2545; Oct. 31, 1988, P.L.
100-568, § 4(a)(2), (3), 102 Stat. 2855; Oct. 28, 1998, P.L. 105-304, Title I, § 102(b), 112
Stat. 2862.

(a) Automatic Protection and Term.
(1) Term.
(A) Copyright subsists, in accordance with this section, in restored
949
works, and vests automatically on the date of restoration.
(B) Any work in which copyright is restored under this section shall
subsist for the remainder of the term of copyright that the work would
have otherwise been granted in the United States if the work never
entered the public domain in the United States.
(2) Exception. Any work in which the copyright was ever owned or
administered by the Alien Property Custodian and in which the restored
copyright would be owned by a government or instrumentality thereof, is not
a restored work.
(b) Ownership of Restored Copyright. A restored work vests initially in
the author or initial rightholder of the work as determined by the law of the
source country of the work.
(c) Filing of Notice of Intent to Enforce Restored Copyright Against
Reliance Parties. On or after the date of restoration, any person who owns a
copyright in a restored work or an exclusive right therein may file with the
Copyright Office a notice of intent to enforce that person’s copyright or
exclusive right or may serve such a notice directly on a reliance party.
Acceptance of a notice by the Copyright Office is effective as to any reliance
parties but shall not create a presumption of the validity of any of the facts stated
therein. Service on a reliance party is effective as to that reliance party and any
other reliance parties with actual knowledge of such service and of the contents
of that notice.
(d) Remedies for Infringement of Restored Copyrights.
(1) Enforcement of Copyright in Restored Works in the Absence of a
Reliance Party. As against any party who is not a reliance party, the
remedies provided in chapter 5 of this title shall be available on or after the
date of restoration of a restored copyright with respect to an act of
infringement of the restored copyright that is commenced on or after the date
of restoration.
(2) Enforcement of Copyright in Restored Works as Against Reliance
Parties. As against a reliance party, except to the extent provided in
paragraphs (3) and (4), the remedies provided in chapter 5 of this title shall
be available, with respect to an act of infringement of a restored copyright,
on or after the date of restoration of the restored copyright if the
requirements of either of the following subparagraphs are met:
(A)
(i) The owner of the restored copyright (or such owner’s agent)
or the owner of an exclusive right therein (or such owner’s agent)
950
files with the Copyright Office, during the 24-month period
beginning on the date of restoration, a notice of intent to enforce the
restored copyright; and
(ii)
(I) the act of infringement commenced after the end of the 12-
month period beginning on the date of publication of the notice in
the Federal Register;
(II) the act of infringement commenced before the end of the
12-month period described in subclause (I) and continued after
the end of that 12-month period, in which case remedies shall be
available only for infringement occurring after the end of that 12-
month period; or
(III) copies or phonorecords of a work in which copyright has
been restored under this section are made after publication of the
notice of intent in the Federal Register.
(B)
(i) The owner of the restored copyright (or such owner’s agent)
or the owner of an exclusive right therein (or such owner’s agent)
serves upon a reliance party a notice of intent to enforce a restored
copyright; and
(ii)
(I) the act of infringement commenced after the end of the 12-
month period beginning on the date the notice of intent is
received;
(II) the act of infringement commenced before the end of the
12-month period described in subclause (I) and continued after
the end of that 12-month period, in which case remedies shall be
available only for the infringement occurring after the end of that
12-month period; or
(III) copies or phonorecords of a work in which copyright has
been restored under this section are made after receipt of the
notice of intent. In the event that notice is provided under both
subparagraphs (A) and (B), the 12-month period referred to in
such subparagraphs shall run from the earlier of publication or
service of notice.
(3) Existing Derivative Works.
(A) In the case of a derivative work that is based upon a restored
951
work and is created—
( i ) before the date of the enactment of the Uruguay Round
Agreements Act, if the source country of the restored work is an
eligible country on such date, or
(ii) before the date on which the source country of the restored
work becomes an eligible country, if that country is not an eligible
country on such date of enactment, a reliance party may continue to
exploit that derivative work for the duration of the restored copyright
if the reliance party pays to the owner of the restored copyright
reasonable compensation for conduct which would be subject to a
remedy for infringement but for the provisions of this paragraph.
(B) In the absence of an agreement between the parties, the amount
of such compensation shall be determined by an action in United States
district court, and shall reflect any harm to the actual or potential market
for or value of the restored work from the reliance party’s continued
exploitation of the work, as well as compensation for the relative
contributions of expression of the author of the restored work and the
reliance party to the derivative work.
(4) Commencement of Infringement for Reliance Parties. For purposes
of section 412, in the case of reliance parties, infringement shall be deemed
to have commenced before registration when acts which would have
constituted infringement had the restored work been subject to copyright
were commenced before the date of restoration.
(e) Notices of Intent to Enforce a Restored Copyright.
(1) Notices of Intent Filed With the Copyright Office.
(A)
(i) A notice of intent filed with the Copyright Office to enforce a
restored copyright shall be signed by the owner of the restored
copyright or the owner of an exclusive right therein, who files the
notice under subsection (d)(2)(A)(i) (hereafter in this paragraph
referred to as the “owner”), or by the owner’s agent, shall identify
the title of the restored work, and shall include an English translation
of the title and any other alternative titles known to the owner by
which the restored work may be identified, and an address and
telephone number at which the owner may be contacted. If the notice
is signed by an agent, the agency relationship must have been
constituted in a writing signed by the owner before the filing of the
notice. The Copyright Office may specifically require in regulations
other information to be included in the notice, but failure to provide
952
such other information shall not invalidate the notice or be a basis
for refusal to list the restored work in the Federal Register.
(ii) If a work in which copyright is restored has no formal title, it
shall be described in the notice of intent in detail sufficient to
identify it.
(iii) Minor errors or omissions may be corrected by further
notice at any time after the notice of intent is filed. Notices of
corrections for such minor errors or omissions shall be accepted
after the period established in subsection (d)(2)(A)(i). Notices shall
be published in the Federal Register pursuant to subparagraph (B).
(B)
( i ) The Register of Copyrights shall publish in the Federal
Register, commencing not later than 4 months after the date of
restoration for a particular nation and every 4 months thereafter for a
period of 2 years, lists identifying restored works and the ownership
thereof if a notice of intent to enforce a restored copyright has been
filed.
(ii) Not less than 1 list containing all notices of intent to enforce
shall be maintained in the Public Information Office of the Copyright
Office and shall be available for public inspection and copying
during regular business hours pursuant to sections 705 and 708.
(C) The Register of Copyrights is authorized to fix reasonable fees
based on the costs of receipt, processing, recording, and publication of
notices of intent to enforce a restored copyright and corrections thereto.
(D)
( i ) Not later than 90 days before the date the Agreement on
Trade-Related Aspects of Intellectual Property referred to in section
101(d)(15) of the Uruguay Round Agreements Act enters into force
with respect to the United States, the Copyright Office shall issue
and publish in the Federal Register regulations governing the filing
under this subsection of notices of intent to enforce a restored
copyright.
(ii) Such regulations shall permit owners of restored copyrights
to file simultaneously for registration of the restored copyright.
(2) Notices of Intent Served on a Reliance Party.
(A) Notices of intent to enforce a restored copyright may be served
on a reliance party at any time after the date of restoration of the
953
restored copyright.
(B) Notices of intent to enforce a restored copyright served on a
reliance party shall be signed by the owner or the owner’s agent, shall
identify the restored work and the work in which the restored work is
used, if any, in detail sufficient to identify them, and shall include an
English translation of the title, any other alternative titles known to the
owner by which the work may be identified, the use or uses to which the
owner objects, and an address and telephone number at which the
reliance party may contact the owner. If the notice is signed by an agent,
the agency relationship must have been constituted in writing and signed
by the owner before service of the notice.
(3) Effect of Material False Statements. Any material false statement
knowingly made with respect to any restored copyright identified in any
notice of intent shall make void all claims and assertions made with respect
to such restored copyright.
(f) Immunity From Warranty and Related Liability.
(1) In General. Any person who warrants, promises, or guarantees that
a work does not violate an exclusive right granted in section 106 shall not
be liable for legal, equitable, arbitral, or administrative relief if the
warranty, promise, or guarantee is breached by virtue of the restoration of
copyright under this section, if such warranty, promise, or guarantee is made
before January 1, 1995.
(2) Performances. No person shall be required to perform any act if
such performance is made infringing by virtue of the restoration of copyright
under the provisions of this section, if the obligation to perform was
undertaken before January 1, 1995.
(g) Proclamation of Copyright Restoration. Whenever the President finds
that a particular foreign nation extends, to works by authors who are nationals or
domiciliaries of the United States, restored copyright protection on substantially
the same basis as provided under this section, the President may by
proclamation extend restored protection provided under this section to any work
—
( 1 ) of which one or more of the authors is, on the date of first
publication, a national, domiciliary, or sovereign authority of that nation; or
(2) which was first published in that nation. The President may revise,
suspend, or revoke any such proclamation or impose any conditions or
limitations on protection under such a proclamation.
(h) Definitions. For purposes of this section and section 109(a):
954
(1) The term “date of adherence or proclamation” means the earlier of
the date on which a foreign nation which, as of the date the WTO Agreement
enters into force with respect to the United States, is not a nation adhering to
the Berne Convention or a WTO member country, becomes—
(A) a nation adhering to the Berne Convention;
(B) a WTO member country;
(C) a nation adhering to the WIPO Copyright Treaty;
(D) a nation adhering to the WIPO Performances and Phonograms
Treaty; or
(E) subject to a Presidential proclamation under subsection (g).
(2) The “date of restoration” of a restored copyright is—
(A) January 1, 1996, if the source country of the restored work is a
nation adhering to the Berne Convention or a WTO member country on
such date, or
(B) the date of adherence or proclamation, in the case of any other
source country of the restored work.
(3) The term “eligible country” means a nation, other than the United
States, that—
(A) becomes a WTO member country after the date of the enactment
of the Uruguay Round Agreements Act;
(B) on such date of enactment is, or after such date of enactment
becomes, a nation adhering to the Berne Convention;
(C) adheres to the WIPO Copyright Treaty;
(D) adheres to the WIPO Performances and Phonograms Treaty; or
(E) after such date of enactment becomes subject to a proclamation
under subsection (g).
(4) The term “reliance party” means any person who—
(A) with respect to a particular work, engages in acts, before the
source country of that work becomes an eligible country, which would
have violated section 106 if the restored work had been subject to
copyright protection, and who, after the source country becomes an
eligible country, continues to engage in such acts;
( B ) before the source country of a particular work becomes an
eligible country, makes or acquires 1 or more copies or phonorecords of
955
that work; or
(C) as the result of the sale or other disposition of a derivative work
covered under subsection (d)(3), or significant assets of a person
described in subparagraph (A) or (B), is a successor, assignee, or
licensee of that person.
(5) The term “restored copyright” means copyright in a restored work
under this section.
(6) The term “restored work” means an original work of authorship that
—
(A) is protected under subsection (a);
( B ) is not in the public domain in its source country through
expiration of term of protection;
(C) is in the public domain in the United States due to—
( i ) noncompliance with formalities imposed at any time by
United States copyright law, including failure of renewal, lack of
proper notice, or failure to comply with any manufacturing
requirements;
( i i ) lack of subject matter protection in the case of sound
recordings fixed before February 15, 1972; or
(iii) lack of national eligibility;
(D) has at least one author or rightholder who was, at the time the
work was created, a national or domiciliary of an eligible country, and
if published, was first published in an eligible country and not published
in the United States during the 30-day period following publication in
such eligible country; and
(E) if the source country for the work is an eligible country solely by
virtue of its adherence to the WIPO Performances and Phonograms
Treaty, is a sound recording.
(7) The term “rightholder” means the person—
( A) who, with respect to a sound recording, first fixes a sound
recording with authorization, or
( B ) who has acquired rights from the person described in
subparagraph (A) by means of any conveyance or by operation of law.
(8) The “source country” of a restored work is—
956
(A) a nation other than the United States;
(B) in the case of an unpublished work—
(i) the eligible country in which the author or rightholder is a
national or domiciliary, or, if a restored work has more than 1 author
or rightholder, of which the majority of foreign authors or
rightholders are nationals or domiciliaries; or
(ii) if the majority of authors or rightholders are not foreign, the
nation other than the United States which has the most significant
contacts with the work; and
(C) in the case of a published work—
(i) the eligible country in which the work is first published, or
(ii) if the restored work is published on the same day in 2 or
more eligible countries, the eligible country which has the most
significant contacts with the work.
Leg.H. Added Dec. 8, 1993, P.L. 103-182, Title III, Subtitle C, § 334(a), 107 Stat. 2115;
Dec. 8, 1994, P.L. 103-465, Title V, Subtitle A, § 514(a), 108 Stat. 4976; Oct. 11, 1996, P.L.
104-295, § 20(e)(2), 110 Stat. 3529; Nov. 13, 1997, P.L. 105-80, § 2, 111 Stat. 1530; Oct.
28, 1998, P.L. 105-304, Title I, § 102(c), 112 Stat. 2862.
§ 105. Subject Matter of Copyright: United States

Government Works.
Copyright protection under this title is not available for any work of the
United States Government, but the United States Government is not precluded
from receiving and holding copyrights transferred to it by assignment, bequest,
or otherwise.

Subject to sections 107 through 122, the owner of copyright under this title
has the exclusive rights to do and to authorize any of the following:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the
public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works,
957
pantomimes, and motion pictures and other audiovisual works, to perform
the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works,
pantomimes, and pictorial, graphic, or sculptural works, including the
individual images of a motion picture or other audiovisual work, to display
the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work
publicly by means of a digital audio transmission.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat. 2546; July 3, 1990, P.L. 101-318
§ 3(d), 104 Stat. 288, effective November 16, 1988; December 1, 1990, P.L. 101-650 §
704(b)(2), 104 Stat. 5134; November 1, 1995, P.L. 104-39 § 2, 109 Stat. 336, effective
February 1, 1996; August 5, 1999, P.L. 106-44 § 1(g)(2), 113 Stat. 222; November 2, 2002,
P.L. 107-273 § 13210(4)(A), 116 Stat. 1909.
§ 106A. Rights of Certain Authors to Attribution and

Integrity.
(a) Rights of Attribution and Integrity. Subject to section 107 and
independent of the exclusive rights provided in section 106, the author of a work
of visual art—
(1) shall have the right—
(A) to claim authorship of that work, and
(B) to prevent the use of his or her name as the author of any work of
visual art which he or she did not create;
(2) shall have the right to prevent the use of his or her name as the author
of the work of visual art in the event of a distortion, mutilation, or other
modification of the work which would be prejudicial to his or her honor or
reputation; and
(3) subject to the limitations set forth in section 113(d), shall have the
right—
( A ) to prevent any intentional distortion, mutilation, or other
modification of that work which would be prejudicial to his or her
honor or reputation, and any intentional distortion, mutilation, or
modification of that work is a violation of that right, and
(B) to prevent any destruction of a work of recognized stature, and
any intentional or grossly negligent destruction of that work is a
violation of that right.
(b) Scope and Exercise of Rights. Only the author of a work of visual art
958
has the rights conferred by subsection (a) in that work, whether or not the author
is the copyright owner. The authors of a joint work of visual art are coowners of
the rights conferred by subsection (a) in that work.
(c) Exceptions.
(1) The modification of a work of visual art which is a result of the
passage of time or the inherent nature of the materials is not a distortion,
mutilation, or other modification described in subsection (a)(3)(A).
( 2) The modification of a work of visual art which is the result of
conservation, or of the public presentation, including lighting and placement,
of the work is not a destruction, distortion, mutilation, or other modification
described in subsection (a)(3) unless the modification is caused by gross
negligence.
(3) The rights described in paragraphs (1) and (2) of subsection (a)
shall not apply to any reproduction, depiction, portrayal, or other use of a
work in, upon, or in any connection with any item described in subparagraph
(A) or (B) of the definition of “work of visual art” in section 101, and any
such reproduction, depiction, portrayal, or other use of a work is not a
destruction, distortion, mutilation, or other modification described in
paragraph (3) of subsection (a).
(d) Duration of rights.
(1) With respect to works of visual art created on or after the effective
date set forth in section 610(a) of the Visual Artists Rights Act of 1990, the
rights conferred by subsection (a) shall endure for a term consisting of the
life of the author.
(2) With respect to works of visual art created before the effective date
set forth in section 610(a) of the Visual Artists Rights Act of 1990, but title
to which has not, as of such effective date, been transferred from the author,
the rights conferred by subsection (a) shall be coextensive with, and shall
expire at the same time as, the rights conferred by section 106.
(3) In the case of a joint work prepared by two or more authors, the
rights conferred by subsection (a) shall endure for a term consisting of the
life of the last surviving author.
(4) All terms of the rights conferred by subsection (a) run to the end of
the calendar year in which they would otherwise expire.
(e) Transfer and waiver.
(1) The rights conferred by subsection (a) may not be transferred, but
those rights may be waived if the author expressly agrees to such waiver in
959
a written instrument signed by the author. Such instrument shall specifically
identify the work, and uses of that work, to which the waiver applies, and
the waiver shall apply only to the work and uses so identified. In the case of
a joint work prepared by two or more authors, a waiver of rights under this
paragraph made by one such author waives such rights for all such authors.
(2) Ownership of the rights conferred by subsection (a) with respect to a
work of visual art is distinct from ownership of any copy of that work, or of
a copyright or any exclusive right under a copyright in that work. Transfer of
ownership of any copy of a work of visual art, or of a copyright or any
exclusive right under a copyright, shall not constitute a waiver of the rights
conferred by subsection (a). Except as may otherwise be agreed by the
author in a written instrument signed by the author, a waiver of the rights
conferred by subsection (a) with respect to a work of visual art shall not
constitute a transfer of ownership of any copy of that work, or of ownership
of a copyright or of any exclusive right under a copyright in that work.
Leg.H. December 1, 1990, P.L. 101-650 § 603(a), 104 Stat. 5128, effective June 1,
1991.

Notwithstanding the provisions of sections 106 and 106A, the fair use of a
copyrighted work, including such use by reproduction in copies or
phonorecords or by any other means specified by that section, for purposes such
as criticism, comment, news reporting, teaching (including multiple copies for
classroom use), scholarship, or research, is not an infringement of copyright. In
determining whether the use made of a work in any particular case is a fair use
the factors to be considered shall include—
(1) the purpose and character of the use, including whether such use is
of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the
copyrighted work. The fact that a work is unpublished shall not itself bar a
finding of fair use if such finding is made upon consideration of all the
above factors.
101-650 § 607, 104 Stat. 5132, effective June 1, 1991; October 24, 1992, P.L. 102-492,
106 Stat. 3145.
960
§ 108. Limitations on Exclusive Rights: Reproduction
by Libraries and Archives.
( a ) Except as otherwise provided in this title and notwithstanding the
provisions of section 106 [17 USCS § 106], it is not an infringement of
copyright for a library or archives, or any of its employees acting within the
scope of their employment, to reproduce no more than one copy or phonorecord
of a work, except as provided in subsections (b) and (c), or to distribute such
copy or phonorecord, under the conditions specified by this section, if—
( 1) the reproduction or distribution is made without any purpose of
direct or indirect commercial advantage;
(2) the collections of the library or archives are (i) open to the public,
or (ii) available not only to researchers affiliated with the library or
archives or with the institution of which it is a part, but also to other persons
doing research in a specialized field; and
(3) the reproduction or distribution of the work includes a notice of
copyright that appears on the copy or phonorecord that is reproduced under
the provisions of this section, or includes a legend stating that the work may
be protected by copyright if no such notice can be found on the copy or
phonorecord that is reproduced under the provisions of this section.
(b) The rights of reproduction and distribution under this section apply to
three copies or phonorecords of an unpublished work duplicated solely for
purposes of preservation and security or for deposit for research use in another
library or archives of the type described by clause (2) of subsection (a), if—
(1) the copy or phonorecord reproduced is currently in the collections of
the library or archives; and
(2) any such copy or phonorecord that is reproduced in digital format is
not otherwise distributed in that format and is not made available to the
public in that format outside the premises of the library or archives.
(c) The right of reproduction under this section applies to three copies or
phonorecords of a published work duplicated solely for the purpose of
replacement of a copy or phonorecord that is damaged, deteriorating, lost, or
stolen, or if the existing format in which the work is stored has become
obsolete, if—
(1) the library or archives has, after a reasonable effort, determined that
an unused replacement cannot be obtained at a fair price; and
(2) any such copy or phonorecord that is reproduced in digital format is
not made available to the public in that format outside the premises of the
961
library or archives in lawful possession of such copy. For purposes of this
subsection, a format shall be considered obsolete if the machine or device
necessary to render perceptible a work stored in that format is no longer
manufactured or is no longer reasonably available in the commercial
marketplace.
(d) The rights of reproduction and distribution under this section apply to a
copy, made from the collection of a library or archives where the user makes his
or her request or from that of another library or archives, of no more than one
article or other contribution to a copyrighted collection or periodical issue, or
to a copy or phonorecord of a small part of any other copyrighted work, if—
(1) the copy or phonorecord becomes the property of the user, and the
library or archives has had no notice that the copy or phonorecord would be
used for any purpose other than private study, scholarship, or research; and
( 2) the library or archives displays prominently, at the place where
orders are accepted, and includes on its order form, a warning of copyright
in accordance with requirements that the Register of Copyrights in
accordance with requirements that the Register of Copyrights shall
prescribe by regulation.
(e) The rights of reproduction and distribution under this section apply to the
entire work, or to a substantial part of it, made from the collection of a library
or archives where the user makes his or her request or from that of another
library or archives, if the library or archives has first determined, on the basis
of a reasonable investigation, that a copy or phonorecord of the copyrighted
work cannot be obtained at a fair price, if—
(1) the copy or phonorecord becomes the property of the user, and the
library or archives has had no notice that the copy or phonorecord would be
used for any purpose other than private study, scholarship, or research; and
( 2) the library or archives displays prominently, at the place where
orders are accepted, and includes on its order form, a warning of copyright
in accordance with requirements that the Register of Copyrights shall
(f) Nothing in this section—
( 1) shall be construed to impose liability for copyright infringement
upon a library or archives or its employees for the unsupervised use of
reproducing equipment located on its premises: Provided, That such
equipment displays a notice that the making of a copy may be subject to the
copyright law;
( 2) excuses a person who uses such reproducing equipment or who
962
requests a copy or phonorecord under subsection (d) from liability for
copyright infringement for any such act, or for any later use of such copy or
phonorecord, if it exceeds fair use as provided by section 107 [17 USCS §
107];
( 3 ) shall be construed to limit the reproduction and distribution by
lending of a limited number of copies and excerpts by a library or archives
of an audiovisual news program, subject to clauses (1), (2), and (3) of
subsection (a); or
(4) in any way affects the right of fair use as provided by section 107
[17 USCS § 107], or any contractual obligations assumed at any time by the
library or archives when it obtained a copy or phonorecord of a work in its
collections.
(g) The rights of reproduction and distribution under this section extend to
the isolated and unrelated reproduction or distribution of a single copy or
phonorecord of the same material on separate occasions, but do not extend to
cases where the library or archives, or its employee—
(1) is aware or has substantial reason to believe that it is engaging in the
related or concerted reproduction or distribution of multiple copies or
phonorecords of the same material, whether made on one occasion or over a
period of time, and whether intended for aggregate use by one or more
individuals or for separate use by the individual members of a group; or
(2) engages in the systematic reproduction or distribution of single or
multiple copies or phonorecords of material described in subsection (d):
Provided, That nothing in this clause prevents a library or archives from
participating in interlibrary arrangements that do not have, as their purpose
or effect, that the library or archives receiving such copies or phonorecords
for distribution does so in such aggregate quantities as to substitute for a
subscription to or purchase of such work.
(h)
(1) For purposes of this section, during the last 20 years of any term of
copyright of a published work, a library or archives, including a nonprofit
educational institution that functions as such, may reproduce, distribute,
display, or perform in facsimile or digital form a copy or phonorecord of
such work, or portions thereof, for purposes of preservation, scholarship, or
research, if such library or archives has first determined, on the basis of a
reasonable investigation, that none of the conditions set forth in
subparagraphs (A), (B), and (C) of paragraph (2) apply.
(2) No reproduction, distribution, display, or performance is authorized
963
under this subsection if—
(A) the work is subject to normal commercial exploitation;
( B ) a copy or phonorecord of the work can be obtained at a
reasonable price; or
( C) the copyright owner or its agent provides notice pursuant to
regulations promulgated by the Register of Copyrights that either of the
conditions set forth in subparagraphs (A) and (B) applies.
(3) The exemption provided in this subsection does not apply to any
subsequent uses by users other than such library or archives.
( i ) The rights of reproduction and distribution under this section do not
apply to a musical work, a pictorial, graphic or sculptural work, or a motion
picture or other audiovisual work other than an audiovisual work dealing with
news, except that no such limitation shall apply with respect to rights granted by
subsections (b), (c), and (h), or with respect to pictorial or graphic works
published as illustrations, diagrams, or similar adjuncts to works of which
copies are reproduced or distributed in accordance with subsections (d) and
(e).
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat. 2546; June 26, 1992, P.L. 102-
307 § 301, 106 Stat. 272; November 13, 1997, P.L. 105-80 § 12(a)(4), 111 Stat. 1534;
October 27, 1998, P.L. 105-298 § 104, 112 Stat. 2829; October 28, 1998, P.L. 105-304 §
404, 112 Stat. 2889; April 27, 2005, P.L. 109-9 § 402, 119 Stat. 227.
§ 109. Limitations on Exclusive Rights: Effect of

Transfer of Particular Copy or Phonorecord.
(a) Notwithstanding the provisions of section 106(3) [17 USCS § 106(3)],
the owner of a particular copy or phonorecord lawfully made under this title, or
any person authorized by such owner, is entitled, without the authority of the
copyright owner, to sell or otherwise dispose of the possession of that copy or
phonorecord. Notwithstanding the preceding sentence, copies or phonorecords
of works subject to restored copyright under section 104A [17 USCS § 104A]
that are manufactured before the date of restoration of copyright or, with respect
to reliance parties, before publication or service of notice under section
104A(e) [17 USCS § 104A(e)], may be sold or otherwise disposed of without
the authorization of the owner of the restored copyright for purposes of direct or
indirect commercial advantage only during the 12-month period beginning on—
(1) the date of the publication in the Federal Register of the notice of
intent filed with the Copyright Office under section 104A(d)(2)(A) [17
USCS § 104A(d)(2)(A)], or
964
(2) the date of the receipt of actual notice served under section 104A(d)
(2)(B) [17 USCS § 104A(d)(2)(B)], whichever occurs first.
(b)
(1)
( A ) Notwithstanding the provisions of subsection (a), unless
authorized by the owners of copyright in the sound recording or the
owner of copyright in a computer program (including any tape, disk, or
other medium embodying such program), and in the case of a sound
recording in the musical works embodied therein, neither the owner of a
particular phonorecord nor any person in possession of a particular
copy of a computer program (including any tape, disk, or other medium
embodying such program), may, for the purposes of direct or indirect
commercial advantage, dispose of, or authorize the disposal of, the
possession of that phonorecord or computer program (including any
tape, disk, or other medium embodying such program) by rental, lease,
or lending, or by any other act or practice in the nature of rental, lease,
or lending. Nothing in the preceding sentence shall apply to the rental,
lease, or lending of a phonorecord for nonprofit purposes by a nonprofit
library or nonprofit educational institution. The transfer of possession of
a lawfully made copy of a computer program by a nonprofit educational
institution to another nonprofit educational institution or to faculty, staff,
and students does not constitute rental, lease, or lending for direct or
indirect commercial purposes under this subsection.
(B) This subsection does not apply to—
( i ) a computer program which is embodied in a machine or
product and which cannot be copied during the ordinary operation or
use of the machine or product; or
(ii) a computer program embodied in or used in conjunction with
a limited purpose computer that is designed for playing video games
and may be designed for other purposes.
(C) Nothing in this subsection affects any provision of chapter 9 of
this title [17 USCS § 901 et seq.].
(2)
( A ) Nothing in this subsection shall apply to the lending of a
computer program for nonprofit purposes by a nonprofit library, if each
copy of a computer program which is lent by such library has affixed to
the packaging containing the program a warning of copyright in
accordance with requirements that the Register of Copyrights shall
965
(B) Not later than three years after the date of the enactment of the
Computer Software Rental Amendments Act of 1990 [enacted Dec. 1,
1990], and at such times thereafter as the Register of Copyrights
considers appropriate, the Register of Copyrights, after consultation
with representatives of copyright owners and librarians, shall submit to
the Congress a report stating whether this paragraph has achieved its
intended purpose of maintaining the integrity of the copyright system
while providing nonprofit libraries the capability to fulfill their function.
Such report shall advise the Congress as to any information or
recommendations that the Register of Copyrights considers necessary to
carry out the purposes of this subsection.
(3) Nothing in this subsection shall affect any provision of the antitrust
laws. For purposes of the preceding sentence, “antitrust laws” has the
meaning given that term in the first section of the Clayton Act [15 USCS §
12] and includes section 5 of the Federal Trade Commission Act [ 15 USCS
§ 45] to the extent that section relates to unfair methods of competition.
(4) Any person who distributes a phonorecord or a copy of a computer
program (including any tape, disk, or other medium embodying such
program) in violation of paragraph (1) is an infringer of copyright under
section 501 of this title [17 USCS § 501] and is subject to the remedies set
forth in sections 502, 503, 504, and 505 [17 USCS §§ 502, 503, 504, and
505]. Such violation shall not be a criminal offense under section 506 [17
USCS § 506] or cause such person to be subject to the criminal penalties set
forth in section 2319 of title 18.
966
(c) Notwithstanding the provisions of section 106(5) [17 USCS § 106(5)],
the owner of a particular copy lawfully made under this title, or any person
authorized by such owner, is entitled, without the authority of the copyright
owner, to display that copy publicly, either directly or by the projection of no
more than one image at a time, to viewers present at the place where the copy is
located.
( d) The privileges prescribed by subsections (a) and (c) do not, unless
authorized by the copyright owner, extend to any person who has acquired
possession of the copy or phonorecord from the copyright owner, by rental,
lease, loan, or otherwise, without acquiring ownership of it.
(e) [Caution: For termination of application of this subsection, see § 804(c)
of Act Dec. 1, 1990, P.L. 101-650, which appears as a note to this section.]
Notwithstanding the provisions of sections 106(4) and 106(5) [17 USCS §§
106(4) and 106(5)], in the case of an electronic audiovisual game intended for
use in coin-operated equipment, the owner of a particular copy of such a game
lawfully made under this title, is entitled, without the authority of the copyright
owner of the game, to publicly perform or display that game in coin-operated
equipment, except that this subsection shall not apply to any work of authorship
embodied in the audiovisual game if the copyright owner of the electronic
audiovisual game is not also the copyright owner of the work of authorship.
Leg.H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat 2548; Oct. 4, 1984, P.L. 98-
450, § 2, 98 Stat. 1727; Nov. 5, 1988, P.L. 100-617, § 2, 102 Stat. 3194; Dec. 1, 1990, P.L.
101-650, Title VIII, §§ 802, 803, 104 Stat. 5134, 5135; Dec. 8, 1994, P.L. 103-465, Title V,
Subtitle A, § 514(b), 108 Stat. 4981; Nov. 13, 1997, P.L. 105-80, § 12(a)(5), 111 Stat. 1534;
Oct. 13, 2008, P.L. 110-403, Title II, § 209(a)(1), 122 Stat. 4264.
§ 110. Limitations on Exclusive Rights: Exemption of

Certain Performances and Displays.
Notwithstanding the provisions of section 106 [17 USCS § 106], the
following are not infringements of copyright:
(1) performance or display of a work by instructors or pupils in the
course of face-to-face teaching activities of a nonprofit educational
institution, in a classroom or similar place devoted to instruction, unless, in
the case of a motion picture or other audiovisual work, the performance, or
the display of individual images, is given by means of a copy that was not
lawfully made under this title, and that the person responsible for the
performance knew or had reason to believe was not lawfully made;
(2) except with respect to a work produced or marketed primarily for
performance or display as part of mediated instructional activities
transmitted via digital networks, or a performance or display that is given
967
by means of a copy or phonorecord that is not lawfully made and acquired
under this title, and the transmitting government body or accredited nonprofit
educational institution knew or had reason to believe was not lawfully made
and acquired, the performance of a nondramatic literary or musical work or
reasonable and limited portions of any other work, or display of a work in
an amount comparable to that which is typically displayed in the course of a
live classroom session, by or in the course of a transmission, if—
(A) the performance or display is made by, at the direction of, or
under the actual supervision of an instructor as an integral part of a class
session offered as a regular part of the systematic mediated instructional
activities of a governmental body or an accredited nonprofit educational
institution;
(B) the performance or display is directly related and of material
assistance to the teaching content of the transmission;
( C ) the transmission is made solely for, and, to the extent
technologically feasible, the reception of such transmission is limited to
—
( i ) students officially enrolled in the course for which the
transmission is made; or
(ii) officers or employees of governmental bodies as a part of
their official duties or employment; and
(D) the transmitting body or institution—
(i) institutes policies regarding copyright, provides informational
materials to faculty, students, and relevant staff members that
accurately describe, and promote compliance with, the laws of the
United States relating to copyright, and provides notice to students
that materials used in connection with the course may be subject to
copyright protection; and
(ii) in the case of digital transmissions—
(I) applies technological measures that reasonably prevent—
(aa) retention of the work in accessible form by recipients
of the transmission from the transmitting body or institution for
longer than the class session; and
( bb) unauthorized further dissemination of the work in
accessible form by such recipients to others; and
(II) does not engage in conduct that could reasonably be
expected to interfere with technological measures used by
968
copyright owners to prevent such retention or unauthorized
further dissemination;
( 3) performance of a nondramatic literary or musical work or of a
dramatico-musical work of a religious nature, or display of a work, in the
course of services at a place of worship or other religious assembly;
(4) performance of a nondramatic literary or musical work otherwise
than in a transmission to the public, without any purpose of direct or indirect
commercial advantage and without payment of any fee or other
compensation for the performance to any of its performers, promoters, or
organizers, if—
(A) there is no direct or indirect admission charge; or
(B) the proceeds, after deducting the reasonable costs of producing
the performance, are used exclusively for educational, religious, or
charitable purposes and not for private financial gain, except where the
copyright owner has served notice of objection to the performance under
the following conditions:
( i ) the notice shall be in writing and signed by the copyright
owner or such owner’s duly authorized agent; and
(ii) the notice shall be served on the person responsible for the
performance at least seven days before the date of the performance,
and shall state the reasons for the objection; and
(iii) the notice shall comply, in form, content, and manner of
service, with requirements that the Register of Copyrights shall
prescribe by regulation;
(5)
(A) except as provided in subparagraph (B), communication of a
transmission embodying a performance or display of a work by the
public reception of the transmission on a single receiving apparatus of a
kind commonly used in private homes, unless—
(i) a direct charge is made to see or hear the transmission; or
(ii) the transmission thus received is further transmitted to the
public;
( B ) communication by an establishment of a transmission or
retransmission embodying a performance or display of a nondramatic
musical work intended to be received by the general public, originated
by a radio or television broadcast station licensed as such by the
Federal Communications Commission, or, if an audiovisual
969
transmission, by a cable system or satellite carrier, if—
(i) in the case of an establishment other than a food service or
drinking establishment, either the establishment in which the
communication occurs has less than 2,000 gross square feet of space
(excluding space used for customer parking and for no other
purpose), or the establishment in which the communication occurs
has 2,000 or more gross square feet of space (excluding space used
for customer parking and for no other purpose) and—
(I) if the performance is by audio means only, the performance
is communicated by means of a total of not more than 6
loudspeakers, of which not more than 4 loudspeakers are located
in any 1 room or adjoining outdoor space; or
(II) if the performance or display is by audiovisual means, any
visual portion of the performance or display is communicated by
means of a total of not more than 4 audiovisual devices, of which
not more than 1 audiovisual device is located in any 1 room, and
no such audiovisual device has a diagonal screen size greater
than 55 inches, and any audio portion of the performance or
display is communicated by means of a total of not more than 6
in any 1 room or adjoining outdoor space;
(ii) in the case of a food service or drinking establishment, either
the establishment in which the communication occurs has less than
3,750 gross square feet of space (excluding space used for customer
parking and for no other purpose), or the establishment in which the
communication occurs has 3,750 gross square feet of space or more
(excluding space used for customer parking and for no other
purpose) and—
(I) if the performance is by audio means only, the performance
is communicated by means of a total of not more than 6
in any 1 room or adjoining outdoor space; or
(II) if the performance or display is by audiovisual means, any
visual portion of the performance or display is communicated by
means of a total of not more than 4 audiovisual devices, of which
not more than one audiovisual device is located in any 1 room,
and no such audiovisual device has a diagonal screen size greater
than 55 inches, and any audio portion of the performance or
display is communicated by means of a total of not more than 6
970
in any 1 room or adjoining outdoor space;
(iii) no direct charge is made to see or hear the transmission or
retransmission;
(iv) the transmission or retransmission is not further transmitted
beyond the establishment where it is received; and
( v ) the transmission or retransmission is licensed by the
copyright owner of the work so publicly performed or displayed;
(6) performance of a nondramatic musical work by a governmental body
or a nonprofit agricultural or horticultural organization, in the course of an
annual agricultural or horticultural fair or exhibition conducted by such body
or organization; the exemption provided by this clause shall extend to any
liability for copyright infringement that would otherwise be imposed on
such body or organization, under doctrines of vicarious liability or related
infringement, for a performance by a concessionnaire, business
establishment, or other person at such fair or exhibition, but shall not excuse
any such person from liability for the performance;
( 7 ) performance of a nondramatic musical work by a vending
establishment open to the public at large without any direct or indirect
admission charge, where the sole purpose of the performance is to promote
the retail sale of copies or phonorecords of the work, or of the audiovisual
or other devices utilized in such performance, and the performance is not
transmitted beyond the place where the establishment is located and is
within the immediate area where the sale is occurring;
(8) performance of a nondramatic literary work, by or in the course of a
transmission specifically designed for and primarily directed to blind or
other handicapped persons who are unable to read normal printed material
as a result of their handicap, or deaf or other handicapped persons who are
unable to hear the aural signals accompanying a transmission of visual
signals, if the performance is made without any purpose of direct or indirect
commercial advantage and its transmission is made through the facilities of:
(i) a governmental body; or (ii) a noncommercial educational broadcast
station (as defined in section 397 of title 47); or (iii) a radio subcarrier
authorization (as defined in 47 CFR 73.293–73.295 and 73.593–73.595); or
(iv) a cable system (as defined in section 111(f) [17 USCS § 111(f)]);
( 9 ) performance on a single occasion of a dramatic literary work
published at least ten years before the date of the performance, by or in the
course of a transmission specifically designed for and primarily directed to
blind or other handicapped persons who are unable to read normal printed
material as a result of their handicap, if the performance is made without
971
any purpose of direct or indirect commercial advantage and its transmission
is made through the facilities of a radio subcarrier authorization referred to
in clause (8)(iii), Provided, That the provisions of this clause shall not be
applicable to more than one performance of the same work by the same
performers or under the auspices of the same organization;
(10) notwithstanding paragraph (4), the following is not an infringement
of copyright: performance of a nondramatic literary or musical work in the
course of a social function which is organized and promoted by a nonprofit
veterans’ organization or a nonprofit fraternal organization to which the
general public is not invited, but not including the invitees of the
organizations, if the proceeds from the performance, after deducting the
reasonable costs of producing the performance, are used exclusively for
charitable purposes and not for financial gain. For purposes of this section
the social functions of any college or university fraternity or sorority shall
not be included unless the social function is held solely to raise funds for a
specific charitable purpose; and
(11) the making imperceptible, by or at the direction of a member of a
private household, of limited portions of audio or video content of a motion
picture, during a performance in or transmitted to that household for private
home viewing, from an authorized copy of the motion picture, or the creation
or provision of a computer program or other technology that enables such
making imperceptible and that is designed and marketed to be used, at the
direction of a member of a private household, for such making
imperceptible, if no fixed copy of the altered version of the motion picture
is created by such computer program or other technology. The exemptions
provided under paragraph (5) shall not be taken into account in any
administrative, judicial, or other governmental proceeding to set or adjust
the royalties payable to copyright owners for the public performance or
display of their works. Royalties payable to copyright owners for any public
performance or display of their works other than such performances or
displays as are exempted under paragraph (5) shall not be diminished in any
respect as a result of such exemption. In paragraph (2), the term “mediated
instructional activities” with respect to the performance or display of a
work by digital transmission under this section refers to activities that use
such work as an integral part of the class experience, controlled by or under
the actual supervision of the instructor and analogous to the type of
performance or display that would take place in a live classroom setting.
The term does not refer to activities that use, in 1 or more class sessions of
a single course, such works as textbooks, course packs, or other material in
any media, copies or phonorecords of which are typically purchased or
acquired by the students in higher education for their independent use and
retention or are typically purchased or acquired for elementary and
972
secondary students for their possession and independent use. For purposes
of paragraph (2), accreditation—
( A ) with respect to an institution providing post-secondary
education, shall be as determined by a regional or national accrediting
agency recognized by the Council on Higher Education Accreditation or
the United States Department of Education; and
(B) with respect to an institution providing elementary or secondary
education, shall be as recognized by the applicable state certification or
licensing procedures. For purposes of paragraph (2), no governmental
body or accredited nonprofit educational institution shall be liable for
infringement by reason of the transient or temporary storage of material
carried out through the automatic technical process of a digital
transmission of the performance or display of that material as authorized
under paragraph (2). No such material stored on the system or network
controlled or operated by the transmitting body or institution under this
paragraph shall be maintained on such system or network in a manner
ordinarily accessible to anyone other than anticipated recipients. No
such copy shall be maintained on the system or network in a manner
ordinarily accessible to such anticipated recipients for a longer period
than is reasonably necessary to facilitate the transmissions for which it
was made. For purposes of paragraph (11), the term “making
imperceptible” does not include the addition of audio or video content
that is performed or displayed over or in place of existing content in a
motion picture. Nothing in paragraph (11) shall be construed to imply
further rights under section 106 of this title [17 USCS § 106], or to have
any effect on defenses or limitations on rights granted under any other
section of this title or under any other paragraph of this section.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat 2549; October 15, 1982, P.L. 97-
366 § 3, 96 Stat. 1759; November 13, 1997, P.L. 105-80 § 12(a)(6), 111 Stat. 1534;
October 27, 1998, P.L. 105-298 § 202, 112 Stat. 2830, effective January 25, 1999; August
5, 1999, P.L. 106-44 § 1(a), 113 Stat. 221; November 2, 2002, P.L. 107-273 §§ 13210(6),
13301(b), 116 Stat. 1909, 1910; April 27, 2005, P.L. 109-9 § 202(a), 119 Stat. 223.
§ 111. Limitations on Exclusive Rights: Secondary

Transmissions of Broadcasting by Cable.
(a) Certain Secondary Transmissions Exempted. The secondary
transmission of a performance or display of a work embodied in a primary
transmission is not an infringement of copyright if—
( 1) the secondary transmission is not made by a cable system, and
consists entirely of the relaying, by the management of a hotel, apartment
973
house, or similar establishment, of signals transmitted by a broadcast station
licensed by the Federal Communications Commission, within the local
service area of such station, to the private lodgings of guests or residents of
such establishment, and no direct charge is made to see or hear the
secondary transmission; or
(2) the secondary transmission is made solely for the purpose and under
the conditions specified by paragraph (2) of section 110 [17 USCS § 110];
or
(3) the secondary transmission is made by any carrier who has no direct
or indirect control over the content or selection of the primary transmission
or over the particular recipients of the secondary transmission, and whose
activities with respect to the secondary transmission consist solely of
providing wires, cables, or other communications channels for the use of
others: Provided, That the provisions of this paragraph extend only to the
activities of said carrier with respect to secondary transmissions and do not
exempt from liability the activities of others with respect to their own
primary or secondary transmissions;
(4) the secondary transmission is made by a satellite carrier pursuant to
a statutory license under section 119 [17 USCS § 119] or section 122 [17
USCS § 122];
(5) the secondary transmission is not made by a cable system but is
made by a governmental body, or other nonprofit organization, without any
purpose of direct or indirect commercial advantage, and without charge to
the recipients of the secondary transmission other than assessments
necessary to defray the actual and reasonable costs of maintaining and
operating the secondary transmission service.
(b) Secondary Transmission of Primary Transmission to Controlled Group.
Notwithstanding the provisions of subsections (a) and (c), the secondary
transmission to the public of a performance or display of a work embodied in a
primary transmission is actionable as an act of infringement under section 501
[17 USCS § 501], and is fully subject to the remedies provided by sections 502
through 506 [17 USCS §§ 502–506], if the primary transmission is not made for
reception by the public at large but is controlled and limited to reception by
particular members of the public: Provided, however, That such secondary
transmission is not actionable as an act of infringement if—
(1) the primary transmission is made by a broadcast station licensed by
the Federal Communications Commission; and
(2) the carriage of the signals comprising the secondary transmission is
required under the rules, regulations, or authorizations of the Federal
974
Communications Commission; and
(3) the signal of the primary transmitter is not altered or changed in any
way by the secondary transmitter.
(c) Secondary Transmissions by Cable Systems.
( 1) Subject to the provisions of paragraphs (2), (3), and (4) of this
subsection and section 114(d) [17 USCS § 114(d)], secondary transmissions
to the public by a cable system of a performance or display of a work
embodied in a primary transmission made by a broadcast station licensed by
the Federal Communications Commission or by an appropriate
governmental authority of Canada or Mexico shall be subject to statutory
licensing upon compliance with the requirements of subsection (d) where
the carriage of the signals comprising the secondary transmission is
permissible under the rules, regulations, or authorizations of the Federal
Communications Commission.
(2) Notwithstanding the provisions of paragraph (1) of this subsection,
the willful or repeated secondary transmission to the public by a cable
system of a primary transmission made by a broadcast station licensed by
the Federal Communications Commission or by an appropriate
governmental authority of Canada or Mexico and embodying a performance
or display of a work is actionable as an act of infringement under section
501 [17 USCS § 501], and is fully subject to the remedies provided by
sections 502 through 506 [17 USCS §§ 502–506], in the following cases:
( A ) where the carriage of the signals comprising the secondary
transmission is not permissible under the rules, regulations, or
authorizations of the Federal Communications Commission; or
( B ) where the cable system has not deposited the statement of
account and royalty fee required by subsection (d).
(3) Notwithstanding the provisions of paragraph (1) of this subsection
and subject to the provisions of subsection (e) of this section, the secondary
transmission to the public by a cable system of a performance or display of
a work embodied in a primary transmission made by a broadcast station
licensed by the Federal Communications Commission or by an appropriate
governmental authority of Canada or Mexico is actionable as an act of
infringement under section 501 [17 USCS § 501], and is fully subject to the
remedies provided by sections 502 through 506 [17 USCS §§ 502–506] and
section 510 [17 USCS § 510], if the content of the particular program in
which the performance or display is embodied, or any commercial
advertising or station announcements transmitted by the primary transmitter
during, or immediately before or after, the transmission of such program, is
975
in any way willfully altered by the cable system through changes, deletions,
or additions, except for the alteration, deletion, or substitution of
commercial advertisements performed by those engaged in television
commercial advertising market research: Provided, That the research
company has obtained the prior consent of the advertiser who has purchased
the original commercial advertisement, the television station broadcasting
that commercial advertisement, and the cable system performing the
secondary transmission: And provided further, That such commercial
alteration, deletion, or substitution is not performed for the purpose of
deriving income from the sale of that commercial time.
(4) Notwithstanding the provisions of paragraph (1) of this subsection,
the secondary transmission to the public by a cable system of a performance
or display of a work embodied in a primary transmission made by a
broadcast station licensed by an appropriate governmental authority of
Canada or Mexico is actionable as an act of infringement under section 501
[17 USCS § 501], and is fully subject to the remedies provided by sections
502 through 506 [17 USCS §§ 502–506], if (A) with respect to Canadian
signals, the community of the cable system is located more than 150 miles
from the United States-Canadian border and is also located south of the
forty-second parallel of latitude, or (B) with respect to Mexican signals, the
secondary transmission is made by a cable system which received the
primary transmission by means other than direct interception of a free space
radio wave emitted by such broadcast television station, unless prior to
April 15, 1976, such cable system was actually carrying, or was
specifically authorized to carry, the signal of such foreign station on the
system pursuant to the rules, regulations, or authorizations of the Federal
Communications Commission.
(d) Statutory License for Secondary Transmissions by Cable Systems.
(1) Statement of Account and Royalty Fees. Subject to paragraph (5), a
cable system whose secondary transmissions have been subject to statutory
licensing under subsection (c) shall, on a semiannual basis, deposit with the
Register of Copyrights, in accordance with requirements that the Register
shall prescribe by regulation the following:
(A) A statement of account, covering the six months next preceding,
specifying the number of channels on which the cable system made
secondary transmissions to its subscribers, the names and locations of
all primary transmitters whose transmissions were further transmitted by
the cable system, the total number of subscribers, the gross amounts paid
to the cable system for the basic service of providing secondary
transmissions of primary broadcast transmitters, and such other data as
the Register of Copyrights may from time to time prescribe by
976
regulation. In determining the total number of subscribers and the gross
amounts paid to the cable system for the basic service of providing
secondary transmissions of primary broadcast transmitters, the system
shall not include subscribers and amounts collected from subscribers
receiving secondary transmissions pursuant to section 119 [17 USCS §
119]. Such statement shall also include a special statement of account
covering any non-network television programming that was carried by
the cable system in whole or in part beyond the local service area of the
primary transmitter, under rules, regulations, or authorizations of the
Federal Communications Commission permitting the substitution or
addition of signals under certain circumstances, together with logs
showing the times, dates, stations, and programs involved in such
substituted or added carriage.
( B ) Except in the case of a cable system whose royalty fee is
specified in subparagraph (E) or (F), a total royalty fee payable to
copyright owners pursuant to paragraph (3) for the period covered by
the statement, computed on the basis of specified percentages of the
gross receipts from subscribers to the cable service during such period
for the basic service of providing secondary transmissions of primary
broadcast transmitters, as follows:
( i ) 1.064 percent of such gross receipts for the privilege of
further transmitting, beyond the local service area of such primary
transmitter, any non-network programming of a primary transmitter in
whole or in part, such amount to be applied against the fee, if any,
payable pursuant to clauses (ii) through (iv);
(ii) 1.064 percent of such gross receipts for the first distant signal
equivalent;
(iii) 0.701 percent of such gross receipts for each of the second,
third, and fourth distant signal equivalents; and
(iv) 0.330 percent of such gross receipts for the fifth distant
signal equivalent and each distant signal equivalent thereafter.
( C ) In computing amounts under clauses (ii) through (iv) of
subparagraph (B)—
(i) any fraction of a distant signal equivalent shall be computed at
its fractional value;
(ii) in the case of any cable system located partly within and
partly outside of the local service area of a primary transmitter,
gross receipts shall be limited to those gross receipts derived from
subscribers located outside of the local service area of such primary
977
transmitter; and
(iii) if a cable system provides a secondary transmission of a
primary transmitter to some but not all communities served by that
cable system—
(I) the gross receipts and the distant signal equivalent values
for such secondary transmission shall be derived solely on the
basis of the subscribers in those communities where the cable
system provides such secondary transmission; and
(II) the total royalty fee for the period paid by such system
shall not be less than the royalty fee calculated under
subparagraph (B)(i) multiplied by the gross receipts from all
subscribers to the system.
(D) A cable system that, on a statement submitted before the date of
the enactment of the Satellite Television Extension and Localism Act of
2010 [enacted May 27, 2010], computed its royalty fee consistent with
the methodology under subparagraph (C)(iii), or that amends a statement
filed before such date of enactment to compute the royalty fee due using
such methodology, shall not be subject to an action for infringement, or
eligible for any royalty refund or offset, arising out of its use of such
methodology on such statement.
(E) If the actual gross receipts paid by subscribers to a cable system
for the period covered by the statement for the basic service of
providing secondary transmissions of primary broadcast transmitters are
$263,800 or less—
( i ) gross receipts of the cable system for the purpose of this
paragraph shall be computed by subtracting from such actual gross
receipts the amount by which $263,800 exceeds such actual gross
receipts, except that in no case shall a cable system’s gross receipts
be reduced to less than $10,400; and
(ii) the royalty fee payable under this paragraph to copyright
owners pursuant to paragraph (3) shall be 0.5 percent, regardless of
the number of distant signal equivalents, if any.
(F) If the actual gross receipts paid by subscribers to a cable system
for the period covered by the statement for the basic service of
providing secondary transmissions of primary broadcast transmitters are
more than $263,800 but less than $527,600, the royalty fee payable
under this paragraph to copyright owners pursuant to paragraph (3) shall
be—
978
(i) 0.5 percent of any gross receipts up to $263,800, regardless
of the number of distant signal equivalents, if any; and
(ii) 1 percent of any gross receipts in excess of $263,800, but
less than $527,600, regardless of the number of distant signal
equivalents, if any.
( G ) A filing fee, as determined by the Register of Copyrights
pursuant to section 708(a) [17 USCS § 708(a)].
(2) Handling of fees. The Register of Copyrights shall receive all fees
(including the filing fee specified in paragraph (1)(G)) deposited under this
section and, after deducting the reasonable costs incurred by the Copyright
Office under this section, shall deposit the balance in the Treasury of the
United States, in such manner as the Secretary of the Treasury directs. All
funds held by the Secretary of the Treasury shall be invested in interest-
bearing United States securities for later distribution with interest by the
Librarian of Congress upon authorization by the Copyright Royalty Judges.
(3) Distribution of royalty fees to copyright owners. The royalty fees
thus deposited shall, in accordance with the procedures provided by clause
(4), be distributed to those among the following copyright owners who
claim that their works were the subject of secondary transmissions by cable
systems during the relevant semiannual period:
( A ) Any such owner whose work was included in a secondary
transmission made by a cable system of a non-network television
program in whole or in part beyond the local service area of the primary
transmitter.
( B ) Any such owner whose work was included in a secondary
transmission identified in a special statement of account deposited under
clause (1)(A).
( C ) Any such owner whose work was included in non-network
programming consisting exclusively of aural signals carried by a cable
system in whole or in part beyond the local service area of the primary
transmitter of such programs.
( 4 ) Procedures for royalty fee distribution. The royalty fees thus
deposited shall be distributed in accordance with the following procedures:
(A) During the month of July in each year, every person claiming to
be entitled to statutory license fees for secondary transmissions shall file
a claim with the Copyright Royalty Judges, in accordance with
requirements that the Copyright Royalty Judges shall prescribe by
regulation. Notwithstanding any provisions of the antitrust laws, for
979
purposes of this clause any claimants may agree among themselves as to
the proportionate division of statutory licensing fees among them, may
lump their claims together and file them jointly or as a single claim, or
may designate a common agent to receive payment on their behalf.
(B) After the first day of August of each year, the Copyright Royalty
Judges shall determine whether there exists a controversy concerning the
distribution of royalty fees. If the Copyright Royalty Judges determine
that no such controversy exists, the Copyright Royalty Judges shall
authorize the Librarian of Congress to proceed to distribute such fees to
the copyright owners entitled to receive them, or to their designated
agents, subject to the deduction of reasonable administrative costs under
this section. If the Copyright Royalty Judges find the existence of a
controversy, the Copyright Royalty Judges shall, pursuant to chapter 8 of
this title [17 USCS §§ 801 et seq.], conduct a proceeding to determine
the distribution of royalty fees.
(C) During the pendency of any proceeding under this subsection, the
Copyright Royalty Judges shall have the discretion to authorize the
Librarian of Congress to proceed to distribute any amounts that are not
in controversy.
( 5 ) 3.75 percent rate and syndicated exclusivity surcharge not
applicable to multicast streams. The royalty rates specified in sections
256.2(c) and 256.2(d) of title 37, Code of Federal Regulations (commonly
referred to as the “3.75 percent rate” and the “syndicated exclusivity
surcharge”, respectively), as in effect on the date of the enactment of the
Satellite Television Extension and Localism Act of 2010 [enacted May 27,
2010], as such rates may be adjusted, or such sections redesignated,
thereafter by the Copyright Royalty Judges, shall not apply to the secondary
transmission of a multicast stream.
( 6 ) Verification of accounts and fee payments. The Register of
Copyrights shall issue regulations to provide for the confidential
verification by copyright owners whose works were embodied in the
secondary transmissions of primary transmissions pursuant to this section of
the information reported on the semiannual statements of account filed under
this subsection for accounting periods beginning on or after January 1, 2010,
in order that the auditor designated under subparagraph (A) is able to
confirm the correctness of the calculations and royalty payments reported
therein. The regulations shall—
( A ) establish procedures for the designation of a qualified
independent auditor—
( i ) with exclusive authority to request verification of such a
980
statement of account on behalf of all copyright owners whose works
were the subject of secondary transmissions of primary
transmissions by the cable system (that deposited the statement)
during the accounting period covered by the statement; and
( i i ) who is not an officer, employee, or agent of any such
copyright owner for any purpose other than such audit;
(B) establish procedures for safeguarding all non-public financial
and business information provided under this paragraph;
(C)
(i) require a consultation period for the independent auditor to
review its conclusions with a designee of the cable system;
(ii) establish a mechanism for the cable system to remedy any
errors identified in the auditor’s report and to cure any underpayment
identified; and
(iii) provide an opportunity to remedy any disputed facts or
conclusions;
(D) limit the frequency of requests for verification for a particular
cable system and the number of audits that a multiple system operator
can be required to undergo in a single year; and
(E) permit requests for verification of a statement of account to be
made only within 3 years after the last day of the year in which the
statement of account is filed.
( 7 ) Acceptance of additional deposits. Any royalty fee payments
received by the Copyright Office from cable systems for the secondary
transmission of primary transmissions that are in addition to the payments
calculated and deposited in accordance with this subsection shall be
deemed to have been deposited for the particular accounting period for
which they are received and shall be distributed as specified under this
subsection.
(e) Nonsimultaneous Secondary Transmissions by Cable Systems.
(1) Notwithstanding those provisions of [the] subsection (f)(2) relating
to nonsimultaneous secondary transmissions by a cable system, any such
transmissions are actionable as an act of infringement under section 501 [17
USCS § 501], and are fully subject to the remedies provided by sections
502 through 506 [17 USCS §§ 502–506] and section 510 [17 USCS § 510],
unless—
(A) the program on the videotape is transmitted no more than one
981
time to the cable system’s subscribers;
(B) the copyrighted program, episode, or motion picture videotape,
including the commercials contained within such program, episode, or
picture, is transmitted without deletion or editing;
( C ) an owner or officer of the cable system (i) prevents the
duplication of the videotape while in the possession of the system, (ii)
prevents unauthorized duplication while in the possession of the facility
making the videotape for the system if the system owns or controls the
facility, or takes reasonable precautions to prevent such duplication if it
does not own or control the facility, (iii) takes adequate precautions to
prevent duplication while the tape is being transported, and (iv) subject
to paragraph (2), erases or destroys, or causes the erasure or destruction
of, the videotape;
(D) within forty-five days after the end of each calendar quarter, an
owner or officer of the cable system executes an affidavit attesting (i) to
the steps and precautions taken to prevent duplication of the videotape,
and (ii) subject to paragraph (2), to the erasure or destruction of all
videotapes made or used during such quarter;
(E) such owner or officer places or causes each such affidavit, and
affidavits received pursuant to paragraph (2)(C), to be placed in a file,
open to public inspection, at such system’s main office in the community
where the transmission is made or in the nearest community where such
system maintains an office; and
(F) the nonsimultaneous transmission is one that the cable system
would be authorized to transmit under the rules, regulations, and
authorizations of the Federal Communications Commission in effect at
the time of the nonsimultaneous transmission if the transmission had
been made simultaneously, except that this subparagraph shall not apply
to inadvertent or accidental transmissions.
(2) If a cable system transfers to any person a videotape of a program
nonsimultaneously transmitted by it, such transfer is actionable as an act of
remedies provided by sections 502 through 506 [17 USCS §§ 502–506],
except that, pursuant to a written, nonprofit contract providing for the
equitable sharing of the costs of such videotape and its transfer, a videotape
nonsimultaneously transmitted by it, in accordance with paragraph (1), may
be transferred by one cable system in Alaska to another system in Alaska, by
one cable system in Hawaii permitted to make such nonsimultaneous
transmissions to another such cable system in Hawaii, or by one cable
system in Guam, the Northern Mariana Islands, the Federated States of
982
Micronesia, the Republic of Palau, or the Republic of the Marshall Islands,
to another cable system in any of those five entities, if—
( A ) each such contract is available for public inspection in the
offices of the cable systems involved, and a copy of such contract is
filed, within thirty days after such contract is entered into, with the
Copyright Office (which Office shall make each such contract available
for public inspection);
(B) the cable system to which the videotape is transferred complies
with paragraph (1)(A), (B), (C)(i), (iii), and (iv), and (D) through (F);
and
(C) such system provides a copy of the affidavit required to be made
in accordance with paragraph (1)(D) to each cable system making a
previous nonsimultaneous transmission of the same videotape.
(3) This subsection shall not be construed to supersede the exclusivity
protection provisions of any existing agreement, or any such agreement
hereafter entered into, between a cable system and a television broadcast
station in the area in which the cable system is located, or a network with
which such station is affiliated.
( 4 ) As used in this subsection, the term “videotape” means the
reproduction of the images and sounds of a program or programs broadcast
by a television broadcast station licensed by the Federal Communications
Commission, regardless of the nature of the material objects, such as tapes
or films, in which the reproduction is embodied.
(f) Definitions. As used in this section, the following terms mean the
following:
(1) Primary Transmission. A “primary transmission” is a transmission
made to the public by a transmitting facility whose signals are being
received and further transmitted by a secondary transmission service,
regardless of where or when the performance or display was first
transmitted. In the case of a television broadcast station, the primary stream
and any multicast streams transmitted by the station constitute primary
transmissions.
(2) Secondary Transmission. A “secondary transmission” is the further
transmitting of a primary transmission simultaneously with the primary
transmission, or nonsimultaneously with the primary transmission if by a
cable system not located in whole or in part within the boundary of the
forty-eight contiguous States, Hawaii, or Puerto Rico: Provided, however,
That a nonsimultaneous further transmission by a cable system located in
983
Hawaii of a primary transmission shall be deemed to be a secondary
transmission if the carriage of the television broadcast signal comprising
such further transmission is permissible under the rules, regulations, or
authorizations of the Federal Communications Commission.
(3) Cable System. A “cable system” is a facility, located in any State,
territory, trust territory, or possession of the United States, that in whole or
in part receives signals transmitted or programs broadcast by one or more
television broadcast stations licensed by the Federal Communications
Commission, and makes secondary transmissions of such signals or
programs by wires, cables, microwave, or other communications channels
to subscribing members of the public who pay for such service. For
purposes of determining the royalty fee under subsection (d)(1), two or
more cable systems in contiguous communities under common ownership or
control or operating from one headend shall be considered as one system.
(4) Local Service Area of a Primary Transmitter. The “local service
area of a primary transmitter”, in the case of both the primary stream and
any multicast streams transmitted by a primary transmitter that is a television
broadcast station, comprises the area where such primary transmitter could
have insisted upon its signal being retransmitted by a cable system pursuant
to the rules, regulations, and authorizations of the Federal Communications
Commission in effect on April 15, 1976, or such station’s television market
as defined in section 76.55(e) of title 47, Code of Federal Regulations (as in
effect on September 18, 1993), or any modifications to such television
market made, on or after September 18, 1993, pursuant to section 76.55(e)
o r 76.59 of title 47, Code of Federal Regulations, or within the noise-
limited contour as defined in 73.622(e)(1) of title 47, Code of Federal
Regulations, or in the case of a television broadcast station licensed by an
appropriate governmental authority of Canada or Mexico, the area in which
it would be entitled to insist upon its signal being retransmitted if it were a
television broadcast station subject to such rules, regulations, and
authorizations. In the case of a low power television station, the “local
service area of a primary transmitter” comprises the area within 35 miles of
the transmitter site, except that in the case of such a station located in a
standard metropolitan statistical area which has one of the 50 largest
populations of all standard metropolitan statistical areas (based on the 1980
decennial census of population taken by the Secretary of Commerce), the
number of miles shall be 20 miles. The “local service area of a primary
transmitter”, in the case of a radio broadcast station, comprises the primary
service area of such station, pursuant to the rules and regulations of the
Federal Communications Commission.
(5) Distant Signal Equivalent.
984
(A) In General. Except as provided under subparagraph (B), a
“distant signal equivalent”—
(i) is the value assigned to the secondary transmission of any
non-network television programming carried by a cable system in
whole or in part beyond the local service area of the primary
transmitter of such programming; and
(ii) is computed by assigning a value of one to each primary
stream and to each multicast stream (other than a simulcast) that is an
independent station, and by assigning a value of one-quarter to each
primary stream and to each multicast stream (other than a simulcast)
that is a network station or a noncommercial educational station.
(B) Exceptions. The values for independent, network, and
noncommercial educational stations specified in subparagraph (A) are
subject to the following:
( i ) Where the rules and regulations of the Federal
Communications Commission require a cable system to omit the
further transmission of a particular program and such rules and
regulations also permit the substitution of another program
embodying a performance or display of a work in place of the
omitted transmission, or where such rules and regulations in effect
on the date of the enactment of the Copyright Act of 1976 [enacted
Oct. 19, 1976] permit a cable system, at its election, to effect such
omission and substitution of a nonlive program or to carry additional
programs not transmitted by primary transmitters within whose local
service area the cable system is located, no value shall be assigned
for the substituted or additional program.
(ii) Where the rules, regulations, or authorizations of the Federal
Communications Commission in effect on the date of the enactment
of the Copyright Act of 1976 [enacted Oct. 19, 1976] permit a cable
system, at its election, to omit the further transmission of a particular
program and such rules, regulations, or authorizations also permit the
substitution of another program embodying a performance or display
of a work in place of the omitted transmission, the value assigned for
the substituted or additional program shall be, in the case of a live
program, the value of one full distant signal equivalent multiplied by
a fraction that has as its numerator the number of days in the year in
which such substitution occurs and as its denominator the number of
days in the year.
(iii) In the case of the secondary transmission of a primary
transmitter that is a television broadcast station pursuant to the late-
985
night or specialty programming rules of the Federal Communications
Commission, or the secondary transmission of a primary transmitter
that is a television broadcast station on a part-time basis where full-
time carriage is not possible because the cable system lacks the
activated channel capacity to retransmit on a full-time basis all
signals that it is authorized to carry, the values for independent,
network, and noncommercial educational stations set forth in
subparagraph (A), as the case may be, shall be multiplied by a
fraction that is equal to the ratio of the broadcast hours of such
primary transmitter retransmitted by the cable system to the total
broadcast hours of the primary transmitter.
(iv) No value shall be assigned for the secondary transmission of
the primary stream or any multicast streams of a primary transmitter
that is a television broadcast station in any community that is within
the local service area of the primary transmitter.
(6) Network Station.
(A) Treatment of Primary Stream. The term “network station” shall
be applied to a primary stream of a television broadcast station that is
owned or operated by, or affiliated with, one or more of the television
networks in the United States providing nationwide transmissions, and
that transmits a substantial part of the programming supplied by such
networks for a substantial part of the primary stream’s typical broadcast
day.
(B) Treatment of Multicast Streams. The term “network station”
shall be applied to a multicast stream on which a television broadcast
station transmits all or substantially all of the programming of an
interconnected program service that—
(i) is owned or operated by, or affiliated with, one or more of the
television networks described in subparagraph (A); and
(ii) offers programming on a regular basis for 15 or more hours
per week to at least 25 of the affiliated television licensees of the
interconnected program service in 10 or more States.
(7) Independent Station. The term “independent station” shall be
applied to the primary stream or a multicast stream of a television broadcast
station that is not a network station or a noncommercial educational station.
(8) Noncommercial Educational Station. The term “noncommercial
educational station” shall be applied to the primary stream or a multicast
stream of a television broadcast station that is a noncommercial educational
broadcast station as defined in section 397 of the Communications Act of
986
1934 [47 USCS § 397], as in effect on the date of the enactment of the
Satellite Television Extension and Localism Act of 2010 [enacted May 27,
2010].
(9) Primary Stream. A “primary stream” is—
(A) the single digital stream of programming that, before June 12,
2009, was substantially duplicating the programming transmitted by the
television broadcast station as an analog signal; or
(B) if there is no stream described in subparagraph (A), then the
single digital stream of programming transmitted by the television
broadcast station for the longest period of time.
(10) Primary Transmitter. A “primary transmitter” is a television or
radio broadcast station licensed by the Federal Communications
Commission, or by an appropriate governmental authority of Canada or
Mexico, that makes primary transmissions to the public.
(11) Multicast Stream. A “multicast stream” is a digital stream of
programming that is transmitted by a television broadcast station and is not
the station’s primary stream.
(12) Simulcast. A “simulcast” is a multicast stream of a television
broadcast station that duplicates the programming transmitted by the primary
stream or another multicast stream of such station.
(13) Subscriber; Subscribe.
(A) Subscriber. The term “subscriber” means a person or entity
that receives a secondary transmission service from a cable system and
pays a fee for the service, directly or indirectly, to the cable system.
(B) Subscribe. The term “subscribe” means to elect to become a
subscriber.
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2550; Aug. 27, 1986, P.L.
99-397, §§ 1, 2(a), (b), 100 Stat. 848; Nov. 16, 1988, P.L. 100-667, Title II, § 202(1), 102
Stat. 3949; July 3, 1990, P.L. 101-318, § 3(a), 104 Stat. 288; Dec. 17, 1993, P.L. 103-198, §
6(a), 107 Stat. 2311; Oct. 18, 1994, P.L. 103-369, § 3, 108 Stat. 3480; Nov. 1, 1995, P.L.
104-39, § 5(b), 109 Stat. 348; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat.
1536; Nov. 30, 2004, P.L. 108-419, § 5(a), 118 Stat. 2361; Dec. 8, 2004, P.L. 108-447, Div
J, Title IX, Title I, § 107(b), 118 Stat. 3406; Oct. 6, 2006, P.L. 109-303, § 4(a), 120 Stat.
1481; May 8, 2008, P.L. 110-229, Title VIII, § 807, 122 Stat. 874; Oct. 13, 2008, P.L. 110-
403, Title II, § 209(a)(2), 122 Stat. 4264; May 27, 2010, P.L. 111-175, Title I, § 104(a)(1),
(b), (c), (e), (g), 124 Stat. 1231, 1235, 1238.
2010 Notes: Effective date of new royalty fee rates. Act May 27, 2010, P.L. 111-175,
Title I, § 104(d), 124 Stat. 1235, provides: “The royalty fee rates established in section
111(d)(1)(B) of title 17, United States Code , as amended by subsection (c)(1)(C) of this
987
section, shall take effect commencing with the first accounting period occurring in 2010.”.
Effective date of May 27, 2010 amendments with respect to multicast streams. Act
May 27, 2010, P.L. 111-175, Title I, § 104(h), 124 Stat. 1238, provides:
“(1)
In General.
Subject to paragraphs (2) and (3), the amendments made by this section [amending
this section], to the extent such amendments assign a distant signal equivalent value to
the secondary transmission of the multicast stream of a primary transmitter, shall take
effect on the date of the enactment of this Act.
“(2)
Delayed Applicability.
( A) Secondary transmissions of a multicast stream beyond the local service
area of its primary transmitter before 2010 Act. In any case in which a cable system
was making secondary transmissions of a multicast stream beyond the local service
area of its primary transmitter before the date of the enactment of this Act, a distant
signal equivalent value (referred to in paragraph (1)) shall not be assigned to
secondary transmissions of such multicast stream that are made on or before June
30, 2010.
“( B) Multicast streams subject to preexisting written agreements for the
secondary transmission of such streams. In any case in which the secondary
transmission of a multicast stream of a primary transmitter is the subject of a
written agreement entered into on or before June 30, 2009, between a cable system
or an association representing the cable system and a primary transmitter or an
association representing the primary transmitter, a distant signal equivalent value
(referred to in paragraph (1)) shall not be assigned to secondary transmissions of
such multicast stream beyond the local service area of its primary transmitter that
are made on or before the date on which such written agreement expires.
“(C) No refunds or offsets for prior statements of account. A cable system that
has reported secondary transmissions of a multicast stream beyond the local service
area of its primary transmitter on a statement of account deposited under section
111 of title 17, United States Code , before the date of the enactment of this Act
shall not be entitled to any refund, or offset, of royalty fees paid on account of such
secondary transmissions of such multicast stream.
“( 3 ) Definitions. In this subsection, the terms ‘cable system’, ‘secondary
transmission’, ‘multicast stream’, and ‘local service area of a primary transmitter’ have
the meanings given those terms in section 111(f) of title 17, United States Code , as
amended by this section.”
Construction of 17 USCS §§ 111 , 119, and 122. Act May 27, 2010, P.L. 111-175 ,
Title I, § 108, 124 Stat. 1245, provides: “Nothing in section 111 , 119, or 122 of title 17,
United States Code, including the amendments made to such sections by this title, shall be
construed to affect the meaning of any terms under the Communications Act of 1934 [47
USCS §§ 151 et seq.], except to the extent that such sections are specifically cross-
988
referenced in such Act or the regulations issued thereunder.”.
Savings provision regarding use of negotiated licenses. Act May 27, 2010, P.L.
111-175, Title III, § 306, 124 Stat. 1257, provides:
“(a) In general. Nothing in this Act [for full classification, consult USCS Tables
volumes], title 17, United States Code, the Communications Act of 1934 [47 USCS §§
151 et seq.], regulations promulgated by the Register of Copyrights under this title or
title 17, United States Code, or regulations promulgated by the Federal Communications
Commission under this Act [for full classification, consult USCS Tables volumes] or the
Communications Act of 1934 [47 USCS §§ 151 et seq.] shall be construed to prevent a
multichannel video programming distributor from retransmitting a performance or
display of a work pursuant to an authorization granted by the copyright owner or, if
within the scope of its authorization, its licensee.
“(b) Limitation. Nothing in subsection (a) shall be construed to affect any obligation
of a multichannel video programming distributor under section 325(b) of the
Communications Act of 1934 [47 USCS § 325(b)] to obtain the authority of a television
broadcast station before retransmitting that station’s signal.”
Effective date of Act May 27, 2010, P.L. 111-175 ; noninfringement of copyright.
Act May 27, 2010, P.L. 111-175, Title III, § 307, 124 Stat. 1257, provides:
“( a) Effective date. Unless specifically provided otherwise, this Act, and the
amendments made by this Act [for full classification, consult USCS Tables volumes],
shall take effect on February 27, 2010, and with the exception of the reference in
subsection (b), all references to the date of enactment of this Act shall be deemed to
refer to February 27, 2010, unless otherwise specified.
“(b) Noninfringement of copyright. The secondary transmission of a performance or
display of a work embodied in a primary transmission is not an infringement of
copyright if it was made by a satellite carrier on or after February 27, 2010, and prior to
enactment of this Act, and was in compliance with the law as in existence on February
27, 2010.”
Act May 27, 2010; severability. Act May 27, 2010, P.L. 111-175, Title IV, § 401, 124
Stat. 1258, provides: “If any provision of this Act [for full classification, consult USCS
Tables volumes], an amendment made by this Act [for full classification, consult USCS
Tables volumes], or the application of such provision or amendment to any person or
circumstance is held to be unconstitutional, the remainder of this Act [for full classification,
consult USCS Tables volumes], the amendments made by this Act [for full classification,
consult USCS Tables volumes], and the application of such provision or amendment to any
person or circumstance shall not be affected thereby.”
§ 112. Limitations on Exclusive Rights: Ephemeral

Recordings.
(a)
(1) Notwithstanding the provisions of section 106, and except in the
case of a motion picture or other audiovisual work, it is not an infringement
989
of copyright for a transmitting organization entitled to transmit to the public
a performance or display of a work, under a license, including a statutory
license under section 114(f), or transfer of the copyright or under the
limitations on exclusive rights in sound recordings specified by section
114(a), or for a transmitting organization that is a broadcast radio or
television station licensed as such by the Federal Communications
Commission and that makes a broadcast transmission of a performance of a
sound recording in a digital format on a nonsubscription basis, to make no
more than one copy or phonorecord of a particular transmission program
embodying the performance or display, if—
( A) the copy or phonorecord is retained and used solely by the
transmitting organization that made it, and no further copies or
phonorecords are reproduced from it; and
( B ) the copy or phonorecord is used solely for the transmitting
organization’s own transmissions within its local service area, or for
purposes of archival preservation or security; and
(C) unless preserved exclusively for archival purposes, the copy or
phonorecord is destroyed within six months from the date the
transmission program was first transmitted to the public.
(2) In a case in which a transmitting organization entitled to make a copy
or phonorecord under paragraph (1) in connection with the transmission to
the public of a performance or display of a work is prevented from making
such copy or phonorecord by reason of the application by the copyright
owner of technical measures that prevent the reproduction of the work, the
copyright owner shall make available to the transmitting organization the
necessary means for permitting the making of such copy or phonorecord as
permitted under that paragraph, if it is technologically feasible and
economically reasonable for the copyright owner to do so. If the copyright
owner fails to do so in a timely manner in light of the transmitting
organization’s reasonable business requirements, the transmitting
organization shall not be liable for a violation of section 1201(a)(1) of this
title for engaging in such activities as are necessary to make such copies or
phonorecords as permitted under paragraph (1) of this subsection.
(b) Notwithstanding the provisions of section 106, it is not an infringement
of copyright for a governmental body or other nonprofit organization entitled to
transmit a performance or display of a work, under section 110(2) or under the
limitations on exclusive rights in sound recordings specified by section 114(a),
to make no more than thirty copies or phonorecords of a particular transmission
program embodying the performance or display, if—
(1) no further copies or phonorecords are reproduced from the copies or
990
phonorecords made under this clause; and
( 2 ) except for one copy or phonorecord that may be preserved
exclusively for archival purposes, the copies or phonorecords are destroyed
within seven years from the date the transmission program was first
transmitted to the public.
(c) Notwithstanding the provisions of section 106, it is not an infringement
of copyright for a governmental body or other nonprofit organization to make for
distribution no more than one copy or phonorecord, for each transmitting
organization specified in clause (2) of this subsection, of a particular
transmission program embodying a performance of a nondramatic musical work
of a religious nature, or of a sound recording of such a musical work, if—
(1) there is no direct or indirect charge for making or distributing any
such copies or phonorecords; and
(2) none of such copies or phonorecords is used for any performance
other than a single transmission to the public by a transmitting organization
entitled to transmit to the public a performance of the work under a license
or transfer of the copyright; and
( 3 ) except for one copy or phonorecord that may be preserved
exclusively for archival purposes, the copies or phonorecords are all
destroyed within one year from the date the transmission program was first
transmitted to the public.
(d) Notwithstanding the provisions of section 106, it is not an infringement
of copyright for a governmental body or other nonprofit organization entitled to
transmit a performance of a work under section 110(8) to make no more than ten
copies or phonorecords embodying the performance, or to permit the use of any
such copy or phonorecord by any governmental body or nonprofit organization
entitled to transmit a performance of a work under section 110(8), if—
(1) any such copy or phonorecord is retained and used solely by the
organization that made it, or by a governmental body or nonprofit
organization entitled to transmit a performance of a work under section
110(8), and no further copies or phonorecords are reproduced from it; and
( 2 ) any such copy or phonorecord is used solely for transmissions
authorized under section 110(8), or for purposes of archival preservation or
security; and
(3) the governmental body or nonprofit organization permitting any use
of any such copy or phonorecord by any governmental body or nonprofit
organization under this subsection does not make any charge for such use.
991
(e) Statutory License.
( 1 ) A transmitting organization entitled to transmit to the public a
performance of a sound recording under the limitation on exclusive rights
specified by section 114(d)(1)(C)(iv) or under a statutory license in
accordance with section 114(f) is entitled to a statutory license, under the
conditions specified by this subsection, to make no more than 1 phonorecord
of the sound recording (unless the terms and conditions of the statutory
license allow for more), if the following conditions are satisfied:
(A) The phonorecord is retained and used solely by the transmitting
organization that made it, and no further phonorecords are reproduced
from it.
( B ) The phonorecord is used solely for the transmitting
organization’s own transmissions originating in the United States under a
statutory license in accordance with section 114(f) or the limitation on
exclusive rights specified by section 114(d)(1)(C)(iv).
( C ) Unless preserved exclusively for purposes of archival
preservation, the phonorecord is destroyed within 6 months from the
date the sound recording was first transmitted to the public using the
phonorecord.
(D) Phonorecords of the sound recording have been distributed to
the public under the authority of the copyright owner or the copyright
owner authorizes the transmitting entity to transmit the sound recording,
and the transmitting entity makes the phonorecord under this subsection
from a phonorecord lawfully made and acquired under the authority of
the copyright owner.
(2) Notwithstanding any provision of the antitrust laws, any copyright
owners of sound recordings and any transmitting organizations entitled to a
statutory license under this subsection may negotiate and agree upon royalty
rates and license terms and conditions for making phonorecords of such
sound recordings under this section and the proportionate division of fees
paid among copyright owners, and may designate common agents to
negotiate, agree to, pay, or receive such royalty payments.
(3) Proceedings under chapter 8 shall determine reasonable rates and
terms of royalty payments for the activities specified by paragraph (1)
during the 5-year period beginning on January 1 of the second year
following the year in which the proceedings are to be commenced, or such
other period as the parties may agree. Such rates shall include a minimum
fee for each type of service offered by transmitting organizations. Any
copyright owners of sound recordings or any transmitting organizations
992
entitled to a statutory license under this subsection may submit to the
Copyright Royalty Judges licenses covering such activities with respect to
such sound recordings. The parties to each proceeding shall bear their own
costs.
( 4 ) The schedule of reasonable rates and terms determined by the
Copyright Royalty Judges shall, subject to paragraph (5), be binding on all
copyright owners of sound recordings and transmitting organizations entitled
to a statutory license under this subsection during the 5-year period
specified in paragraph (3), or such other period as the parties may agree.
Such rates shall include a minimum fee for each type of service offered by
transmitting organizations. The Copyright Royalty Judges shall establish
rates that most clearly represent the fees that would have been negotiated in
the marketplace between a willing buyer and a willing seller. In determining
such rates and terms, the Copyright Royalty Judges shall base their decision
on economic, competitive, and programming information presented by the
parties, including—
(A) whether use of the service may substitute for or may promote the
sales of phonorecords or otherwise interferes with or enhances the
copyright owner’s traditional streams of revenue; and
(B) the relative roles of the copyright owner and the transmitting
organization in the copyrighted work and the service made available to
the public with respect to relative creative contribution, technological
contribution, capital investment, cost, and risk. In establishing such rates
and terms, the Copyright Royalty Judges may consider the rates and
terms under voluntary license agreements described in paragraphs (2)
and (3). The Copyright Royalty Judges shall also establish requirements
by which copyright owners may receive reasonable notice of the use of
their sound recordings under this section, and under which records of
such use shall be kept and made available by transmitting organizations
entitled to obtain a statutory license under this subsection.
(5) License agreements voluntarily negotiated at any time between 1 or
more copyright owners of sound recordings and 1 or more transmitting
organizations entitled to obtain a statutory license under this subsection shall
be given effect in lieu of any decision by the Librarian of Congress or
determination by the Copyright Royalty Judges.
(6)
( A) Any person who wishes to make a phonorecord of a sound
recording under a statutory license in accordance with this subsection
may do so without infringing the exclusive right of the copyright owner
of the sound recording under section 106(1)—
993
(i) by complying with such notice requirements as the Copyright
Royalty Judges shall prescribe by regulation and by paying royalty
fees in accordance with this subsection; or
(ii) if such royalty fees have not been set, by agreeing to pay such
royalty fees as shall be determined in accordance with this
subsection.
(B) Any royalty payments in arrears shall be made on or before the
20th day of the month next succeeding the month in which the royalty
fees are set.
(7) If a transmitting organization entitled to make a phonorecord under
this subsection is prevented from making such phonorecord by reason of the
application by the copyright owner of technical measures that prevent the
reproduction of the sound recording, the copyright owner shall make
available to the transmitting organization the necessary means for permitting
the making of such phonorecord as permitted under this subsection, if it is
technologically feasible and economically reasonable for the copyright
owner to do so. If the copyright owner fails to do so in a timely manner in
light of the transmitting organization’s reasonable business requirements, the
transmitting organization shall not be liable for a violation of section
1201(a)(1) of this title for engaging in such activities as are necessary to
make such phonorecords as permitted under this subsection.
( 8 ) Nothing in this subsection annuls, limits, impairs, or otherwise
affects in any way the existence or value of any of the exclusive rights of the
copyright owners in a sound recording, except as otherwise provided in this
subsection, or in a musical work, including the exclusive rights to reproduce
and distribute a sound recording or musical work, including by means of a
digital phonorecord delivery, under sections 106(1), 106(3), and 115, and
the right to perform publicly a sound recording or musical work, including
by means of a digital audio transmission, under sections 106(4) and 106(6).
(f)
(1) Notwithstanding the provisions of section 106, and without limiting
the application of subsection (b), it is not an infringement of copyright for a
governmental body or other nonprofit educational institution entitled under
section 110(2) to transmit a performance or display to make copies or
phonorecords of a work that is in digital form and, solely to the extent
permitted in paragraph (2), of a work that is in analog form, embodying the
performance or display to be used for making transmissions authorized
under section 110(2), if—
(A) such copies or phonorecords are retained and used solely by the
994
body or institution that made them, and no further copies or
phonorecords are reproduced from them, except as authorized under
section 110(2); and
(B) such copies or phonorecords are used solely for transmissions
authorized under section 110(2).
(2) This subsection does not authorize the conversion of print or other
analog versions of works into digital formats, except that such conversion is
permitted hereunder, only with respect to the amount of such works
authorized to be performed or displayed under section 110(2), if—
(A) no digital version of the work is available to the institution; or
(B) the digital version of the work that is available to the institution
is subject to technological protection measures that prevent its use for
section 110(2).
(g) The transmission program embodied in a copy or phonorecord made
under this section is not subject to protection as a derivative work under this
title except with the express consent of the owners of copyright in the
preexisting works employed in the program.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat. 2558, effective January 1, 1978;
October 28, 1998, P.L. 105-304 §§ 402, 405(b), 112 Stat. 2888; August 5, 1999, P.L. 106-
44 § 1(b), 113 Stat. 221; November 2, 2002, P.L. 107-273 § 13301(c)(1), 116 Stat. 1912;
November 30, 2004, P.L. 108-419, § 5(b), 118 Stat. 2361.
§ 113. Scope of Exclusive Rights in Pictorial, Graphic,

and Sculptural Works.
(a) Subject to the provisions of subsections (b) and (c) of this section, the
exclusive right to reproduce a copyrighted pictorial, graphic, or sculptural work
in copies under section 106 includes the right to reproduce the work in or on any
kind of article, whether useful or otherwise.
( b) This title does not afford, to the owner of copyright in a work that
portrays a useful article as such, any greater or lesser rights with respect to the
making, distribution, or display of the useful article so portrayed than those
afforded to such works under the law, whether title 17 or the common law or
statutes of a State, in effect on December 31, 1977, as held applicable and
construed by a court in an action brought under this title.
(c) In the case of a work lawfully reproduced in useful articles that have
been offered for sale or other distribution to the public, copyright does not
include any right to prevent the making, distribution, or display of pictures or
photographs of such articles in connection with advertisements or commentaries
995
related to the distribution or display of such articles, or in connection with news
reports.
(d) In a case in which—
(1)
(A) a work of visual art has been incorporated in or made part of a
building in such a way that removing the work from the building will
cause the destruction, distortion, mutilation, or other modification of the
work as described in section 106A(a)(3), and
( B ) the author consented to the installation of the work in the
building either before the effective date set forth in section 610(a) of the
Visual Artists Rights Act of 1990, or in a written instrument executed on
or after such effective date that is signed by the owner of the building
and the author and that specifies that installation of the work may subject
the work to destruction, distortion, mutilation, or other modification, by
reason of its removal, then the rights conferred by paragraphs (2) and
(3) of section 106A(a) shall not apply.
(2) If the owner of a building wishes to remove a work of visual art
which is a part of such building and which can be removed from the
building without the destruction, distortion, mutilation, or other modification
of the work as described in section 106A(a)(3), the author’s rights under
paragraphs (2) and (3) of section 106A(a) shall apply unless—
( A ) the owner has made a diligent, good faith attempt without
success to notify the author of the owner’s intended action affecting the
work of visual art, or
(B) the owner did provide such notice in writing and the person so
notified failed, within 90 days after receiving such notice, either to
remove the work or to pay for its removal.
For purposes of subparagraph (A), an owner shall be presumed to
have made a diligent, good faith attempt to send notice if the owner sent
such notice by registered mail to the author at the most recent address of
the author that was recorded with the Register of Copyrights pursuant to
paragraph (3). If the work is removed at the expense of the author, title
to that copy of the work shall be deemed to be in the author.
( 3 ) The Register of Copyrights shall establish a system of records
whereby any author of a work of visual art that has been incorporated in or
made part of a building, may record his or her identity and address with the
Copyright Office. The Register shall also establish procedures under which
any such author may update the information so recorded, and procedures
996
under which owners of buildings may record with the Copyright Office
evidence of their efforts to comply with this subsection.
101-650 § 604, 104 Stat. 5130, effective June 1, 1991.

(a) The exclusive rights of the owner of copyright in a sound recording are
limited to the rights specified by clauses (1), (2), (3) and (6) of section 106 [17
USCS § 106], and do not include any right of performance under section 106(4)
[17 USCS § 106(4)].
(b) The exclusive right of the owner of copyright in a sound recording under
clause (1) of section 106 [17 USCS § 106] is limited to the right to duplicate the
sound recording in the form of phonorecords or copies that directly or indirectly
recapture the actual sounds fixed in the recording. The exclusive right of the
owner of copyright in a sound recording under clause (2) of section 106 [17
USCS § 106] is limited to the right to prepare a derivative work in which the
actual sounds fixed in the sound recording are rearranged, remixed, or
otherwise altered in sequence or quality. The exclusive rights of the owner of
copyright in a sound recording under clauses (1) and (2) of section 106 [17
USCS § 106] do not extend to the making or duplication of another sound
recording that consists entirely of an independent fixation of other sounds, even
though such sounds imitate or simulate those in the copyrighted sound recording.
The exclusive rights of the owner of copyright in a sound recording under
clauses (1), (2), and (3) of section 106 [17 USCS § 106] do not apply to sound
recordings included in educational television and radio programs (as defined in
section 397 of title 47 [47 USCS § 397]) distributed or transmitted by or through
public broadcasting entities (as defined by section 118(f) [17 USCS § 118(f)]):
Provided, That copies or phonorecords of said programs are not commercially
distributed by or through public broadcasting entities to the general public.
( c ) This section does not limit or impair the exclusive right to perform
publicly, by means of a phonorecord, any of the works specified by section
106(4) [17 USCS § 106(4)].
(d) Limitations on exclusive right. Notwithstanding the provisions of
section 106(6) [17 USCS § 106(6)]—
(1) Exempt transmissions and retransmissions. The performance of a
sound recording publicly by means of a digital audio transmission, other
than as a part of an interactive service, is not an infringement of section
106(6) [17 USCS § 106(6)] if the performance is part of—
(A) a nonsubscription broadcast transmission;
997
(B) a retransmission of a nonsubscription broadcast transmission:
Provided, That, in the case of a retransmission of a radio station’s
broadcast transmission—
(i) the radio station’s broadcast transmission is not willfully or
repeatedly retransmitted more than a radius of 150 miles from the
site of the radio broadcast transmitter, however—
(I) the 150 mile limitation under this clause shall not apply
when a nonsubscription broadcast transmission by a radio station
licensed by the Federal Communications Commission is
retransmitted on a nonsubscription basis by a terrestrial
broadcast station, terrestrial translator, or terrestrial repeater
licensed by the Federal Communications Commission; and
( I I ) in the case of a subscription retransmission of a
nonsubscription broadcast retransmission covered by subclause
(I), the 150 mile radius shall be measured from the transmitter
site of such broadcast retransmitter;
(ii) the retransmission is of radio station broadcast transmissions
that are—
(I) obtained by the retransmitter over the air;
( I I ) not electronically processed by the retransmitter to
deliver separate and discrete signals; and
(III) retransmitted only within the local communities served
by the retransmitter;
( i i i ) the radio station’s broadcast transmission was being
retransmitted to cable systems (as defined in section 111(f) [ 17
USCS § 111(f) ]) by a satellite carrier on January 1, 1995, and that
retransmission was being retransmitted by cable systems as a
separate and discrete signal, and the satellite carrier obtains the
radio station’s broadcast transmission in an analog format: Provided,
That the broadcast transmission being retransmitted may embody the
programming of no more than one radio station; or
(i v) the radio station’s broadcast transmission is made by a
noncommercial educational broadcast station funded on or after
January 1, 1995, under section 396(k) of the Communications Act of
1934 (47 U.S.C. 396(k)), consists solely of noncommercial
educational and cultural radio programs, and the retransmission,
whether or not simultaneous, is a nonsubscription terrestrial
broadcast retransmission; or
998
(C) a transmission that comes within any of the following categories
—
(i) a prior or simultaneous transmission incidental to an exempt
transmission, such as a feed received by and then retransmitted by an
exempt transmitter: Provided, That such incidental transmissions do
not include any subscription transmission directly for reception by
members of the public;
(ii) a transmission within a business establishment, confined to
its premises or the immediately surrounding vicinity;
( i i i ) a retransmission by any retransmitter, including a
multichannel video programming distributor as defined in section
602(12) of the Communications Act of 1934 (47 U.S.C. 522(12)), of
a transmission by a transmitter licensed to publicly perform the
sound recording as a part of that transmission, if the retransmission
is simultaneous with the licensed transmission and authorized by the
transmitter; or
(iv) a transmission to a business establishment for use in the
ordinary course of its business: Provided, That the business recipient
does not retransmit the transmission outside of its premises or the
immediately surrounding vicinity, and that the transmission does not
exceed the sound recording performance complement. Nothing in this
clause shall limit the scope of the exemption in clause (ii).
(2) Statutory licensing of certain transmissions. The performance of a
sound recording publicly by means of a subscription digital audio
transmission not exempt under paragraph (1), an eligible nonsubscription
transmission, or a transmission not exempt under paragraph (1) that is made
by a preexisting satellite digital audio radio service shall be subject to
statutory licensing, in accordance with subsection (f) if—
(A)
(i) the transmission is not part of an interactive service;
( i i ) except in the case of a transmission to a business
establishment, the transmitting entity does not automatically and
intentionally cause any device receiving the transmission to switch
from one program channel to another; and
(iii) except as provided in section 1002(e) [17 USCS § 1002(e)],
the transmission of the sound recording is accompanied, if
technically feasible, by the information encoded in that sound
recording, if any, by or under the authority of the copyright owner of
999
that sound recording, that identifies the title of the sound recording,
the featured recording artist who performs on the sound recording,
and related information, including information concerning the
underlying musical work and its writer;
( B ) in the case of a subscription transmission not exempt under
paragraph (1) that is made by a preexisting subscription service in the
same transmission medium used by such service on July 31, 1998, or in
the case of a transmission not exempt under paragraph (1) that is made
by a preexisting satellite digital audio radio service—
( i ) the transmission does not exceed the sound recording
performance complement; and
(ii) the transmitting entity does not cause to be published by
means of an advance program schedule or prior announcement the
titles of the specific sound recordings or phonorecords embodying
such sound recordings to be transmitted; and
( C ) in the case of an eligible nonsubscription transmission or a
subscription transmission not exempt under paragraph (1) that is made
by a new subscription service or by a preexisting subscription service
other than in the same transmission medium used by such service on July
31, 1998—
( i ) the transmission does not exceed the sound recording
performance complement, except that this requirement shall not
apply in the case of a retransmission of a broadcast transmission if
the retransmission is made by a transmitting entity that does not have
the right or ability to control the programming of the broadcast
station making the broadcast transmission, unless—
(I) the broadcast station makes broadcast transmissions—
( a a ) in digital format that regularly exceed the sound
recording performance complement; or
(bb) in analog format, a substantial portion of which, on a
weekly basis, exceed the sound recording performance
complement; and
(II) the sound recording copyright owner or its representative
has notified the transmitting entity in writing that broadcast
transmissions of the copyright owner’s sound recordings exceed
the sound recording performance complement as provided in this
clause;
(ii) the transmitting entity does not cause to be published, or
1000
induce or facilitate the publication, by means of an advance program
schedule or prior announcement, the titles of the specific sound
recordings to be transmitted, the phonorecords embodying such
sound recordings, or, other than for illustrative purposes, the names
of the featured recording artists, except that this clause does not
disqualify a transmitting entity that makes a prior announcement that
a particular artist will be featured within an unspecified future time
period, and in the case of a retransmission of a broadcast
transmission by a transmitting entity that does not have the right or
ability to control the programming of the broadcast transmission, the
requirement of this clause shall not apply to a prior oral
announcement by the broadcast station, or to an advance program
schedule published, induced, or facilitated by the broadcast station,
if the transmitting entity does not have actual knowledge and has not
received written notice from the copyright owner or its
representative that the broadcast station publishes or induces or
facilitates the publication of such advance program schedule, or if
such advance program schedule is a schedule of classical music
programming published by the broadcast station in the same manner
as published by that broadcast station on or before September 30,
1998;
(iii) the transmission—
(I) is not part of an archived program of less than 5 hours
duration;
(II) is not part of an archived program of 5 hours or greater in
duration that is made available for a period exceeding 2 weeks;
(III) is not part of a continuous program which is of less than
3 hours duration; or
( I V) is not part of an identifiable program in which
performances of sound recordings are rendered in a
predetermined order, other than an archived or continuous
program, that is transmitted at—
(aa) more than 3 times in any 2-week period that have been
publicly announced in advance, in the case of a program of
less than 1 hour in duration, or
(bb) more than 4 times in any 2-week period that have been
publicly announced in advance, in the case of a program of 1
hour or more in duration,
except that the requirement of this subclause shall not apply in
the case of a retransmission of a broadcast transmission by a
1001
transmitting entity that does not have the right or ability to control
the programming of the broadcast transmission, unless the
transmitting entity is given notice in writing by the copyright
owner of the sound recording that the broadcast station makes
broadcast transmissions that regularly violate such requirement;
(iv) the transmitting entity does not knowingly perform the sound
recording, as part of a service that offers transmissions of visual
images contemporaneously with transmissions of sound recordings,
in a manner that is likely to cause confusion, to cause mistake, or to
deceive, as to the affiliation, connection, or association of the
copyright owner or featured recording artist with the transmitting
entity or a particular product or service advertised by the
transmitting entity, or as to the origin, sponsorship, or approval by
the copyright owner or featured recording artist of the activities of
the transmitting entity other than the performance of the sound
recording itself;
( v) the transmitting entity cooperates to prevent, to the extent
feasible without imposing substantial costs or burdens, a
transmission recipient or any other person or entity from
automatically scanning the transmitting entity’s transmissions alone
or together with transmissions by other transmitting entities in order
to select a particular sound recording to be transmitted to the
transmission recipient, except that the requirement of this clause
shall not apply to a satellite digital audio service that is in operation,
or that is licensed by the Federal Communications Commission, on
or before July 31, 1998;
(vi) the transmitting entity takes no affirmative steps to cause or
induce the making of a phonorecord by the transmission recipient,
and if the technology used by the transmitting entity enables the
transmitting entity to limit the making by the transmission recipient of
phonorecords of the transmission directly in a digital format, the
transmitting entity sets such technology to limit such making of
phonorecords to the extent permitted by such technology;
(vii) phonorecords of the sound recording have been distributed
to the public under the authority of the copyright owner or the
copyright owner authorizes the transmitting entity to transmit the
sound recording, and the transmitting entity makes the transmission
from a phonorecord lawfully made under the authority of the
copyright owner, except that the requirement of this clause shall not
apply to a retransmission of a broadcast transmission by a
transmitting entity that does not have the right or ability to control the
1002
programming of the broadcast transmission, unless the transmitting
entity is given notice in writing by the copyright owner of the sound
recording that the broadcast station makes broadcast transmissions
that regularly violate such requirement;
(viii) the transmitting entity accommodates and does not interfere
with the transmission of technical measures that are widely used by
sound recording copyright owners to identify or protect copyrighted
works, and that are technically feasible of being transmitted by the
transmitting entity without imposing substantial costs on the
transmitting entity or resulting in perceptible aural or visual
degradation of the digital signal, except that the requirement of this
clause shall not apply to a satellite digital audio service that is in
operation, or that is licensed under the authority of the Federal
Communications Commission, on or before July 31, 1998, to the
extent that such service has designed, developed, or made
commitments to procure equipment or technology that is not
compatible with such technical measures before such technical
measures are widely adopted by sound recording copyright owners;
and
(ix) the transmitting entity identifies in textual data the sound
recording during, but not before, the time it is performed, including
the title of the sound recording, the title of the phonorecord
embodying such sound recording, if any, and the featured recording
artist, in a manner to permit it to be displayed to the transmission
recipient by the device or technology intended for receiving the
service provided by the transmitting entity, except that the obligation
in this clause shall not take effect until 1 year after the date of the
enactment of the Digital Millennium Copyright Act [enacted Oct. 28,
1998] and shall not apply in the case of a retransmission of a
broadcast transmission by a transmitting entity that does not have the
right or ability to control the programming of the broadcast
transmission, or in the case in which devices or technology intended
for receiving the service provided by the transmitting entity that have
the capability to display such textual data are not common in the
marketplace.
(3) Licenses for transmissions by interactive services.
( A) No interactive service shall be granted an exclusive license
under section 106(6) for the performance of a sound recording publicly
by means of digital audio transmission for a period in excess of 12
months, except that with respect to an exclusive license granted to an
interactive service by a licensor that holds the copyright to 1,000 or
1003
fewer sound recordings, the period of such license shall not exceed 24
months: Provided, however, That the grantee of such exclusive license
shall be ineligible to receive another exclusive license for the
performance of that sound recording for a period of 13 months from the
expiration of the prior exclusive license.
(B) The limitation set forth in subparagraph (A) of this paragraph
shall not apply if—
(i) the licensor has granted and there remain in effect licenses
under section 106(6) [17 USCS § 106(6)] for the public performance
of sound recordings by means of digital audio transmission by at
least 5 different interactive services: Provided, however, That each
such license must be for a minimum of 10 percent of the copyrighted
sound recordings owned by the licensor that have been licensed to
interactive services, but in no event less than 50 sound recordings; or
(ii) the exclusive license is granted to perform publicly up to 45
seconds of a sound recording and the sole purpose of the
performance is to promote the distribution or performance of that
sound recording.
( C ) Notwithstanding the grant of an exclusive or nonexclusive
license of the right of public performance under section 106(6) [17
USCS § 106(6)], an interactive service may not publicly perform a
sound recording unless a license has been granted for the public
performance of any copyrighted musical work contained in the sound
recording: Provided, That such license to publicly perform the
copyrighted musical work may be granted either by a performing rights
society representing the copyright owner or by the copyright owner.
( D ) The performance of a sound recording by means of a
retransmission of a digital audio transmission is not an infringement of
section 106(6) [17 USCS § 106(6)] if—
( i ) the retransmission is of a transmission by an interactive
service licensed to publicly perform the sound recording to a
particular member of the public as part of that transmission; and
( i i ) the retransmission is simultaneous with the licensed
transmission, authorized by the transmitter, and limited to that
particular member of the public intended by the interactive service to
be the recipient of the transmission.
(E) For the purposes of this paragraph—
(i) a “licensor” shall include the licensing entity and any other
1004
entity under any material degree of common ownership, management,
or control that owns copyrights in sound recordings; and
(ii) a “performing rights society” is an association or corporation
that licenses the public performance of nondramatic musical works
on behalf of the copyright owner, such as the American Society of
Composers, Authors and Publishers, Broadcast Music, Inc., and
SESAC, Inc.
(4) Rights not otherwise limited.
(A) Except as expressly provided in this section, this section does
not limit or impair the exclusive right to perform a sound recording
publicly by means of a digital audio transmission under section 106(6)
[17 USCS § 106(6)].
(B) Nothing in this section annuls or limits in any way—
( i ) the exclusive right to publicly perform a musical work,
including by means of a digital audio transmission, under section
106(4) [17 USCS § 106(4)];
(ii) the exclusive rights in a sound recording or the musical work
embodied therein under sections 106(1), 106(2) and 106(3) [17
USCS §§ 106(1), 106(2), and 106(3)]; or
(iii) any other rights under any other clause of section 106 [17
USCS § 106], or remedies available under this title, as such rights or
remedies exist either before or after the date of enactment of the
Digital Performance Right in Sound Recordings Act of 1995
[enacted Nov. 1, 1995].
( C ) Any limitations in this section on the exclusive right under
section 106(6) [17 USCS § 106(6)] apply only to the exclusive right
under section 106(6) and not to any other exclusive rights under section
106. Nothing in this section shall be construed to annul, limit, impair or
otherwise affect in any way the ability of the owner of a copyright in a
sound recording to exercise the rights under sections 106(1), 106(2) and
106(3) [17 USCS §§ 106(1), 106(2), and 106(3)], or to obtain the
remedies available under this title pursuant to such rights, as such rights
and remedies exist either before or after the date of enactment of the
Digital Performance Right in Sound Recordings Act of 1995 [enacted
Nov. 1, 1995].
(e) Authority for negotiations.
(1) Notwithstanding any provision of the antitrust laws, in negotiating
statutory licenses in accordance with subsection (f), any copyright owners
1005
of sound recordings and any entities performing sound recordings affected
by this section may negotiate and agree upon the royalty rates and license
terms and conditions for the performance of such sound recordings and the
proportionate division of fees paid among copyright owners, and may
designate common agents on a nonexclusive basis to negotiate, agree to, pay,
or receive payments.
(2) For licenses granted under section 106(6) [17 USCS § 106], other
than statutory licenses, such as for performances by interactive services or
performances that exceed the sound recording performance complement—
(A) copyright owners of sound recordings affected by this section
may designate common agents to act on their behalf to grant licenses and
receive and remit royalty payments: Provided, That each copyright
owner shall establish the royalty rates and material license terms and
conditions unilaterally, that is, not in agreement, combination, or concert
with other copyright owners of sound recordings; and
( B) entities performing sound recordings affected by this section
may designate common agents to act on their behalf to obtain licenses
and collect and pay royalty fees: Provided, That each entity performing
sound recordings shall determine the royalty rates and material license
terms and conditions unilaterally, that is, not in agreement, combination,
or concert with other entities performing sound recordings.
(f) Licenses for certain nonexempt transmissions.
(1)
(A) Proceedings under chapter 8 [17 USCS §§ 801 et seq.] shall
determine reasonable rates and terms of royalty payments for
subscription transmissions by preexisting subscription services and
transmissions by preexisting satellite digital audio radio services
specified by subsection (d)(2) during the 5-year period beginning on
January 1 of the second year following the year in which the
proceedings are to be commenced, except in the case of a different
transitional period provided under section 6(b)(3) of the Copyright
Royalty and Distribution Reform Act of 2004 [17 USCS § 801 note], or
such other period as the parties may agree. Such terms and rates shall
distinguish among the different types of digital audio transmission
services then in operation. Any copyright owners of sound recordings,
preexisting subscription services, or preexisting satellite digital audio
radio services may submit to the Copyright Royalty Judges licenses
covering such subscription transmissions with respect to such sound
recordings. The parties to each proceeding shall bear their own costs.
1006
(B) The schedule of reasonable rates and terms determined by the
Copyright Royalty Judges shall, subject to paragraph (3), be binding on
all copyright owners of sound recordings and entities performing sound
recordings affected by this paragraph during the 5-year period specified
in subparagraph (A), a transitional period provided under section 6(b)
(3) of the Copyright Royalty and Distribution Reform Act of 2004 [17
USCS § 801 note], or such other period as the parties may agree. In
establishing rates and terms for preexisting subscription services and
preexisting satellite digital audio radio services, in addition to the
objectives set forth in section 801(b)(1) [17 USCS § 801(b)(1)], the
Copyright Royalty Judges may consider the rates and terms for
comparable types of subscription digital audio transmission services
and comparable circumstances under voluntary license agreements
described in subparagraph (A).
(C) The procedures under subparagraphs (A) and (B) shall also be
initiated pursuant to a petition filed by any copyright owners of sound
recordings or any eligible nonsubscription service or new subscription
service indicating that a new type of eligible nonsubscription service or
new subscription service on which sound recordings are performed is or
is about to become operational, for the purpose of determining
reasonable terms and rates of royalty payments with respect to such new
type of service for the period beginning with the inception of such new
type of service and ending on the date on which the royalty rates and
terms for preexisting subscription digital audio transmission services or
preexisting satellite digital radio audio services, as the case may be,
most recently determined under subparagraph (A) or (B) and chapter 8
expire [17 USCS §§ 801 et seq.], or such other period as the parties may
agree.
(2)
(A) Proceedings under chapter 8 [17 USCS §§ 801 et seq.] shall
determine reasonable rates and terms of royalty payments for public
performances of sound recordings by means of eligible nonsubscription
transmission services and new subscription services specified by
subsection (d)(2) during the 5-year period beginning on January 1 of the
second year following the year in which the proceedings are to be
commenced, except in the case of a different transitional period
provided under section 6(b)(3) of the Copyright Royalty and
Distribution Reform Act of 2004 [17 USCS § 801 note], or such other
period as the parties may agree. Such rates and terms shall distinguish
among the different types of eligible nonsubscription transmission
services and new subscription services then in operation and shall
1007
include a minimum fee for each such type of service. Any copyright
owners of sound recordings or any entities performing sound recordings
affected by this paragraph may submit to the Copyright Royalty Judges
licenses covering such eligible nonsubscription transmissions and new
subscription services with respect to such sound recordings. The parties
to each proceeding shall bear their own costs.
(B) The schedule of reasonable rates and terms determined by the
Copyright Royalty Judges shall, subject to paragraph (3), be binding on
all copyright owners of sound recordings and entities performing sound
recordings affected by this paragraph during the 5-year period specified
in subparagraph (A), a transitional period provided under section 6(b)
(3) of the Copyright Royalty and Distribution [Reform] Act of 2004 [17
USCS § 801 note], or such other period as the parties may agree. Such
rates and terms shall distinguish among the different types of eligible
nonsubscription transmission services then in operation and shall
include a minimum fee for each such type of service, such differences to
be based on criteria including, but not limited to, the quantity and nature
of the use of sound recordings and the degree to which use of the service
may substitute for or may promote the purchase of phonorecords by
consumers. In establishing rates and terms for transmissions by eligible
nonsubscription services and new subscription services, the Copyright
Royalty Judges shall establish rates and terms that most clearly
represent the rates and terms that would have been negotiated in the
marketplace between a willing buyer and a willing seller. In
determining such rates and terms, the Copyright Royalty Judges shall
base their decision on economic, competitive and programming
information presented by the parties, including—
(i) whether use of the service may substitute for or may promote
the sales of phonorecords or otherwise may interfere with or may
enhance the sound recording copyright owner’s other streams of
revenue from its sound recordings; and
(ii) the relative roles of the copyright owner and the transmitting
entity in the copyrighted work and the service made available to the
public with respect to relative creative contribution, technological
contribution, capital investment, cost, and risk.
In establishing such rates and terms, the Copyright Royalty Judges
may consider the rates and terms for comparable types of digital
audio transmission services and comparable circumstances under
voluntary license agreements described in subparagraph (A).
(C) The procedures under subparagraphs (A) and (B) shall also be
1008
initiated pursuant to a petition filed by any copyright owners of sound
recordings or any eligible nonsubscription service or new subscription
service indicating that a new type of eligible nonsubscription service or
new subscription service on which sound recordings are performed is or
is about to become operational, for the purpose of determining
reasonable terms and rates of royalty payments with respect to such new
type of service for the period beginning with the inception of such new
type of service and ending on the date on which the royalty rates and
terms for eligible nonsubscription services and new subscription
services, as the case may be, most recently determined under
subparagraph (A) or (B) and chapter 8 [17 USCS §§ 801 et seq.] expire,
or such other period as the parties may agree.
(3) License agreements voluntarily negotiated at any time between 1 or
more copyright owners of sound recordings and 1 or more entities
performing sound recordings shall be given effect in lieu of any decision by
the Librarian of Congress or determination by the Copyright Royalty Judges.
(4)
(A) The Copyright Royalty Judges shall also establish requirements
by which copyright owners may receive reasonable notice of the use of
their sound recordings under this section, and under which records of
such use shall be kept and made available by entities performing sound
recordings. The notice and recordkeeping rules in effect on the day
before the effective date of the Copyright Royalty and Distribution
Reform Act of 2004 [effective May 30, 2005] shall remain in effect
unless and until new regulations are promulgated by the Copyright
Royalty Judges. If new regulations are promulgated under this
subparagraph, the Copyright Royalty Judges shall take into account the
substance and effect of the rules in effect on the day before the effective
date of the Copyright Royalty and Distribution Reform Act of 2004
[effective May 30, 2005] and shall, to the extent practicable, avoid
significant disruption of the functions of any designated agent authorized
to collect and distribute royalty fees.
(B) Any person who wishes to perform a sound recording publicly
by means of a transmission eligible for statutory licensing under this
subsection may do so without infringing the exclusive right of the
copyright owner of the sound recording—
(i) by complying with such notice requirements as the Copyright
Royalty Judges shall prescribe by regulation and by paying royalty
fees in accordance with this subsection; or
(ii) if such royalty fees have not been set, by agreeing to pay such
1009
royalty fees as shall be determined in accordance with this
subsection.
(C) Any royalty payments in arrears shall be made on or before the
twentieth day of the month next succeeding the month in which the
royalty fees are set.
(5)
( A) Notwithstanding section 112(e) [17 USCS § 112(e)] and the
other provisions of this subsection, the receiving agent may enter into
agreements for the reproduction and performance of sound recordings
under section 112(e) [17 USCS § 112(e)] and this section by any 1 or
more commercial webcasters or noncommercial webcasters for a period
of not more than 11 years beginning on January 1, 2005, that, once
published in the Federal Register pursuant to subparagraph (B), shall be
binding on all copyright owners of sound recordings and other persons
entitled to payment under this section, in lieu of any determination by the
Copyright Royalty Judges. Any such agreement for commercial
webcasters may include provisions for payment of royalties on the basis
of a percentage of revenue or expenses, or both, and include a minimum
fee. Any such agreement may include other terms and conditions,
including requirements by which copyright owners may receive notice
of the use of their sound recordings and under which records of such use
shall be kept and made available by commercial webcasters or
noncommercial webcasters. The receiving agent shall be under no
obligation to negotiate any such agreement. The receiving agent shall
have no obligation to any copyright owner of sound recordings or any
other person entitled to payment under this section in negotiating any
such agreement, and no liability to any copyright owner of sound
recordings or any other person entitled to payment under this section for
having entered into such agreement.
(B) The Copyright Office shall cause to be published in the Federal
Register any agreement entered into pursuant to subparagraph (A). Such
publication shall include a statement containing the substance of
subparagraph (C). Such agreements shall not be included in the Code of
Federal Regulations. Thereafter, the terms of such agreement shall be
available, as an option, to any commercial webcaster or noncommercial
webcaster meeting the eligibility conditions of such agreement.
(C) Neither subparagraph (A) nor any provisions of any agreement
entered into pursuant to subparagraph (A), including any rate structure,
fees, terms, conditions, or notice and recordkeeping requirements set
forth therein, shall be admissible as evidence or otherwise taken into
1010
account in any administrative, judicial, or other government proceeding
involving the setting or adjustment of the royalties payable for the public
performance or reproduction in ephemeral phonorecords or copies of
sound recordings, the determination of terms or conditions related
thereto, or the establishment of notice or recordkeeping requirements by
the Copyright Royalty Judges under paragraph (4) or section 112(e)(4)
[17 USCS § 112(e)(4)]. It is the intent of Congress that any royalty rates,
rate structure, definitions, terms, conditions, or notice and recordkeeping
requirements, included in such agreements shall be considered as a
compromise motivated by the unique business, economic and political
circumstances of webcasters, copyright owners, and performers rather
than as matters that would have been negotiated in the marketplace
between a willing buyer and a willing seller, or otherwise meet the
objectives set forth in section 801(b) [17 USCS § 801(b)]. This
subparagraph shall not apply to the extent that the receiving agent and a
webcaster that is party to an agreement entered into pursuant to
subparagraph (A) expressly authorize the submission of the agreement in
a proceeding under this subsection.
(D) Nothing in the Webcaster Settlement Act of 2008, the Webcaster
Settlement Act of 2009, or any agreement entered into pursuant to
subparagraph (A) shall be taken into account by the United States Court
of Appeals for the District of Columbia Circuit in its review of the
determination by the Copyright Royalty Judges of May 1, 2007, of rates
and terms for the digital performance of sound recordings and ephemeral
recordings, pursuant to sections 112 and 114 [ 17 USCS §§ 112 and
114].
(E) As used in this paragraph—
(i) the term “noncommercial webcaster” means a webcaster that
—
(I) is exempt from taxation under section 501 of the Internal
Revenue Code of 1986 (26 U.S.C. 501);
(II) has applied in good faith to the Internal Revenue Service
for exemption from taxation under section 501 of the Internal
Revenue Code [26 USCS § 501] and has a commercially
reasonable expectation that such exemption shall be granted; or
(III) is operated by a State or possession or any governmental
entity or subordinate thereof, or by the United States or District of
Columbia, for exclusively public purposes;
(ii) the term “receiving agent” shall have the meaning given that
1011
term in section 261.2 of title 37, Code of Federal Regulations, as
published in the Federal Register on July 8, 2002; and
(iii) the term “webcaster” means a person or entity that has
obtained a compulsory license under section 112 or 114 [ 17 USCS §
112 or 114] and the implementing regulations therefor.
(F) The authority to make settlements pursuant to subparagraph (A)
shall expire at 11:59 p.m. Eastern time on the 30th day after the date of
the enactment of the Webcaster Settlement Act of 2009 [enacted June 30,
2009].
(g) Proceeds from licensing of transmissions.
( 1 ) Except in the case of a transmission licensed under a statutory
license in accordance with subsection (f) of this section—
(A) a featured recording artist who performs on a sound recording
that has been licensed for a transmission shall be entitled to receive
payments from the copyright owner of the sound recording in accordance
with the terms of the artist’s contract; and
( B ) a nonfeatured recording artist who performs on a sound
recording that has been licensed for a transmission shall be entitled to
receive payments from the copyright owner of the sound recording in
accordance with the terms of the nonfeatured recording artist’s
applicable contract or other applicable agreement.
( 2 ) An agent designated to distribute receipts from the licensing of
transmissions in accordance with subsection (f) shall distribute such
receipts as follows:
(A) 50 percent of the receipts shall be paid to the copyright owner of
the exclusive right under section 106(6) of this title [17 USCS § 106(6)]
to publicly perform a sound recording by means of a digital audio
transmission.
(B) 2 1/2 percent of the receipts shall be deposited in an escrow
account managed by an independent administrator jointly appointed by
copyright owners of sound recordings and the American Federation of
Musicians (or any successor entity) to be distributed to nonfeatured
musicians (whether or not members of the American Federation of
Musicians) who have performed on sound recordings.
(C) 2 1/2 percent of the receipts shall be deposited in an escrow
account managed by an independent administrator jointly appointed by
copyright owners of sound recordings and the American Federation of
1012
Television and Radio Artists (or any successor entity) to be distributed
to nonfeatured vocalists (whether or not members of the American
Federation of Television and Radio Artists) who have performed on
sound recordings.
( D ) 45 percent of the receipts shall be paid, on a per sound
recording basis, to the recording artist or artists featured on such sound
recording (or the persons conveying rights in the artists’ performance in
the sound recordings).
(3) A nonprofit agent designated to distribute receipts from the licensing
of transmissions in accordance with subsection (f) may deduct from any of
its receipts, prior to the distribution of such receipts to any person or entity
entitled thereto other than copyright owners and performers who have
elected to receive royalties from another designated agent and have notified
such nonprofit agent in writing of such election, the reasonable costs of such
agent incurred after November 1, 1995, in—
(A) the administration of the collection, distribution, and calculation
of the royalties;
( B ) the settlement of disputes relating to the collection and
calculation of the royalties; and
( C ) the licensing and enforcement of rights with respect to the
making of ephemeral recordings and performances subject to licensing
under section 112 [17 USCS § 112] and this section, including those
incurred in participating in negotiations or arbitration proceedings under
section 112 [17 USCS § 112] and this section, except that all costs
incurred relating to the section 112 [17 USCS § 112] ephemeral
recordings right may only be deducted from the royalties received
pursuant to section 112 [17 USCS § 112].
(4) Notwithstanding paragraph (3), any designated agent designated to
distribute receipts from the licensing of transmissions in accordance with
subsection (f) may deduct from any of its receipts, prior to the distribution
of such receipts, the reasonable costs identified in paragraph (3) of such
agent incurred after November 1, 1995, with respect to such copyright
owners and performers who have entered with such agent a contractual
relationship that specifies that such costs may be deducted from such royalty
receipts.
(h) Licensing to affiliates.
(1) If the copyright owner of a sound recording licenses an affiliated
entity the right to publicly perform a sound recording by means of a digital
1013
audio transmission under section 106(6) [17 USCS § 106(6)], the copyright
owner shall make the licensed sound recording available under section
106(6) [17 USCS § 106(6)] on no less favorable terms and conditions to all
bona fide entities that offer similar services, except that, if there are
material differences in the scope of the requested license with respect to the
type of service, the particular sound recordings licensed, the frequency of
use, the number of subscribers served, or the duration, then the copyright
owner may establish different terms and conditions for such other services.
(2) The limitation set forth in paragraph (1) of this subsection shall not
apply in the case where the copyright owner of a sound recording licenses
—
(A) an interactive service; or
( B) an entity to perform publicly up to 45 seconds of the sound
recording and the sole purpose of the performance is to promote the
distribution or performance of that sound recording.
(i) No effect on royalties for underlying works. License fees payable for
the public performance of sound recordings under section 106(6) [17 USCS §
106(6)] shall not be taken into account in any administrative, judicial, or other
governmental proceeding to set or adjust the royalties payable to copyright
owners of musical works for the public performance of their works. It is the
intent of Congress that royalties payable to copyright owners of musical works
for the public performance of their works shall not be diminished in any respect
as a result of the rights granted by section 106(6) [17 USCS § 106(6)].
(j) Definitions. As used in this section, the following terms have the
following meanings:
( 1 ) An “affiliated entity” is an entity engaging in digital audio
transmissions covered by section 106(6) [17 USCS § 106(6)], other than an
interactive service, in which the licensor has any direct or indirect
partnership or any ownership interest amounting to 5 percent or more of the
outstanding voting or non-voting stock.
(2) An “archived program” is a predetermined program that is available
repeatedly on the demand of the transmission recipient and that is performed
in the same order from the beginning, except that an archived program shall
not include a recorded event or broadcast transmission that makes no more
than an incidental use of sound recordings, as long as such recorded event or
broadcast transmission does not contain an entire sound recording or feature
a particular sound recording.
(3) A “broadcast” transmission is a transmission made by a terrestrial
1014
broadcast station licensed as such by the Federal Communications
Commission.
( 4 ) A “continuous program” is a predetermined program that is
continuously performed in the same order and that is accessed at a point in
the program that is beyond the control of the transmission recipient.
(5) A “digital audio transmission” is a digital transmission as defined in
section 101 [17 USCS § 101], that embodies the transmission of a sound
recording. This term does not include the transmission of any audiovisual
work.
( 6 ) An “eligible nonsubscription transmission” is a noninteractive
nonsubscription digital audio transmission not exempt under subsection (d)
(1) that is made as part of a service that provides audio programming
consisting, in whole or in part, of performances of sound recordings,
including retransmissions of broadcast transmissions, if the primary purpose
of the service is to provide to the public such audio or other entertainment
programming, and the primary purpose of the service is not to sell,
advertise, or promote particular products or services other than sound
recordings, live concerts, or other music-related events.
(7) An “interactive service” is one that enables a member of the public
to receive a transmission of a program specially created for the recipient, or
on request, a transmission of a particular sound recording, whether or not as
part of a program, which is selected by or on behalf of the recipient. The
ability of individuals to request that particular sound recordings be
performed for reception by the public at large, or in the case of a
subscription service, by all subscribers of the service, does not make a
service interactive, if the programming on each channel of the service does
not substantially consist of sound recordings that are performed within 1
hour of the request or at a time designated by either the transmitting entity or
the individual making such request. If an entity offers both interactive and
noninteractive services (either concurrently or at different times), the
noninteractive component shall not be treated as part of an interactive
service.
( 8 ) A “new subscription service” is a service that performs sound
recordings by means of noninteractive subscription digital audio
transmissions and that is not a preexisting subscription service or a
preexisting satellite digital audio radio service.
(9) A “nonsubscription” transmission is any transmission that is not a
subscription transmission.
( 1 0 ) A “preexisting satellite digital audio radio service” is a
1015
subscription satellite digital audio radio service provided pursuant to a
satellite digital audio radio service license issued by the Federal
Communications Commission on or before July 31, 1998, and any renewal
of such license to the extent of the scope of the original license, and may
include a limited number of sample channels representative of the
subscription service that are made available on a nonsubscription basis in
order to promote the subscription service.
(11) A “preexisting subscription service” is a service that performs
sound recordings by means of noninteractive audio-only subscription digital
audio transmissions, which was in existence and was making such
transmissions to the public for a fee on or before July 31, 1998, and may
include a limited number of sample channels representative of the
subscription service that are made available on a nonsubscription basis in
order to promote the subscription service.
( 1 2 ) A “retransmission” is a further transmission of an initial
transmission, and includes any further retransmission of the same
transmission. Except as provided in this section, a transmission qualifies as
a “retransmission” only if it is simultaneous with the initial transmission.
Nothing in this definition shall be construed to exempt a transmission that
fails to satisfy a separate element required to qualify for an exemption under
section 114(d)(1) [17 USCS § 114(d)(1)].
( 1 3 ) The “sound recording performance complement” is the
transmission during any 3-hour period, on a particular channel used by a
transmitting entity, of no more than—
( A ) 3 different selections of sound recordings from any one
phonorecord lawfully distributed for public performance or sale in the
United States, if no more than 2 such selections are transmitted
consecutively; or
(B) 4 different selections of sound recordings—
(i) by the same featured recording artist; or
( i i ) from any set or compilation of phonorecords lawfully
distributed together as a unit for public performance or sale in the
United States, if no more than three such selections are transmitted
consecutively: Provided, That the transmission of selections in
excess of the numerical limits provided for in clauses (A) and (B)
from multiple phonorecords shall nonetheless qualify as a sound
recording performance complement if the programming of the
multiple phonorecords was not willfully intended to avoid the
numerical limitations prescribed in such clauses.
1016
(14) A “subscription” transmission is a transmission that is controlled
and limited to particular recipients, and for which consideration is required
to be paid or otherwise given by or on behalf of the recipient to receive the
transmission or a package of transmissions including the transmission.
( 1 5 ) A “transmission” is either an initial transmission or a
retransmission.
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2560; Nov. 1, 1995, P.L.
104-39, § 3, 109 Stat. 336; Nov. 13, 1997, P.L. 105-80, § 3, 111 Stat. 1531; Oct. 28, 1998,
P.L. 105-304, Title IV, § 405(a)(1)-(4), 112 Stat. 2890; Dec. 4, 2002, P.L. 107-321, §§ 4,
5(b), (c), 116 Stat. 2781, 2784; Nov. 30, 2004, P.L. 108-419, § 5(c), 118 Stat. 2362; Oct. 6,
2006, P.L. 109-303, § 4(b), 120 Stat. 1481; Oct. 16, 2008, P.L. 110-435, § 2, 122 Stat.
4974; June 30, 2009, P.L. 111-36, § 2, 123 Stat. 1926; Dec. 9, 2010, P.L. 111-295, §§ 5(c),
6(b), (f)(1), 124 Stat. 3181.
Amendment
2010. Act Dec. 9, 2010, in subsec. (b), substituted “118(f)” for “118(g)”; and in subsec. (f)
(2), in subpara. (B), in the introductory matter, substituted “base their decision” for “base its
decision”, and in subpara. (C), substituted “eligible nonsubscription services and new
subscription services” for “preexisting subscription digital audio transmission services or
preexisting satellite digital radio audio services”.
§ 115. Scope of Exclusive Rights in Nondramatic

Musical Works: Compulsory License for Making
and Distributing Phonorecords.
In the case of nondramatic musical works, the exclusive rights provided by
clauses (1) and (3) of section 106 [17 USCS § 106], to make and to distribute
phonorecords of such works, are subject to compulsory licensing under the
conditions specified by this section.
(a) Availability and scope of compulsory license.
(1) When phonorecords of a nondramatic musical work have been
distributed to the public in the United States under the authority of the
copyright owner, any other person, including those who make
phonorecords or digital phonorecord deliveries, may, by complying
with the provisions of this section, obtain a compulsory license to make
and distribute phonorecords of the work. A person may obtain a
compulsory license only if his or her primary purpose in making
phonorecords is to distribute them to the public for private use,
including by means of a digital phonorecord delivery. A person may not
obtain a compulsory license for use of the work in the making of
phonorecords duplicating a sound recording fixed by another, unless: (i)
1017
such sound recording was fixed lawfully; and (ii) the making of the
phonorecords was authorized by the owner of copyright in the sound
recording or, if the sound recording was fixed before February 15,
1972, by any person who fixed the sound recording pursuant to an
express license from the owner of the copyright in the musical work or
pursuant to a valid compulsory license for use of such work in a sound
recording.
(2) A compulsory license includes the privilege of making a musical
arrangement of the work to the extent necessary to conform it to the style
or manner of interpretation of the performance involved, but the
arrangement shall not change the basic melody or fundamental character
of the work, and shall not be subject to protection as a derivative work
under this title, except with the express consent of the copyright owner.
(b) Notice of intention to obtain compulsory license.
(1) Any person who wishes to obtain a compulsory license under
this section shall, before or within thirty days after making, and before
distributing any phonorecords of the work, serve notice of intention to
do so on the copyright owner. If the registration or other public records
of the Copyright Office do not identify the copyright owner and include
an address at which notice can be served, it shall be sufficient to file the
notice of intention in the Copyright Office. The notice shall comply, in
form, content, and manner of service, with requirements that the Register
of Copyrights shall prescribe by regulation.
( 2 ) Failure to serve or file the notice required by clause (1)
forecloses the possibility of a compulsory license and, in the absence of
a negotiated license, renders the making and distribution of
phonorecords actionable as acts of infringement under section 501 [17
USCS § 501] and fully subject to the remedies provided by sections 502
through 506 and 509 [17 USCS §§ 502–506 and 509].
(c) Royalty payable under compulsory license.
(1) To be entitled to receive royalties under a compulsory license,
the copyright owner must be identified in the registration or other public
records of the Copyright Office. The owner is entitled to royalties for
phonorecords made and distributed after being so identified, but is not
entitled to recover for any phonorecords previously made and
distributed.
(2) Except as provided by clause (1), the royalty under a compulsory
license shall be payable for every phonorecord made and distributed in
accordance with the license. For this purpose, and other than as
1018
provided in paragraph (3), a phonorecord is considered “distributed” if
the person exercising the compulsory license has voluntarily and
permanently parted with its possession. With respect to each work
embodied in the phonorecord, the royalty shall be either two and three-
fourths cents, or one-half of one cent per minute of playing time or
fraction thereof, whichever amount is larger.
(3)
(A) A compulsory license under this section includes the right of
the compulsory licensee to distribute or authorize the distribution of
a phonorecord of a nondramatic musical work by means of a digital
transmission which constitutes a digital phonorecord delivery,
regardless of whether the digital transmission is also a public
performance of the sound recording under section 106(6) of this title
[17 USCS § 106(6)] or of any nondramatic musical work embodied
therein under section 106(4) of this title [17 USCS § 106(4)]. For
every digital phonorecord delivery by or under the authority of the
compulsory licensee—
(i) on or before December 31, 1997, the royalty payable by
the compulsory licensee shall be the royalty prescribed under
paragraph (2) and chapter 8 of this title [17 USCS §§ 801 et
seq.]; and
(ii) on or after January 1, 1998, the royalty payable by the
compulsory licensee shall be the royalty prescribed under
subparagraphs (B) through (E) and chapter 8 of this title [17
USCS §§ 801 et seq.].
( B ) Notwithstanding any provision of the antitrust laws, any
copyright owners of nondramatic musical works and any persons
entitled to obtain a compulsory license under subsection (a)(1) may
negotiate and agree upon the terms and rates of royalty payments
under this section and the proportionate division of fees paid among
copyright owners, and may designate common agents on a
nonexclusive basis to negotiate, agree to, pay or receive such royalty
payments. Such authority to negotiate the terms and rates of royalty
payments includes, but is not limited to, the authority to negotiate the
year during which the royalty rates prescribed under this
subparagraph and subparagraphs (C) through (E) and chapter 8 of
this title [17 USCS §§ 801 et seq.] shall next be determined.
(C) Proceedings under chapter 8 [17 USCS §§ 801 et seq.] shall
determine reasonable rates and terms of royalty payments for the
activities specified by this section during the period beginning with
1019
the effective date of such rates and terms, but not earlier than January
1 of the second year following the year in which the petition
requesting the proceeding is filed, and ending on the effective date of
successor rates and terms, or such other period as the parties may
agree. Such terms and rates shall distinguish between (i) digital
phonorecord deliveries where the reproduction or distribution of a
phonorecord is incidental to the transmission which constitutes the
digital phonorecord delivery, and (ii) digital phonorecord deliveries
in general. Any copyright owners of nondramatic musical works and
any persons entitled to obtain a compulsory license under subsection
(a)(1) may submit to the Copyright Royalty Judges licenses covering
such activities. The parties to each proceeding shall bear their own
costs.
(D) The schedule of reasonable rates and terms determined by
the Copyright Royalty Judges shall, subject to subparagraph (E), be
binding on all copyright owners of nondramatic musical works and
persons entitled to obtain a compulsory license under subsection (a)
(1) during the period specified in subparagraph (C), such other
period as may be determined pursuant to subparagraphs (B) and (C),
or such other period as the parties may agree. Such terms and rates
shall distinguish between (i) digital phonorecord deliveries where
the reproduction or distribution of a phonorecord is incidental to the
transmission which constitutes the digital phonorecord delivery, and
(ii) digital phonorecord deliveries in general. In addition to the
objectives set forth in section 801(b)(1) [17 USCS § 801(b)(1)], in
establishing such rates and terms, the Copyright Royalty Judges may
consider rates and terms under voluntary license agreements
described in subparagraphs (B) and (C). The royalty rates payable
for a compulsory license for a digital phonorecord delivery under
this section shall be established de novo and no precedential effect
shall be given to the amount of the royalty payable by a compulsory
licensee for digital phonorecord deliveries on or before December
31, 1997. The Copyright Royalty Judges shall also establish
requirements by which copyright owners may receive reasonable
notice of the use of their works under this section, and under which
records of such use shall be kept and made available by persons
making digital phonorecord deliveries.
(E)
( i ) License agreements voluntarily negotiated at any time
between one or more copyright owners of nondramatic musical
works and one or more persons entitled to obtain a compulsory
1020
license under subsection (a)(1) shall be given effect in lieu of any
determination by the Librarian of Congress and Copyright
Royalty Judges. Subject to clause (ii), the royalty rates
determined pursuant to subparagraph [subparagraphs] (C) and
(D) shall be given effect as to digital phonorecord deliveries in
lieu of any contrary royalty rates specified in a contract pursuant
to which a recording artist who is the author of a nondramatic
musical work grants a license under that person’s exclusive rights
in the musical work under paragraphs (1) and (3) of section 106
[17 USCS § 106] or commits another person to grant a license in
that musical work under paragraphs (1) and (3) of section 106
[17 USCS § 106], to a person desiring to fix in a tangible medium
of expression a sound recording embodying the musical work.
(ii) The second sentence of clause (i) shall not apply to—
(I) a contract entered into on or before June 22, 1995, and
not modified thereafter for the purpose of reducing the royalty
rates determined pursuant to subparagraph (C) and (D) or of
increasing the number of musical works within the scope of
the contract covered by the reduced rates, except if a contract
entered into on or before June 22, 1995, is modified thereafter
for the purpose of increasing the number of musical works
within the scope of the contract, any contrary royalty rates
specified in the contract shall be given effect in lieu of royalty
rates determined pursuant to subparagraph (C) and (D) for the
number of musical works within the scope of the contract as of
June 22, 1995; and
(II) a contract entered into after the date that the sound
recording is fixed in a tangible medium of expression
substantially in a form intended for commercial release, if at
the time the contract is entered into, the recording artist retains
the right to grant licenses as to the musical work under
paragraphs (1) and (3) of section 106 [17 USCS § 106].
(F) Except as provided in section 1002(e) of this title [17 USCS
§ 1002(e)], a digital phonorecord delivery licensed under this
paragraph shall be accompanied by the information encoded in the
sound recording, if any, by or under the authority of the copyright
owner of that sound recording, that identifies the title of the sound
recording, the featured recording artist who performs on the sound
recording, and related information, including information concerning
the underlying musical work and its writer.
1021
(G)
( i ) A digital phonorecord delivery of a sound recording is
actionable as an act of infringement under section 501 [17 USCS
§ 501], and is fully subject to the remedies provided by sections
502 through 506 [17 USCS §§ 502–506], unless—
(I) the digital phonorecord delivery has been authorized by
the copyright owner of the sound recording; and
(II) the owner of the copyright in the sound recording or the
entity making the digital phonorecord delivery has obtained a
compulsory license under this section or has otherwise been
authorized by the copyright owner of the musical work to
distribute or authorize the distribution, by means of a digital
phonorecord delivery, of each musical work embodied in the
sound recording.
(ii) Any cause of action under this subparagraph shall be in
addition to those available to the owner of the copyright in the
nondramatic musical work under subsection (c)(6) and section
106(4) [17 USCS § 106(4)] and the owner of the copyright in the
sound recording under section 106(6) [17 USCS § 106(6)].
(H) The liability of the copyright owner of a sound recording for
infringement of the copyright in a nondramatic musical work
embodied in the sound recording shall be determined in accordance
with applicable law, except that the owner of a copyright in a sound
recording shall not be liable for a digital phonorecord delivery by a
third party if the owner of the copyright in the sound recording does
not license the distribution of a phonorecord of the nondramatic
musical work.
(I) Nothing in section 1008 [17 USCS § 1008] shall be construed
to prevent the exercise of the rights and remedies allowed by this
paragraph, paragraph (6), and chapter 5 [17 USCS §§ 501 et seq.] in
the event of a digital phonorecord delivery, except that no action
alleging infringement of copyright may be brought under this title
against a manufacturer, importer or distributor of a digital audio
recording device, a digital audio recording medium, an analog
recording device, or an analog recording medium, or against a
consumer, based on the actions described in such section.
(J) Nothing in this section annuls or limits (i) the exclusive right
to publicly perform a sound recording or the musical work embodied
therein, including by means of a digital transmission, under sections
1022
106(4) and 106(6) [17 USCS §§ 106(4) and 106(6)], (ii) except for
compulsory licensing under the conditions specified by this section,
the exclusive rights to reproduce and distribute the sound recording
and the musical work embodied therein under sections 106(1) and
106(3) [17 USCS §§ 106(1) and 106(3)], including by means of a
digital phonorecord delivery, or (iii) any other rights under any other
provision of section 106 [17 USCS § 106], or remedies available
under this title, as such rights or remedies exist either before or after
the date of enactment of the Digital Performance Right in Sound
Recordings Act of 1995 [enacted Nov. 1, 1995].
( K ) The provisions of this section concerning digital
phonorecord deliveries shall not apply to any exempt transmissions
or retransmissions under section 114(d)(1) [17 USCS § 114(d)91)].
The exemptions created in section 114(d)(1) [17 USCS § 114(d)(1)]
do not expand or reduce the rights of copyright owners under section
106 (1) through (5) with respect to such transmissions and
retransmissions.
(4) A compulsory license under this section includes the right of the
maker of a phonorecord of a nondramatic musical work under
subsection (a)(1) to distribute or authorize distribution of such
phonorecord by rental, lease, or lending (or by acts or practices in the
nature of rental, lease, or lending). In addition to any royalty payable
under clause (2) and chapter 8 of this title [17 USCS §§ 801 et seq.], a
royalty shall be payable by the compulsory licensee for every act of
distribution of a phonorecord by or in the nature of rental, lease, or
lending, by or under the authority of the compulsory licensee. With
respect to each nondramatic musical work embodied in the phonorecord,
the royalty shall be a proportion of the revenue received by the
compulsory licensee from every such act of distribution of the
phonorecord under this clause equal to the proportion of the revenue
received by the compulsory licensee from distribution of the
phonorecord under clause (2) that is payable by a compulsory licensee
under that clause and under chapter 8 [17 USCS §§ 801 et seq.]. The
Register of Copyrights shall issue regulations to carry out the purpose of
this clause.
(5) Royalty payments shall be made on or before the twentieth day of
each month and shall include all royalties for the month next preceding.
Each monthly payment shall be made under oath and shall comply with
requirements that the Register of Copyrights shall prescribe by
regulation. The Register shall also prescribe regulations under which
detailed cumulative annual statements of account, certified by a certified
1023
public accountant, shall be filed for every compulsory license under this
section. The regulations covering both the monthly and the annual
statements of account shall prescribe the form, content, and manner of
certification with respect to the number of records made and the number
of records distributed.
(6) If the copyright owner does not receive the monthly payment and
the monthly and annual statements of account when due, the owner may
give written notice to the licensee that, unless the default is remedied
within thirty days from the date of the notice, the compulsory license
will be automatically terminated. Such termination renders either the
making or the distribution, or both, of all phonorecords for which the
royalty has not been paid, actionable as acts of infringement under
section 501 [17 USCS § 501] and fully subject to the remedies provided
by sections 502 through 506 [17 USCS §§ 502–506].
(d) Definition. As used in this section, the following term has the
following meaning: A “digital phonorecord delivery” is each individual
delivery of a phonorecord by digital transmission of a sound recording
which results in a specifically identifiable reproduction by or for any
transmission recipient of a phonorecord of that sound recording, regardless
of whether the digital transmission is also a public performance of the sound
recording or any nondramatic musical work embodied therein. A digital
phonorecord delivery does not result from a real-time, non-interactive
subscription transmission of a sound recording where no reproduction of the
sound recording or the musical work embodied therein is made from the
inception of the transmission through to its receipt by the transmission
recipient in order to make the sound recording audible.
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2561; Oct. 4, 1984, P.L. 98-
450, § 3, 98 Stat. 1727; Nov. 1, 1995, P.L. 104-39, § 4, 109 Stat. 344; Nov. 13, 1997, P.L.
105-80, §§ 4, 10, 12(a)(7), 111 Stat. 1531, 1534; Nov. 30, 2004, P.L. 108-419, § 5(d), 118
Stat. 2364; Oct. 6, 2006, P.L. 109-303, § 4(c), 120 Stat. 1482; Oct. 13, 2008, P.L. 110-403,
Title II, § 209(a)(3), 122 Stat. 4264; Dec. 9, 2010, P.L. 111-295, § 6(g), 124 Stat. 3181.
Amendment
2010. Act Dec. 9, 2010, amended the directory language of Act Oct. 13, 2008.
§ 116. Negotiated Licenses for Public Performances by

Means of Coin-Operated Phonorecord Players.
(a) Applicability of Section. This section applies to any nondramatic
musical work embodied in a phonorecord.
(b) Negotiated Licenses.
1024
(1) Authority for Negotiations. Any owners of copyright in works to
which this section applies and any operators of coin-operated phonorecord
players may negotiate and agree upon the terms and rates of royalty
payments for the performance of such works and the proportionate division
of fees paid among copyright owners, and may designate common agents to
negotiate, agree to, pay, or receive such royalty payments.
(2) Chapter 8 Proceeding. Parties not subject to such a negotiation may
have the terms and rates and the division of fees described in paragraph (1)
determined in a proceeding in accordance with the provisions of chapter 8.
(c) License Agreements Superior to Determinations by Copyright Royalty
Judges. License agreements between one or more copyright owners and one or
more operators of coin-operated phonorecord players, which are negotiated in
accordance with subsection (b), shall be given effect in lieu of any otherwise
applicable determination by a Copyright Royalty Judges.
(d) Definitions. As used in this section, the following terms mean the
following:
(1) A “coin-operated phonorecord player” is a machine or device that—
(A) is employed solely for the performance of nondramatic musical
works by means of phonorecords upon being activated by the insertion
of coins, currency, tokens, or other monetary units or their equivalent;
( B ) is located in an establishment making no direct or indirect
charge for admission;
(C) is accompanied by a list which is comprised of the titles of all
the musical works available for performance on it, and is affixed to the
phonorecord player or posted in the establishment in a prominent
position where it can be readily examined by the public; and
(D) affords a choice of works available for performance and permits
the choice to be made by the patrons of the establishment in which it is
located.
(2) An “operator” is any person who, alone or jointly with others—
(A) owns a coin-operated phonorecord player;
( B ) has the power to make a coin-operated phonorecord player
available for placement in an establishment for purposes of public
performance; or
(C) has the power to exercise primary control over the selection of
the musical works made available for public performance on a coin-
1025
operated phonorecord player.
Leg.H. October 31, 1988, P.L. 100-568 § 4(a)(4), 102 Stat. 2855; December 17, 1993,
P.L. 103-198 § 3(b)(1), 107 Stat. 2309; November 13, 1997, P.L. 105-80 § 5, 111 Stat.
1531; November 30, 2004, P.L. 108-419, § 5(e), 118 Stat. 2365.
§ 117. Limitation on Exclusive Rights: Computer

Programs.
(a) Making of Additional Copy or Adaptation by Owner of Copy.
Notwithstanding the provisions of section 106, it is not an infringement for the
owner of a copy of a computer program to make or authorize the making of
another copy or adaptation of that computer program provided:
(1) that such a new copy or adaptation is created as an essential step in
the utilization of the computer program in conjunction with a machine and
that it is used in no other manner, or
(2) that such new copy or adaptation is for archival purposes only and
that all archival copies are destroyed in the event that continued possession
of the computer program should cease to be rightful.
(b) Lease, Sale, or Other Transfer of Additional Copy or Adaptation. Any
exact copies prepared in accordance with the provisions of this section may be
leased, sold, or otherwise transferred, along with the copy from which such
copies were prepared, only as part of the lease, sale, or other transfer of all
rights in the program. Adaptations so prepared may be transferred only with the
authorization of the copyright owner.
(c) Machine Maintenance or Repair. Notwithstanding the provisions of
section 106, it is not an infringement for the owner or lessee of a machine to
make or authorize the making of a copy of a computer program if such copy is
made solely by virtue of the activation of a machine that lawfully contains an
authorized copy of the computer program, for purposes only of maintenance or
repair of that machine, if—
( 1 ) such new copy is used in no other manner and is destroyed
immediately after the maintenance or repair is completed; and
(2) with respect to any computer program or part thereof that is not
necessary for that machine to be activated, such program or part thereof is
not accessed or used other than to make such new copy by virtue of the
activation of the machine.
(d) Definitions. For purposes of this section—
(1) the “maintenance” of a machine is the servicing of the machine in
1026
order to make it work in accordance with its original specifications and any
changes to those specifications authorized for that machine; and
(2) the “repair” of a machine is the restoring of the machine to the state
of working in accordance with its original specifications and any changes to
those specifications authorized for that machine.
96-517 § 10(b), 94 Stat. 3028; October 28, 1998, P.L. 105-304 § 302, 112 Stat. 2887.
§ 118. Scope of Exclusive Rights: Use of Certain Works

in Connection With Noncommercial Broadcasting.
(a) The exclusive rights provided by section 106 shall, with respect to the
works specified by subsection (b) and the activities specified by subsection (d),
be subject to the conditions and limitations prescribed by this section.
( b ) Notwithstanding any provision of the antitrust laws, any owners of
copyright in published nondramatic musical works and published pictorial,
graphic, and sculptural works and any public broadcasting entities, respectively,
may negotiate and agree upon the terms and rates of royalty payments and the
proportionate division of fees paid among various copyright owners, and may
designate common agents to negotiate, agree to, pay, or receive payments.
(1) Any owner of copyright in a work specified in this subsection or any
public broadcasting entity may submit to the Copyright Royalty Judges
proposed licenses covering such activities with respect to such works.
(2) License agreements voluntarily negotiated at any time between one
or more copyright owners and one or more public broadcasting entities shall
be given effect in lieu of any determination by the Librarian of Congress or
the Copyright Royalty Judges, if copies of such agreements are filed with the
Copyright Royalty Judges within 30 days of execution in accordance with
regulations that the Copyright Royalty Judges shall issue.
( 3) Voluntary negotiation proceedings initiated pursuant to a petition
filed under section 804(a) [17 USCS § 804(a)] for the purpose of
determining a schedule of terms and rates of royalty payments by public
broadcasting entities to owners of copyright in works specified by this
subsection and the proportionate division of fees paid among various
copyright owners shall cover the 5-year period beginning on January 1 of
the second year following the year in which the petition is filed. The parties
to each negotiation proceeding shall bear their own costs.
(4) In the absence of license agreements negotiated under paragraph (2)
or (3), the Copyright Royalty Judges shall, pursuant to chapter 8 [17 USCS
1027
§§ 801 et seq.], conduct a proceeding to determine and publish in the
Federal Register a schedule of rates and terms which, subject to paragraph
(2), shall be binding on all owners of copyright in works specified by this
subsection and public broadcasting entities, regardless of whether such
copyright owners have submitted proposals to the Copyright Royalty Judges.
In establishing such rates and terms the Copyright Royalty Judges may
consider the rates for comparable circumstances under voluntary license
agreements negotiated as provided in paragraph (2) or (3). The Copyright
Royalty Judges shall also establish requirements by which copyright owners
may receive reasonable notice of the use of their works under this section,
and under which records of such use shall be kept by public broadcasting
entities.
(c) Subject to the terms of any voluntary license agreements that have been
negotiated as provided by subsection (b)(2) or (3), a public broadcasting entity
may, upon compliance with the provisions of this section, including the rates
and terms established by the Copyright Royalty Judges under subsection (b)(4),
engage in the following activities with respect to published nondramatic musical
works and published pictorial, graphic, and sculptural works:
(1) performance or display of work by or in the course of a transmission
made by a noncommercial educational broadcast station referred to in
subsection (f); and
( 2) production of a transmission program, reproduction of copies or
phonorecords of such a transmission program, and distribution of such
copies or phonorecords, where such production, reproduction, or
distribution is made by a nonprofit institution or organization solely for the
purpose of transmissions specified in paragraph (1); and
(3) the making of reproductions by a governmental body or a nonprofit
institution of a transmission program simultaneously with its transmission as
specified in paragraph (1), and the performance or display of the contents of
such program under the conditions specified by paragraph (1) of section 110
[17 USCS § 110], but only if the reproductions are used for performances or
displays for a period of no more than seven days from the date of the
transmission specified in paragraph (1), and are destroyed before or at the
end of such period. No person supplying, in accordance with paragraph (2),
a reproduction of a transmission program to governmental bodies or
nonprofit institutions under this paragraph shall have any liability as a result
of failure of such body or institution to destroy such reproduction: Provided,
That it shall have notified such body or institution of the requirement for
such destruction pursuant to this paragraph: And provided further, That if
such body or institution itself fails to destroy such reproduction it shall be
deemed to have infringed.
1028
(d) Except as expressly provided in this subsection, this section shall have
no applicability to works other than those specified in subsection (b). Owners
of copyright in nondramatic literary works and public broadcasting entities may,
during the course of voluntary negotiations, agree among themselves,
respectively, as to the terms and rates of royalty payments without liability
under the antitrust laws. Any such terms and rates of royalty payments shall be
effective upon filing with the Copyright Royalty Judges, in accordance with
regulations that the Copyright Royalty Judges shall prescribe as provided in
section 803(b)(6).
(e) Nothing in this section shall be construed to permit, beyond the limits of
fair use as provided by section 107 [17 USCS § 107], the unauthorized
dramatization of a nondramatic musical work, the production of a transmission
program drawn to any substantial extent from a published compilation of
pictorial, graphic, or sculptural works, or the unauthorized use of any portion of
an audiovisual work.
(f) As used in this section, the term “public broadcasting entity” means a
noncommercial educational broadcast station as defined in section 397 of title
47 and any nonprofit institution or organization engaged in the activities
described in paragraph (2) of subsection (c).
History:
(Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2565; Dec. 17, 1993, P.L. 103-198,
§ 4, 107 Stat. 2309; Aug. 5, 1999, P.L. 106-44, § 1(g)(3), 113 Stat. 222; Nov. 2, 2002, P.L.
107-273, Div C, Title III, Subtitle B, § 13210(7), 116 Stat. 1909.)
(As amended Nov. 30, 2004, P.L. 108-419, § 5(f), 118 Stat. 2365; Oct. 6, 2006, P.L.
109-303, § 4(d), 120 Stat. 1482.)

Transmissions of Distant Television Programming by
Satellite [Caution: See prospective amendment note
below.]
(a) Secondary transmissions by satellite carriers.
(1) Non-network stations. Subject to the provisions of paragraphs (4),
(5), and (7) of this subsection and section 114(d) [17 USCS § 114(d)],
secondary transmissions of a performance or display of a work embodied in
a primary transmission made by a non-network station shall be subject to
statutory licensing under this section if the secondary transmission is made
by a satellite carrier to the public for private home viewing or for viewing
in a commercial establishment, with regard to secondary transmissions the
satellite carrier is in compliance with the rules, regulations, or
1029
authorizations of the Federal Communications Commission governing the
carriage of television broadcast station signals, and the carrier makes a
direct or indirect charge for each retransmission service to each subscriber
receiving the secondary transmission or to a distributor that has contracted
with the carrier for direct or indirect delivery of the secondary transmission
to the public for private home viewing or for viewing in a commercial
establishment.
(2) Network stations.
(A) In General. Subject to the provisions of subparagraph (B) of
this paragraph and paragraphs (4), (5), (6), and (7) of this subsection
and section 114(d) [17 USCS § 114(d)], secondary transmissions of a
performance or display of a work embodied in a primary transmission
made by a network station shall be subject to statutory licensing under
this section if the secondary transmission is made by a satellite carrier
to the public for private home viewing, with regard to secondary
transmissions the satellite carrier is in compliance with the rules,
regulations, or authorizations of the Federal Communications
Commission governing the carriage of television broadcast station
signals, and the carrier makes a direct or indirect charge for such
retransmission service to each subscriber receiving the secondary
transmission.
(B) Secondary transmissions to unserved households.
(i) In General. The statutory license provided for in
subparagraph (A) shall be limited to secondary transmissions of the
signals of no more than two network stations in a single day for each
television network to persons who reside in unserved households.
(ii) Accurate determinations of eligibility.
(I) Accurate Predictive Model. In determining presumptively
whether a person resides in an unserved household under
subsection (d)(10)(A), a court shall rely on the Individual
Location Longley-Rice model set forth by the Federal
Communications Commission in Docket No. 98-201, as that
model may be amended by the Commission over time under
section 339(c)(3) of the Communications Act of 1934 [47 USCS
§ 339(c)(3)] to increase the accuracy of that model.
(II) Accurate Measurements. For purposes of site
measurements to determine whether a person resides in an
unserved household under subsection (d)(10)(A), a court shall
rely on section 339(c)(4) of the Communications Act of 1934 [47
1030
USCS § 339(c)(4)].
(III) Accurate Predictive Model with Respect to Digital
Signals. Notwithstanding subclause (I), in determining
presumptively whether a person resides in an unserved household
under subsection (d)(10)(A) with respect to digital signals, a
court shall rely on a predictive model set forth by the Federal
Communications Commission pursuant to a rulemaking as
provided in section 339(c)(3) of the Communications Act of
1934 (47 U.S.C. 339(c)(3)), as that model may be amended by
the Commission over time under such section to increase the
accuracy of that model. Until such time as the Commission sets
forth such model, a court shall rely on the predictive model as
recommended by the Commission with respect to digital signals
in its Report to Congress in ET Docket No. 05-182, FCC 05-199
(released December 9, 2005).
(iii) C-band exemption to unserved households.
(I) In General. The limitations of clause (i) shall not apply to
any secondary transmissions by C-band services of network
stations that a subscriber to C-band service received before any
termination of such secondary transmissions before October 31,
1999.
(II) Definition. In this clause, the term “C-band service”
means a service that is licensed by the Federal Communications
Commission and operates in the Fixed Satellite Service under
part 25 of title 47, Code of Federal Regulations.
(C) Submission of subscriber lists to networks.
(i) Initial Lists. A satellite carrier that makes secondary
transmissions of a primary transmission made by a network station
pursuant to subparagraph (A) shall, not later than 90 days after
commencing such secondary transmissions, submit to the network
that owns or is affiliated with the network station a list identifying
(by name and address, including street or rural route number, city,
State, and 9-digit zip code) all subscribers to which the satellite
carrier makes secondary transmissions of that primary transmission
to subscribers in unserved households.
(ii) Monthly Lists. After the submission of the initial lists under
clause (i), the satellite carrier shall, not later than the 15th of each
month, submit to the network a list, aggregated by designated market
area, identifying (by name and address, including street or rural route
1031
number, city, State, and 9-digit zip code) any persons who have been
added or dropped as subscribers under clause (i) since the last
submission under this subparagraph.
(iii) Use of Subscriber Information. Subscriber information
submitted by a satellite carrier under this subparagraph may be used
only for purposes of monitoring compliance by the satellite carrier
with this subsection.
(iv) Applicability. The submission requirements of this
subparagraph shall apply to a satellite carrier only if the network to
which the submissions are to be made places on file with the
Register of Copyrights a document identifying the name and address
of the person to whom such submissions are to be made. The
Register shall maintain for public inspection a file of all such
documents.
(3) Statutory license where retransmissions into local market available.
(A) Rules for subscribers to signals under subsection (e).
(i) For Those Receiving Distant Signals. In the case of a
subscriber of a satellite carrier who is eligible to receive the
secondary transmission of the primary transmission of a network
station solely by reason of subsection (e) (in this subparagraph
referred to as a “distant signal”), and who, as of October 1, 2004, is
receiving the distant signal of that network station, the following
shall apply:
(I) In a case in which the satellite carrier makes available to
the subscriber the secondary transmission of the primary
transmission of a local network station affiliated with the same
television network pursuant to the statutory license under section
122 [17 USCS § 122], the statutory license under paragraph (2)
shall apply only to secondary transmissions by that satellite
carrier to that subscriber of the distant signal of a station
affiliated with the same television network—
(aa) if, within 60 days after receiving the notice of the
satellite carrier under section 338(h)(1) of the
Communications Act of 1934 [47 USCS § 338(h)(1)], the
subscriber elects to retain the distant signal; but
(bb) only until such time as the subscriber elects to receive
such local signal.
(II) Notwithstanding subclause (I), the statutory license under
1032
paragraph (2) shall not apply with respect to any subscriber who
is eligible to receive the distant signal of a television network
station solely by reason of subsection (e), unless the satellite
carrier, within 60 days after the date of the enactment of the
Satellite Home Viewer Extension and Reauthorization Act of
2004 [enacted Dec. 8, 2004], submits to that television network a
list, aggregated by designated market area (as defined in section
122(j)(2)(C) [17 USCS § 122(j)(2)(C)]), that—
(aa) identifies that subscriber by name and address (street
or rural route number, city, State, and zip code) and specifies
the distant signals received by the subscriber; and
(bb) states, to the best of the satellite carrier’s knowledge
and belief, after having made diligent and good faith inquiries,
that the subscriber is eligible under subsection (e) to receive
the distant signals.
(ii) For Those not Receiving Distant Signals. In the case of any
subscriber of a satellite carrier who is eligible to receive the distant
signal of a network station solely by reason of subsection (e) and
who did not receive a distant signal of a station affiliated with the
same network on October 1, 2004, the statutory license under
paragraph (2) shall not apply to secondary transmissions by that
satellite carrier to that subscriber of the distant signal of a station
affiliated with the same network.
(B) Rules for lawful subscribers as of date of enactment of 2010
Act. In the case of a subscriber of a satellite carrier who, on the day
before the date of the enactment of the Satellite Television Extension
and Localism Act of 2010 [enacted May 27, 2010], was lawfully
receiving the secondary transmission of the primary transmission of a
network station under the statutory license under paragraph (2) (in this
subparagraph referred to as the “distant signal”), other than subscribers
to whom subparagraph (A) applies, the statutory license under
paragraph (2) shall apply to secondary transmissions by that satellite
carrier to that subscriber of the distant signal of a station affiliated with
the same television network, and the subscriber’s household shall
continue to be considered to be an unserved household with respect to
such network, until such time as the subscriber elects to terminate such
secondary transmissions, whether or not the subscriber elects to
subscribe to receive the secondary transmission of the primary
transmission of a local network station affiliated with the same network
pursuant to the statutory license under section 122 [17 USCS § 122].
1033
(C) Future applicability.
( i ) When local signal available at time of subscription. The
statutory license under paragraph (2) shall not apply to the secondary
transmission by a satellite carrier of the primary transmission of a
network station to a person who is not a subscriber lawfully
receiving such secondary transmission as of the date of the enactment
of the Satellite Television Extension and Localism Act of 2010
[enacted May 27, 2010] and, at the time such person seeks to
subscribe to receive such secondary transmission, resides in a local
market where the satellite carrier makes available to that person the
secondary transmission of the primary transmission of a local
network station affiliated with the same network pursuant to the
statutory license under section 122 [17 USCS § 122].
(ii) When local signal available after subscription. In the case of
a subscriber who lawfully subscribes to and receives the secondary
transmission by a satellite carrier of the primary transmission of a
network station under the statutory license under paragraph (2) (in
this clause referred to as the ‘distant signal’) on or after the date of
the enactment of the Satellite Television Extension and Localism Act
of 2010 [enacted May 27, 2010], the statutory license under
paragraph (2) shall apply to secondary transmissions by that satellite
carrier to that subscriber of the distant signal of a station affiliated
with the same television network, and the subscriber’s household
shall continue to be considered to be an unserved household with
respect to such network, until such time as the subscriber elects to
terminate such secondary transmissions, but only if such subscriber
subscribes to the secondary transmission of the primary transmission
of a local network station affiliated with the same network within 60
days after the satellite carrier makes available to the subscriber such
secondary transmission of the primary transmission of such local
network station.
(D) Other Provisions not Affected. This paragraph shall not affect
the applicability of the statutory license to secondary transmissions to
unserved households included under paragraph (11).
(E) Waiver. A subscriber who is denied the secondary
transmission of a network station under subparagraph (B) or (C) may
request a waiver from such denial by submitting a request, through the
subscriber’s satellite carrier, to the network station in the local market
affiliated with the same network where the subscriber is located. The
network station shall accept or reject the subscriber’s request for a
waiver within 30 days after receipt of the request. If the network station
1034
fails to accept or reject the subscriber’s request for a waiver within that
30-day period, that network station shall be deemed to agree to the
waiver request. Unless specifically stated by the network station, a
waiver that was granted before the date of the enactment of the Satellite
Home Viewer Extension and Reauthorization Act of 2004 [enacted Dec.
8, 2004] under section 339(c)(2) of the Communications Act of 1934
[47 USCS § 339(c)(2)] shall not constitute a waiver for purposes of this
subparagraph.
(F) Available Defined. For purposes of this paragraph, a satellite
carrier makes available a secondary transmission of the primary
transmission of a local station to a subscriber or person if the satellite
carrier offers that secondary transmission to other subscribers who
reside in the same 9-digit zip code as that subscriber or person.
(4) Noncompliance with Reporting and Payment Requirements.
Notwithstanding the provisions of paragraphs (1) and (2), the willful or
repeated secondary transmission to the public by a satellite carrier of a
primary transmission made by a non-network station or a network station
and embodying a performance or display of a work is actionable as an act of
remedies provided by sections 502 through 506 [17 USCS §§ 502–506],
where the satellite carrier has not deposited the statement of account and
royalty fee required by subsection (b), or has failed to make the submissions
to networks required by paragraph (2)(C).
(5) Willful Alterations. Notwithstanding the provisions of paragraphs
(1) and (2), the secondary transmission to the public by a satellite carrier of
a performance or display of a work embodied in a primary transmission
made by a non-network station or a network station is actionable as an act of
remedies provided by sections 502 through 506 [17 USCS §§ 502–506] and
section 510 [17 USCS § 510], if the content of the particular program in
which the performance or display is embodied, or any commercial
advertising or station announcement transmitted by the primary transmitter
during, or immediately before or after, the transmission of such program, is
in any way willfully altered by the satellite carrier through changes,
deletions, or additions, or is combined with programming from any other
broadcast signal.
(6) Violation of territorial restrictions on statutory license for network
stations.
(A) Individual Violations. The willful or repeated secondary
transmission by a satellite carrier of a primary transmission made by a
1035
network station and embodying a performance or display of a work to a
subscriber who is not eligible to receive the transmission under this
section is actionable as an act of infringement under section 501 [17
USCS § 501] and is fully subject to the remedies provided by sections
502 through 506 [17 USCS §§ 502–506], except that—
(i) no damages shall be awarded for such act of infringement if
the satellite carrier took corrective action by promptly withdrawing
service from the ineligible subscriber, and
( i i ) any statutory damages shall not exceed $250 for such
subscriber for each month during which the violation occurred.
(B) Pattern of Violations. If a satellite carrier engages in a willful
or repeated pattern or practice of delivering a primary transmission
made by a network station and embodying a performance or display of a
work to subscribers who are not eligible to receive the transmission
under this section, then in addition to the remedies set forth in
subparagraph (A)—
( i ) if the pattern or practice has been carried out on a
substantially nationwide basis, the court shall order a permanent
injunction barring the secondary transmission by the satellite carrier,
for private home viewing, of the primary transmissions of any
primary network station affiliated with the same network, and the
court may order statutory damages of not to exceed $2,500,000 for
each 3-month period during which the pattern or practice was
carried out; and
(ii) if the pattern or practice has been carried out on a local or
regional basis, the court shall order a permanent injunction barring
the secondary transmission, for private home viewing in that locality
or region, by the satellite carrier of the primary transmissions of any
primary network station affiliated with the same network, and the
court may order statutory damages of not to exceed $2,500,000 for
carried out.
(C) Previous Subscribers Excluded. Subparagraphs (A) and (B) do
not apply to secondary transmissions by a satellite carrier to persons
who subscribed to receive such secondary transmissions from the
satellite carrier or a distributor before November 16, 1988.
(D) Burden of Proof. In any action brought under this paragraph, the
satellite carrier shall have the burden of proving that its secondary
transmission of a primary transmission by a network station is to a
1036
subscriber who is eligible to receive the secondary transmission under
this section.
(E) Exception. The secondary transmission by a satellite carrier of
a performance or display of a work embodied in a primary transmission
made by a network station to subscribers who do not reside in unserved
households shall not be an act of infringement if—
(i) the station on May 1, 1991, was retransmitted by a satellite
carrier and was not on that date owned or operated by or affiliated
with a television network that offered interconnected program
service on a regular basis for 15 or more hours per week to at least
25 affiliated television licensees in 10 or more States;
(i i ) as of July 1, 1998, such station was retransmitted by a
satellite carrier under the statutory license of this section; and
(iii) the station is not owned or operated by or affiliated with a
television network that, as of January 1, 1995, offered interconnected
program service on a regular basis for 15 or more hours per week to
at least 25 affiliated television licensees in 10 or more States. The
court shall direct one half of any statutory damages ordered under
clause (i) [subparagraph (B)(i)] to be deposited with the Register of
Copyrights for distribution to copyright owners pursuant to
subsection (b). The Copyright Royalty Judges shall issue regulations
establishing procedures for distributing such funds, on a proportional
basis, to copyright owners whose works were included in the
secondary transmissions that were the subject of the statutory
damages.
(7) Discrimination by a Satellite Carrier. Notwithstanding the
provisions of paragraph (1), the willful or repeated secondary transmission
to the public by a satellite carrier of a performance or display of a work
embodied in a primary transmission made by a non-network station or a
network station is actionable as an act of infringement under section 501 [17
USCS § 501], and is fully subject to the remedies provided by sections 502
through 506 [17 USCS §§ 502–506], if the satellite carrier unlawfully
discriminates against a distributor.
(8) Geographic Limitation on Secondary Transmissions. The statutory
license created by this section shall apply only to secondary transmissions
to households located in the United States.
(9) Loser Pays for Signal Intensity Measurement; Recovery of
Measurement Costs in a Civil Action. In any civil action filed relating to the
eligibility of subscribing households as unserved households—
1037
(A) a network station challenging such eligibility shall, within 60
days after receipt of the measurement results and a statement of such
costs, reimburse the satellite carrier for any signal intensity
measurement that is conducted by that carrier in response to a challenge
by the network station and that establishes the household is an unserved
household; and
( B ) a satellite carrier shall, within 60 days after receipt of the
measurement results and a statement of such costs, reimburse the
network station challenging such eligibility for any signal intensity
measurement that is conducted by that station and that establishes the
household is not an unserved household.
(10) Inability to Conduct Measurement. If a network station makes a
reasonable attempt to conduct a site measurement of its signal at a
subscriber’s household and is denied access for the purpose of conducting
the measurement, and is otherwise unable to conduct a measurement, the
satellite carrier shall within 60 days notice thereof, terminate service of the
station’s network to that household.
(11) Service to recreational vehicles and commercial trucks.
(A) Exemption.
(i) In General. For purposes of this subsection, and subject to
clauses (ii) and (iii), the term “unserved household” shall include—
( I ) recreational vehicles as defined in regulations of the
Secretary of Housing and Urban Development under section
3282.8 of title 24, Code of Federal Regulations; and
( II) commercial trucks that qualify as commercial motor
vehicles under regulations of the Secretary of Transportation
under section 383.5 of title 49, Code of Federal Regulations.
(ii) Limitation. Clause (i) shall apply only to a recreational
vehicle or commercial truck if any satellite carrier that proposes to
make a secondary transmission of a network station to the operator
of such a recreational vehicle or commercial truck complies with the
documentation requirements under subparagraphs (B) and (C).
(iii) Exclusion. For purposes of this subparagraph, the terms
“recreational vehicle” and “commercial truck” shall not include any
fixed dwelling, whether a mobile home or otherwise.
(B) Documentation Requirements. A recreational vehicle or
commercial truck shall be deemed to be an unserved household
beginning 10 days after the relevant satellite carrier provides to the
1038
network that owns or is affiliated with the network station that will be
secondarily transmitted to the recreational vehicle or commercial truck
the following documents:
(i) Declaration. A signed declaration by the operator of the
recreational vehicle or commercial truck that the satellite dish is
permanently attached to the recreational vehicle or commercial
truck, and will not be used to receive satellite programming at any
fixed dwelling.
(ii) Registration. In the case of a recreational vehicle, a copy of
the current State vehicle registration for the recreational vehicle.
(iii) Registration and License. In the case of a commercial truck,
a copy of—
(I) the current State vehicle registration for the truck; and
(II) a copy of a valid, current commercial driver’s license, as
defined in regulations of the Secretary of Transportation under
section 383 of title 49, Code of Federal Regulations, issued to the
operator.
(C) Updated Documentation Requirements. If a satellite carrier
wishes to continue to make secondary transmissions to a recreational
vehicle or commercial truck for more than a 2-year period, that carrier
shall provide each network, upon request, with updated documentation
in the form described under subparagraph (B) during the 90 days before
expiration of that 2-year period.
(12) Statutory license contingent on compliance with FCC rules and
remedial steps. Notwithstanding any other provision of this section, the
willful or repeated secondary transmission to the public by a satellite
carrier of a primary transmission embodying a performance or display of a
work made by a broadcast station licensed by the Federal Communications
Commission is actionable as an act of infringement under section 501 [17
USCS § 501], and is fully subject to the remedies provided by sections 502
through 506 [17 USCS §§ 502–506], if, at the time of such transmission, the
satellite carrier is not in compliance with the rules, regulations, and
authorizations of the Federal Communications Commission concerning the
carriage of television broadcast station signals.
(13) Waivers. A subscriber who is denied the secondary transmission
of a signal of a network station under subsection (a)(2)(B) may request a
waiver from such denial by submitting a request, through the subscriber’s
satellite carrier, to the network station asserting that the secondary
transmission is prohibited. The network station shall accept or reject a
1039
subscriber’s request for a waiver within 30 days after receipt of the request.
If a television network station fails to accept or reject a subscriber’s request
for a waiver within the 30-day period after receipt of the request, that
station shall be deemed to agree to the waiver request and have filed such
written waiver. Unless specifically stated by the network station, a waiver
that was granted before the date of the enactment of the Satellite Home
Viewer Extension and Reauthorization Act of 2004 [enacted Dec. 8, 2004]
under section 339(c)(2) of the Communications Act of 1934 [47 USCS §
339(c)(2)], and that was in effect on such date of enactment, shall constitute
a waiver for purposes of this paragraph.
(14) Restricted transmission of out-of-State distant network signals into
certain markets.
(A) Out-of-State Network Affiliates. Notwithstanding any other
provision of this title, the statutory license in this subsection and
subsection (b) shall not apply to any secondary transmission of the
primary transmission of a network station located outside of the State of
Alaska to any subscriber in that State to whom the secondary
transmission of the primary transmission of a television station located
in that State is made available by the satellite carrier pursuant to section
122 [17 USCS § 122].
(B) Exception. The limitation in subparagraph (A) shall not apply
to the secondary transmission of the primary transmission of a digital
signal of a network station located outside of the State of Alaska if at the
time that the secondary transmission is made, no television station
licensed to a community in the State and affiliated with the same
network makes primary transmissions of a digital signal.
(b) Deposit of statements and fees; verification procedures.
(1) Deposits with the Register of Copyrights. A satellite carrier whose
secondary transmissions are subject to statutory licensing under subsection
(a) shall, on a semiannual basis, deposit with the Register of Copyrights, in
accordance with requirements that the Register shall prescribe by regulation
—
(A) a statement of account, covering the preceding 6-month period,
specifying the names and locations of all non-network stations and
network stations whose signals were retransmitted, at any time during
that period, to subscribers as described in subsections (a)(1) and (a)(2),
the total number of subscribers that received such retransmissions, and
such other data as the Register of Copyrights may from time to time
prescribe by regulation;
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(B) a royalty fee payable to copyright owners pursuant to paragraph
(4) for that 6-month period, computed by multiplying the total number of
subscribers receiving each secondary transmission of a primary stream
or multicast stream of each non-network station or network station
during each calendar year month by the appropriate rate in effect under
this subsection; and
(C) a filing fee, as determined by the Register of Copyrights pursuant
to section 708(a) [17 USCS § 708(a)].
(2) Verification of Accounts and Fee Payments. The Register of
Copyrights shall issue regulations to permit interested parties to verify and
audit the statements of account and royalty fees submitted by satellite
carriers under this subsection.
(3) Investment of Fees. The Register of Copyrights shall receive all
fees (including the filing fee specified in paragraph (1)(C)) deposited under
this section and, after deducting the reasonable costs incurred by the
Copyright Office under this section (other than the costs deducted under
paragraph (5)), shall deposit the balance in the Treasury of the United
States, in such manner as the Secretary of the Treasury directs. All funds
held by the Secretary of the Treasury shall be invested in interest-bearing
securities of the United States for later distribution with interest by the
Librarian of Congress as provided by this title.
(4) Persons to Whom Fees are Distributed. The royalty fees deposited
under paragraph (3) shall, in accordance with the procedures provided by
paragraph (5), be distributed to those copyright owners whose works were
included in a secondary transmission made by a satellite carrier during the
applicable 6-month accounting period and who file a claim with the
Copyright Royalty Judges under paragraph (5).
(5) Procedures for Distribution. The royalty fees deposited under
paragraph (3) shall be distributed in accordance with the following
procedures:
(A) Filing of Claims for Fees. During the month of July in each
year, each person claiming to be entitled to statutory license fees for
secondary transmissions shall file a claim with the Copyright Royalty
Judges, in accordance with requirements that the Copyright Royalty
Judges shall prescribe by regulation. For purposes of this paragraph, any
claimants may agree among themselves as to the proportionate division
of statutory license fees among them, may lump their claims together and
file them jointly or as a single claim, or may designate a common agent
to receive payment on their behalf.
1041
(B) Determination of Controversy; Distributions. After the first day
of August of each year, the Copyright Royalty Judges shall determine
whether there exists a controversy concerning the distribution of royalty
fees. If the Copyright Royalty Judges determine that no such controversy
exists, the Copyright Royalty Judges shall authorize the Librarian of
Congress to proceed to distribute such fees to the copyright owners
entitled to receive them, or to their designated agents, subject to the
deduction of reasonable administrative costs under this section. If the
Copyright Royalty Judges find the existence of a controversy, the
Copyright Royalty Judges shall, pursuant to chapter 8 of this title [17
USCS §§ 801 et seq.], conduct a proceeding to determine the
distribution of royalty fees.
(C) Withholding of Fees During Controversy. During the pendency
of any proceeding under this subsection, the Copyright Royalty Judges
shall have the discretion to authorize the Librarian of Congress to
proceed to distribute any amounts that are not in controversy.
(c) Adjustment of royalty fees.
(1) Applicability and determination of royalty fees for signals.
(A) Initial Fee. The appropriate fee for purposes of determining the
royalty fee under subsection (b)(1)(B) for the secondary transmission of
the primary transmissions of network stations and non-network stations
shall be the appropriate fee set forth in part 258 of title 37, Code of
Federal Regulations, as in effect on July 1, 2009, as modified under this
paragraph.
(B) Fee Set by Voluntary Negotiation. On or before June 1, 2010,
the Copyright Royalty Judges shall cause to be published in the Federal
Register of the initiation of voluntary negotiation proceedings for the
purpose of determining the royalty fee to be paid by satellite carriers for
the secondary transmission of the primary transmissions of network
stations and non-network stations under subsection (b)(1)(B).
(C) Negotiations. Satellite carriers, distributors, and copyright
owners entitled to royalty fees under this section shall negotiate in good
faith in an effort to reach a voluntary agreement or agreements for the
payment of royalty fees. Any such satellite carriers, distributors and
copyright owners may at any time negotiate and agree to the royalty fee,
and may designate common agents to negotiate, agree to, or pay such
fees. If the parties fail to identify common agents, the Copyright Royalty
Judges shall do so, after requesting recommendations from the parties to
the negotiation proceeding. The parties to each negotiation proceeding
shall bear the cost thereof.
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( D ) Agreements binding on parties; filing of agreements; public
notice.
(i) Voluntary Agreements; Filing. Voluntary agreements
negotiated at any time in accordance with this paragraph shall be
binding upon all satellite carriers, distributors, and copyright owners
that are parties thereto. Copies of such agreements shall be filed with
the Copyright Office within 30 days after execution in accordance
with regulations that the Register of Copyrights shall prescribe.
(ii) Procedure for adoption of fees.
(I) Publication of Notice. Within 10 days after publication in
the Federal Register of a notice of the initiation of voluntary
negotiation proceedings, parties who have reached a voluntary
agreement may request that the royalty fees in that agreement be
applied to all satellite carriers, distributors, and copyright
owners without convening a proceeding under subparagraph (F).
(II) Public Notice of Fees. Upon receiving a request under
subclause (I), the Copyright Royalty Judges shall immediately
provide public notice of the royalty fees from the voluntary
agreement and afford parties an opportunity to state that they
object to those fees.
(III) Adoption of Fees. The Copyright Royalty Judges shall
adopt the royalty fees from the voluntary agreement for all
satellite carriers, distributors, and copyright owners without
convening the proceeding under subparagraph (F) unless a party
with an intent to participate in that proceeding and a significant
interest in the outcome of that proceeding objects under subclause
(II).
(E) Period Agreement is in Effect. The obligation to pay the royalty
fees established under a voluntary agreement which has been filed with
the Copyright Royalty Judges in accordance with this paragraph shall
become effective on the date specified in the agreement, and shall
remain in effect until December 31, 2014, or in accordance with the
terms of the agreement, whichever is later.
(F) Fee set by Copyright Royalty Judges proceeding.
(i) Notice of Initiation of the Proceeding. On or before
September 1, 2010, the Copyright Royalty Judges shall cause notice
to be published in the Federal Register of the initiation of a
proceeding for the purpose of determining the royalty fees to be paid
1043
for the secondary transmission of the primary transmissions of
network stations and non-network stations under subsection (b)(1)
(B) by satellite carriers and distributors—
( I ) in the absence of a voluntary agreement filed in
accordance with subparagraph (D) that establishes royalty fees to
be paid by all satellite carriers and distributors; or
(II) if an objection to the fees from a voluntary agreement
submitted for adoption by the Copyright Royalty Judges to apply
to all satellite carriers, distributors, and copyright owners is
received under subparagraph (D) from a party with an intent to
participate in the proceeding and a significant interest in the
outcome of that proceeding.
Such proceeding shall be conducted under chapter 8 [17
USCS §§ 801 et seq.].
(ii) Establishment of Royalty Fees. In determining royalty fees
under this subparagraph, the Copyright Royalty Judges shall
establish fees for the secondary transmissions of the primary
transmissions of network stations and non-network stations that most
clearly represent the fair market value of secondary transmissions,
except that the Copyright Royalty Judges shall adjust royalty fees to
account for the obligations of the parties under any applicable
voluntary agreement filed with the Copyright Royalty Judges in
accordance with subparagraph (D). In determining the fair market
value, the Judges shall base their decision on economic, competitive,
and programming information presented by the parties, including—
(I) the competitive environment in which such programming is
distributed, the cost of similar signals in similar private and
compulsory license marketplaces, and any special features and
conditions of the retransmission marketplace;
(II) the economic impact of such fees on copyright owners and
satellite carriers; and
(III) the impact on the continued availability of secondary
transmissions to the public.
(iii) Effective Date for Decision of Copyright Royalty Judges.
The obligation to pay the royalty fees established under a
determination that is made by the Copyright Royalty Judges in a
proceeding under this paragraph shall be effective as of January 1,
2010.
(iv) Persons Subject to Royalty Fees. The royalty fees referred
1044
to in clause (iii) shall be binding on all satellite carriers, distributors
and copyright owners, who are not party to a voluntary agreement
filed with the Copyright Office under subparagraph (D).
(2) Annual Royalty Fee Adjustment. Effective January 1 of each year,
the royalty fee payable under subsection (b)(1)(B) for the secondary
transmission of the primary transmissions of network stations and non-
network stations shall be adjusted by the Copyright Royalty Judges to reflect
any changes occurring in the cost of living as determined by the most recent
Consumer Price Index (for all consumers and for all items) published by the
Secretary of Labor before December 1 of the preceding year. Notification of
the adjusted fees shall be published in the Federal Register at least 25 days
before January 1.
(d) Definitions. As used in this section—
(1) Distributor. The term “distributor” means an entity that contracts to
distribute secondary transmissions from a satellite carrier and, either as a
single channel or in a package with other programming, provides the
secondary transmission either directly to individual subscribers or
indirectly through other program distribution entities in accordance with the
(2) Network Station. The term “network station” means—
( A) a television station licensed by the Federal Communications
Commission, including any translator station or terrestrial satellite
station that rebroadcasts all or substantially all of the programming
broadcast by a network station, that is owned or operated by, or
affiliated with, one or more of the television networks in the United
States that offer an interconnected program service on a regular basis for
15 or more hours per week to at least 25 of its affiliated television
licensees in 10 or more States; or
(B) a noncommercial educational broadcast station (as defined in
section 397 of the Communications Act of 1934 [47 USCS § 397]);
except that the term does not include the signal of the Alaska Rural
Communications Service, or any successor entity to that service.
(3) Primary Network Station. The term “primary network station”
means a network station that broadcasts or rebroadcasts the basic
programming service of a particular national network.
(4) Primary Transmission. The term “primary transmission” has the
meaning given that term in section 111(f) of this title [17 USCS § 111(f)].
1045
(5) Private Home Viewing. The term “private home viewing” means
the viewing, for private use in a household by means of satellite reception
equipment that is operated by an individual in that household and that serves
only such household, of a secondary transmission delivered by a satellite
carrier of a primary transmission of a television station licensed by the
Federal Communications Commission.
(6) Satellite Carrier. The term “satellite carrier” means an entity that
uses the facilities of a satellite or satellite service licensed by the Federal
Communications Commission and operates in the Fixed-Satellite Service
under part 25 of title 47, Code of Federal Regulations, or the Direct
Broadcast Satellite Service under part 100 of title 47, Code of Federal
Regulations, to establish and operate a channel of communications for point-
to-multipoint distribution of television station signals, and that owns or
leases a capacity or service on a satellite in order to provide such point-to-
multipoint distribution, except to the extent that such entity provides such
distribution pursuant to tariff under the Communications Act of 1934, other
than for private home viewing pursuant to this section.
(7) Secondary Transmission. The term “secondary transmission” has
the meaning given that term in section 111(f) of this title [ 17 USCS §
111(f)].
(8) Subscriber; subscribe.
(A) Subscriber. The term “subscriber” means a person or entity
that receives a secondary transmission service from a satellite carrier
and pays a fee for the service, directly or indirectly, to the satellite
carrier or to a distributor.
(B) Subscribe. The term “subscribe” means to elect to become a
subscriber.
(9) Non-network Station. The term “non-network station” means a
television station, other than a network station, licensed by the Federal
Communications Commission, that is secondarily transmitted by a satellite
carrier.
(10) Unserved Household. The term “unserved household”, with
respect to a particular television network, means a household that—
(A) cannot receive, through the use of an antenna, an over-the-air
signal containing the primary stream, or, on or after the qualifying date,
the multicast stream, originating in that household’s local market and
affiliated with that network of—
(i) if the signal originates as an analog signal, Grade B intensity
1046
as defined by the Federal Communications Commission in section
73.683(a) of title 47, Code of Federal Regulations, as in effect on
January 1, 1999; or
(ii) if the signal originates as a digital signal, intensity defined in
the values for the digital television noise-limited service contour, as
defined in regulations issued by the Federal Communications
Commission (section 73.622(e) of title 47, Code of Federal
Regulations), as such regulations may be amended from time to time;
(B) is subject to a waiver that meets the standards of subsection (a)
(13) whether or not the waiver was granted before the date of the
enactment of the Satellite Television Extension and Localism Act of
2010 [enacted May 27, 2010];
(C) is a subscriber to whom subsection (e) applies;
(D) is a subscriber to whom subsection (a)(11) applies; or
(E) is a subscriber to whom the exemption under subsection (a)(2)
(B)(iii) applies.
(11) Local Market. The term “local market” has the meaning given
such term under section 122(j) [17 USCS § 122(j)].
(12) Commercial Establishment. The term “commercial
establishment”—
(A) means an establishment used for commercial purposes, such as a
bar, restaurant, private office, fitness club, oil rig, retail store, bank or
other financial institution, supermarket, automobile or boat dealership,
or any other establishment with a common business area; and
(B) does not include a multi-unit permanent or temporary dwelling
where private home viewing occurs, such as a hotel, dormitory,
hospital, apartment, condominium, or prison.
(13) Qualifying Date. The term “qualifying date”, for purposes of
paragraph (10)(A), means—
(A) October 1, 2010, for multicast streams that exist on March 31,
2010; and
(B) January 1, 2011, for all other multicast streams.
(14) Multicast Stream. The term “multicast stream” means a digital
stream containing programming and program-related material affiliated with
a television network, other than the primary stream.
1047
(15) Primary Stream. The term “primary stream” means—
(A) the single digital stream of programming as to which a television
broadcast station has the right to mandatory carriage with a satellite
carrier under the rules of the Federal Communications Commission in
effect on July 1, 2009; or
(B) if there is no stream described in subparagraph (A), then either
—
(i) the single digital stream of programming associated with the
network last transmitted by the station as an analog signal; or
(ii) if there is no stream described in clause (i), then the single
digital stream of programming affiliated with the network that, as of
July 1, 2009, had been offered by the television broadcast station for
the longest period of time.
(e) Moratorium on Copyright Liability. Until December 31, 2014, a
subscriber who does not receive a signal of Grade A intensity (as defined in the
regulations of the Federal Communications Commission under section 73.683(a)
of title 47, Code of Federal Regulations, as in effect on January 1, 1999, or
predicted by the Federal Communications Commission using the Individual
Location Longley-Rice methodology described by the Federal Communications
Commission in Docket No. 98-201) of a local network television broadcast
station shall remain eligible to receive signals of network stations affiliated
with the same network, if that subscriber had satellite service of such network
signal terminated after July 11, 1998, and before October 31, 1999, as required
by this section, or received such service on October 31, 1999.
(f) Expedited consideration by Justice Department of voluntary agreements
to provide satellite secondary transmissions to local markets.
(1) In General. In a case in which no satellite carrier makes available,
to subscribers located in a local market, as defined in section 122(j)(2) [17
USCS § 122(j)(2)], the secondary transmission into that market of a primary
transmission of one or more television broadcast stations licensed by the
Federal Communications Commission, and two or more satellite carriers
request a business review letter in accordance with section 50.6 of title 28,
Code of Federal Regulations (as in effect on July 7, 2004), in order to
assess the legality under the antitrust laws of proposed business conduct to
make or carry out an agreement to provide such secondary transmission into
such local market, the appropriate official of the Department of Justice shall
respond to the request no later than 90 days after the date on which the
request is received.
(2) Definition. For purposes of this subsection, the term “antitrust
1048
laws”—
(A) has the meaning given that term in subsection (a) of the first
section of the Clayton Act (15 U.S.C. 12(a)), except that such term
includes section 5 of the Federal Trade Commission Act ( 15 U.S.C. 45)
to the extent such section 5 applies to unfair methods of competition; and
( B ) includes any State law similar to the laws referred to in
paragraph (1).
1049
(g) Certain waivers granted to providers of local-into-local service to all
DMAs.
(1) Injunction Waiver. A court that issued an injunction pursuant to
subsection (a)(7)(B) before the date of the enactment of this subsection
[enacted May 27, 2010] shall waive such injunction if the court recognizes
the entity against which the injunction was issued as a qualified carrier.
(2) Limited temporary waiver.
(A) In General. Upon a request made by a satellite carrier, a court
that issued an injunction against such carrier under subsection (a)(7)(B)
before the date of the enactment of this subsection [enacted May 27,
2010] shall waive such injunction with respect to the statutory license
provided under subsection (a)(2) to the extent necessary to allow such
carrier to make secondary transmissions of primary transmissions made
by a network station to unserved households located in short markets in
which such carrier was not providing local service pursuant to the
license under section 122 [17 USCS § 122] as of December 31, 2009.
(B) Expiration of Temporary Waiver. A temporary waiver of an
injunction under subparagraph (A) shall expire after the end of the 120-
day period beginning on the date such temporary waiver is issued unless
extended for good cause by the court making the temporary waiver.
(C) Failure to provide local-into-local service to all DMAs.
(i) Failure to Act Reasonably and in Good Faith. If the court
issuing a temporary waiver under subparagraph (A) determines that
the satellite carrier that made the request for such waiver has failed
to act reasonably or has failed to make a good faith effort to provide
local-into-local service to all DMAs, such failure—
(I) is actionable as an act of infringement under section 501
[17 USCS § 501] and the court may in its discretion impose the
remedies provided for in sections 502 through 506 [17 USCS §§
502–506] and subsection (a)(6)(B) of this section; and
(II) shall result in the termination of the waiver issued under
subparagraph (A).
(ii) Failure to Provide Local-into-Local Service. If the court
issuing a temporary waiver under subparagraph (A) determines that
the satellite carrier that made the request for such waiver has failed
to provide local-into-local service to all DMAs, but determines that
the carrier acted reasonably and in good faith, the court may in its
discretion impose financial penalties that reflect—
1050
( I ) the degree of control the carrier had over the
circumstances that resulted in the failure;
(II) the quality of the carrier’s efforts to remedy the failure;
and
(III) the severity and duration of any service interruption.
(D) Single Temporary Waiver Available. An entity may only
receive one temporary waiver under this paragraph.
(E) Short Market Defined. For purposes of this paragraph, the term
“short market” means a local market in which programming of one or
more of the four most widely viewed television networks nationwide as
measured on the date of the enactment of this subsection [enacted May
27, 2010] is not offered on the primary stream transmitted by any local
television broadcast station.
(3) Establishment of qualified carrier recognition.
(A) Statement of Eligibility. An entity seeking to be recognized as a
qualified carrier under this subsection shall file a statement of eligibility
with the court that imposed the injunction. A statement of eligibility must
include—
(i) an affidavit that the entity is providing local-into-local service
to all DMAs;
(ii) a motion for a waiver of the injunction;
(iii) a motion that the court appoint a special master under Rule
53 of the Federal Rules of Civil Procedure;
(iv) an agreement by the carrier to pay all expenses incurred by
the special master under paragraph (4)(B)(ii); and
( v ) a certification issued pursuant to section 342(a) of
Communications Act of 1934 [47 USCS § 342(a)].
(B) Grant of Recognition as a Qualified Carrier. Upon receipt of a
statement of eligibility, the court shall recognize the entity as a qualified
carrier and issue the waiver under paragraph (1). Upon motion pursuant
to subparagraph (A)(iii), the court shall appoint a special master to
conduct the examination and provide a report to the court as provided in
paragraph (4)(B).
(C) Voluntary Termination. At any time, an entity recognized as a
qualified carrier may file a statement of voluntary termination with the
court certifying that it no longer wishes to be recognized as a qualified
1051
carrier. Upon receipt of such statement, the court shall reinstate the
injunction waived under paragraph (1).
(D) Loss of Recognition Prevents Future Recognition. No entity
may be recognized as a qualified carrier if such entity had previously
been recognized as a qualified carrier and subsequently lost such
recognition or voluntarily terminated such recognition under
subparagraph (C).
(4) Qualified carrier obligations and compliance.
(A) Continuing obligations.
(i) In General. An entity recognized as a qualified carrier shall
continue to provide local-into-local service to all DMAs.
(ii) Cooperation with Compliance Examination. An entity
recognized as a qualified carrier shall fully cooperate with the
special master appointed by the court under paragraph (3)(B) in an
examination set forth in subparagraph (B).
(B) Qualified carrier compliance examination.
(i) Examination and Report. A special master appointed by the
court under paragraph (3)(B) shall conduct an examination of, and
file a report on, the qualified carrier’s compliance with the royalty
payment and household eligibility requirements of the license under
this section. The report shall address the qualified carrier’s conduct
during the period beginning on the date on which the qualified
carrier is recognized as such under paragraph (3)(B) and ending on
April 30, 2012.
(ii) Records of Qualified Carrier. Beginning on the date that is
one year after the date on which the qualified carrier is recognized
as such under paragraph (3)(B), but not later than December 1, 2011,
the qualified carrier shall provide the special master with all
records that the special master considers to be directly pertinent to
the following requirements under this section:
( I) Proper calculation and payment of royalties under the
statutory license under this section.
( I I ) Provision of service under this license to eligible
subscribers only.
(iii) Submission of Report. The special master shall file the
report required by clause (i) not later than July 24, 2012, with the
court referred to in paragraph (1) that issued the injunction, and the
1052
court shall transmit a copy of the report to the Register of
Copyrights, the Committees on the Judiciary and on Energy and
Commerce of the House of Representatives, and the Committees on
the Judiciary and on Commerce, Science, and Transportation of the
Senate.
(iv) Evidence of Infringement. The special master shall include
in the report a statement of whether the examination by the special
master indicated that there is substantial evidence that a copyright
holder could bring a successful action under this section against the
qualified carrier for infringement.
(v) Subsequent Examination. If the special master’s report
includes a statement that its examination indicated the existence of
substantial evidence that a copyright holder could bring a successful
action under this section against the qualified carrier for
infringement, the special master shall, not later than 6 months after
the report under clause (i) is filed, initiate another examination of the
qualified carrier’s compliance with the royalty payment and
household eligibility requirements of the license under this section
since the last report was filed under clause (iii). The special master
shall file a report on the results of the examination conducted under
this clause with the court referred to in paragraph (1) that issued the
injunction, and the court shall transmit a copy to the Register of
Copyrights, the Committees on the Judiciary and on Energy and
Commerce of the House of Representatives, and the Committees on
the Judiciary and on Commerce, Science, and Transportation of the
Senate. The report shall include a statement described in clause (iv).
(vi) Compliance. Upon motion filed by an aggrieved copyright
owner, the court recognizing an entity as a qualified carrier shall
terminate such designation upon finding that the entity has failed to
cooperate with an examination required by this subparagraph.
(vii) Oversight. During the period of time that the special master
is conducting an examination under this subparagraph, the
Comptroller General shall monitor the degree to which the entity
seeking to be recognized or recognized as a qualified carrier under
paragraph (3) is complying with the special master’s examination.
The qualified carrier shall make available to the Comptroller
General all records and individuals that the Comptroller General
considers necessary to meet the Comptroller General’s obligations
under this clause. The Comptroller General shall report the results of
the monitoring required by this clause to the Committees on the
Judiciary and on Energy and Commerce of the House of
1053
Representatives and the Committees on the Judiciary and on
Commerce, Science, and Transportation of the Senate at intervals of
not less than six months during such period.
(C) Affirmation. A qualified carrier shall file an affidavit with the
district court and the Register of Copyrights 30 months after such status
was granted stating that, to the best of the affiant’s knowledge, it is in
compliance with the requirements for a qualified carrier. The qualified
carrier shall attach to its affidavit copies of all reports or orders issued
by the court, the special master, and the Comptroller General.
(D) Compliance Determination. Upon the motion of an aggrieved
television broadcast station, the court recognizing an entity as a
qualified carrier may make a determination of whether the entity is
providing local-into-local service to all DMAs.
(E) Pleading Requirement. In any motion brought under
subparagraph (D), the party making such motion shall specify one or
more designated market areas (as such term is defined in section 122(j)
(2)(C) [17 USCS § 122(j)(2)(C)]) for which the failure to provide
service is being alleged, and, for each such designated market area,
shall plead with particularity the circumstances of the alleged failure.
(F) Burden of Proof. In any proceeding to make a determination
under subparagraph (D), and with respect to a designated market area
for which failure to provide service is alleged, the entity recognized as a
qualified carrier shall have the burden of proving that the entity
provided local-into-local service with a good quality satellite signal to
at least 90 percent of the households in such designated market area
(based on the most recent census data released by the United States
Census Bureau) at the time and place alleged.
(5) Failure to provide service.
(A) Penalties. If the court recognizing an entity as a qualified
carrier finds that such entity has willfully failed to provide local-into-
local service to all DMAs, such finding shall result in the loss of
recognition of the entity as a qualified carrier and the termination of the
waiver provided under paragraph (1), and the court may, in its
discretion—
(i) treat such failure as an act of infringement under section 501
[17 USCS § 501], and subject such infringement to the remedies
provided for in sections 502 through 506 [17 USCS §§ 502–506] and
subsection (a)(6)(B) of this section; and
(ii) impose a fine of not less than $250,000 and not more than
1054
$5,000,000.
(B) Exception for Nonwillful Violation. If the court determines that
the failure to provide local-into-local service to all DMAs is
nonwillful, the court may in its discretion impose financial penalties for
noncompliance that reflect—
(i) the degree of control the entity had over the circumstances that
resulted in the failure;
(ii) the quality of the entity’s efforts to remedy the failure and
restore service; and
(iii) the severity and duration of any service interruption.
(6) Penalties for Violations of License. A court that finds, under
subsection (a)(6)(A), that an entity recognized as a qualified carrier has
willfully made a secondary transmission of a primary transmission made by
a network station and embodying a performance or display of a work to a
subscriber who is not eligible to receive the transmission under this section
shall reinstate the injunction waived under paragraph (1), and the court may
order statutory damages of not more than $2,500,000.
(7) Local-into-Local Service to all DMAs Defined. For purposes of
this subsection:
(A) In General. An entity provides “local-into-local service to all
DMAs” if the entity provides local service in all designated market
areas (as such term is defined in section 122(j)(2)(C) [17 USCS §
122(j)(2)(C)]) pursuant to the license under section 122 [17 USCS §
122].
(B) Household Coverage. For purposes of subparagraph (A), an
entity that makes available local-into-local service with a good quality
satellite signal to at least 90 percent of the households in a designated
market area based on the most recent census data released by the United
States Census Bureau shall be considered to be providing local service
to such designated market area.
(C) Good Quality Satellite Signal Defined. The term “good quality
satellite signal” has the meaning given such term under section 342(e)(2)
of [the] Communications Act of 1934 [47 USCS § 342(e)(2)].
Leg. H. Nov. 16, 1988, P.L. 100-667, Title II, § 202(2), 102 Stat. 3949; Dec. 17, 1993,
P.L. 103-198, § 5, 107 Stat. 2310; Oct. 18, 1994, P.L. 103-369, § 2, 108 Stat. 3477; Nov. 1,
1995, P.L. 104-39, § 5(c), 109 Stat. 348; Nov. 13, 1997, P.L. 105-80, §§ 1, 12(a)(8), 111
Stat. 1529, 1535; Aug. 5, 1999, P.L. 106-44, § 1(g)(4), 113 Stat. 222; Nov. 29, 1999, P.L.
106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Nov. 2, 2002, P.L. 107-273, Div C, Title III,
Subtitle B, §§ 13209, 13210(1), (8), 116 Stat. 1908, 1909; Nov. 30, 2004, P.L. 108-419, §
1055
5(g), (h), 118 Stat. 2367; Dec. 8, 2004, P.L. 108-447, Div J, Title IX, Title I, §§ 101(b), 102-
105, 107(a), 108, 111(a), 118 Stat. 3394, 3407, 3408; Oct. 6, 2006, P.L. 109-303, § 4(e),
120 Stat. 1482; Oct. 13, 2008, P.L. 110-403, Title II, § 209(a)(4), 122 Stat. 4264; Dec. 19,
2009, P.L. 111-118, Div B, § 1003(a)(1), 123 Stat. 3469; March 2, 2010, P.L. 111-144, §
10(a)(1), 124 Stat. 47; March 26, 2010, P.L. 111-151, § 2(a)(1), 124 Stat. 1027; April 15,
2010, P.L. 111-157, § 9(a)(1), 124 Stat. 1119; May 27, 2010, P.L. 111-175, Title I, §§
102(a)(1), (b)-(k), 105, 124 Stat. 1219, 1239; Dec. 9, 2010, P.L. 111-295, § 6(c), 124 Stat.
3181.
Termination of section, effective December 31, 2014. Act May 27, 2010, P.L. 111-
175, Title I, § 107(a), 124 Stat. 1245, provides that this section ceases to be effective on
December 31, 2014.
2010 Notes: Repeal of termination provision. Act Dec. 19, 2009, P.L. 111-118 , Div
B, § 1003(a)(2)(A), 123 Stat. 3469; March 2, 2010, P.L. 111-144 , § 10(a)(2), 124 Stat. 47;
March 26, 2010, P.L. 111-151 , § 2(a)(2), 124 Stat. 1027; April 15, 2010, P.L. 111-157 , §
9(a)(2), 124 Stat. 1119 , which formerly appeared as a note to this section, was repealed by
Act May 27, 2010, P.L. 111-175 , Title I, § 107(b), 124 Stat. 1245, effective 2/27/2010, as
provided by § 307(a) of such Act, which appears as 17 USCS § 111 note. Such note provided
for termination of this section on May 31, 2010.
Termination of section, effective Dec. 31, 2014. Act May 27, 2010, P.L. 111-175 ,
Title I, § 107(a), 124 Stat. 1245 (effective 2/27/2010, as provided by § 307(a) of such Act,
which appears as 17 USCS § 111 note), provides: “Section 119 of title 17, United States
Code, as amended by this Act, shall cease to be effective on December 31, 2014.”
§ 120. Scope of Exclusive Rights in Architectural

Works.
(a) Pictorial Representations Permitted. The copyright in an architectural
work that has been constructed does not include the right to prevent the making,
distributing, or public display of pictures, paintings, photographs, or other
pictorial representations of the work, if the building in which the work is
embodied is located in or ordinarily visible from a public place.
(b) Alterations to and Destruction of Buildings. Notwithstanding the
provisions of section 106(2), the owners of a building embodying an
architectural work may, without the consent of the author or copyright owner of
the architectural work, make or authorize the making of alterations to such
building, and destroy or authorize the destruction of such building.
Leg.H. December 1, 1990, P.L. 101-650 § 704(a), 104 Stat. 5133.
§ 121. Limitations on Exclusive Rights: Reproduction

for Blind or Other People With Disabilities.
1056
(a) Notwithstanding the provisions of section 106, it is not an infringement
of copyright for an authorized entity to reproduce or to distribute copies or
phonorecords of a previously published, nondramatic literary work if such
copies or phonorecords are reproduced or distributed in specialized formats
exclusively for use by blind or other persons with disabilities.
(b)
(1) Copies or phonorecords to which this section applies shall—
( A ) not be reproduced or distributed in a format other than a
specialized format exclusively for use by blind or other persons with
disabilities;
(B) bear a notice that any further reproduction or distribution in a
format other than a specialized format is an infringement; and
(C) include a copyright notice identifying the copyright owner and
the date of the original publication.
(2) The provisions of this subsection shall not apply to standardized,
secure, or norm-referenced tests and related testing material, or to computer
programs, except the portions thereof that are in conventional human
language (including descriptions of pictorial works) and displayed to users
in the ordinary course of using the computer programs.
(c) Notwithstanding the provisions of section 106, it is not an infringement
of copyright for a publisher of print instructional materials for use in elementary
or secondary schools to create and distribute to the National Instructional
Materials Access Center copies of the electronic files described in sections
612(a)(23)(C), 613(a)(6), and section 674(e) of the Individuals with
Disabilities Education Act that contain the contents of print instructional
materials using the National Instructional Material Accessibility Standard (as
defined in section 674(e)(3) of that Act), if—
(1) the inclusion of the contents of such print instructional materials is
required by any State educational agency or local educational agency;
( 2 ) the publisher had the right to publish such print instructional
materials in print formats; and
(3) such copies are used solely for reproduction or distribution of the
contents of such print instructional materials in specialized formats.
(d) For purposes of this section, the term—
(1) “authorized entity” means a nonprofit organization or a governmental
agency that has a primary mission to provide specialized services relating to
1057
training, education, or adaptive reading or information access needs of blind
or other persons with disabilities;
(2) “blind or other persons with disabilities” means individuals who are
eligible or who may qualify in accordance with the Act entitled “An Act to
provide books for the adult blind”, approved March 3, 1931 (2 U.S.C. 135a;
46 Stat. 1487) to receive books and other publications produced in
specialized formats;
(3) “print instructional materials” has the meaning given under section
674(e)(3)(C) of the Individuals with Disabilities Education Act; and
(4) “specialized formats” means—
(A) braille, audio, or digital text which is exclusively for use by
blind or other persons with disabilities; and
(B) with respect to print instructional materials, includes large print
formats when such materials are distributed exclusively for use by blind
or other persons with disabilities.
Leg.H. September 16, 1996, P.L. 104-197 § 316(a), 110 Stat. 2416; October 27, 2000,
P.L. 106-379 § 3(b), 114 Stat. 1445; November 2, 2002, P.L. 107-273 § 13210(3)(A), 116
Stat. 1909; December 3, 2004, P.L. 108-446, Title III, § 306, 118 Stat. 2807.

Transmissions of Local Television Programming by
Satellite.
(a) Secondary transmissions into local markets.
(1) Secondary transmissions of television broadcast stations within a
local market. A secondary transmission of a performance or display of a
work embodied in a primary transmission of a television broadcast station
into the station’s local market shall be subject to statutory licensing under
this section if—
(A) the secondary transmission is made by a satellite carrier to the
public;
(B) with regard to secondary transmissions, the satellite carrier is in
compliance with the rules, regulations, or authorizations of the Federal
Communications Commission governing the carriage of television
broadcast station signals; and
(C) the satellite carrier makes a direct or indirect charge for the
secondary transmission to—
1058
(i) each subscriber receiving the secondary transmission; or
(ii) a distributor that has contracted with the satellite carrier for
direct or indirect delivery of the secondary transmission to the
public.
(2) Significantly viewed stations.
(A) In General. A secondary transmission of a performance or
display of a work embodied in a primary transmission of a television
broadcast station to subscribers who receive secondary transmissions of
primary transmissions under paragraph (1) shall be subject to statutory
licensing under this paragraph if the secondary transmission is of the
primary transmission of a network station or a non-network station to a
subscriber who resides outside the station’s local market but within a
community in which the signal has been determined by the Federal
Communications Commission to be significantly viewed in such
community, pursuant to the rules, regulations, and authorizations of the
Federal Communications Commission in effect on April 15, 1976,
applicable to determining with respect to a cable system whether signals
are significantly viewed in a community.
(B) Waiver. A subscriber who is denied the secondary
transmission of the primary transmission of a network station or a non-
network station under subparagraph (A) may request a waiver from such
denial by submitting a request, through the subscriber’s satellite carrier,
to the network station or non-network station in the local market
affiliated with the same network or non-network where the subscriber is
located. The network station or non-network station shall accept or
reject the subscriber’s request for a waiver within 30 days after receipt
of the request. If the network station or non-network station fails to
accept or reject the subscriber’s request for a waiver within that 30-day
period, that network station or non-network station shall be deemed to
agree to the waiver request.
(3) Secondary transmission of low power programming.
(A) In General. Subject to subparagraphs (B) and (C), a secondary
transmission of a performance or display of a work embodied in a
primary transmission of a television broadcast station to subscribers
who receive secondary transmissions of primary transmissions under
paragraph (1) shall be subject to statutory licensing under this paragraph
if the secondary transmission is of the primary transmission of a
television broadcast station that is licensed as a low power television
station, to a subscriber who resides within the same designated market
area as the station that originates the transmission.
1059
(B) No Applicability to Repeaters and Translators. Secondary
transmissions provided for in subparagraph (A) shall not apply to any
low power television station that retransmits the programs and signals of
another television station for more than 2 hours each day.
(C) No Impact on Other Secondary Transmissions Obligations. A
satellite carrier that makes secondary transmissions of a primary
transmission of a low power television station under a statutory license
provided under this section is not required, by reason of such secondary
transmissions, to make any other secondary transmissions.
(4) Special Exceptions. A secondary transmission of a performance or
display of a work embodied in a primary transmission of a television
broadcast station to subscribers who receive secondary transmissions of
primary transmissions under paragraph (1) shall, if the secondary
transmission is made by a satellite carrier that complies with the
requirements of paragraph (1), be subject to statutory licensing under this
paragraph as follows:
(A) States with Single Full-Power Network Station. In a State in
which there is licensed by the Federal Communications Commission a
single full-power station that was a network station on January 1, 1995,
the statutory license provided for in this paragraph shall apply to the
secondary transmission by a satellite carrier of the primary transmission
of that station to any subscriber in a community that is located within that
State and that is not within the first 50 television markets as listed in the
regulations of the Commission as in effect on such date (47 C.F.R.
76.51).
(B) States with all Network Stations and Non-Network Stations in
Same Local Market. In a State in which all network stations and non-
network stations licensed by the Federal Communications Commission
within that State as of January 1, 1995, are assigned to the same local
market and that local market does not encompass all counties of that
State, the statutory license provided under this paragraph shall apply to
the secondary transmission by a satellite carrier of the primary
transmissions of such station to all subscribers in the State who reside in
a local market that is within the first 50 major television markets as
listed in the regulations of the Commission as in effect on such date
(section 76.51 of title 47, Code of Federal Regulations).
(C) Additional Stations. In the case of that State in which are
located 4 counties that—
( i ) on January 1, 2004, were in local markets principally
comprised of counties in another State, and
1060
( i i ) had a combined total of 41,340 television households,
according to the U.S. Television Household Estimates by Nielsen
Media Research for 2004, the statutory license provided under this
paragraph shall apply to secondary transmissions by a satellite
carrier to subscribers in any such county of the primary
transmissions of any network station located in that State, if the
satellite carrier was making such secondary transmissions to any
subscribers in that county on January 1, 2004.
(D) Certain Additional Stations. If 2 adjacent counties in a single
State are in a local market comprised principally of counties located in
another State, the statutory license provided for in this paragraph shall
apply to the secondary transmission by a satellite carrier to subscribers
in those 2 counties of the primary transmissions of any network station
located in the capital of the State in which such 2 counties are located, if
—
(i) the 2 counties are located in a local market that is in the top
100 markets for the year 2003 according to Nielsen Media Research;
and
(ii) the total number of television households in the 2 counties
combined did not exceed 10,000 for the year 2003 according to
Nielsen Media Research.
(E) Networks of Noncommercial Educational Broadcast Stations.
In the case of a system of three or more noncommercial educational
broadcast stations licensed to a single State, public agency, or political,
educational, or special purpose subdivision of a State, the statutory
license provided for in this paragraph shall apply to the secondary
transmission of the primary transmission of such system to any
subscriber in any county or county equivalent within such State, if such
subscriber is located in a designated market area that is not otherwise
eligible to receive the secondary transmission of the primary
transmission of a noncommercial educational broadcast station located
within the State pursuant to paragraph (1).
(5) Applicability of Royalty Rates and Procedures. The royalty rates
and procedures under section 119(b) [17 USCS § 119(b)] shall apply to the
secondary transmissions to which the statutory license under paragraph (4)
applies.
(b) Reporting requirements.
(1) Initial Lists. A satellite carrier that makes secondary transmissions
of a primary transmission made by a network station under subsection (a)
1061
shall, within 90 days after commencing such secondary transmissions,
submit to the network that owns or is affiliated with the network station—
( A ) a list identifying (by name in alphabetical order and street
address, including county and 9-digit zip code) all subscribers to which
the satellite carrier makes secondary transmissions of that primary
transmission under subsection (a); and
(B) a separate list, aggregated by designated market area (by name
and address, including street or rural route number, city, State, and 9-
digit zip code), which shall indicate those subscribers being served
pursuant to paragraph (2) of subsection (a).
(2) Subsequent Lists. After the list is submitted under paragraph (1),
the satellite carrier shall, on the 15th of each month, submit to the network—
( A ) a list identifying (by name in alphabetical order and street
address, including county and 9-digit zip code) any subscribers who
have been added or dropped as subscribers since the last submission
under this subsection; and
(B) a separate list, aggregated by designated market area (by name
and street address, including street or rural route number, city, State, and
9-digit zip code), identifying those subscribers whose service pursuant
to paragraph (2) of subsection (a) has been added or dropped since the
last submission under this subsection.
(3) Use of Subscriber Information. Subscriber information submitted
by a satellite carrier under this subsection may be used only for the purposes
of monitoring compliance by the satellite carrier with this section.
(4) Requirements of Networks. The submission requirements of this
subsection shall apply to a satellite carrier only if the network to which the
submissions are to be made places on file with the Register of Copyrights a
document identifying the name and address of the person to whom such
submissions are to be made. The Register of Copyrights shall maintain for
public inspection a file of all such documents.
(c) No Royalty Fee Required for Certain Secondary Transmissions. A
satellite carrier whose secondary transmissions are subject to statutory licensing
under paragraphs (1), (2), and (3) of subsection (a) shall have no royalty
obligation for such secondary transmissions.
(d) Noncompliance with Reporting and Regulatory Requirements.
Notwithstanding subsection (a), the willful or repeated secondary transmission
to the public by a satellite carrier into the local market of a television broadcast
station of a primary transmission embodying a performance or display of a work
1062
made by that television broadcast station is actionable as an act of infringement
under section 501 [17 USCS § 501], and is fully subject to the remedies
provided under sections 502 through 506 [17 USCS §§ 502–506], if the satellite
carrier has not complied with the reporting requirements of subsection (b) or
with the rules, regulations, and authorizations of the Federal Communications
Commission concerning the carriage of television broadcast signals.
(e) Willful Alterations. Notwithstanding subsection (a), the secondary
transmission to the public by a satellite carrier into the local market of a
television broadcast station of a performance or display of a work embodied in
a primary transmission made by that television broadcast station is actionable as
an act of infringement under section 501 [17 USCS § 501], and is fully subject
to the remedies provided by sections 502 through 506 [17 USCS §§ 502–506]
and section 510 [17 USCS § 510], if the content of the particular program in
which the performance or display is embodied, or any commercial advertising
or station announcement transmitted by the primary transmitter during, or
immediately before or after, the transmission of such program, is in any way
willfully altered by the satellite carrier through changes, deletions, or additions,
or is combined with programming from any other broadcast signal.
( f) Violation of territorial restrictions on statutory license for television
broadcast stations.
(1) Individual Violations. The willful or repeated secondary
transmission to the public by a satellite carrier of a primary transmission
embodying a performance or display of a work made by a television
broadcast station to a subscriber who does not reside in that station’s local
market, and is not subject to statutory licensing under section 119 [17 USCS
§ 119], subject to statutory licensing by reason of paragraph (2)(A), (3), or
(4) of subsection (a), or subject to a private licensing agreement, is
actionable as an act of infringement under section 501 [17 USCS § 501] and
is fully subject to the remedies provided by sections 502 through 506 [17
USCS §§ 502–506], except that—
(A) no damages shall be awarded for such act of infringement if the
satellite carrier took corrective action by promptly withdrawing service
from the ineligible subscriber; and
(B) any statutory damages shall not exceed $250 for such subscriber
for each month during which the violation occurred.
(2) Pattern of Violations. If a satellite carrier engages in a willful or
repeated pattern or practice of secondarily transmitting to the public a
primary transmission embodying a performance or display of a work made
by a television broadcast station to subscribers who do not reside in that
station’s local market, and are not subject to statutory licensing under
1063
section 119 [17 USCS § 119], subject to statutory licensing by reason of
paragraph (2)(A), (3), or (4) of subsection (a), or subject to a private
licensing agreement, then in addition to the remedies under paragraph (1)—
(A) if the pattern or practice has been carried out on a substantially
nationwide basis, the court—
( i ) shall order a permanent injunction barring the secondary
transmission by the satellite carrier of the primary transmissions of
that television broadcast station (and if such television broadcast
station is a network station, all other television broadcast stations
affiliated with such network); and
(ii) may order statutory damages not exceeding $2,500,000 for
carried out; and
( B) if the pattern or practice has been carried out on a local or
regional basis with respect to more than one television broadcast
station, the court—
( i ) shall order a permanent injunction barring the secondary
transmission in that locality or region by the satellite carrier of the
primary transmissions of any television broadcast station; and
(ii) may order statutory damages not exceeding $2,500,000 for
carried out.
(g) Burden of Proof. In any action brought under subsection (f), the satellite
carrier shall have the burden of proving that its secondary transmission of a
primary transmission by a television broadcast station is made only to
subscribers located within that station’s local market or subscribers being
served in compliance with section 119 [17 USCS § 119], paragraph (2)(A), (3),
or (4) of subsection (a), or a private licensing agreement.
(h) Geographic Limitations on Secondary Transmissions. The statutory
license created by this section shall apply to secondary transmissions to
locations in the United States.
(i) Exclusivity with respect to secondary transmissions of broadcast stations
by satellite to members of the public. No provision of section 111 [ 17 USCS §
111] or any other law (other than this section and section 119 [17 USCS § 119])
shall be construed to contain any authorization, exemption, or license through
which secondary transmissions by satellite carriers of programming contained
in a primary transmission made by a television broadcast station may be made
without obtaining the consent of the copyright owner.
1064
(j) Definitions. In this section—
(1) Distributor. The term “distributor” means an entity that contracts to
distribute secondary transmissions from a satellite carrier and, either as a
single channel or in a package with other programming, provides the
secondary transmission either directly to individual subscribers or
indirectly through other program distribution entities.
(2) Local market.
(A) In General. The term “local market”, in the case of both
commercial and noncommercial television broadcast stations, means the
designated market area in which a station is located, and—
(i) in the case of a commercial television broadcast station, all
commercial television broadcast stations licensed to a community
within the same designated market area are within the same local
market; and
( i i ) in the case of a noncommercial educational television
broadcast station, the market includes any station that is licensed to a
community within the same designated market area as the
noncommercial educational television broadcast station.
(B) County of License. In addition to the area described in
subparagraph (A), a station’s local market includes the county in which
the station’s community of license is located.
(C) Designated Market Area. For purposes of subparagraph (A),
the term “designated market area” means a designated market area, as
determined by Nielsen Media Research and published in the 1999–2000
Nielsen Station Index Directory and Nielsen Station Index United States
Television Household Estimates or any successor publication.
(D) Certain Areas Outside of any Designated Market Area. Any
census area, borough, or other area in the State of Alaska that is outside
of a designated market area, as determined by Nielsen Media Research,
shall be deemed to be part of one of the local markets in the State of
Alaska. A satellite carrier may determine which local market in the
State of Alaska will be deemed to be the relevant local market in
connection with each subscriber in such census area, borough, or other
area.
(3) Low Power Television Station. The term ‘low power television
station’ means a low power TV station as defined in section 74.701(f) of
title 47, Code of Federal Regulations, as in effect on June 1, 2004. For
purposes of this paragraph, the term ‘low power television station’ includes
1065
a low power television station that has been accorded primary status as a
Class A television licensee under section 73.6001(a) of title 47, Code of
Federal Regulations.
( 4) Network station; non-network station; satellite carrier; secondary
transmission. The terms “network station”, “non-network station”, “satellite
carrier”, and “secondary transmission” have the meanings given such terms
under section 119(d) [17 USCS § 119(d)].
(5) Noncommercial Educational Broadcast Station. The term
“noncommercial educational broadcast station” means a television
broadcast station that is a noncommercial educational broadcast station as
defined in section 397 of the Communications Act of 1934 [47 USCS §
397], as in effect on the date of the enactment of the Satellite Television
Extension and Localism Act of 2010 [enacted May 27, 2010].
(6) Subscriber. The term “subscriber” means a person or entity that
receives a secondary transmission service from a satellite carrier and pays
a fee for the service, directly or indirectly, to the satellite carrier or to a
distributor.
(7) Television Broadcast Station. The term “television broadcast
station”—
(A) means an over-the-air, commercial or noncommercial television
broadcast station licensed by the Federal Communications Commission
under subpart E of part 73 of title 47, Code of Federal Regulations,
except that such term does not include a low-power or translator
television station; and
( B ) includes a television broadcast station licensed by an
appropriate governmental authority of Canada or Mexico if the station
broadcasts primarily in the English language and is a network station as
defined in section 119(d)(2)(A) [17 USCS § 119(d)(2)(A)].
Leg. H. Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Nov. 2,
2002, P.L. 107-273, Div C, Title III, Subtitle B, § 13210(2)(A), 116 Stat. 1909; Dec. 8,
2004, P.L. 108-447, Div J, Title IX, Title I, § 111(b), 118 Stat. 3409; Oct. 13, 2008, P.L.
110-403, Title II, § 209(a)(5), 122 Stat. 4264; May 27, 2010, P.L. 111-175, Title I, § 103(a)
(1), (b)-(f), 124 Stat. 1227.
CHAPTER 2
COPYRIGHT OWNERSHIP AND
1066
TRANSFER
(a) Initial Ownership. Copyright in a work protected under this title vests
initially in the author or authors of the work. The authors of a joint work are co-
owners of copyright in the work.
(b) Works Made for Hire. In the case of a work made for hire, the
employer or other person for whom the work was prepared is considered the
author for purposes of this title, and, unless the parties have expressly agreed
otherwise in a written instrument signed by them, owns all of the rights
comprised in the copyright.
(c) Contributions to Collective Works. Copyright in each separate
contribution to a collective work is distinct from copyright in the collective
work as a whole, and vests initially in the author of the contribution. In the
absence of an express transfer of the copyright or of any rights under it, the
owner of copyright in the collective work is presumed to have acquired only the
privilege of reproducing and distributing the contribution as part of that
particular collective work, any revision of that collective work, and any later
collective work in the same series.
(d) Transfer of Ownership.
(1) The ownership of a copyright may be transferred in whole or in part
by any means of conveyance or by operation of law, and may be bequeathed
by will or pass as personal property by the applicable laws of intestate
succession.
(2) Any of the exclusive rights comprised in a copyright, including any
subdivision of any of the rights specified by section 106, may be transferred
as provided by clause (1) and owned separately. The owner of any
particular exclusive right is entitled, to the extent of that right, to all of the
protection and remedies accorded to the copyright owner by this title.
(e) Involuntary Transfer. When an individual author’s ownership of a
copyright, or of any of the exclusive rights under a copyright, has not previously
been transferred voluntarily by that individual author, no action by any
governmental body or other official or organization purporting to seize,
expropriate, transfer, or exercise rights of ownership with respect to the
copyright, or any of the exclusive rights under a copyright, shall be given effect
under this title, except as provided under title 11.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat. 2568; November 6, 1978, P.L.
95-598 § 313, 92 Stat. 2676.
1067
§ 202. Ownership of copyright as distinct from
ownership of material object.
Ownership of a copyright, or of any of the exclusive rights under a
copyright, is distinct from ownership of any material object in which the work is
embodied. Transfer of ownership of any material object, including the copy or
phonorecord in which the work is first fixed, does not of itself convey any rights
in the copyrighted work embodied in the object; nor, in the absence of an
agreement, does transfer of ownership of a copyright or of any exclusive rights
under a copyright convey property rights in any material object.
Leg.H.(Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2568.)
§ 203. Termination of Transfers and Licenses Granted

by the Author.
(a) Conditions for Termination. In the case of any work other than a work
made for hire, the exclusive or nonexclusive grant of a transfer or license of
copyright or of any right under a copyright, executed by the author on or after
January 1, 1978, otherwise than by will, is subject to termination under the
following conditions:
(1) In the case of a grant executed by one author, termination of the grant
may be effected by that author or, if the author is dead, by the person or
persons who, under clause (2) of this subsection, own and are entitled to
exercise a total of more than one-half of that author’s termination interest. In
the case of a grant executed by two or more authors of a joint work,
termination of the grant may be effected by a majority of the authors who
executed it; if any of such authors is dead, the termination interest of any
such author may be exercised as a unit by the person or persons who, under
clause (2) of this subsection, own and are entitled to exercise a total of more
than one-half of that author’s interest.
(2) Where an author is dead, his or her termination interest is owned,
and may be exercised, as follows:
(A) The widow or widower owns the author’s entire termination
interest unless there are any surviving children or grandchildren of the
author, in which case the widow or widower owns one-half of the
author’s interest.
(B) The author’s surviving children, and the surviving children of
any dead child of the author, own the author’s entire termination interest
unless there is a widow or widower, in which case the ownership of
one-half of the author’s interest is divided among them.
1068
(C) The rights of the author’s children and grandchildren are in all
cases divided among them and exercised on a per stirpes basis
according to the number of such author’s children represented; the share
of the children of a dead child in a termination interest can be exercised
only by the action of a majority of them.
(D) In the event that the author’s widow or widower, children, and
grandchildren are not living, the author’s executor, administrator,
personal representative, or trustee shall own the author’s entire
termination interest.
(3) Termination of the grant may be effected at any time during a period
of five years beginning at the end of thirty-five years from the date of
execution of the grant; or, if the grant covers the right of publication of the
work, the period begins at the end of thirty-five years from the date of
publication of the work under the grant or at the end of forty years from the
date of execution of the grant, whichever term ends earlier.
(4) The termination shall be effected by serving an advance notice in
writing, signed by the number and proportion of owners of termination
interests required under clauses (1) and (2) of this subsection, or by their
duly authorized agents, upon the grantee or the grantee’s successor in title.
(A) The notice shall state the effective date of the termination, which
shall fall within the five-year period specified by clause (3) of this
subsection, and the notice shall be served not less than two or more than
ten years before that date. A copy of the notice shall be recorded in the
Copyright Office before the effective date of termination, as a condition
to its taking effect.
(B) The notice shall comply, in form, content, and manner of service,
with requirements that the Register of Copyrights shall prescribe by
regulation.
( 5 ) Termination of the grant may be effected notwithstanding any
agreement to the contrary, including an agreement to make a will or to make
any future grant.
(b) Effect of Termination. Upon the effective date of termination, all rights
under this title that were covered by the terminated grants revert to the author,
authors, and other persons owning termination interests under clauses (1) and
(2) of subsection (a), including those owners who did not join in signing the
notice of termination under clause (4) of subsection (a), but with the following
limitations:
(1) A derivative work prepared under authority of the grant before its
1069
termination may continue to be utilized under the terms of the grant after its
termination, but this privilege does not extend to the preparation after the
termination of other derivative works based upon the copyrighted work
covered by the terminated grant.
( 2 ) The future rights that will revert upon termination of the grant
become vested on the date the notice of termination has been served as
provided by clause (4) of subsection (a). The rights vest in the author,
authors, and other persons named in, and in the proportionate shares
provided by, clauses (1) and (2) of subsection (a).
(3) Subject to the provisions of clause (4) of this subsection, a further
grant, or agreement to make a further grant, of any right covered by a
terminated grant is valid only if it is signed by the same number and
proportion of the owners, in whom the right has vested under clause (2) of
this subsection, as are required to terminate the grant under clauses (1) and
(2) of subsection (a). Such further grant or agreement is effective with
respect to all of the persons in whom the right it covers has vested under
clause (2) of this subsection, including those who did not join in signing it.
If any person dies after rights under a terminated grant have vested in him or
her, that person’s legal representatives, legatees, or heirs at law represent
him or her for purposes of this clause.
(4) A further grant, or agreement to make a further grant, of any right
covered by a terminated grant is valid only if it is made after the effective
date of the termination. As an exception, however, an agreement for such a
further grant may be made between the persons provided by clause (3) of
this subsection and the original grantee or such grantee’s successor in title,
after the notice of termination has been served as provided by clause (4) of
subsection (a).
(5) Termination of a grant under this section affects only those rights
covered by the grants that arise under this title, and in no way affects rights
arising under any other Federal, State, or foreign laws.
(6) Unless and until termination is effected under this section, the grant,
if it does not provide otherwise, continues in effect for the term of copyright
provided by this title.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat. 2569; October 27, 1998, P.L.
105-298 § 103, 112 Stat. 2829; November 2, 2002, P.L. 107-273 § 13210(9), 116 Stat.
1909.

(a) A transfer of copyright ownership, other than by operation of law, is not
1070
valid unless an instrument of conveyance, or a note or memorandum of the
transfer, is in writing and signed by the owner of the rights conveyed or such
owner’s duly authorized agent.
(b) A certificate of acknowledgement is not required for the validity of a
transfer, but is prima facie evidence of the execution of the transfer if—
(1) in the case of a transfer executed in the United States, the certificate
is issued by a person authorized to administer oaths within the United States;
or
(2) in the case of a transfer executed in a foreign country, the certificate
is issued by a diplomatic or consular officer of the United States, or by a
person authorized to administer oaths whose authority is proved by a
certificate of such an officer.

(a) Conditions for Recordation. Any transfer of copyright ownership or
other document pertaining to a copyright may be recorded in the Copyright
Office if the document filed for recordation bears the actual signature of the
person who executed it, or if it is accompanied by a sworn or official
certification that it is a true copy of the original, signed document. A sworn or
official certification may be submitted to the Copyright Office electronically,
pursuant to regulations established by the Register of Copyrights.
(b) Certificate of Recordation. The Register of Copyrights shall, upon
receipt of a document as provided by subsection (a) and of the fee provided by
section 708 [17 USCS § 708], record the document and return it with a
certificate of recordation.
(c) Recordation as Constructive Notice. Recordation of a document in the
Copyright Office gives all persons constructive notice of the facts stated in the
recorded document, but only if—
(1) the document, or material attached to it, specifically identifies the
work to which it pertains so that, after the document is indexed by the
Register of Copyrights, it would be revealed by a reasonable search under
the title or registration number of the work; and
(2) registration has been made for the work.
(d) Priority between Conflicting Transfers. As between two conflicting
transfers, the one executed first prevails if it is recorded, in the manner required
to give constructive notice under subsection (c), within one month after its
1071
execution in the United States or within two months after its execution outside
the United States, or at any time before recordation in such manner of the later
transfer. Otherwise the later transfer prevails if recorded first in such manner,
and if taken in good faith, for valuable consideration or on the basis of a binding
promise to pay royalties, and without notice of the earlier transfer.
(e) Priority between Conflicting Transfer of Ownership and Nonexclusive
License. A nonexclusive license, whether recorded or not, prevails over a
conflicting transfer of copyright ownership if the license is evidenced by a
written instrument signed by the owner of the rights licensed or such owner’s
duly authorized agent, and if—
(1) the license was taken before execution of the transfer; or
(2) the license was taken in good faith before recordation of the transfer
and without notice of it.
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2571; Oct. 31, 1988, P.L.
100-568, § 5, 102 Stat. 2857; Dec. 9, 2010, P.L. 111-295, § 3(b), 124 Stat. 3180.
CHAPTER 3
DURATION OF COPYRIGHT
( a ) On and after January 1, 1978, all legal or equitable rights that are
equivalent to any of the exclusive rights within the general scope of copyright as
specified by section 106 in works of authorship that are fixed in a tangible
medium of expression and come within the subject matter of copyright as
specified by sections 102 and 103, whether created before or after that date and
whether published or unpublished, are governed exclusively by this title.
Thereafter, no person is entitled to any such right or equivalent right in any such
work under the common law or statutes of any State.
(b) Nothing in this title annuls or limits any rights or remedies under the
common law or statutes of any State with respect to—
( 1 ) subject matter that does not come within the subject matter of
copyright as specified by sections 102 and 103, including works of
authorship not fixed in any tangible medium of expression; or
(2) any cause of action arising from undertakings commenced before
January 1, 1978;
1072
(3) activities violating legal or equitable rights that are not equivalent to
any of the exclusive rights within the general scope of copyright as specified
by section 106; or
(4) State and local landmarks, historic preservation, zoning, or building
codes, relating to architectural works protected under section 102(a)(8).
(c) With respect to sound recordings fixed before February 15, 1972, any
rights or remedies under the common law or statutes of any State shall not be
annulled or limited by this title until February 15, 2067. The preemptive
provisions of subsection (a) shall apply to any such rights and remedies
pertaining to any cause of action arising from undertakings commenced on and
after February 15, 2067. Notwithstanding the provisions of section 303, no
sound recording fixed before February 15, 1972, shall be subject to copyright
under this title before, on, or after February 15, 2067.
(d) Nothing in this title annuls or limits any rights or remedies under any
other Federal statute.
(e) The scope of Federal preemption under this section is not affected by the
adherence of the United States to the Berne Convention or the satisfaction of
obligations of the United States thereunder.
(f)
(1) On or after the effective date set forth in section 610(a) of the Visual
Artists Rights Act of 1990, all legal or equitable rights that are equivalent to
any of the rights conferred by section 106A with respect to works of visual
art to which the rights conferred by section 106A apply are governed
exclusively by section 106A and section 113(d) and the provisions of this
title relating to such sections. Thereafter, no person is entitled to any such
right or equivalent right in any work of visual art under the common law or
statutes of any State.
(2) Nothing in paragraph (1) annuls or limits any rights or remedies
under the common law or statutes of any State with respect to—
(A) any cause of action from undertakings commenced before the
effective date set forth in section 610(a) of the Visual Artists Rights Act
of 1990;
( B ) activities violating legal or equitable rights that are not
equivalent to any of the rights conferred by section 106A with respect to
works of visual art; or
( C ) activities violating legal or equitable rights which extend
beyond the life of the author.
1073
100-568 § 6, 102 Stat. 2857; December 1, 1990, P.L. 101-650 §§ 605, 705, 104 Stat. 5131,
5134; October 27, 1998, P.L. 105-298 § 102(a), 112 Stat. 2827.
§ 302. Duration of Copyright: Works Created on or

After January 1, 1978.
(a) In General. Copyright in a work created on or after January 1, 1978,
subsists from its creation and, except as provided by the following subsections,
endures for a term consisting of the life of the author and 70 years after the
author’s death.
(b) Joint Works. In the case of a joint work prepared by two or more
authors who did not work for hire, the copyright endures for a term consisting of
the life of the last surviving author and 70 years after such last surviving
author’s death.
(c) Anonymous Works, Pseudonymous Works, and Works Made for Hire.
In the case of an anonymous work, a pseudonymous work, or a work made for
hire, the copyright endures for a term of 95 years from the year of its first
publication, or a term of 120 years from the year of its creation, whichever
expires first. If, before the end of such term, the identity of one or more of the
authors of an anonymous or pseudonymous work is revealed in the records of a
registration made for that work under subsections (a) or (d) of section 408, or in
the records provided by this subsection, the copyright in the work endures for
the term specified by subsection (a) or (b), based on the life of the author or
authors whose identity has been revealed. Any person having an interest in the
copyright in an anonymous or pseudonymous work may at any time record, in
records to be maintained by the Copyright Office for that purpose, a statement
identifying one or more authors of the work; the statement shall also identify the
person filing it, the nature of that person’s interest, the source of the information
recorded, and the particular work affected, and shall comply in form and content
with requirements that the Register of Copyrights shall prescribe by regulation.
(d) Records Relating to Death of Authors. Any person having an interest in
a copyright may at any time record in the Copyright Office a statement of the
date of death of the author of the copyrighted work, or a statement that the author
is still living on a particular date. The statement shall identify the person filing
it, the nature of that person’s interest, and the source of the information
recorded, and shall comply in form and content with requirements that the
Register of Copyrights shall prescribe by regulation. The Register shall
maintain current records of information relating to the death of authors of
copyrighted works, based on such recorded statements and, to the extent the
Register considers practicable, on data contained in any of the records of the
Copyright Office or in other reference sources.
1074
(e) Presumption as to Author’s Death. After a period of 95 years from the
year of first publication of a work, or a period of 120 years from the year of its
creation, whichever expires first, any person who obtains from the Copyright
Office a certified report that the records provided by subsection (d) disclose
nothing to indicate that the author of the work is living, or died less than 70
years before, is entitled to the benefit of a presumption that the author has been
dead for at least 70 years. Reliance in good faith upon this presumption shall be
a complete defense to any action for infringement under this title.
105-298 § 102(b), 112 Stat. 2827.
§ 303. Duration of Copyright: Works Created But Not

Published or Copyrighted Before January 1, 1978.
(a) Copyright in a work created before January 1, 1978, but not theretofore
in the public domain or copyrighted, subsists from January 1, 1978, and endures
for the term provided by section 302 [17 USCS § 302]. In no case, however,
shall the term of copyright in such a work expire before December 31, 2002;
and, if the work is published on or before December 31, 2002, the term of
copyright shall not expire before December 31, 2047.
(b) The distribution before January 1, 1978, of a phonorecord shall not for
any purpose constitute a publication of any musical work, dramatic work, or
literary work embodied therein.
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2573; Nov. 13, 1997, P.L.
105-80, § 11, 111 Stat. 1534; Oct. 27, 1998, P.L. 105-298, Title I, § 102(c), 112 Stat. 2827;
Dec. 9, 2010, P.L. 111-295, § 5(a), 124 Stat. 3181.
Amendment
2010. Act Dec. 9, 2010, in subsec. (b), substituted “any musical work, dramatic work, or
literary work” for “the musical work”.

(a) Copyrights in Their First Term on January 1, 1978.
(1)
( A ) Any copyright, the first term of which is subsisting on
January 1, 1978, shall endure for 28 years from the date it was
originally secured.
(B) In the case of—
(i) any posthumous work or of any periodical, cyclopedic, or
1075
other composite work upon which the copyright was originally
secured by the proprietor thereof, or
(ii) any work copyrighted by a corporate body (otherwise
than as assignee or licensee of the individual author) or by an
employer for whom such work is made for hire, the proprietor of
such copyright shall be entitled to a renewal and extension of the
copyright in such work for the further term of 67 years.
( C ) In the case of any other copyrighted work, including a
contribution by an individual author to a periodical or to a
cyclopedic or other composite work—
(i) the author of such work, if the author is still living,
(ii) the widow, widower, or children of the author, if the
author is not living,
(iii) the author’s executors, if such author, widow, widower,
or children are not living, or
(iv) the author’s next of kin, in the absence of a will of the
author, shall be entitled to a renewal and extension of the
copyright in such work for a further term of 67 years.
(2)
(A) At the expiration of the original term of copyright in a work
specified in paragraph (1)(B) of this subsection, the copyright shall
endure for a renewed and extended further term of 67 years, which—
(i) if an application to register a claim to such further term has
been made to the Copyright Office within 1 year before the
expiration of the original term of copyright, and the claim is
registered, shall vest, upon the beginning of such further term, in the
proprietor of the copyright who is entitled to claim the renewal of
copyright at the time the application is made; or
(ii) if no such application is made or the claim pursuant to such
application is not registered, shall vest, upon the beginning of such
further term, in the person or entity that was the proprietor of the
copyright as of the last day of the original term of copyright.
(B) At the expiration of the original term of copyright in a work
specified in paragraph (1)(C) of this subsection, the copyright shall
endure for a renewed and extended further term of 67 years, which—
(i) if an application to register a claim to such further term has
been made to the Copyright Office within 1 year before the
1076
expiration of the original term of copyright, and the claim is
registered, shall vest, upon the beginning of such further term, in any
person who is entitled under paragraph (1)(C) to the renewal and
extension of the copyright at the time the application is made; or
(ii) if no such application is made or the claim pursuant to such
application is not registered, shall vest, upon the beginning of such
further term, in any person entitled under paragraph (1)(C), as of the
last day of the original term of copyright, to the renewal and
extension of the copyright.
(3)
(A) An application to register a claim to the renewed and extended
term of copyright in a work may be made to the Copyright Office—
(i) within 1 year before the expiration of the original term of
copyright by any person entitled under paragraph (1)(B) or (C) to
such further term of 67 years; and
(ii) at any time during the renewed and extended term by any
person in whom such further term vested, under paragraph (2)(A) or
(B), or by any successor or assign of such person, if the application
is made in the name of such person.
( B ) Such an application is not a condition of the renewal and
extension of the copyright in a work for a further term of 67 years.
(4)
(A) If an application to register a claim to the renewed and extended
term of copyright in a work is not made within 1 year before the
expiration of the original term of copyright in a work, or if the claim
pursuant to such application is not registered, then a derivative work
prepared under authority of a grant of a transfer or license of the
copyright that is made before the expiration of the original term of
copyright may continue to be used under the terms of the grant during the
renewed and extended term of copyright without infringing the copyright,
except that such use does not extend to the preparation during such
renewed and extended term of other derivative works based upon the
copyrighted work covered by such grant.
(B) If an application to register a claim to the renewed and extended
term of copyright in a work is made within 1 year before its expiration,
and the claim is registered, the certificate of such registration shall
constitute prima facie evidence as to the validity of the copyright during
its renewed and extended term and of the facts stated in the certificate.
1077
The evidentiary weight to be accorded the certificates of a registration
of a renewed and extended term of copyright made after the end of that
1-year period shall be within the discretion of the court.
(b) Copyrights in Their Renewal Term at the Time of the Effective Date of
the Sonny Bono Copyright Term Extension Act. Any copyright still in its
renewal term at the time that the Sonny Bono Copyright Term Extension Act
becomes effective shall have a copyright term of 95 years from the date
copyright was originally secured.
(c) Termination of Transfers and Licenses Covering Extended Renewal
Term. In the case of any copyright subsisting in either its first or renewal term
on January 1, 1978, other than a copyright in a work made for hire, the exclusive
or nonexclusive grant of a transfer or license of the renewal copyright or any
right under it, executed before January 1, 1978, by any of the persons designated
by subsection (a)(1)(C) of this section, otherwise than by will, is subject to
termination under the following conditions:
(1) In the case of a grant executed by a person or persons other than the
author, termination of the grant may be effected by the surviving person or
persons who executed it. In the case of a grant executed by one or more of
the authors of the work, termination of the grant may be effected, to the
extent of a particular author’s share in the ownership of the renewal
copyright, by the author who executed it or, if such author is dead, by the
person or persons who, under clause (2) of this subsection, own and are
entitled to exercise a total of more than one-half of that author’s termination
interest.
(2) Where an author is dead, his or her termination interest is owned,
and may be exercised, as follows:
(A) The widow or widower owns the author’s entire termination
interest unless there are any surviving children or grandchildren of the
author, in which case the widow or widower owns one-half of the
author’s interest.
(B) The author’s surviving children, and the surviving children of
any dead child of the author, own the author’s entire termination interest
unless there is a widow or widower, in which case the ownership of
one-half of the author’s interest is divided among them.
(C) The rights of the author’s children and grandchildren are in all
cases divided among them and exercised on a per stirpes basis
according to the number of such author’s children represented; the share
of the children of a dead child in a termination interest can be exercised
only by the action of a majority of them.
1078
(D) In the event that the author’s widow or widower, children, and
grandchildren are not living, the author’s executor, administrator,
personal representative, or trustee shall own the author’s entire
termination interest.
of five years beginning at the end of fifty-six years from the date copyright
was originally secured, or beginning on January 1, 1978, whichever is later.
(4) The termination shall be effected by serving an advance notice in
writing upon the grantee or the grantee’s successor in title. In the case of a
grant executed by a person or persons other than the author, the notice shall
be signed by all of those entitled to terminate the grant under clause (1) of
this subsection, or by their duly authorized agents. In the case of a grant
executed by one or more of the authors of the work, the notice as to any one
author’s share shall be signed by that author or his or her duly authorized
agent or, if that author is dead, by the number and proportion of the owners
of his or her termination interest required under clauses (1) and (2) of this
subsection, or by their duly authorized agents.
(A) The notice shall state the effective date of the termination, which
shall fall within the five-year period specified by clause (3) of this
subsection, or, in the case of a termination under subsection (d), within
the five-year period specified by subsection (d)(2), and the notice shall
be served not less than two or more than ten years before that date. A
copy of the notice shall be recorded in the Copyright Office before the
effective date of termination, as a condition to its taking effect.
(B) The notice shall comply, in form, content, and manner of service,
with requirements that the Register of Copyrights shall prescribe by
regulation.
( 5 ) Termination of the grant may be effected notwithstanding any
agreement to the contrary, including an agreement to make a will or to make
any future grant.
(6) In the case of a grant executed by a person or persons other than the
author, all rights under this title that were covered by the terminated grant
revert, upon the effective date of termination, to all of those entitled to
terminate the grant under clause (1) of this subsection. In the case of a grant
executed by one or more of the authors of the work, all of a particular
author’s rights under this title that were covered by the terminated grant
revert, upon the effective date of termination, to that author or, if that author
is dead, to the persons owning his or her termination interest under clause
(2) of this subsection, including those owners who did not join in signing the
notice of termination under clause (4) of this subsection. In all cases the
1079
reversion of rights is subject to the following limitations:
(A) A derivative work prepared under authority of the grant before
its termination may continue to be utilized under the terms of the grant
after its termination, but this privilege does not extend to the preparation
after the termination of other derivative works based upon the
copyrighted work covered by the terminated grant.
(B) The future rights that will revert upon termination of the grant
become vested on the date the notice of termination has been served as
provided by clause (4) of this subsection.
(C) Where the author’s rights revert to two or more persons under
clause (2) of this subsection, they shall vest in those persons in the
proportionate shares provided by that clause. In such a case, and subject
to the provisions of subclause (D) of this clause, a further grant, or
agreement to make a further grant, of a particular author’s share with
respect to any right covered by a terminated grant is valid only if it is
signed by the same number and proportion of the owners, in whom the
right has vested under this clause, as are required to terminate the grant
under clause (2) of this subsection. Such further grant or agreement is
effective with respect to all of the persons in whom the right it covers
has vested under this subclause, including those who did not join in
signing it. If any person dies after rights under a terminated grant have
vested in him or her, that person’s legal representatives, legatees, or
heirs at law represent him or her for purposes of this subclause.
(D) A further grant, or agreement to make a further grant, of any right
covered by a terminated grant is valid only if it is made after the
effective date of the termination. As an exception, however, an
agreement for such a further grant may be made between the author or
any of the persons provided by the first sentence of clause (6) of this
subsection, or between the persons provided by subclause (C) of this
clause, and the original grantee or such grantee’s successor in title, after
the notice of termination has been served as provided by clause (4) of
this subsection.
(E) Termination of a grant under this subsection affects only those
rights covered by the grant that arise under this title, and in no way
affects rights arising under any other Federal, State, or foreign laws.
(F) Unless and until termination is effected under this subsection, the
grant, if it does not provide otherwise, continues in effect for the
remainder of the extended renewal term.
(d) Termination Rights Provided in Subsection (C) Which Have Expired
1080
on or Before The Effective Date of the Sonny Bono Copyright Term Extension
Act. In the case of any copyright other than a work made for hire, subsisting in
its renewal term on the effective date of the Sonny Bono Copyright Term
Extension Act for which the termination right provided in subsection (c) has
expired by such date, where the author or owner of the termination right has not
previously exercised such termination right, the exclusive or nonexclusive grant
of a transfer or license of the renewal copyright or any right under it, executed
before January 1, 1978, by any of the persons designated in subsection (a)(1)(C)
of this section, other than by will, is subject to termination under the following
conditions:
(1) The conditions specified in subsections (c)(1), (2), (4), (5), and (6)
of this section apply to terminations of the last 20 years of copyright term as
provided by the amendments made by the Sonny Bono Copyright Term
Extension Act.
of 5 years beginning at the end of 75 years from the date copyright was
originally secured.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat. 2573; June 26, 1992, P.L. 102-
307 § 102(a), (d), 106 Stat. 264, 266; November 13, 1997, P.L. 105-80 § 12(a)(9), 111 Stat.
1535; October 27, 1998, P.L. 105-298 §§ 102(d)(1), 103, 112 Stat. 2827, 2829; November
2, 2002, P.L. 107-273 § 13210(10), 116 Stat. 1910.

All terms of copyright provided by sections 302 through 304 run to the end
of the calendar year in which they would otherwise expire.
CHAPTER 4
COPYRIGHT NOTICE, DEPOSIT, AND

REGISTRATION
(a) General Provisions. Whenever a work protected under this title is
published in the United States or elsewhere by authority of the copyright owner,
a notice of copyright as provided by this section may be placed on publicly
distributed copies from which the work can be visually perceived, either
1081
directly or with the aid of a machine or device.
(b) Form of Notice. If a notice appears on the copies, it shall consist of the
following three elements:
(1) the symbol © (the letter C in a circle), or the word “Copyright”, or
the abbreviation “Copr.”; and
(2) the year of first publication of the work; in the case of compilations
or derivative works incorporating previously published material, the year
date of first publication of the compilation or derivative work is sufficient.
The year date may be omitted where a pictorial, graphic, or sculptural work,
with accompanying text matter, if any, is reproduced in or on greeting cards,
postcards, stationery, jewelry, dolls, toys, or any useful articles; and
(3) the name of the owner of copyright in the work, or an abbreviation
by which the name can be recognized, or a generally known alternative
designation of the owner.
(c) Position of Notice. The notice shall be affixed to the copies in such
manner and location as to give reasonable notice of the claim of copyright. The
Register of Copyrights shall prescribe by regulation, as examples, specific
methods of affixation and positions of the notice on various types of works that
will satisfy this requirement, but these specifications shall not be considered
exhaustive.
(d) Evidentiary Weight of Notice. If a notice of copyright in the form and
position specified by this section appears on the published copy or copies to
which a defendant in a copyright infringement suit had access, then no weight
shall be given to such a defendant’s interposition of a defense based on innocent
infringement in mitigation of actual or statutory damages, except as provided in
the last sentence of section 504(c)(2).
100-568 § 7(a), 102 Stat. 2857.
§ 402. Notice of Copyright: Phonorecords of Sound

Recordings.
(a) General provisions. Whenever a sound recording protected under this
title is published in the United States or elsewhere by authority of the copyright
owner, a notice of copyright as provided by this section may be placed on
publicly distributed phonorecords of the sound recording.
(b) Form of Notice. If a notice appears on the phonorecords, it shall
consist of the following three elements:
1082
(1) the symbol ; (the letter P in a circle); and
(2) the year of first publication of the sound recording; and
(3) the name of the owner of copyright in the sound recording, or an
abbreviation by which the name can be recognized, or a generally known
alternative designation of the owner; if the producer of the sound recording
is named on the phonorecord labels or containers, and if no other name
appears in conjunction with the notice, the producer’s name shall be
considered a part of the notice.
(c) Position of Notice. The notice shall be placed on the surface of the
phonorecord, or on the phonorecord label or container, in such manner and
location as to give reasonable notice of the claim of copyright.
(d) Evidentiary Weight of Notice. If a notice of copyright in the form and
position specified by this section appears on the published phonorecord or
phonorecords to which a defendant in a copyright infringement suit had access,
then no weight shall be given to such a defendant’s interposition of a defense
based on innocent infringement in mitigation of actual or statutory damages,
except as provided in the last sentence of section 504(c)(2).
100-568 § 7(b), 102 Stat. 2857.
§ 403. Notice of Copyright: Publications Incorporating

United States Government Works.
Sections 401(d) and 402(d) shall not apply to a work published in copies or
phonorecords consisting predominantly of one or more works of the United
States Government unless the notice of copyright appearing on the published
copies or phonorecords to which a defendant in the copyright infringement suit
had access includes a statement identifying, either affirmatively or negatively,
those portions of the copies or phonorecords embodying any work or works
protected under this title.
100-568 § 7(c), 102 Stat. 2858.
§ 404. Notice of Copyright: Contributions to Collective

Works.
(a) A separate contribution to a collective work may bear its own notice of
copyright, as provided by sections 401 through 403. However, a single notice
applicable to the collective work as a whole is sufficient to invoke the
provisions of section 401(d) or 402(d), as applicable with respect to the
1083
separate contributions it contains (not including advertisements inserted on
behalf of persons other than the owner of copyright in the collective work),
regardless of the ownership of copyright in the contributions and whether or not
they have been previously published.
( b ) With respect to copies and phonorecords publicly distributed by
authority of the copyright owner before the effective date of the Berne
Convention Implementation Act of 1988, where the person named in a single
notice applicable to a collective work as a whole is not the owner of copyright
in a separate contribution that does not bear its own notice, the case is governed
by the provisions of section 406(a).
100-568 § 7(d), 102 Stat. 2858.
§ 405. Notice of Copyright: Omission of Notice on

Certain Copies and Phonorecords.
(a) Effect of Omission on Copyright. With respect to copies and
phonorecords publicly distributed by authority of the copyright owner before the
effective date of the Berne Convention Implementation Act of 1988, the
omission of the copyright notice described in sections 401 through 403 from
copies or phonorecords publicly distributed by authority of the copyright owner
does not invalidate the copyright in a work if—
(1) the notice has been omitted from no more than a relatively small
number of copies or phonorecords distributed to the public; or
(2) registration for the work has been made before or is made within
five years after the publication without notice, and a reasonable effort is
made to add notice to all copies or phonorecords that are distributed to the
public in the United States after the omission has been discovered; or
(3) the notice has been omitted in violation of an express requirement in
writing that, as a condition of the copyright owner’s authorization of the
public distribution of copies or phonorecords, they bear the prescribed
notice.
(b) Effect of Omission on Innocent Infringers. Any person who innocently
infringes a copyright, in reliance upon an authorized copy or phonorecord from
which the copyright notice has been omitted and which was publicly distributed
by authority of the copyright owner before the effective date of the Berne
Convention Implementation Act of 1988, incurs no liability for actual or
statutory damages under section 504 for any infringing acts committed before
receiving actual notice that registration for the work has been made under
section 408, if such person proves that he or she was misled by the omission of
1084
notice. In a suit for infringement in such a case the court may allow or disallow
recovery of any of the infringer’s profits attributable to the infringement, and
may enjoin the continuation of the infringing undertaking or may require, as a
condition for permitting the continuation of the infringing undertaking, that the
infringer pay the copyright owner a reasonable license fee in an amount and on
terms fixed by the court.
(c) Removal of Notice. Protection under this title is not affected by the
removal, destruction, or obliteration of the notice, without the authorization of
the copyright owner, from any publicly distributed copies or phonorecords.
100-568 § 7(e), 102 Stat. 2858; November 13, 1997, P.L. 105-80 § 12(a)(10), 111 Stat.
1535.
§ 406. Notice of Copyright: Error in Name or Date on

Certain Copies and Phonorecords.
(a) Error in Name. With respect to copies and phonorecords publicly
distributed by authority of the copyright owner before the effective date of the
Berne Convention Implementation Act of 1988, where the person named in the
copyright notice on copies or phonorecords publicly distributed by authority of
the copyright owner is not the owner of copyright, the validity and ownership of
the copyright are not affected. In such a case, however, any person who
innocently begins an undertaking that infringes the copyright has a complete
defense to any action for such infringement if such person proves that he or she
was misled by the notice and began the undertaking in good faith under a
purported transfer or license from the person named therein, unless before the
undertaking was begun—
(1) registration for the work had been made in the name of the owner of
copyright; or
(2) a document executed by the person named in the notice and showing
the ownership of the copyright had been recorded. The person named in the
notice is liable to account to the copyright owner for all receipts from
transfers or licenses purportedly made under the copyright by the person
named in the notice.
(b) Error in Date. When the year date in the notice on copies or
phonorecords distributed before the effective date of the Berne Convention
Implementation Act of 1988 by authority of the copyright owner is earlier than
the year in which publication first occurred, any period computed from the year
of first publication under section 302 is to be computed from the year in the
notice. Where the year date is more than one year later than the year in which
1085
publication first occurred, the work is considered to have been published
without any notice and is governed by the provisions of section 405.
(c) Omission of Name or Date. Where copies or phonorecords publicly
distributed before the effective date of the Berne Convention Implementation
Act of 1988 by authority of the copyright owner contain no name or no date that
could reasonably be considered a part of the notice, the work is considered to
have been published without any notice and is governed by the provisions of
section 405 as in effect on the day before the effective date of the Berne
Convention Implementation Act of 1988.
100-568 § 7(f), 102 Stat. 2858.
§ 407. Deposit of Copies or Phonorecords for Library of

Congress.
(a) Except as provided by subsection (c), and subject to the provisions of
subsection (e), the owner of copyright or of the exclusive right of publication in
a work published in the United States shall deposit, within three months after the
date of such publication—
(1) two complete copies of the best edition; or
(2) if the work is a sound recording, two complete phonorecords of the
best edition, together with any printed or other visually perceptible material
published with such phonorecords. Neither the deposit requirements of this
subsection nor the acquisition provisions of subsection (e) are conditions of
copyright protection.
(b) The required copies or phonorecords shall be deposited in the Copyright
Office for the use or disposition of the Library of Congress. The Register of
Copyrights shall, when requested by the depositor and upon payment of the fee
prescribed by section 708, issue a receipt for the deposit.
(c) The Register of Copyrights may be regulation exempt any categories of
material from the deposit requirements of this section, or require deposit of only
one copy or phonorecord with respect to any categories. Such regulations shall
provide either for complete exemption from the deposit requirements of this
section, or for alternative forms of deposit aimed at providing a satisfactory
archival record of a work without imposing practical or financial hardships on
the depositor, where the individual author is the owner of copyright in a
pictorial, graphic, or sculptural work and (i) less than five copies of the work
have been published, or (ii) the work has been published in a limited edition
consisting of numbered copies, the monetary value of which would make the
mandatory deposit of two copies of the best edition of the work burdensome,
1086
unfair, or unreasonable.
(d) At any time after publication of a work as provided by subsection (a),
the Register of Copyrights may make written demand for the required deposit on
any of the persons obligated to make the deposit under subsection (a). Unless
deposit is made within three months after the demand is received, the person or
persons on whom the demand was made are liable—
(1) to a fine of not more than $250 for each work; and
(2) to pay into a specially designated fund in the Library of Congress the
total retail price of the copies or phonorecords demanded, or, if no retail
price has been fixed, the reasonable cost to the Library of Congress of
acquiring them; and
(3) to pay a fine of $2,500, in addition to any fine or liability imposed
under clauses (1) and (2), if such person willfully or repeatedly fails or
refuses to comply with such a demand.
( e ) With respect to transmission programs that have been fixed and
transmitted to the public in the United States but have not been published, the
Register of Copyrights shall, after consulting with the Librarian of Congress and
other interested organizations and officials, establish regulations governing the
acquisition, through deposit or otherwise, of copies or phonorecords of such
programs for the collections of the Library of Congress.
(1) The Librarian of Congress shall be permitted, under the standards
and conditions set forth in such regulations, to make a fixation of a
transmission program directly from a transmission to the public, and to
reproduce one copy or phonorecord from such fixation for archival
purposes.
(2) Such regulations shall also provide standards and procedures by
which the Register of Copyrights may make written demand, upon the owner
of the right of transmission in the United States, for the deposit of a copy or
phonorecord of a specific transmission program. Such deposit may, at the
option of the owner of the right of transmission in the United States, be
accomplished by gift, by loan for purposes of reproduction, or by sale at a
price not to exceed the cost of reproducing and supplying the copy or
phonorecord. The regulations established under this clause shall provide
reasonable periods of not less than three months for compliance with a
demand, and shall allow for extensions of such periods and adjustments in
the scope of the demand or the methods for fulfilling it, as reasonably
warranted by the circumstances. Willful failure or refusal to comply with
the conditions prescribed by such regulations shall subject the owner of the
right of transmission in the United States to liability for an amount, not to
1087
exceed the cost of reproducing and supplying the copy or phonorecord in
question, to be paid into a specially designated fund in the Library of
Congress.
(3) Nothing in this subsection shall be construed to require the making
or retention, for purposes of deposit, of any copy or phonorecord of an
unpublished transmission program, the transmission of which occurs before
the receipt of a specific written demand as provided by clause (2).
(4) No activity undertaken in compliance with regulations prescribed
under clauses (1) or (2) of this subsection shall result in liability if intended
solely to assist in the acquisition of copies or phonorecords under this
subsection.
100-568 § 8, 102 Stat. 2859; November 13, 1997, P.L. 105-80 § 12(a)(11), 111 Stat. 1535.

(a) Registration Permissive. At any time during the subsistence of the first
term of copyright in any published or unpublished work in which the copyright
was secured before January 1, 1978, and during the subsistence of any copyright
secured on or after that date, the owner of copyright or of any exclusive right in
the work may obtain registration of the copyright claim by delivering to the
Copyright Office the deposit specified by this section, together with the
application and fee specified by sections 409 and 708 [17 USCS §§ 409 and
708]. Such registration is not a condition of copyright protection.
(b) Deposit for Copyright Registration. Except as provided by subsection
(c), the material deposited for registration shall include—
( 1 ) in the case of an unpublished work, one complete copy or
phonorecord;
( 2 ) in the case of a published work, two complete copies or
phonorecords of the best edition;
(3) in the case of a work first published outside the United States, one
complete copy or phonorecord as so published;
(4) in the case of a contribution to a collective work, one complete copy
or phonorecord of the best edition of the collective work. Copies or
phonorecords deposited for the Library of Congress under section 407 [17
USCS § 407] may be used to satisfy the deposit provisions of this section, if
they are accompanied by the prescribed application and fee, and by any
additional identifying material that the Register may, by regulation, require.
The Register shall also prescribe regulations establishing requirements
1088
under which copies or phonorecords acquired for the Library of Congress
under subsection (e) of section 407 [17 USCS § 407], otherwise than by
deposit, may be used to satisfy the deposit provisions of this section.
(c) Administrative Classification and Optional Deposit.
(1) The Register of Copyrights is authorized to specify by regulation the
administrative classes into which works are to be placed for purposes of
deposit and registration, and the nature of the copies or phonorecords to be
deposited in the various classes specified. The regulations may require or
permit, for particular classes, the deposit of identifying material instead of
copies or phonorecords, the deposit of only one copy or phonorecord where
two would normally be required, or a single registration for a group of
related works. This administrative classification of works has no
significance with respect to the subject matter of copyright or the exclusive
rights provided by this title.
(2) Without prejudice to the general authority provided under clause (1),
the Register of Copyrights shall establish regulations specifically permitting
a single registration for a group of works by the same individual author, all
first published as contributions to periodicals, including newspapers, within
a twelve-month period, on the basis of a single deposit, application, and
registration fee, under the following conditions:
(A) if the deposit consists of one copy of the entire issue of the
periodical, or of the entire section in the case of a newspaper, in which
each contribution was first published; and
(B) if the application identifies each work separately, including the
periodical containing it and its date of first publication.
(3) As an alternative to separate renewal registrations under subsection
(a) of section 304 [17 USCS § 304], a single renewal registration may be
made for a group of works by the same individual author, all first published
as contributions to periodicals, including newspapers, upon the filing of a
single application and fee, under all of the following conditions:
(A) the renewal claimant or claimants, and the basis of claim or
claims under section 304(a) [17 USCS § 304(a)], is the same for each of
the works; and
( B ) the works were all copyrighted upon their first publication,
either through separate copyright notice and registration or by virtue of a
general copyright notice in the periodical issue as a whole; and
( C) the renewal application and fee are received not more than
twenty-eight or less than twenty-seven years after the thirty-first day of
1089
December of the calendar year in which all of the works were first
published; and
( D ) the renewal application identifies each work separately,
including the periodical containing it and its date of first publication.
(d) Corrections and Amplifications. The Register may also establish, by
regulation, formal procedures for the filing of an application for supplementary
registration, to correct an error in a copyright registration or to amplify the
information given in a registration. Such application shall be accompanied by
the fee provided by section 708 [17 USCS § 708], and shall clearly identify the
registration to be corrected or amplified. The information contained in a
supplementary registration augments but does not supersede that contained in the
earlier registration.
(e) Published Edition of Previously Registered Work. Registration for the
first published edition of a work previously registered in unpublished form may
be made even though the work as published is substantially the same as the
unpublished version.
(f) Preregistration of Works Being Prepared for Commercial Distribution.
(1) Rulemaking. Not later than 180 days after the date of enactment of
this subsection [enacted April 27, 2005], the Register of Copyrights shall
issue regulations to establish procedures for preregistration of a work that is
being prepared for commercial distribution and has not been published.
(2) Class of Works. The regulations established under paragraph (1)
shall permit preregistration for any work that is in a class of works that the
Register determines has had a history of infringement prior to authorized
commercial distribution.
(3) Application for Registration. Not later than 3 months after the first
publication of a work preregistered under this subsection, the applicant
shall submit to the Copyright Office—
(A) an application for registration of the work;
(B) a deposit; and
(C) the applicable fee.
(4) Effect of Untimely Application. An action under this chapter [ 17
USCS §§ 401 et seq.] for infringement of a work preregistered under this
subsection, in a case in which the infringement commenced no later than 2
months after the first publication of the work, shall be dismissed if the items
described in paragraph (3) are not submitted to the Copyright Office in
proper form within the earlier of—
1090
(A) 3 months after the first publication of the work; or
( B ) 1 month after the copyright owner has learned of the
infringement.
100-568 § 9(a), 102 Stat. 2859; June 26, 1992, P.L. 102-307 § 102(e), 106 Stat. 266; April
27, 2005, P.L. 109-9 § 104(a), 119 Stat. 221.

The application for copyright registration shall be made on a form
prescribed by the Register of Copyrights and shall include—
(1) the name and address of the copyright claimant;
(2) in the case of a work other than an anonymous or pseudonymous
work, the name and nationality or domicile of the author or authors, and, if
one or more of the authors is dead, the dates of their deaths;
( 3 ) if the work is anonymous or pseudonymous, the nationality or
domicile of the author or authors;
(4) in the case of a work made for hire, a statement to this effect;
(5) if the copyright claimant is not the author, a brief statement of how
the claimant obtained ownership of the copyright;
(6) the title of the work, together with any previous or alternative titles
under which the work can be identified;
(7) the year in which creation of the work was completed;
( 8) if the work has been published, the date and nation of its first
publication;
(9) in the case of a compilation or derivative work, an identification of
any preexisting work or works that it is based on or incorporates, and a
brief, general statement of the additional material covered by the copyright
claim being registered; and
(10) any other information regarded by the Register of Copyrights as
bearing upon the preparation or identification of the work or the existence,
ownership, or duration of the copyright.
If an application is submitted for the renewed and extended term provided
for in section 304(a)(3)(A) [17 USCS § 304(a)(3)(A)] and an original term
registration has not been made, the Register may request information with
respect to the existence, ownership, or duration of the copyright for the original
term.
1091
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2582; June 26, 1992, P.L.
102-307, Title I, § 102(b)(1), 106 Stat. 266; Dec. 9, 2010, P.L. 111-295, § 4(b)(2), 124 Stat.
3180.
Amendment
2010. Act Dec. 9, 2010, in para. (9), added “and” following the concluding semicolon,
deleted para. (10), which read: “(10) in the case of a published work containing material of
which copies are required by section 601 to be manufactured in the United States, the names
of the persons or organizations who performed the processes specified by subsection (c) of
section 601 with respect to that material, and the places where those processes were
performed; and”, and redesignated para. (11) as para. (10).
§ 410. Registration of Claim and Issuance of

Certificate.
(a) When, after examination, the Register of Copyrights determines that, in
accordance with the provisions of this title, the material deposited constitutes
copyrightable subject matter and that the other legal and formal requirements of
this title have been met, the Register shall register the claim and issue to the
applicant a certificate of registration under the seal of the Copyright Office. The
certificate shall contain the information given in the application, together with
the number and effective date of the registration.
( b) In any case in which the Register of Copyrights determines that, in
accordance with the provisions of this title, the material deposited does not
constitute copyrightable subject matter or that the claim is invalid for any other
reason, the Register shall refuse registration and shall notify the applicant in
writing of the reasons for such refusal.
(c) In any judicial proceedings the certificate of a registration made before
or within five years after first publication of the work shall constitute prima
facie evidence of the validity of the copyright and of the facts stated in the
certificate. The evidentiary weight to be accorded the certificate of a
registration made thereafter shall be within the discretion of the court.
(d) The effective date of a copyright registration is the day on which an
application, deposit, and fee, which are later determined by the Register of
Copyrights or by a court of competent jurisdiction to be acceptable for
registration, have all been received in the Copyright Office.

(a) Except for an action brought for a violation of the rights of the author
1092
under section 106A(a) [17 USCS § 106A(a)], and subject to the provisions of
subsection (b), no civil action for infringement of the copyright in any United
States work shall be instituted until preregistration or registration of the
copyright claim has been made in accordance with this title. In any case,
however, where the deposit, application, and fee required for registration have
been delivered to the Copyright Office in proper form and registration has been
refused, the applicant is entitled to institute a civil action for infringement if
notice thereof, with a copy of the complaint, is served on the Register of
Copyrights. The Register may, at his or her option, become a party to the action
with respect to the issue of registrability of the copyright claim by entering an
appearance within sixty days after such service, but the Register’s failure to
become a party shall not deprive the court of jurisdiction to determine that issue.
(b)
(1) A certificate of registration satisfies the requirements of this section
and section 412 [17 USCS § 412], regardless of whether the certificate
contains any inaccurate information, unless—
(A) the inaccurate information was included on the application for
copyright registration with knowledge that it was inaccurate; and
(B) the inaccuracy of the information, if known, would have caused
the Register of Copyrights to refuse registration.
( 2 ) In any case in which inaccurate information described under
paragraph (1) is alleged, the court shall request the Register of Copyrights
to advise the court whether the inaccurate information, if known, would
have caused the Register of Copyrights to refuse registration.
( 3) Nothing in this subsection shall affect any rights, obligations, or
requirements of a person related to information contained in a registration
certificate, except for the institution of and remedies in infringement actions
under this section and section 412 [17 USCS § 412].
(c) In the case of a work consisting of sounds, images, or both, the first
fixation of which is made simultaneously with its transmission, the copyright
owner may, either before or after such fixation takes place, institute an action
for infringement under section 501 [17 USCS § 501], fully subject to the
remedies provided by sections 502 through 505 [17 USCS §§ 502 through 505]
and section 510 [17 USCS § 510], if, in accordance with requirements that the
Register of Copyrights shall prescribe by regulation, the copyright owner—
(1) serves notice upon the infringer, not less than 48 hours before such
fixation, identifying the work and the specific time and source of its first
transmission, and declaring an intention to secure copyright in the work; and
1093
(2) makes registration for the work, if required by subsection (a), within
three months after its first transmission.
100-568, § 9(b)(1), 102 Stat. 2859; Dec. 1, 1990, P.L. 101-650, Title VI, § 606(c)(1), 104
Stat. 5131; Nov. 13, 1997, P.L. 105-80, § 6, 111 Stat. 1532; Oct. 28, 1998, P.L. 105-304,
Title I, § 102(d), 112 Stat. 2863; April 27, 2005, P.L. 109-9, Title I, § 104(b), 119 Stat. 222;
Oct. 13, 2008, P.L. 110-403, Title I, § 101(a), Title II, § 209(a)(6), 122 Stat. 4257, 4264.
§ 412. Registration as Prerequisite to Certain Remedies

for Infringement.
In any action under this title, other than an action brought for a violation of
the rights of the author under section 106A(a) [17 USCS § 106A(a)], an action
for infringement of the copyright of a work that has been preregistered under
section 408(f) [17 USCS § 408(f)] before the commencement of the infringement
and that has an effective date of registration not later than the earlier of 3 months
after the first publication of the work or 1 month after the copyright owner has
learned of the infringement, or an action instituted under section 411(c) [17
USCS § 411(c)], no award of statutory damages or of attorney’s fees, as
provided by sections 504 and 505 [17 USCS §§ 504 and 505], shall be made for
—
(1) any infringement of copyright in an unpublished work commenced
before the effective date of its registration; or
(2) any infringement of copyright commenced after first publication of
the work and before the effective date of its registration, unless such
registration is made within three months after the first publication of the
work.
Leg.H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2583; Dec. 1, 1990, P.L.
101-650, Title VI, § 606(c)(2), 104 Stat. 5131; April 27, 2005, P.L. 109-9, Title I, § 104(c),
119 Stat. 222; Oct. 13, 2008, P.L. 110-403, Title I, § 101(b)(1), 122 Stat. 4258.
CHAPTER 5
COPYRIGHT INFRINGEMENT AND

REMEDIES
(a) Anyone who violates any of the exclusive rights of the copyright owner
1094
as provided by sections 106 through 122, or of the author as provided in section
106A(a), or who imports copies or phonorecords into the United States in
violation of section 602, is an infringer of the copyright or right of the author, as
the case may be. For purposes of this chapter (other than section 506), any
reference to copyright shall be deemed to include the rights conferred by section
106A(a). As used in this subsection, the term “anyone” includes any State, any
instrumentality of a State, and any officer or employee of a State or
instrumentality of a State acting in his or her official capacity. Any State, and
any such instrumentality, officer, or employee, shall be subject to the provisions
of this title in the same manner and to the same extent as any nongovernmental
entity.
(b) The legal or beneficial owner of an exclusive right under a copyright is
entitled, subject to the requirements of section 411, to institute an action for any
infringement of that particular right committed while he or she is the owner of it.
The court may require such owner to serve written notice of the action with a
copy of the complaint upon any person shown, by the records of the Copyright
Office or otherwise, to have or claim an interest in the copyright, and shall
require that such notice be served upon any person whose interest is likely to be
affected by a decision in the case. The court may require the joinder, and shall
permit the intervention, of any person having or claiming an interest in the
copyright.
( c ) For any secondary transmission by a cable system that embodies a
performance or a display of a work which is actionable as an act of
infringement under subsection (c) of section 111, a television broadcast station
holding a copyright or other license to transmit or perform the same version of
that work shall, for purposes of subsection (b) of this section, be treated as a
legal or beneficial owner if such secondary transmission occurs within the local
service area of that television station.
(d) For any secondary transmission by a cable system that is actionable as
an act of infringement pursuant to section 111(c)(3), the following shall also
have standing to sue: (i) the primary transmitter whose transmission has been
altered by the cable system; and (ii) any broadcast station within whose local
service area the secondary transmission occurs.
(e) With respect to any secondary transmission that is made by a satellite
carrier of a performance or display of a work embodied in a primary
transmission and is actionable as an act of infringement under section 119(a)(5),
a network station holding a copyright or other license to transmit or perform the
same version of that work shall, for purposes of subsection (b) of this section,
be treated as a legal or beneficial owner if such secondary transmission occurs
within the local service area of that station.
1095
(f)
( 1 ) With respect to any secondary transmission that is made by a
satellite carrier of a performance or display of a work embodied in a
primary transmission and is actionable as an act of infringement under
section 122, a television broadcast station holding a copyright or other
license to transmit or perform the same version of that work shall, for
purposes of subsection (b) of this section, be treated as a legal or beneficial
owner if such secondary transmission occurs within the local market of that
station.
(2) A television broadcast station may file a civil action against any
satellite carrier that has refused to carry television broadcast signals, as
required under section 122(a)(2), to enforce that television broadcast
station’s rights under section 338(a) of the Communications Act of 1934.
100-568, § 10(a), 102 Stat. 2860; Nov. 16, 1988, P.L. 100-667, Title II, § 202(3), 102 Stat.
3957; Nov. 15, 1990, P.L. 101-553, § 2(a)(1), 104 Stat. 2749; Dec. 1, 1990, P.L. 101-650,
Title VI, § 606(a), 104 Stat. 5131; Aug. 5, 1999, P.L. 106-44, § 1(g)(5), 113 Stat. 222; Nov.
29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Nov. 2, 2002, P.L. 107-273,
Div C, Title III, Subtitle B, § 13210(4)(B), 116 Stat. 1909.
UNITED STATES SUPREME COURT
COPYRIGHT PRACTICE RULES (1909)

The Supreme Court adopted the Copyright Rules of Practice in 1909. Except
for Rule 2, which was rescinded effective July 1, 1966, the Copyright Rules
remained in effect until they were abrogated effective December 31, 2001.
Copyright actions are now governed by the Federal Rules of Civil Procedure.
The rules are reprinted below for historical interest.
RULE 1 [Proceedings in actions brought under section 25 of the Act of
March, 4, 1909, entitled “An Act to amend and consolidate the acts
respecting copyright,” including proceedings relating to the perfecting of
appeals, shall be governed by the Rules of Civil Procedure, insofar as they
are not inconsistent with these rules.]
RULE 2 [A copy of the alleged infringement of copyright, if actually
made, and a copy of the work alleged to be infringed, should accompany the
petition, or its absence be explained; except in cases of alleged infringement
1096
by the public performance of dramatic and dramatico-musical compositions,
the delivery of lectures, sermons, addresses, and so forth, the infringement
of copyright upon sculptures and other similar works and in any case where
it is not feasible.]
RULE 3 [Upon the institution of any action, suit or proceeding, or at
any time thereafter, and before the entry of final judgment or decree therein,
the plaintiff or complainant, or his authorized agent or attorney, may file
with the clerk of any court given jurisdiction under section 34 of the Act of
March 4, 1909, an affidavit stating upon the best for his knowledge,
information and belief, the number and location, as near as may be, of the
alleged infringing copies, records, plates molds, matrices, etc., or other
means for making the copies alleged to infringe the copyright, and the value
of the same, and with such affidavit shall file with the clerk a bond executed
by at least two sureties and approved by the court or a commissioner
thereof.]
RULE 4 [Such bond shall bind the sureties in a specified sum, to be
fixed by the court, but not less than twice the reasonable value of such
infringing copies, plates, records, molds, matrices, or other means for
making such infringing copies, and be conditioned for the prompt
prosecution of the action, suit or proceeding; for the return of said articles to
the defendant, if they or any of them are adjudged not to be infringements, or
if the action abates, or is discontinued before they are returned to the
defendant; and for the payment to the defendant of any damages which the
court may award to him against the plaintiff or complainant. Upon the filing
of said affidavit and bond, and the approval of said bond, the clerk shall
issue a writ directed to the marshal of the district where the said infringing
copies, plates, records, molds, matrices, etc., or other means of making such
infringing copies shall be stated in said affidavit to be located, and
generally to any marshal of the United States, directing the said marshal to
forthwith seize and hold the same subject to the order of the court issuing
said writ, or of the court of the district in which the seizure shall be made.]
RULE 5 [The marshall [sic] shall thereupon seize said articles or any
smaller or larger part thereof he may then or thereafter find, using such force
as may be reasonably necessary in the premises, and serve on the defendant
a copy of the affidavit, writ and bond by delivering the same to him
personally, if he can be found within the district, or if he cannot be found, to
his agent, if any, or to the person from whose possession the articles are
taken, or if the owner, agent, or such person cannot be found within the
district, by leaving said copy at the usual place of abode of such owner or
agent, with a person of suitable age and discretion, or at the place where
said articles are found, and shall make immediate return of such seizure, or
1097
attempted seizure, to the court. He shall also attach to said articles a tag or
label stating the fact of such seizure and warning all persons from in any
manner interfering therewith.]
RULE 6 [A marshal who has seized alleged infringing articles, shall
retain them in his possession, keeping them in a secure place, subject to the
order of the court.]
RULE 7 [Within three days after the articles are seized, and a copy of
the affidavit, writ and bond are served as hereinbefore provided, the
defendant shall serve upon the clerk a notice that he excepts to the amount of
the penalty of the bond, or to the sureties of the plaintiff or complainant, or
both, otherwise he shall be deemed to have waived all objection to the
amount of the penalty of the bond and the sufficiency of the sureties thereon.
If the court sustain the exceptions it may order a new bond to be executed by
the plaintiff or complainant, or in default thereof with a time to be named by
the court, the property to be returned to the defendant.]
RULE 8 [Within ten days after service of such notice, the attorney of
the plaintiff or complainant shall serve upon the defendant or his attorney a
notice of the justification of the sureties, and said sureties shall justify
before the court or a judge thereof at the time therein stated.]
RULE 9 [The defendant, if he does not except to the amount of the
penalty of the bond or the sufficiency of the sureties of the plaintiff or
complainant, may make application to the court for the return to him of the
articles seized, upon filing an affidavit stating all material facts and
circumstances tending to show that the articles seized are not infringing
copies, records, plates, molds, matrices, or means for making the copies
alleged to infringe the copyright.]
RULE 10 [Thereupon the court in its discretion, after such hearing as it
may direct, may order such return upon the filing by the defendant of a bond
executed by at least two sureties, binding them in a specified sum to be fixed
in the discretion of the court, and conditioned for the delivery of said
specified articles to abide the order of the court. The plaintiff or
complainant may require such sureties to justify within ten days of the filing
of such bond.]
RULE 11 [Upon the granting of such application and the justification of
the sureties on the bond, the marshal shall immediately deliver the articles
seized to the defendant.]
RULE 12 [Any service required to be performed by any marshal may
be performed by any deputy of such marshal.]
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RULE 13 [For services in cases arising under this section, the marshal
shall be entitled to the same fees as are allowed for similar services in other
cases.]
Note: Title 17 U.S.C. § 502 follows.

(a) Any court having jurisdiction of a civil action arising under this title
may, subject to the provisions of section 1498 of title 28, grant temporary and
final injunctions on such terms as it may deem reasonable to prevent or restrain
infringement of a copyright.
(b) Any such injunction may be served anywhere in the United States on the
person enjoined; it shall be operative throughout the United States and shall be
enforceable, by proceedings in contempt or otherwise, by any United States
court having jurisdiction of that person. The clerk of the court granting the
injunction shall, when requested by any other court in which enforcement of the
injunction is sought, transmit promptly to the other court a certified copy of all
the papers in the case on file in such clerk’s office.
Leg.H. October 19, 1976, P.L. 94-553 § 101, 90 Stat 2584.
§ 503. Remedies for Infringement: Impounding and

Disposition of Infringing Articles.
(a)
(1) At any time while an action under this title is pending, the court may
order the impounding, on such terms as it may deem reasonable—
(A) of all copies or phonorecords claimed to have been made or
used in violation of the exclusive right of the copyright owner;
(B) of all plates, molds, matrices, masters, tapes, film negatives, or
other articles by means of which such copies or phonorecords may be
reproduced; and
( C ) of records documenting the manufacture, sale, or receipt of
things involved in any such violation, provided that any records seized
under this subparagraph shall be taken into the custody of the court.
(2) For impoundments of records ordered under paragraph (1)(C), the
court shall enter an appropriate protective order with respect to discovery
and use of any records or information that has been impounded. The
protective order shall provide for appropriate procedures to ensure that
confidential, private, proprietary, or privileged information contained in
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such records is not improperly disclosed or used.
(3) The relevant provisions of paragraphs (2) through (11) of section
34(d) of the Trademark Act ( 15 U.S.C. 1116(d)(2) through (11) ) shall
extend to any impoundment of records ordered under paragraph (1)(C) that
is based upon an ex parte application, notwithstanding the provisions of rule
65 of the Federal Rules of Civil Procedure. Any references in paragraphs
(2) through (11) of section 34(d) of the Trademark Act to section 32 of such
Act [15 USCS § 1114] shall be read as references to section 501 of this title
[17 USCS § 501], and references to use of a counterfeit mark in connection
with the sale, offering for sale, or distribution of goods or services shall be
read as references to infringement of a copyright.
(b) As part of a final judgment or decree, the court may order the destruction
or other reasonable disposition of all copies or phonorecords found to have
been made or used in violation of the copyright owner’s exclusive rights, and of
all plates, molds, matrices, masters, tapes, film negatives, or other articles by
means of which such copies or phonorecords may be reproduced.
110-403, Title I, § 102(a), 122 Stat. 4258; Dec. 9, 2010, P.L. 111-295, § 6(d), 124 Stat.
3181.
Amendment
2010. Act Dec. 9, 2010, in subsec. (a)(1)(B), substituted “copies or phonorecords” for
“copies of phonorecords”.
§ 504. Remedies for Infringement: Damages and

Profits.
(a) In General. Except as otherwise provided by this title, an infringer of
copyright is liable for either—
(1) the copyright owner’s actual damages and any additional profits of
the infringer, as provided by subsection (b); or
(2) statutory damages, as provided by subsection (c).
(b) Actual Damages and Profits. The copyright owner is entitled to recover
the actual damages suffered by him or her as a result of the infringement, and any
profits of the infringer that are attributable to the infringement and are not taken
into account in computing the actual damages. In establishing the infringer’s
profits, the copyright owner is required to present proof only of the infringer’s
gross revenue, and the infringer is required to prove his or her deductible
expenses and the elements of profit attributable to factors other than the
copyrighted work.
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(c) Statutory Damages.
(1) Except as provided by clause (2) of this subsection, the copyright
owner may elect, at any time before final judgment is rendered, to recover,
instead of actual damages and profits, an award of statutory damages for all
infringements involved in the action, with respect to any one work, for
which any one infringer is liable individually, or for which any two or more
infringers are liable jointly and severally, in a sum of not less than $750 or
more than $30,000 as the court considers just. For the purposes of this
subsection, all the parts of a compilation or derivative work constitute one
work.
(2) In a case where the copyright owner sustains the burden of proving,
and the court finds, that infringement was committed willfully, the court in
its discretion may increase the award of statutory damages to a sum of not
more than $150,000. In a case where the infringer sustains the burden of
proving, and the court finds, that such infringer was not aware and had no
reason to believe that his or her acts constituted an infringement of
copyright, the court in its discretion may reduce the award of statutory
damages to a sum of not less than $200. The court shall remit statutory
damages in any case where an infringer believed and had reasonable
grounds for believing that his or her use of the copyrighted work was a fair
use under section 107 [17 USCS § 107], if the infringer was: (i) an
employee or agent of a nonprofit educational institution, library, or archives
acting within the scope of his or her employment who, or such institution,
library, or archives itself, which infringed by reproducing the work in
copies or phonorecords; or (ii) a public broadcasting entity which or a
person who, as a regular part of the nonprofit activities of a public
broadcasting entity (as defined in section 118(f) [17 USCS § 118(f)])
infringed by performing a published nondramatic literary work or by
reproducing a transmission program embodying a performance of such a
work.
(3)
(A) In a case of infringement, it shall be a rebuttable presumption
that the infringement was committed willfully for purposes of
determining relief if the violator, or a person acting in concert with the
violator, knowingly provided or knowingly caused to be provided
materially false contact information to a domain name registrar, domain
name registry, or other domain name registration authority in registering,
maintaining, or renewing a domain name used in connection with the
infringement.
(B) Nothing in this paragraph limits what may be considered willful
1101
infringement under this subsection.
(C) For purposes of this paragraph, the term “domain name” has the
meaning given that term in section 45 of the Act entitled “An Act to
provide for the registration and protection of trademarks used in
commerce, to carry out the provisions of certain international
conventions, and for other purposes” approved July 5, 1946 (commonly
referred to as the “Trademark Act of 1946”; 15 U.S.C. 1127).
(d) Additional Damages in Certain Cases. In any case in which the court
finds that a defendant proprietor of an establishment who claims as a defense
that its activities were exempt under section 110(5) [17 USCS § 110(5)] did not
have reasonable grounds to believe that its use of a copyrighted work was
exempt under such section, the plaintiff shall be entitled to, in addition to any
award of damages under this section, an additional award of two times the
amount of the license fee that the proprietor of the establishment concerned
should have paid the plaintiff for such use during the preceding period of up to 3
years.
Amendment
2010. Act Dec. 9, 2010, in subsec. (c)(2), substituted “section 118(f)” for “subsection (g) of
section 118”.
§ 505. Remedies for Infringement: Costs and Attorney’s

Fees.
In any civil action under this title, the court in its discretion may allow the
recovery of full costs by or against any party other than the United States or an
officer thereof. Except as otherwise provided by this title, the court may also
award a reasonable attorney’s fee to the prevailing party as part of the costs.

(a) Criminal Infringement.
(1) In General. Any person who willfully infringes a copyright shall be
punished as provided under section 2319 of title 18 [18 USCS § 2319], if
the infringement was committed—
(A) for purposes of commercial advantage or private financial gain;
( B ) by the reproduction or distribution, including by electronic
means, during any 180-day period, of 1 or more copies or phonorecords
of 1 or more copyrighted works, which have a total retail value of more
1102
than $1,000; or
(C) by the distribution of a work being prepared for commercial
distribution, by making it available on a computer network accessible to
members of the public, if such person knew or should have known that
the work was intended for commercial distribution.
(2) Evidence. For purposes of this subsection, evidence of
reproduction or distribution of a copyrighted work, by itself, shall not be
sufficient to establish willful infringement of a copyright.
(3) Definition. In this subsection, the term “work being prepared for
commercial distribution” means—
(A) a computer program, a musical work, a motion picture or other
audiovisual work, or a sound recording, if, at the time of unauthorized
distribution—
( i ) the copyright owner has a reasonable expectation of
commercial distribution; and
( i i ) the copies or phonorecords of the work have not been
commercially distributed; or
(B) a motion picture, if, at the time of unauthorized distribution, the
motion picture—
( i ) has been made available for viewing in a motion picture
exhibition facility; and
(ii) has not been made available in copies for sale to the general
public in the United States in a format intended to permit viewing
outside a motion picture exhibition facility.
(b) Forfeiture, Destruction, and Restitution. Forfeiture, destruction, and
restitution relating to this section shall be subject to section 2323 of title 18 [18
USCS § 2323], to the extent provided in that section, in addition to any other
similar remedies provided by law.
(c) Fraudulent Copyright Notice. Any person who, with fraudulent intent,
places on any article a notice of copyright or words of the same purport that
such person knows to be false, or who, with fraudulent intent, publicly
distributes or imports for public distribution any article bearing such notice or
words that such person knows to be false, shall be fined not more than $2,500.
(d) Fraudulent Removal of Copyright Notice. Any person who, with
fraudulent intent, removes or alters any notice of copyright appearing on a copy
of a copyrighted work shall be fined not more than $2,500.
1103
(e) False Representation. Any person who knowingly makes a false
representation of a material fact in the application for copyright registration
provided for by section 409 [17 USCS § 409], or in any written statement filed
in connection with the application, shall be fined not more than $2,500.
(f) Rights of Attribution and Integrity. Nothing in this section applies to
infringement of the rights conferred by section 106A(a) [17 USCS § 106A(a)].
Leg.H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2586; May 24, 1982, P.L. 97-
180, § 5, 96 Stat. 93; Dec. 1, 1990, P.L. 101-650, Title VI, § 606(b), 104 Stat. 5131; Dec.
16, 1997, P.L. 105-147, § 2(b), 111 Stat. 2678; April 27, 2005, P.L. 109-9, Title I, § 103(a),
119 Stat. 220; Oct. 13, 2008, P.L. 110-403, Title II, § 201(a), 122 Stat. 4260.

(a) Criminal Proceedings. Except as expressly provided otherwise in this
title, no criminal proceeding shall be maintained under the provisions of this
title unless it is commenced within 5 years after the cause of action arose.
(b) Civil Actions. No civil action shall be maintained under the provisions
of this title unless it is commenced within three years after the claim accrued.
105-147 § 2(c), 111 Stat. 2678; October 28, 1998, P.L. 105-304 § 102(e), 112 Stat. 2863.
§ 508. Notification of Filing and Determination of

Actions.
(a) Within one month after the filing of any action under this title, the clerks
of the courts of the United States shall send written notification to the Register
of Copyrights setting forth, as far as is shown by the papers filed in the court, the
names and addresses of the parties and the title, author, and registration number
of each work involved in the action. If any other copyrighted work is later
included in the action by amendment, answer, or other pleading, the clerk shall
also send a notification concerning it to the Register within one month after the
pleading is filed.
(b) Within one month after any final order or judgment is issued in the case,
the clerk of the court shall notify the Register of it, sending with the notification
a copy of the order or judgment together with the written opinion, if any, of the
court.
(c) Upon receiving the notifications specified in this section, the Register
shall make them a part of the public records of the Copyright Office.
1104
§ 509. [Repealed]
This section (Act Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2587;
Nov. 13, 1997, P.L. 105-80, § 12(a)(14), 111 Stat. 1535) was repealed by Act
Oct. 13, 2008, P.L. 110-403 , Title II, § 201(b)(1), 122 Stat. 4260. It related to
seizure and forfeiture.
§ 510. Remedies for Alteration of Programming by

Cable Systems.
(a) In any action filed pursuant to section 111(c)(3), the following remedies
shall be available:
(1) Where an action is brought by a party identified in subsections (b) or
(c) of section 501, the remedies provided by sections 502 through 505, and
the remedy provided by subsection (b) of this section; and
(2) When an action is brought by a party identified in subsection (d) of
section 501, the remedies provided by sections 502 and 505, together with
any actual damages suffered by such party as a result of the infringement,
and the remedy provided by subsection (b) of this section.
(b) In any action filed pursuant to section 111(c)(3), the court may decree
that, for a period not to exceed thirty days, the cable system shall be deprived of
the benefit of a statutory license for one or more distant signals carried by such
cable system.
Leg.H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2587; Nov. 29, 1999, P.L.
106-113, Div B, § 1000(a)(9), 113 Stat. 1536.
§ 511. Liability of States, Instrumentalities of States,

and State Officials for Infringement of Copyright.
(a) In General. Any State, any instrumentality of a State, and any officer or
employee of a State or instrumentality of a State acting in his or her official
capacity, shall not be immune, under the Eleventh Amendment of the
immunity, from suit in Federal Court by any person, including any governmental
or nongovernmental entity, for a violation of any of the exclusive rights of a
copyright owner provided by sections 106 through 122, for importing copies of
phonorecords in violation of section 602, or for any other violation under this
title.
(b) Remedies. In a suit described in subsection (a) for a violation
described in that subsection, remedies (including remedies both at law and in
1105
equity) are available for the violation to the same extent as such remedies are
available for such a violation in a suit against any public or private entity other
than a State, instrumentality of a State, or officer or employee of a State acting in
his or her official capacity. Such remedies include impounding and disposition
of infringing articles under section 503, actual damages and profits and statutory
damages under section 504, costs and attorney’s fees under section 505, and the
remedies provided in section 510.
Leg.H. November 15, 1990, P.L. 101-553 § 2(a)(2), 104 Stat. 2749; August 5, 1999,
P.L. 106-44 § 1(g)(6), 113 Stat. 222; November 2, 2002, P.L. 107-273 § 13210(4)(C), 116
Stat. 1909.
§ 512. Limitations on Liability Relating to Material

Online.
(a) Transitory Digital Network Communications. A service provider shall
not be liable for monetary relief, or, except as provided in subsection (j), for
injunctive or other equitable relief, for infringement of copyright by reason of
the provider’s transmitting, routing, or providing connections for, material
through a system or network controlled or operated by or for the service
provider, or by reason of the intermediate and transient storage of that material
in the course of such transmitting, routing, or providing connections, if—
(1) the transmission of the material was initiated by or at the direction of
a person other than the service provider;
( 2) the transmission, routing, provision of connections, or storage is
carried out through an automatic technical process without selection of the
material by the service provider;
(3) the service provider does not select the recipients of the material
except as an automatic response to the request of another person;
(4) no copy of the material made by the service provider in the course of
such intermediate or transient storage is maintained on the system or
network in a manner ordinarily accessible to anyone other than anticipated
recipients, and no such copy is maintained on the system or network in a
manner ordinarily accessible to such anticipated recipients for a longer
period than is reasonably necessary for the transmission, routing, or
provision of connections; and
(5) the material is transmitted through the system or network without
modification of its content.
(b) System Caching.
(1) Limitation on Liability. A service provider shall not be liable for
1106
monetary relief, or, except as provided in subsection (j), for injunctive or
other equitable relief, for infringement of copyright by reason of the
intermediate and temporary storage of material on a system or network
controlled or operated by or for the service provider in a case in which—
(A) the material is made available online by a person other than the
service provider;
( B ) the material is transmitted from the person described in
subparagraph (A) through the system or network to a person other than
the person described in subparagraph (A) at the direction of that other
person; and
(C) the storage is carried out through an automatic technical process
for the purpose of making the material available to users of the system or
network who, after the material is transmitted as described in
subparagraph (B), request access to the material from the person
described in subparagraph (A), if the conditions set forth in paragraph
(2) are met.
(2) Conditions. The conditions referred to in paragraph (1) are that—
( A) the material described in paragraph (1) is transmitted to the
subsequent users described in paragraph (1)(C) without modification to
its content from the manner in which the material was transmitted from
the person described in paragraph (1)(A);
(B) the service provider described in paragraph (1) complies with
rules concerning the refreshing, reloading, or other updating of the
material when specified by the person making the material available
online in accordance with a generally accepted industry standard data
communications protocol for the system or network through which that
person makes the material available, except that this subparagraph
applies only if those rules are not used by the person described in
paragraph (1)(A) to prevent or unreasonably impair the intermediate
storage to which this subsection applies;
( C ) the service provider does not interfere with the ability of
technology associated with the material to return to the person described
in paragraph (1)(A) the information that would have been available to
that person if the material had been obtained by the subsequent users
described in paragraph (1)(C) directly from that person, except that this
subparagraph applies only if that technology—
(i) does not significantly interfere with the performance of the
provider’s system or network or with the intermediate storage of the
material;
1107
( i i ) is consistent with generally accepted industry standard
communications protocols; and
(iii) does not extract information from the provider’s system or
network other than the information that would have been available to
the person described in paragraph (1)(A) if the subsequent users had
gained access to the material directly from that person;
( D) if the person described in paragraph (1)(A) has in effect a
condition that a person must meet prior to having access to the material,
such as a condition based on payment of a fee or provision of a
password or other information, the service provider permits access to
the stored material in significant part only to users of its system or
network that have met those conditions and only in accordance with
those conditions; and
(E) if the person described in paragraph (1)(A) makes that material
available online without the authorization of the copyright owner of the
material, the service provider responds expeditiously to remove, or
disable access to, the material that is claimed to be infringing upon
notification of claimed infringement as described in subsection (c)(3),
except that this subparagraph applies only if—
(i) the material has previously been removed from the originating
site or access to it has been disabled, or a court has ordered that the
material be removed from the originating site or that access to the
material on the originating site be disabled; and
(ii) the party giving the notification includes in the notification a
statement confirming that the material has been removed from the
originating site or access to it has been disabled or that a court has
ordered that the material be removed from the originating site or that
access to the material on the originating site be disabled.
(c) Information Residing on Systems or Networks at Direction of Users.
(1) In General. A service provider shall not be liable for monetary
relief, or, except as provided in subsection (j), for injunctive or other
equitable relief, for infringement of copyright by reason of the storage at the
direction of a user of material that resides on a system or network controlled
or operated by or for the service provider, if the service provider—
(A)
(i) does not have actual knowledge that the material or an activity
using the material on the system or network is infringing;
1108
(ii) in the absence of such actual knowledge, is not aware of facts
or circumstances from which infringing activity is apparent; or
( i i i ) upon obtaining such knowledge or awareness, acts
expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the
infringing activity, in a case in which the service provider has the right
and ability to control such activity; and
( C ) upon notification of claimed infringement as described in
paragraph (3), responds expeditiously to remove, or disable access to,
the material that is claimed to be infringing or to be the subject of
infringing activity.
(2) Designated Agent. The limitations on liability established in this
subsection apply to a service provider only if the service provider has
designated an agent to receive notifications of claimed infringement
described in paragraph (3), by making available through its service,
including on its website in a location accessible to the public, and by
providing to the Copyright Office, substantially the following information:
(A) the name, address, phone number, and electronic mail address of
the agent.
(B) other contact information which the Register of Copyrights may
deem appropriate.
The Register of Copyrights shall maintain a current directory of
agents available to the public for inspection, including through the
Internet, and may require payment of a fee by service providers to cover
the costs of maintaining the directory.
(3) Elements of Notification.
(A) To be effective under this subsection, a notification of claimed
infringement must be a written communication provided to the
designated agent of a service provider that includes substantially the
following:
(i) A physical or electronic signature of a person authorized to
act on behalf of the owner of an exclusive right that is allegedly
infringed.
(ii) Identification of the copyrighted work claimed to have been
infringed, or, if multiple copyrighted works at a single online site are
covered by a single notification, a representative list of such works
at that site.
1109
(iii) Identification of the material that is claimed to be infringing
or to be the subject of infringing activity and that is to be removed or
access to which is to be disabled, and information reasonably
sufficient to permit the service provider to locate the material.
( i v ) Information reasonably sufficient to permit the service
provider to contact the complaining party, such as an address,
telephone number, and, if available, an electronic mail address at
which the complaining party may be contacted.
(v) A statement that the complaining party has a good faith belief
that use of the material in the manner complained of is not authorized
by the copyright owner, its agent, or the law.
( v i ) A statement that the information in the notification is
accurate, and under penalty of perjury, that the complaining party is
authorized to act on behalf of the owner of an exclusive right that is
allegedly infringed.
(B)
(i) Subject to clause (ii), a notification from a copyright owner or
from a person authorized to act on behalf of the copyright owner that
fails to comply substantially with the provisions of subparagraph (A)
shall not be considered under paragraph (1)(A) in determining
whether a service provider has actual knowledge or is aware of
facts or circumstances from which infringing activity is apparent.
(ii) In a case in which the notification that is provided to the
service provider’s designated agent fails to comply substantially
with all the provisions of subparagraph (A) but substantially
complies with clauses (ii), (iii), and (iv) of subparagraph (A),
clause (i) of this subparagraph applies only if the service provider
promptly attempts to contact the person making the notification or
takes other reasonable steps to assist in the receipt of notification
that substantially complies with all the provisions of subparagraph
(A).
(d) Information Location Tools. A service provider shall not be liable for
monetary relief, or, except as provided in subsection (j), for injunctive or other
equitable relief, for infringement of copyright by reason of the provider
referring or linking users to an online location containing infringing material or
infringing activity, by using information location tools, including a directory,
index, reference, pointer, or hypertext link, if the service provider—
(1)
1110
(A) does not have actual knowledge that the material or activity is
infringing;
(B) in the absence of such actual knowledge, is not aware of facts or
circumstances from which infringing activity is apparent; or
(C) upon obtaining such knowledge or awareness, acts expeditiously
to remove, or disable access to, the material;
( 2 ) does not receive a financial benefit directly attributable to the
infringing activity, in a case in which the service provider has the right and
ability to control such activity; and
(3) upon notification of claimed infringement as described in subsection
(c)(3), responds expeditiously to remove, or disable access to, the material
that is claimed to be infringing or to be the subject of infringing activity,
except that, for purposes of this paragraph, the information described in
subsection (c)(3)(A)(iii) shall be identification of the reference or link, to
material or activity claimed to be infringing, that is to be removed or access
to which is to be disabled, and information reasonably sufficient to permit
the service provider to locate that reference or link.
(e) Limitation on Liability of Nonprofit Educational Institutions.
(1) When a public or other nonprofit institution of higher education is a
service provider, and when a faculty member or graduate student who is an
employee of such institution is performing a teaching or research function,
for the purposes of subsections (a) and (b) such faculty member or graduate
student shall be considered to be a person other than the institution, and for
the purposes of subsections (c) and (d) such faculty member’s or graduate
student’s knowledge or awareness of his or her infringing activities shall not
be attributed to the institution, if—
(A) such faculty member’s or graduate student’s infringing activities
do not involve the provision of online access to instructional materials
that are or were required or recommended, within the preceding 3-year
period, for a course taught at the institution by such faculty member or
graduate student;
( B ) the institution has not, within the preceding 3-year period,
received more than two notifications described in subsection (c)(3) of
claimed infringement by such faculty member or graduate student, and
such notifications of claimed infringement were not actionable under
subsection (f); and
( C) the institution provides to all users of its system or network
informational materials that accurately describe, and promote
1111
compliance with, the laws of the United States relating to copyright.
( 2) For the purposes of this subsection, the limitations on injunctive
relief contained in subsections (j)(2) and (j)(3), but not those in (j)(1), shall
apply.
(f) Misrepresentations. Any person who knowingly materially
misrepresents under this section—
(1) that material or activity is infringing, or
(2) that material or activity was removed or disabled by mistake or
misidentification,
shall be liable for any damages, including costs and attorneys’ fees,
incurred by the alleged infringer, by any copyright owner or copyright
owner’s authorized licensee, or by a service provider, who is injured by
such misrepresentation, as the result of the service provider relying upon
such misrepresentation in removing or disabling access to the material or
activity claimed to be infringing, or in replacing the removed material or
ceasing to disable access to it.
(g) Replacement of Removed or Disabled Material and Limitation on
Other Liability.
(1) No Liability for Taking Down Generally. Subject to paragraph (2),
a service provider shall not be liable to any person for any claim based on
the service provider’s good faith disabling of access to, or removal of,
material or activity claimed to be infringing or based on facts or
circumstances from which infringing activity is apparent, regardless of
whether the material or activity is ultimately determined to be infringing.
(2) Exception. Paragraph (1) shall not apply with respect to material
residing at the direction of a subscriber of the service provider on a system
or network controlled or operated by or for the service provider that is
removed, or to which access is disabled by the service provider, pursuant to
a notice provided under subsection (c)(1)(C), unless the service provider—
(A) takes reasonable steps promptly to notify the subscriber that it
has removed or disabled access to the material;
(B) upon receipt of a counter notification described in paragraph
(3), promptly provides the person who provided the notification under
subsection (c)(1)(C) with a copy of the counter notification, and informs
that person that it will replace the removed material or cease disabling
access to it in 10 business days; and
(C) replaces the removed material and ceases disabling access to it
1112
not less than 10, nor more than 14, business days following receipt of
the counter notice, unless its designated agent first receives notice from
the person who submitted the notification under subsection (c)(1)(C) that
such person has filed an action seeking a court order to restrain the
subscriber from engaging in infringing activity relating to the material on
the service provider’s system or network.
(3) Contents of Counter Notification. To be effective under this
subsection, a counter notification must be a written communication provided
to the service provider’s designated agent that includes substantially the
following:
(A) A physical or electronic signature of the subscriber.
(B) Identification of the material that has been removed or to which
access has been disabled and the location at which the material
appeared before it was removed or access to it was disabled.
(C) A statement under penalty of perjury that the subscriber has a
good faith belief that the material was removed or disabled as a result of
mistake or misidentification of the material to be removed or disabled.
(D) The subscriber’s name, address, and telephone number, and a
statement that the subscriber consents to the jurisdiction of Federal
District Court for the judicial district in which the address is located, or
if the subscriber’s address is outside of the United States, for any
judicial district in which the service provider may be found, and that the
subscriber will accept service of process from the person who provided
notification under subsection (c)(1)(C) or an agent of such person.
(4) Limitation on Other Liability. A service provider’s compliance
with paragraph (2) shall not subject the service provider to liability for
copyright infringement with respect to the material identified in the notice
provided under subsection (c)(1)(C).
(h) Subpoena to identify infringer.
(1) Request. A copyright owner or a person authorized to act on the
owner’s behalf may request the clerk of any United States district court to
issue a subpoena to a service provider for identification of an alleged
infringer in accordance with this subsection.
(2) Contents of Request. The request may be made by filing with the
clerk—
(A) a copy of a notification described in subsection (c)(3)(A);
(B) a proposed subpoena; and
1113
(C) a sworn declaration to the effect that the purpose for which the
subpoena is sought is to obtain the identity of an alleged infringer and
that such information will only be used for the purpose of protecting
rights under this title.
(3) Contents of Subpoena. The subpoena shall authorize and order the
service provider receiving the notification and the subpoena to
expeditiously disclose to the copyright owner or person authorized by the
copyright owner information sufficient to identify the alleged infringer of the
material described in the notification to the extent such information is
available to the service provider.
(4) Basis for Granting Subpoena. If the notification filed satisfies the
provisions of subsection (c)(3)(A), the proposed subpoena is in proper
form, and the accompanying declaration is properly executed, the clerk shall
expeditiously issue and sign the proposed subpoena and return it to the
requester for delivery to the service provider.
(5) Actions of Service Provider Receiving Subpoena. Upon receipt of
the issued subpoena, either accompanying or subsequent to the receipt of a
notification described in subsection (c)(3)(A), the service provider shall
expeditiously disclose to the copyright owner or person authorized by the
copyright owner the information required by the subpoena, notwithstanding
any other provision of law and regardless of whether the service provider
responds to the notification.
(6) Rules Applicable to Subpoena. Unless otherwise provided by this
section or by applicable rules of the court, the procedure for issuance and
delivery of the subpoena, and the remedies for noncompliance with the
subpoena, shall be governed to the greatest extent practicable by those
provisions of the Federal Rules of Civil Procedure governing the issuance,
service, and enforcement of a subpoena duces tecum.
(i) Conditions for Eligibility.
(1) Accommodation of Technology. The limitations on liability
established by this section shall apply to a service provider only if the
service provider—
( A ) has adopted and reasonably implemented, and informs
subscribers and account holders of the service provider’s system or
network of, a policy that provides for the termination in appropriate
circumstances of subscribers and account holders of the service
provider’s system or network who are repeat infringers; and
(B) accommodates and does not interfere with standard technical
1114
measures.
(2) Definition. As used in this subsection, the term “standard technical
measures” means technical measures that are used by copyright owners to
identify or protect copyrighted works and—
(A) have been developed pursuant to a broad consensus of copyright
owners and service providers in an open, fair, voluntary, multi-industry
standards process;
(B) are available to any person on reasonable and nondiscriminatory
terms; and
( C ) do not impose substantial costs on service providers or
substantial burdens on their systems or networks.
(j) Injunctions. The following rules shall apply in the case of any
application for an injunction under section 502 [17 USCS § 502] against a
service provider that is not subject to monetary remedies under this section:
(1) Scope of Relief.
(A) With respect to conduct other than that which qualifies for the
limitation on remedies set forth in subsection (a), the court may grant
injunctive relief with respect to a service provider only in one or more
of the following forms:
( i ) An order restraining the service provider from providing
access to infringing material or activity residing at a particular
online site on the provider’s system or network.
(ii) An order restraining the service provider from providing
access to a subscriber or account holder of the service provider’s
system or network who is engaging in infringing activity and is
identified in the order, by terminating the accounts of the subscriber
or account holder that are specified in the order.
(iii) Such other injunctive relief as the court may consider
necessary to prevent or restrain infringement of copyrighted material
specified in the order of the court at a particular online location, if
such relief is the least burdensome to the service provider among the
forms of relief comparably effective for that purpose.
(B) If the service provider qualifies for the limitation on remedies
described in subsection (a), the court may only grant injunctive relief in
one or both of the following forms:
( i ) An order restraining the service provider from providing
access to a subscriber or account holder of the service provider’s
1115
system or network who is using the provider’s service to engage in
infringing activity and is identified in the order, by terminating the
accounts of the subscriber or account holder that are specified in the
order.
(ii) An order restraining the service provider from providing
access, by taking reasonable steps specified in the order to block
access, to a specific, identified, online location outside the United
States.
(2) Considerations. The court, in considering the relevant criteria for
injunctive relief under applicable law, shall consider—
(A) whether such an injunction, either alone or in combination with
other such injunctions issued against the same service provider under
this subsection, would significantly burden either the provider or the
operation of the provider’s system or network;
(B) the magnitude of the harm likely to be suffered by the copyright
owner in the digital network environment if steps are not taken to
prevent or restrain the infringement;
( C ) whether implementation of such an injunction would be
technically feasible and effective, and would not interfere with access to
noninfringing material at other online locations; and
(D) whether other less burdensome and comparably effective means
of preventing or restraining access to the infringing material are
available.
(3) Notice and Ex Parte Orders. Injunctive relief under this subsection
shall be available only after notice to the service provider and an
opportunity for the service provider to appear are provided, except for
orders ensuring the preservation of evidence or other orders having no
material adverse effect on the operation of the service provider’s
communications network.
(k) Definitions.
(1) Service Provider.
(A) As used in subsection (a), the term “service provider” means an
entity offering the transmission, routing, or providing of connections for
digital online communications, between or among points specified by a
user, of material of the user’s choosing, without modification to the
content of the material as sent or received.
( B ) As used in this section, other than subsection (a), the term
1116
“service provider” means a provider of online services or network
access, or the operator of facilities therefor, and includes an entity
described in subparagraph (A).
(2) Monetary Relief. As used in this section, the term “monetary relief”
means damages, costs, attorneys’ fees, and any other form of monetary
payment.
(l) Other Defenses not Affected. The failure of a service provider’s
conduct to qualify for limitation of liability under this section shall not bear
adversely upon the consideration of a defense by the service provider that the
service provider’s conduct is not infringing under this title or any other defense.
(m) Protection of Privacy. Nothing in this section shall be construed to
condition the applicability of subsections (a) through (d) on—
(1) a service provider monitoring its service or affirmatively seeking
facts indicating infringing activity, except to the extent consistent with a
standard technical measure complying with the provisions of subsection (i);
or
(2) a service provider gaining access to, removing, or disabling access
to material in cases in which such conduct is prohibited by law.
(n) Construction. Subsections (a), (b), (c), and (d) describe separate and
distinct functions for purposes of applying this section. Whether a service
provider qualifies for the limitation on liability in any one of those subsections
shall be based solely on the criteria in that subsection, and shall not affect a
determination of whether that service provider qualifies for the limitations on
liability under any other such subsection.
Leg. H. Oct. 28, 1998, P.L. 105-304, Title II, § 202(a), 112 Stat. 2877; Aug. 5, 1999,
P.L. 106-44, § 1(d), 113 Stat. 222; Dec. 9, 2010, P.L. 111-295, § 3(a), 124 Stat. 3180.
Amendment
2010. Act Dec. 9, 2010, in subsec. (c)(2), in the concluding matter, deleted “, in both
electronic and hard copy formats” following “Internet”.
§ 513. Determination of Reasonable License Fees for

Individual Proprietors.
In the case of any performing rights society subject to a consent decree
which provides for the determination of reasonable license rates or fees to be
charged by the performing rights society, notwithstanding the provisions of that
consent decree, an individual proprietor who owns or operates fewer than 7
non-publicly traded establishments in which nondramatic musical works are
1117
performed publicly and who claims that any license agreement offered by that
performing rights society is unreasonable in its license rate or fee as to that
individual proprietor, shall be entitled to determination of a reasonable license
rate or fee as follows:
( 1 ) The individual proprietor may commence such proceeding for
determination of a reasonable license rate or fee by filing an application in
the applicable district court under paragraph (2) that a rate disagreement
exists and by serving a copy of the application on the performing rights
society. Such proceeding shall commence in the applicable district court
within 90 days after the service of such copy, except that such 90-day
requirement shall be subject to the administrative requirements of the court.
(2) The proceeding under paragraph (1) shall be held, at the individual
proprietor’s election, in the judicial district of the district court with
jurisdiction over the applicable consent decree or in that place of holding
court of a district court that is the seat of the Federal circuit (other than the
Court of Appeals for the Federal Circuit) in which the proprietor’s
establishment is located.
(3) Such proceeding shall be held before the judge of the court with
jurisdiction over the consent decree governing the performing rights society.
At the discretion of the court, the proceeding shall be held before a special
master or magistrate judge appointed by such judge. Should that consent
decree provide for the appointment of an advisor or advisors to the court for
any purpose, any such advisor shall be the special master so named by the
court.
(4) In any such proceeding, the industry rate shall be presumed to have
been reasonable at the time it was agreed to or determined by the court.
Such presumption shall in no way affect a determination of whether the rate
is being correctly applied to the individual proprietor.
(5) Pending the completion of such proceeding, the individual proprietor
shall have the right to perform publicly the copyrighted musical
compositions in the repertoire of the performing rights society by paying an
interim license rate or fee into an interest bearing escrow account with the
clerk of the court, subject to retroactive adjustment when a final rate or fee
has been determined, in an amount equal to the industry rate, or, in the
absence of an industry rate, the amount of the most recent license rate or fee
agreed to by the parties.
(6) Any decision rendered in such proceeding by a special master or
magistrate judge named under paragraph (3) shall be reviewed by the judge
of the court with jurisdiction over the consent decree governing the
performing rights society. Such proceeding, including such review, shall be
1118
concluded within 6 months after its commencement.
( 7 ) Any such final determination shall be binding only as to the
individual proprietor commencing the proceeding, and shall not be
applicable to any other proprietor or any other performing rights society,
and the performing rights society shall be relieved of any obligation of
nondiscrimination among similarly situated music users that may be imposed
by the consent decree governing its operations.
(8) An individual proprietor may not bring more than one proceeding
provided for in this section for the determination of a reasonable license
rate or fee under any license agreement with respect to any one performing
rights society.
( 9) For purposes of this section, the term “industry rate” means the
license fee a performing rights society has agreed to with, or which has been
determined by the court for, a significant segment of the music user industry
to which the individual proprietor belongs.
Leg.H. October 27, 1998, P.L. 105-298 § 203(a), 112 Stat. 2831, effective January 25,
1999; August 5, 1999, P.L. 106-44 § 1(c)(1), 113 Stat. 221.
CHAPTER 6
IMPORTATION AND EXPORTATION
This section (Act Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2588;
July 13, 1982, P.L. 97-215, 96 Stat. 178; Nov. 13, 1997, P.L. 105-80, § 12(a)
(15), (16), 111 Stat. 1535; Oct. 13, 2008, P.L. 110-403 , Title I, § 105(c)(2),
122 Stat. 4260) was repealed by Act Dec. 9, 2010, P.L. 111-295 , § 4(a), 124
Stat. 3180. It related to importation and public distribution of certain copies
manufactured outside the United States or Canada.
§ 602. Infringing Importation or Exportation of Copies

or Phonorecords.
(a) Infringing Importation or Exportation.
(1) Importation. Importation into the United States, without the
authority of the owner of copyright under this title, of copies or
phonorecords of a work that have been acquired outside the United States is
an infringement of the exclusive right to distribute copies or phonorecords
under section 106 [17 USCS § 106], actionable under section 501 [17 USCS
1119
§ 501].
(2) Importation or Exportation of Infringing Items. Importation into the
United States or exportation from the United States, without the authority of
the owner of copyright under this title, of copies or phonorecords, the
making of which either constituted an infringement of copyright, or which
would have constituted an infringement of copyright if this title had been
applicable, is an infringement of the exclusive right to distribute copies or
phonorecords under section 106 [17 USCS § 106], actionable under
sections 501 and 506 [17 USCS §§ 501 and 506].
(3) Exceptions. This subsection does not apply to—
(A) importation or exportation of copies or phonorecords under the
authority or for the use of the Government of the United States or of any
State or political subdivision of a State, but not including copies or
phonorecords for use in schools, or copies of any audiovisual work
imported for purposes other than archival use;
(B) importation or exportation, for the private use of the importer or
exporter and not for distribution, by any person with respect to no more
than one copy or phonorecord of any one work at any one time, or by any
person arriving from outside the United States or departing from the
United States with respect to copies or phonorecords forming part of
such person’s personal baggage; or
( C) importation by or for an organization operated for scholarly,
educational, or religious purposes and not for private gain, with respect
to no more than one copy of an audiovisual work solely for its archival
purposes, and no more than five copies or phonorecords of any other
work for its library lending or archival purposes, unless the importation
of such copies or phonorecords is part of an activity consisting of
systematic reproduction or distribution, engaged in by such organization
in violation of the provisions of section 108(g)(2) [17 USCS § 108(g)
(2)].
(b) Import Prohibition. In a case where the making of the copies or
phonorecords would have constituted an infringement of copyright if this title
had been applicable, their importation is prohibited. In a case where the copies
or phonorecords were lawfully made, United States Customs and Border
Protection has no authority to prevent their importation. In either case, the
Secretary of the Treasury is authorized to prescribe, by regulation, a procedure
under which any person claiming an interest in the copyright in a particular
work may, upon payment of a specified fee, be entitled to notification by United
States Customs and Border Protection of the importation of articles that appear
to be copies or phonorecords of the work.
1120
110-403, Title I, § 105(b)-(c)(1), 122 Stat. 4259; Dec. 9, 2010, P.L. 111-295, § 4(c), 124
Stat. 3181.
Amendment
2010. Act Dec. 9, 2010, in subsec. (b), deleted “unless the provisions of section 601 are
applicable” following “their importation”.
§ 603. Importation Prohibitions: Enforcement and

Disposition of Excluded Articles.
(a) The Secretary of the Treasury and the United States Postal Service shall
separately or jointly make regulations for the enforcement of the provisions of
this title prohibiting importation.
( b ) These regulations may require, as a condition for the exclusion of
articles under section 602—
( 1) that the person seeking exclusion obtain a court order enjoining
importation of the articles; or
(2) that the person seeking exclusion furnish proof, of a specified nature
and in accordance with prescribed procedures, that the copyright in which
such person claims an interest is valid and that the importation would
violate the prohibition in section 602; the person seeking exclusion may also
be required to post a surety bond for any injury that may result if the
detention or exclusion of the articles proves to be unjustified.
(c) Articles imported in violation of the importation prohibitions of this title
are subject to seizure and forfeiture in the same manner as property imported in
violation of the customs revenue laws. Forfeited articles shall be destroyed as
directed by the Secretary of the Treasury or the court, as the case may be.
§ 8, 110 Stat. 1388.
CHAPTER 7
COPYRIGHT OFFICE
§ 701. The Copyright Office: General Responsibilities
and Organization.
1121
( a ) All administrative functions and duties under this title, except as
otherwise specified, are the responsibility of the Register of Copyrights as
director of the Copyright Office of the Library of Congress. The Register of
Copyrights, together with the subordinate officers and employees of the
Copyright Office, shall be appointed by the Librarian of Congress, and shall act
under the Librarian’s general direction and supervision.
(b) In addition to the functions and duties set out elsewhere in this chapter,
the Register of Copyrights shall perform the following functions:
( 1) Advise Congress on national and international issues relating to
copyright, other matters arising under this title, and related matters.
( 2 ) Provide information and assistance to Federal departments and
agencies and the Judiciary on national and international issues relating to
copyright, other matters arising under this title, and related matters.
( 3 ) Participate in meetings of international intergovernmental
organizations and meetings with foreign government officials relating to
copyright, other matters arising under this title, and related matters,
including as a member of United States delegations as authorized by the
appropriate Executive branch authority.
( 4) Conduct studies and programs regarding copyright, other matters
arising under this title, and related matters, the administration of the
Copyright Office, or any function vested in the Copyright Office by law,
including educational programs conducted cooperatively with foreign
intellectual property offices and international intergovernmental
organizations.
(5) Perform such other functions as Congress may direct, or as may be
appropriate in furtherance of the functions and duties specifically set forth in
this title.
(c) The Register of Copyrights shall adopt a seal to be used on and after
January 1, 1978, to authenticate all certified documents issued by the Copyright
Office.
(d) The Register of Copyrights shall make an annual report to the Librarian
of Congress of the work and accomplishments of the Copyright Office during the
previous fiscal year. The annual report of the Register of Copyrights shall be
published separately and as a part of the annual report of the Librarian of
Congress.
( e ) Except as provided by section 706(b) and the regulations issued
thereunder, all actions taken by the Register of Copyrights under this title are
subject to the provisions of the Administrative Procedure Act of June 11, 1946,
1122
as amended (c. 324, 60 Stat. 237, Title 5, United States Code, Chapter 5,
Subchapter II and Chapter 7).
(f) The Register of Copyrights shall be compensated at the rate of pay in
effect for level III of the Executive Schedule under section 5314 of title 5. The
Librarian of Congress shall establish not more than four positions for Associate
Registers of Copyrights, in accordance with the recommendations of the
Register of Copyrights. The Librarian shall make appointments to such positions
after consultation with the Register of Copyrights. Each Associate Register of
Copyrights shall be paid at a rate not to exceed the maximum annual rate of
basic pay payable for GS-18 of the General Schedule under section 5332 of title
5.
§ 2(b), 104 Stat. 290; October 28, 1998, P.L. 105-304 § 401(a)(2), (b), 112 Stat. 2887.

The Register of Copyrights is authorized to establish regulations not
inconsistent with law for the administration of the functions and duties made the
responsibility of the Register under this title. All regulations established by the
Register under this title are subject to the approval of the Librarian of Congress.

In any case in which time limits are prescribed under this title for the
performance of an action in the Copyright Office, and in which the last day of
the prescribed period falls on a Saturday, Sunday, holiday, or other nonbusiness
day within the District of Columbia or the Federal Government, the action may
be taken on the next succeeding business day, and is effective as of the date
when the period expired.
§ 704. Retention and Disposition of Articles Deposited

in Copyright Office.
(a) Upon their deposit in the Copyright Office under sections 407 and 408
[17 USCS §§ 407 and 408], all copies, phonorecords, and identifying material,
including those deposited in connection with claims that have been refused
registration, are the property of the United States Government.
(b) In the case of published works, all copies, phonorecords, and identifying
material deposited are available to the Library of Congress for its collections,
1123
or for exchange or transfer to any other library. In the case of unpublished
works, the Library is entitled, under regulations that the Register of Copyrights
shall prescribe, to select any deposits for its collections or for transfer to the
National Archives of the United States or to a Federal records center, as defined
in section 2901 of title 44.
( c ) The Register of Copyrights is authorized, for specific or general
categories of works, to make a facsimile reproduction of all or any part of the
material deposited under section 408 [17 USCS § 408], and to make such
reproduction a part of the Copyright Office records of the registration, before
transferring such material to the Library of Congress as provided by subsection
(b), or before destroying or otherwise disposing of such material as provided by
subsection (d).
(d) Deposits not selected by the Library under subsection (b), or identifying
portions or reproductions of them, shall be retained under the control of the
Copyright Office, including retention in Government storage facilities, for the
longest period considered practicable and desirable by the Register of
Copyrights and the Librarian of Congress. After that period it is within the joint
discretion of the Register and the Librarian to order their destruction or other
disposition; but, in the case of unpublished works, no deposit shall be
knowingly or intentionally destroyed or otherwise disposed of during its term of
copyright unless a facsimile reproduction of the entire deposit has been made a
part of the Copyright Office records as provided by subsection (c).
(e) The depositor of copies, phonorecords, or identifying material under
section 408 [17 USCS § 408], or the copyright owner of record, may request
retention, under the control of the Copyright Office, of one or more of such
articles for the full term of copyright in the work. The Register of Copyrights
shall prescribe, by regulation, the conditions under which such requests are to
be made and granted, and shall fix the fee to be charged under section 708(a)
[17 USCS § 708(a)] if the request is granted.
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2591; July 3, 1990, P.L.
101-318, § 2(c), 104 Stat. 288; Dec. 9, 2010, P.L. 111-295, § 6(e), 124 Stat. 3181.
Amendment
2010. Act Dec. 9, 2010, in subsec. (e), substituted “section 708(a)” for “section 708(a)
(10)”.
§ 705. Copyright Office Records: Preparation,

Maintenance, Public Inspection, and Searching.
( a ) The Register of Copyrights shall ensure that records of deposits,
registrations, recordations, and other actions taken under this title are
1124
maintained, and that indexes of such records are prepared.
( b ) Such records and indexes, as well as the articles deposited in
connection with completed copyright registrations and retained under the control
of the Copyright Office, shall be open to public inspection.
( c ) Upon request and payment of the fee specified by section 708, the
Copyright Office shall make a search of its public records, indexes, and
deposits, and shall furnish a report of the information they disclose with respect
to any particular deposits, registrations, or recorded documents.
106-379 § 3(a)(2), 114 Stat. 1445.

(a) Copies may be made of any public records or indexes of the Copyright
Office; additional certificates of copyright registration and copies of any public
records or indexes may be furnished upon request and payment of the fees
specified by section 708.
(b) Copies or reproductions of deposited articles retained under the control
of the Copyright Office shall be authorized or furnished only under the
conditions specified by the Copyright Office regulations.

(a) Catalog of Copyright Entries. The Register of Copyrights shall compile
and publish at periodic intervals catalogs of all copyright registrations. These
catalogs shall be divided into parts in accordance with the various classes of
works, and the Register has discretion to determine, on the basis of
practicability and usefulness, the form and frequency of publication of each
particular part.
(b) Other Publications. The Register shall furnish, free of charge upon
request, application forms for copyright registration and general informational
material in connection with the functions of the Copyright Office. The Register
also has the authority to publish compilations of information, bibliographies,
and other material he or she considers to be of value to the public.
(c) Distribution of Publications. All publications of the Copyright Office
shall be furnished to depository libraries as specified under section 1905 of title
44, and, aside from those furnished free of charge, shall be offered for sale to
the public at prices based on the cost of reproduction and distribution.
1125
(a) Fees. Fees shall be paid to the Register of Copyrights—
(1) on filing each application under section 408 [17 USCS § 408] for
registration of a copyright claim or for a supplementary registration,
including the issuance of a certificate of registration if registration is made;
(2) on filing each application for registration of a claim for renewal of a
subsisting copyright under section 304(a) [17 USCS § 304(a)], including the
issuance of a certificate of registration if registration is made;
(3) for the issuance of a receipt for a deposit under section 407 [17
USCS § 407];
(4) for the recordation, as provided by section 205 [17 USCS § 205], of
a transfer of copyright ownership or other document;
(5) for the filing, under section 115(b) [17 USCS § 115(b)], of a notice
of intention to obtain a compulsory license;
(6) for the recordation, under section 302(c) [17 USCS § 302(c)], of a
statement revealing the identity of an author of an anonymous or
pseudonymous work, or for the recordation, under section 302(d) [17 USCS
§ 302(d)], of a statement relating to the death of an author;
( 7 ) for the issuance, under section 706 [17 USCS § 706], of an
additional certificate of registration;
(8) for the issuance of any other certification;
(9) for the making and reporting of a search as provided by section 705
[17 USCS § 705], and for any related services;
(10) on filing a statement of account based on secondary transmissions
of primary transmissions pursuant to section 119 or 122 [17 USCS § 119 or
122]; and
(11) on filing a statement of account based on secondary transmissions
of primary transmissions pursuant to section 111 [17 USCS § 111].
The Register is authorized to fix fees for other services, including the
cost of preparing copies of Copyright Office records, whether or not such
copies are certified, based on the cost of providing the service. Fees
established under paragraphs (10) and (11) shall be reasonable and may not
exceed one-half of the cost necessary to cover reasonable expenses incurred
by the Copyright Office for the collection and administration of the
statements of account and any royalty fees deposited with such statements.
1126
(b) Adjustment of Fees. The Register of Copyrights may, by regulation,
adjust the fees for the services specified in paragraphs (1) through (9) of
subsection (a) in the following manner:
( 1) The Register shall conduct a study of the costs incurred by the
Copyright Office for the registration of claims, the recordation of
documents, and the provision of services. The study shall also consider the
timing of any adjustment in fees and the authority to use such fees consistent
with the budget.
(2) The Register may, on the basis of the study under paragraph (1), and
subject to paragraph (5), adjust fees to not more than that necessary to cover
the reasonable costs incurred by the Copyright Office for the services
described in paragraph (1), plus a reasonable inflation adjustment to
account for any estimated increase in costs.
(3) Any fee established under paragraph (2) shall be rounded off to the
nearest dollar, or for a fee less than $12, rounded off to the nearest 50 cents.
(4) Fees established under this subsection shall be fair and equitable
and give due consideration to the objectives of the copyright system.
(5) If the Register determines under paragraph (2) that fees should be
adjusted, the Register shall prepare a proposed fee schedule and submit the
schedule with the accompanying economic analysis to the Congress. The
fees proposed by the Register may be instituted after the end of 120 days
after the schedule is submitted to the Congress unless, within that 120-day
period, a law is enacted stating in substance that the Congress does not
approve the schedule.
(c) The fees prescribed by or under this section are applicable to the United
States Government and any of its agencies, employees, or officers, but the
Register of Copyrights has discretion to waive the requirement of this
subsection in occasional or isolated cases involving relatively small amounts.
(d)
(1) Except as provided in paragraph (2), all fees received under this
section shall be deposited by the Register of Copyrights in the Treasury of
the United States and shall be credited to the appropriations for necessary
expenses of the Copyright Office. Such fees that are collected shall remain
available until expended. The Register may, in accordance with regulations
that he or she shall prescribe, refund any sum paid by mistake or in excess
of the fee required by this section.
(2) In the case of fees deposited against future services, the Register of
Copyrights shall request the Secretary of the Treasury to invest in interest-
1127
bearing securities in the United States Treasury any portion of the fees that,
as determined by the Register, is not required to meet current deposit
account demands. Funds from such portion of fees shall be invested in
securities that permit funds to be available to the Copyright Office at all
times if they are determined to be necessary to meet current deposit account
demands. Such investments shall be in public debt securities with maturities
suitable to the needs of the Copyright Office, as determined by the Register
of Copyrights, and bearing interest at rates determined by the Secretary of
the Treasury, taking into consideration current market yields on outstanding
marketable obligations of the United States of comparable maturities.
(3) The income on such investments shall be deposited in the Treasury
of the United States and shall be credited to the appropriations for necessary
expenses of the Copyright Office.
Leg. H. Oct. 19, 1976, P.L. 94-553, Title I, § 101, 90 Stat. 2593; Aug. 5, 1977, P.L. 95-
94, § 406(b), 91 Stat. 682; Oct. 15, 1982, P.L. 97-366, § 1, 96 Stat. 1759; July 3, 1990, P.L.
101-318, § 2, 104 Stat. 287; June 26, 1992, P.L. 102-307, Title I, § 102(f), 106 Stat. 266;
Nov. 13, 1997, P.L. 105-80, § 7, 111 Stat. 1532; Oct. 27, 2000, P.L. 106-379, § 3(a)(3), 114
Stat. 1445; May 27, 2010, P.L. 111-175, Title I, § 106, 124 Stat. 1244.
Amendment
2010. Act May 27, 2010 (effective 2/27/2010, as provided by § 307(a) of such Act, which
appears as 17 USCS § 111 note), in subsec. (a), in para. (8), deleted “and” following the
concluding semicolon, in para. (9), substituted the concluding semicolon for a period,
inserted paras. (10) and (11), and in the concluding matter, added the sentence beginning
“Fees established under paragraphs (10) and (11) …”.
§ 709. Delay in Delivery Caused by Disruption of Postal

or Other Services.
In any case in which the Register of Copyrights determines, on the basis of
such evidence as the Register may by regulation require, that a deposit,
application, fee, or any other material to be delivered to the Copyright Office by
a particular date, would have been received in the Copyright Office in due time
except for a general disruption or suspension of postal or other transportation or
communications services, the actual receipt of such material in the Copyright
Office within one month after the date on which the Register determines that the
disruption or suspension of such services has terminated, shall be considered
timely.
CHAPTER 8
1128
PROCEEDINGS BY COPYRIGHT
ROYALTY JUDGES
§ 801. Copyright Royalty Judges; Appointment and
Functions.
(a) Appointment. The Librarian of Congress shall appoint 3 full-time
Copyright Royalty Judges, and shall appoint 1 of the 3 as the Chief Copyright
Royalty Judge. The Librarian shall make appointments to such positions after
consultation with the Register of Copyrights.
(b) Functions. Subject to the provisions of this chapter [17 USCS §§ 801 et
seq.], the functions of the Copyright Royalty Judges shall be as follows:
(1) To make determinations and adjustments of reasonable terms and
rates of royalty payments as provided in sections 112(e), 114, 115, 116,
118, 119, and 1004 [ 17 USCS §§ 112(e), 114, 115, 116, 118, 119, and
1004]. The rates applicable under sections 114(f)(1)(B), 115, and 116 [ 17
USCS §§ 114(f)(1)(B), 115, and 116] shall be calculated to achieve the
following objectives:
(A) To maximize the availability of creative works to the public.
( B ) To afford the copyright owner a fair return for his or her
creative work and the copyright user a fair income under existing
economic conditions.
( C) To reflect the relative roles of the copyright owner and the
copyright user in the product made available to the public with respect
to relative creative contribution, technological contribution, capital
investment, cost, risk, and contribution to the opening of new markets for
creative expression and media for their communication.
( D ) To minimize any disruptive impact on the structure of the
industries involved and on generally prevailing industry practices.
(2) To make determinations concerning the adjustment of the copyright
royalty rates under section 111 [ 17 USCS § 111] solely in accordance with
the following provisions:
( A ) The rates established by section 111(d)(1)(B) [ 17 USCS §
111(d)(1)(B)] may be adjusted to reflect—
(i) national monetary inflation or deflation; or
1129
(ii) changes in the average rates charged cable subscribers for the
basic service of providing secondary transmissions to maintain the
real constant dollar level of the royalty fee per subscriber which
existed as of the date of October 19, 1976,
except that—
(I) if the average rates charged cable system subscribers for
the basic service of providing secondary transmissions are
changed so that the average rates exceed national monetary
inflation, no change in the rates established by section 111(d)(1)
(B) [17 USCS § 111(d)(1)(B)] shall be permitted; and
(II) no increase in the royalty fee shall be permitted based on
any reduction in the average number of distant signal equivalents
per subscriber.
The Copyright Royalty Judges may consider all factors relating to the
maintenance of such level of payments, including, as an extenuating
factor, whether the industry has been restrained by subscriber rate
regulating authorities from increasing the rates for the basic service of
providing secondary transmissions.
( B ) In the event that the rules and regulations of the Federal
Communications Commission are amended at any time after April 15,
1976, to permit the carriage by cable systems of additional television
broadcast signals beyond the local service area of the primary
transmitters of such signals, the royalty rates established by section
111(d)(1)(B) [ 17 USCS § 111(d)(1)(B) ] may be adjusted to ensure that
the rates for the additional distant signal equivalents resulting from such
carriage are reasonable in the light of the changes effected by the
amendment to such rules and regulations. In determining the
reasonableness of rates proposed following an amendment of Federal
Communications Commission rules and regulations, the Copyright
Royalty Judges shall consider, among other factors, the economic impact
on copyright owners and users; except that no adjustment in royalty rates
shall be made under this subparagraph with respect to any distant signal
equivalent or fraction thereof represented by—
( i ) carriage of any signal permitted under the rules and
regulations of the Federal Communications Commission in effect on
April 15, 1976, or the carriage of a signal of the same type (that is,
independent, network, or noncommercial educational) substituted for
such permitted signal; or
(ii) a television broadcast signal first carried after April 15,
1130
1976, pursuant to an individual waiver of the rules and regulations of
the Federal Communications Commission, as such rules and
regulations were in effect on April 15, 1976.
(C) In the event of any change in the rules and regulations of the
Federal Communications Commission with respect to syndicated and
sports program exclusivity after April 15, 1976, the rates established by
section 111(d)(1)(B) [ 17 USCS § 111(d)(1)(B) ] may be adjusted to
assure that such rates are reasonable in light of the changes to such rules
and regulations, but any such adjustment shall apply only to the affected
television broadcast signals carried on those systems affected by the
change.
(D) The gross receipts limitations established by section 111(d)(1)
(C) and (D) [17 USCS § 111(d)(1)(C) and (D)] shall be adjusted to
reflect national monetary inflation or deflation or changes in the average
rates charged cable system subscribers for the basic service of
providing secondary transmissions to maintain the real constant dollar
value of the exemption provided by such section, and the royalty rate
specified therein shall not be subject to adjustment.
(3)
(A) To authorize the distribution, under sections 111, 119, and 1007
[17 USCS §§ 111, 119, and 1007], of those royalty fees collected under
sections 111, 119, and 1005 [ 17 USCS §§ 111, 119, and 1005], as the
case may be, to the extent that the Copyright Royalty Judges have found
that the distribution of such fees is not subject to controversy.
( B) In cases where the Copyright Royalty Judges determine that
controversy exists, the Copyright Royalty Judges shall determine the
distribution of such fees, including partial distributions, in accordance
with section 111, 119, or 1007 [ 17 USCS § 111, 119, or 1007], as the
case may be.
(C) Notwithstanding section 804(b)(8) [17 USCS § 804(b)(8)], the
Copyright Royalty Judges, at any time after the filing of claims under
section 111, 119, or 1007 [ 17 USCS § 111, 119, or 1007], may, upon
motion of one or more of the claimants and after publication in the
Federal Register of a request for responses to the motion from interested
claimants, make a partial distribution of such fees, if, based upon all
responses received during the 30-day period beginning on the date of
such publication, the Copyright Royalty Judges conclude that no
claimant entitled to receive such fees has stated a reasonable objection
to the partial distribution, and all such claimants—
1131
(i) agree to the partial distribution;
( i i ) sign an agreement obligating them to return any excess
amounts to the extent necessary to comply with the final
determination on the distribution of the fees made under
subparagraph (B);
(iii) file the agreement with the Copyright Royalty Judges; and
(iv) agree that such funds are available for distribution.
(D) The Copyright Royalty Judges and any other officer or employee
acting in good faith in distributing funds under subparagraph (C) shall
not be held liable for the payment of any excess fees under subparagraph
(C). The Copyright Royalty Judges shall, at the time the final
determination is made, calculate any such excess amounts.
(4) To accept or reject royalty claims filed under sections 111, 119, and
1007 [17 USCS §§ 111, 119, and 1007], on the basis of timeliness or the
failure to establish the basis for a claim.
(5) To accept or reject rate adjustment petitions as provided in section
804 [17 USCS § 804] and petitions to participate as provided in section
803(b)(1) and (2) [17 USCS § 803(b)(1) and (2)].
(6) To determine the status of a digital audio recording device or a
digital audio interface device under sections 1002 and 1003 [17 USCS §§
1002 and 1003], as provided in section 1010 [17 USCS § 1010].
(7)
(A) To adopt as a basis for statutory terms and rates or as a basis for
the distribution of statutory royalty payments, an agreement concerning
such matters reached among some or all of the participants in a
proceeding at any time during the proceeding, except that—
( i ) the Copyright Royalty Judges shall provide to those that
would be bound by the terms, rates, or other determination set by any
agreement in a proceeding to determine royalty rates an opportunity
to comment on the agreement and shall provide to participants in the
proceeding under section 803(b)(2) [17 USCS § 803(b)(2)] that
would be bound by the terms, rates, or other determination set by the
agreement an opportunity to comment on the agreement and object to
its adoption as a basis for statutory terms and rates; and
( i i ) the Copyright Royalty Judges may decline to adopt the
agreement as a basis for statutory terms and rates for participants that
are not parties to the agreement, if any participant described in
1132
clause (i) objects to the agreement and the Copyright Royalty Judges
conclude, based on the record before them if one exists, that the
agreement does not provide a reasonable basis for setting statutory
terms or rates.
( B) License agreements voluntarily negotiated pursuant to section
112(e)(5), 114(f)(3), 115(c)(3)(E)(i), 116(c), or 118(b)(2) [ 17 USCS §
112(e)(5), 114(f)(3), 115(c)(3)(E)(i), 116(c), or 118(b)(2)] that do not
result in statutory terms and rates shall not be subject to clauses (i) and
(ii) of subparagraph (A).
(C) Interested parties may negotiate and agree to, and the Copyright
Royalty Judges may adopt, an agreement that specifies as terms notice
and recordkeeping requirements that apply in lieu of those that would
otherwise apply under regulations.
(8) To perform other duties, as assigned by the Register of Copyrights
within the Library of Congress, except as provided in section 802(g) [17
USCS § 802(g)], at times when Copyright Royalty Judges are not engaged in
performing the other duties set forth in this section.
(c) Rulings. The Copyright Royalty Judges may make any necessary
procedural or evidentiary rulings in any proceeding under this chapter and may,
before commencing a proceeding under this chapter [17 USCS §§ 801 et seq.],
make any such rulings that would apply to the proceedings conducted by the
Copyright Royalty Judges.
1133
(d) Administrative support. The Librarian of Congress shall provide the
Copyright Royalty Judges with the necessary administrative services related to
proceedings under this chapter [17 USCS §§ 801 et seq.].
(e) Location in Library of Congress. The offices of the Copyright Royalty
Judges and staff shall be in the Library of Congress.
(f) Effective Date of Actions. On and after the date of the enactment of the
Copyright Royalty and Distribution Reform Act of 2004 [enacted Nov. 30,
2004], in any case in which time limits are prescribed under this title for
performance of an action with or by the Copyright Royalty Judges, and in which
the last day of the prescribed period falls on a Saturday, Sunday, holiday, or
other nonbusiness day within the District of Columbia or the Federal
Government, the action may be taken on the next succeeding business day, and is
effective as of the date when the period expired.
Leg.H. Added Act Nov. 30, 2004, P.L. 108-419, § 3(a), 118 Stat. 2341; Oct. 6, 2006,
P.L. 109-303, §§ 3(1), (2), 5, 120 Stat. 1478, 1483.

(a) Qualifications of Copyright Royalty Judges.
(1) In General. Each Copyright Royalty Judge shall be an attorney who
has at least 7 years of legal experience. The Chief Copyright Royalty Judge
shall have at least 5 years of experience in adjudications, arbitrations, or
court trials. Of the other 2 Copyright Royalty Judges, 1 shall have significant
knowledge of copyright law, and the other shall have significant knowledge
of economics. An individual may serve as a Copyright Royalty Judge only if
the individual is free of any financial conflict of interest under subsection
(h).
(2) Definition. In this subsection, the term “adjudication” has the
meaning given that term in section 551 of title 5, but does not include
mediation.
(b) Staff. The Chief Copyright Royalty Judge shall hire 3 full-time staff
members to assist the Copyright Royalty Judges in performing their functions.
(c) Terms. The individual first appointed as the Chief Copyright Royalty
Judge shall be appointed to a term of 6 years, and of the remaining individuals
first appointed as Copyright Royalty Judges, 1 shall be appointed to a term of 4
years, and the other shall be appointed to a term of 2 years. Thereafter, the terms
of succeeding Copyright Royalty Judges shall each be 6 years. An individual
serving as a Copyright Royalty Judge may be reappointed to subsequent terms.
The term of a Copyright Royalty Judge shall begin when the term of the
predecessor of that Copyright Royalty Judge ends. When the term of office of a
1134
Copyright Royalty Judge ends, the individual serving that term may continue to
serve until a successor is selected.
(d) Vacancies or Incapacity.
(1) Vacancies. If a vacancy should occur in the position of Copyright
Royalty Judge, the Librarian of Congress shall act expeditiously to fill the
vacancy, and may appoint an interim Copyright Royalty Judge to serve until
another Copyright Royalty Judge is appointed under this section. An
individual appointed to fill the vacancy occurring before the expiration of
the term for which the predecessor of that individual was appointed shall be
appointed for the remainder of that term.
(2) Incapacity. In the case in which a Copyright Royalty Judge is
temporarily unable to perform his or her duties, the Librarian of Congress
may appoint an interim Copyright Royalty Judge to perform such duties
during the period of such incapacity.
(e) Compensation.
(1) Judges. The Chief Copyright Royalty Judge shall receive
compensation at the rate of basic pay payable for level AL-1 for
administrative law judges pursuant to section 5372(b) of title 5, and each of
the other two Copyright Royalty Judges shall receive compensation at the
rate of basic pay payable for level AL-2 for administrative law judges
pursuant to such section. The compensation of the Copyright Royalty Judges
shall not be subject to any regulations adopted by the Office of Personnel
Management pursuant to its authority under section 5376(b)(1) of title 5.
(2) Staff Members. Of the staff members appointed under subsection
(b)—
(A) the rate of pay of 1 staff member shall be not more than the basic
rate of pay payable for level 10 of GS-15 of the General Schedule;
(B) the rate of pay of 1 staff member shall be not less than the basic
rate of pay payable for GS-13 of the General Schedule and not more
than the basic rate of pay payable for level 10 of GS-14 of such
Schedule; and
(C) the rate of pay for the third staff member shall be not less than
the basic rate of pay payable for GS-8 of the General Schedule and not
more than the basic rate of pay payable for level 10 of GS-11 of such
Schedule.
(3) Locality Pay. All rates of pay referred to under this subsection
shall include locality pay.
1135
(f) Independence of Copyright Royalty Judge.
(1) In Making Determinations.
(A) In General.
( i ) Subject to subparagraph (B) and clause (ii) of this
subparagraph, the Copyright Royalty Judges shall have full
independence in making determinations concerning adjustments and
determinations of copyright royalty rates and terms, the distribution
of copyright royalties, the acceptance or rejection of royalty claims,
rate adjustment petitions, and petitions to participate, and in issuing
other rulings under this title, except that the Copyright Royalty
Judges may consult with the Register of Copyrights on any matter
other than a question of fact.
(ii) One or more Copyright Royalty Judges may, or by motion to
the Copyright Royalty Judges, any participant in a proceeding may,
request from the Register of Copyrights an interpretation of any
material questions of substantive law that relate to the construction
of provisions of this title and arise in the course of the proceeding.
Any request for a written interpretation shall be in writing and on the
record, and reasonable provision shall be made to permit
participants in the proceeding to comment on the material questions
of substantive law in a manner that minimizes duplication and delay.
Except as provided in subparagraph (B), the Register of Copyrights
shall deliver to the Copyright Royalty Judges a written response
within 14 days after the receipt of all briefs and comments from the
participants. The Copyright Royalty Judges shall apply the legal
interpretation embodied in the response of the Register of Copyrights
if it is timely delivered, and the response shall be included in the
record that accompanies the final determination. The authority under
this clause shall not be construed to authorize the Register of
Copyrights to provide an interpretation of questions of procedure
before the Copyright Royalty Judges, the ultimate adjustments and
determinations of copyright royalty rates and terms, the ultimate
distribution of copyright royalties, or the acceptance or rejection of
royalty claims, rate adjustment petitions, or petitions to participate in
a proceeding.
(B) Novel Questions.
(i) In any case in which a novel material question of substantive
law concerning an interpretation of those provisions of this title that
are the subject of the proceeding is presented, the Copyright Royalty
Judges shall request a decision of the Register of Copyrights, in
1136
writing, to resolve such novel question. Reasonable provision shall
be made for comment on such request by the participants in the
proceeding, in such a way as to minimize duplication and delay. The
Register of Copyrights shall transmit his or her decision to the
Copyright Royalty Judges within 30 days after the Register of
Copyrights receives all of the briefs or comments of the participants.
Such decision shall be in writing and included by the Copyright
Royalty Judges in the record that accompanies their final
determination. If such a decision is timely delivered to the Copyright
Royalty Judges, the Copyright Royalty Judges shall apply the legal
determinations embodied in the decision of the Register of
Copyrights in resolving material questions of substantive law.
(ii) In clause (i), a “novel question of law” is a question of law
that has not been determined in prior decisions, determinations, and
rulings described in section 803(a) [17 USCS § 803(a)].
(C) Consultation. Notwithstanding the provisions of subparagraph
(A), the Copyright Royalty Judges shall consult with the Register of
Copyrights with respect to any determination or ruling that would
require that any act be performed by the Copyright Office, and any such
determination or ruling shall not be binding upon the Register of
Copyrights.
(D) Review of Legal Conclusions by the Register of Copyrights.
The Register of Copyrights may review for legal error the resolution by
the Copyright Royalty Judges of a material question of substantive law
under this title that underlies or is contained in a final determination of
the Copyright Royalty Judges. If the Register of Copyrights concludes,
after taking into consideration the views of the participants in the
proceeding, that any resolution reached by the Copyright Royalty Judges
was in material error, the Register of Copyrights shall issue a written
decision correcting such legal error, which shall be made part of the
record of the proceeding. The Register of Copyrights shall issue such
written decision not later than 60 days after the date on which the final
determination by the Copyright Royalty Judges is issued. Additionally,
the Register of Copyrights shall cause to be published in the Federal
Register such written decision, together with a specific identification of
the legal conclusion of the Copyright Royalty Judges that is determined
to be erroneous. As to conclusions of substantive law involving an
interpretation of the statutory provisions of this title, the decision of the
Register of Copyrights shall be binding as precedent upon the Copyright
Royalty Judges in subsequent proceedings under this chapter [17 USCS
§§ 801 et seq.]. When a decision has been rendered pursuant to this
1137
subparagraph, the Register of Copyrights may, on the basis of and in
accordance with such decision, intervene as of right in any appeal of a
final determination of the Copyright Royalty Judges pursuant to section
803(d) [17 USCS § 803(d)] in the United States Court of Appeals for the
District of Columbia Circuit. If, prior to intervening in such an appeal,
the Register of Copyrights gives notification to, and undertakes to
consult with, the Attorney General with respect to such intervention, and
the Attorney General fails, within a reasonable period after receiving
such notification, to intervene in such appeal, the Register of Copyrights
may intervene in such appeal in his or her own name by any attorney
designated by the Register of Copyrights for such purpose. Intervention
by the Register of Copyrights in his or her own name shall not preclude
the Attorney General from intervening on behalf of the United States in
such an appeal as may be otherwise provided or required by law.
(E) Effect on Judicial Review. Nothing in this section shall be
interpreted to alter the standard applied by a court in reviewing legal
determinations involving an interpretation or construction of the
provisions of this title or to affect the extent to which any construction or
interpretation of the provisions of this title shall be accorded deference
by a reviewing court.
(2) Performance Appraisals.
(A) In General. Notwithstanding any other provision of law or any
regulation of the Library of Congress, and subject to subparagraph (B),
the Copyright Royalty Judges shall not receive performance appraisals.
(B) Relating to Sanction or Removal. To the extent that the
Librarian of Congress adopts regulations under subsection (h) relating to
the sanction or removal of a Copyright Royalty Judge and such
regulations require documentation to establish the cause of such sanction
or removal, the Copyright Royalty Judge may receive an appraisal
related specifically to the cause of the sanction or removal.
(g) Inconsistent Duties Barred. No Copyright Royalty Judge may undertake
duties that conflict with his or her duties and responsibilities as a Copyright
Royalty Judge.
(h) Standards of Conduct. The Librarian of Congress shall adopt
regulations regarding the standards of conduct, including financial conflict of
interest and restrictions against ex parte communications, which shall govern the
Copyright Royalty Judges and the proceedings under this chapter [17 USCS §§
801 et seq.].
(i) Removal or Sanction. The Librarian of Congress may sanction or
1138
remove a Copyright Royalty Judge for violation of the standards of conduct
adopted under subsection (h), misconduct, neglect of duty, or any disqualifying
physical or mental disability. Any such sanction or removal may be made only
after notice and opportunity for a hearing, but the Librarian of Congress may
suspend the Copyright Royalty Judge during the pendency of such hearing. The
Librarian shall appoint an interim Copyright Royalty Judge during the period of
any such suspension.
Leg.H. Added Act Nov. 30, 2004, P.L. 108-419, § 3(a), 118 Stat. 2345; Oct. 6, 2006,
P.L. 109-303, § 3(3), (4), 120 Stat. 1478.

(a) Proceedings.
(1) In General. The Copyright Royalty Judges shall act in accordance
with this title, and to the extent not inconsistent with this title, in accordance
with subchapter II of chapter 5 of title 5 [5 USCS §§ 551 et seq.], in
carrying out the purposes set forth in section 801 [17 USCS § 801]. The
Copyright Royalty Judges shall act in accordance with regulations issued by
the Copyright Royalty Judges and the Librarian of Congress, and on the
basis of a written record, prior determinations and interpretations of the
Copyright Royalty Tribunal, Librarian of Congress, the Register of
Copyrights, copyright arbitration royalty panels (to the extent those
determinations are not inconsistent with a decision of the Librarian of
Congress or the Register of Copyrights), and the Copyright Royalty Judges
(to the extent those determinations are not inconsistent with a decision of the
Register of Copyrights that was timely delivered to the Copyright Royalty
Judges pursuant to section 802(f)(1)(A) or (B) [17 USCS § 802(f)(1)(A) or
(B)], or with a decision of the Register of Copyrights pursuant to section
802(f)(1)(D) [17 USCS § 802(f)(1)(D)]), under this chapter [17 USCS §§
801 et seq.], and decisions of the court of appeals under this chapter [17
USCS §§ 801 et seq.] before, on, or after the effective date of the Copyright
Royalty and Distribution Reform Act of 2004 [effective May 30, 2005].
(2) Judges Acting as Panel and Individually. The Copyright Royalty
Judges shall preside over hearings in proceedings under this chapter [17
USCS §§ 801 et seq.] en banc. The Chief Copyright Royalty Judge may
designate a Copyright Royalty Judge to preside individually over such
collateral and administrative proceedings, and over such proceedings under
paragraphs (1) through (5) of subsection (b), as the Chief Judge considers
appropriate.
(3) Determinations. Final determinations of the Copyright Royalty
Judges in proceedings under this chapter [17 USCS §§ 801 et seq.] shall be
1139
made by majority vote. A Copyright Royalty Judge dissenting from the
majority on any determination under this chapter [17 USCS §§ 801 et seq.]
may issue his or her dissenting opinion, which shall be included with the
determination.
(b) Procedures.
(1) Initiation.
(A) Call for petitions to participate.
(i) The Copyright Royalty Judges shall cause to be published in
the Federal Register notice of commencement of proceedings under
this chapter [17 USCS §§ 801 et seq.], calling for the filing of
petitions to participate in a proceeding under this chapter [17 USCS
§§ 801 et seq.] for the purpose of making the relevant determination
under section 111, 112, 114, 115, 116, 118, 119, 1004, or 1007 [ 17
USCS § 111, 112, 114, 115, 116, 118, 119, 1004, or 1007], as the
case may be—
(I) promptly upon a determination made under section 804(a)
[17 USCS § 804(a)];
(II) by no later than January 5 of a year specified in paragraph
(2) of section 804(b) [17 USCS § 804(b)] for the commencement
of proceedings;
( III) by no later than January 5 of a year specified in
subparagraph (A) or (B) of paragraph (3) of section 804(b) [17
USCS § 804(b)] for the commencement of proceedings, or as
otherwise provided in subparagraph (A) or (C) of such paragraph
for the commencement of proceedings;
(IV) as provided under section 804(b)(8) [17 USCS § 804(b)
(8)]; or
(V) by no later than January 5 of a year specified in any other
provision of section 804(b) [17 USCS § 804(b)] for the filing of
petitions for the commencement of proceedings, if a petition has
not been filed by that date, except that the publication of notice
requirement shall not apply in the case of proceedings under
section 111 [ 17 USCS § 111] that are scheduled to commence in
2005[.]
(ii) Petitions to participate shall be filed by no later than 30 days
after publication of notice of commencement of a proceeding under
clause (i), except that the Copyright Royalty Judges may, for
substantial good cause shown and if there is no prejudice to the
1140
participants that have already filed petitions, accept late petitions to
participate at any time up to the date that is 90 days before the date
on which participants in the proceeding are to file their written
direct statements. Notwithstanding the preceding sentence,
petitioners whose petitions are filed more than 30 days after
publication of notice of commencement of a proceeding are not
eligible to object to a settlement reached during the voluntary
negotiation period under paragraph (3), and any objection filed by
such a petitioner shall not be taken into account by the Copyright
Royalty Judges.
(B) Petitions to Participate. Each petition to participate in a
proceeding shall describe the petitioner’s interest in the subject matter
of the proceeding. Parties with similar interests may file a single
petition to participate.
(2) Participation in General. Subject to paragraph (4), a person may
participate in a proceeding under this chapter [17 USCS §§ 801 et seq.],
including through the submission of briefs or other information, only if—
(A) that person has filed a petition to participate in accordance with
paragraph (1) (either individually or as a group under paragraph (1)
(B));
( B ) the Copyright Royalty Judges have not determined that the
petition to participate is facially invalid;
(C) the Copyright Royalty Judges have not determined, sua sponte or
on the motion of another participant in the proceeding, that the person
lacks a significant interest in the proceeding; and
(D) the petition to participate is accompanied by either—
( i ) in a proceeding to determine royalty rates, a filing fee of
$150; or
(ii) in a proceeding to determine distribution of royalty fees—
(I) a filing fee of $150; or
(II) a statement that the petitioner (individually or as a group)
will not seek a distribution of more than $1000, in which case the
amount distributed to the petitioner shall not exceed $1000.
(3) Voluntary Negotiation Period.
(A) Commencement of Proceedings.
(i) Rate Adjustment Proceeding. Promptly after the date for
1141
filing of petitions to participate in a proceeding, the Copyright
Royalty Judges shall make available to all participants in the
proceeding a list of such participants and shall initiate a voluntary
negotiation period among the participants.
(ii) Distribution Proceeding. Promptly after the date for filing of
petitions to participate in a proceeding to determine the distribution
of royalties, the Copyright Royalty Judges shall make available to all
participants in the proceeding a list of such participants. The
initiation of a voluntary negotiation period among the participants
shall be set at a time determined by the Copyright Royalty Judges.
(B) Length of Proceedings. The voluntary negotiation period
initiated under subparagraph (A) shall be 3 months.
(C) Determination of Subsequent Proceedings. At the close of the
voluntary negotiation proceedings, the Copyright Royalty Judges shall, if
further proceedings under this chapter [17 USCS §§ 801 et seq.] are
necessary, determine whether and to what extent paragraphs (4) and (5)
will apply to the parties.
(4) Small claims procedure in distribution proceedings.
(A) In General. If, in a proceeding under this chapter [17 USCS §§
801 et seq.] to determine the distribution of royalties, the contested
amount of a claim is $10,000 or less, the Copyright Royalty Judges shall
decide the controversy on the basis of the filing of the written direct
statement by the participant, the response by any opposing participant,
and 1 additional response by each such party.
(B) Bad Faith Inflation of Claim. If the Copyright Royalty Judges
determine that a participant asserts in bad faith an amount in controversy
in excess of $10,000 for the purpose of avoiding a determination under
the procedure set forth in subparagraph (A), the Copyright Royalty
Judges shall impose a fine on that participant in an amount not to exceed
the difference between the actual amount distributed and the amount
asserted by the participant.
(5) Paper Proceedings. The Copyright Royalty Judges in proceedings
under this chapter [17 USCS §§ 801 et seq.] may decide, sua sponte or upon
motion of a participant, to determine issues on the basis of the filing of the
written direct statement by the participant, the response by any opposing
participant, and one additional response by each such participant. Prior to
making such decision to proceed on such a paper record only, the Copyright
Royalty Judges shall offer to all parties to the proceeding the opportunity to
comment on the decision. The procedure under this paragraph—
1142
(A) shall be applied in cases in which there is no genuine issue of
material fact, there is no need for evidentiary hearings, and all
participants in the proceeding agree in writing to the procedure; and
(B) may be applied under such other circumstances as the Copyright
Royalty Judges consider appropriate.
(6) Regulations.
(A) In General. The Copyright Royalty Judges may issue
regulations to carry out their functions under this title. All regulations
issued by the Copyright Royalty Judges are subject to the approval of the
Librarian of Congress and are subject to judicial review pursuant to
chapter 7 of title 5 [5 USCS §§ 701 et seq.], except as set forth in
subsection (d). Not later than 120 days after Copyright Royalty Judges
or interim Copyright Royalty Judges, as the case may be, are first
appointed after the enactment of the Copyright Royalty and Distribution
Reform Act of 2004, such judges shall issue regulations to govern
(B) Interim Regulations. Until regulations are adopted under
subparagraph (A), the Copyright Royalty Judges shall apply the
regulations in effect under this chapter [17 USCS §§ 801 et seq.] on the
day before the effective date of the Copyright Royalty and Distribution
Reform Act of 2004, to the extent such regulations are not inconsistent
with this chapter [17 USCS §§ 801 et seq.], except that functions carried
out under such regulations by the Librarian of Congress, the Register of
Copyrights, or copyright arbitration royalty panels that, as of such date
of enactment, are to be carried out by the Copyright Royalty Judges
under this chapter [17 USCS §§ 801 et seq.], shall be carried out by the
Copyright Royalty Judges under such regulations.
(C) Requirements. Regulations issued under subparagraph (A) shall
include the following:
(i) The written direct statements and written rebuttal statements
of all participants in a proceeding under paragraph (2) shall be filed
by a date specified by the Copyright Royalty Judges, which, in the
case of written direct statements, may be not earlier than 4 months,
and not later than 5 months, after the end of the voluntary negotiation
period under paragraph (3). Notwithstanding the preceding sentence,
the Copyright Royalty Judges may allow a participant in a
proceeding to file an amended written direct statement based on new
information received during the discovery process, within 15 days
after the end of the discovery period specified in clause (iv).
1143
(ii)
(I) Following the submission to the Copyright Royalty Judges
of written direct statements and written rebuttal statements by the
participants in a proceeding under paragraph (2), the Copyright
Royalty Judges, after taking into consideration the views of the
participants in the proceeding, shall determine a schedule for
conducting and completing discovery.
(II) In this chapter [17 USCS §§ 801 et seq.], the term “written
direct statements” means witness statements, testimony, and
exhibits to be presented in the proceedings, and such other
information that is necessary to establish terms and rates, or the
distribution of royalty payments, as the case may be, as set forth
in regulations issued by the Copyright Royalty Judges.
(iii) Hearsay may be admitted in proceedings under this chapter
[17 USCS §§ 801 et seq.] to the extent deemed appropriate by the
Copyright Royalty Judges.
(iv) Discovery in connection with written direct statements shall
be permitted for a period of 60 days, except for discovery ordered
by the Copyright Royalty Judges in connection with the resolution of
motions, orders, and disputes pending at the end of such period. The
Copyright Royalty Judges may order a discovery schedule in
connection with written rebuttal statements.
(v) Any participant under paragraph (2) in a proceeding under
this chapter [17 USCS §§ 801 et seq.] to determine royalty rates may
request of an opposing participant nonprivileged documents directly
related to the written direct statement or written rebuttal statement of
that participant. Any objection to such a request shall be resolved by
a motion or request to compel production made to the Copyright
Royalty Judges in accordance with regulations adopted by the
Copyright Royalty Judges. Each motion or request to compel
discovery shall be determined by the Copyright Royalty Judges, or
by a Copyright Royalty Judge when permitted under subsection (a)
(2). Upon such motion, the Copyright Royalty Judges may order
discovery pursuant to regulations established under this paragraph.
(vi)
(I) Any participant under paragraph (2) in a proceeding under
this chapter [17 USCS §§ 801 et seq.] to determine royalty rates
may, by means of written motion or on the record, request of an
opposing participant or witness other relevant information and
1144
materials if, absent the discovery sought, the Copyright Royalty
Judges’ resolution of the proceeding would be substantially
impaired. In determining whether discovery will be granted
under this clause, the Copyright Royalty Judges may consider—
( a a ) whether the burden or expense of producing the
requested information or materials outweighs the likely
benefit, taking into account the needs and resources of the
participants, the importance of the issues at stake, and the
probative value of the requested information or materials in
resolving such issues;
(bb) whether the requested information or materials would
be unreasonably cumulative or duplicative, or are obtainable
from another source that is more convenient, less burdensome,
or less expensive; and
(cc) whether the participant seeking discovery has had
ample opportunity by discovery in the proceeding or by other
means to obtain the information sought.
(II) This clause shall not apply to any proceeding scheduled to
commence after December 31, 2010.
(vii) In a proceeding under this chapter [17 USCS §§ 801 et seq.]
to determine royalty rates, the participants entitled to receive
royalties shall collectively be permitted to take no more than 10
depositions and secure responses to no more than 25 interrogatories,
and the participants obligated to pay royalties shall collectively be
permitted to take no more than 10 depositions and secure responses
to no more than 25 interrogatories. The Copyright Royalty Judges
shall resolve any disputes among similarly aligned participants to
allocate the number of depositions or interrogatories permitted under
this clause.
(viii) The rules and practices in effect on the day before the
effective date of the Copyright Royalty and Distribution Reform Act
of 2004, relating to discovery in proceedings under this chapter [17
USCS §§ 801 et seq.] to determine the distribution of royalty fees,
shall continue to apply to such proceedings on and after such
effective date.
(i x) In proceedings to determine royalty rates, the Copyright
Royalty Judges may issue a subpoena commanding a participant or
witness to appear and give testimony, or to produce and permit
inspection of documents or tangible things, if the Copyright Royalty
1145
Judges’ resolution of the proceeding would be substantially impaired
by the absence of such testimony or production of documents or
tangible things. Such subpoena shall specify with reasonable
particularity the materials to be produced or the scope and nature of
the required testimony. Nothing in this clause shall preclude the
Copyright Royalty Judges from requesting the production by a
nonparticipant of information or materials relevant to the resolution
by the Copyright Royalty Judges of a material issue of fact.
( x ) The Copyright Royalty Judges shall order a settlement
conference among the participants in the proceeding to facilitate the
presentation of offers of settlement among the participants. The
settlement conference shall be held during a 21-day period following
the 60-day discovery period specified in clause (iv) and shall take
place outside the presence of the Copyright Royalty Judges.
(xi) No evidence, including exhibits, may be submitted in the
written direct statement or written rebuttal statement of a participant
without a sponsoring witness, except where the Copyright Royalty
Judges have taken official notice, or in the case of incorporation by
reference of past records, or for good cause shown.
(c) Determination of Copyright Royalty Judges.
(1) Timing. The Copyright Royalty Judges shall issue their
determination in a proceeding not later than 11 months after the conclusion
of the 21-day settlement conference period under subsection (b)(6)(C)(x),
but, in the case of a proceeding to determine successors to rates or terms
that expire on a specified date, in no event later than 15 days before the
expiration of the then current statutory rates and terms.
(2) Rehearings.
(A) In General. The Copyright Royalty Judges may, in exceptional
cases, upon motion of a participant in a proceeding under subsection (b)
(2), order a rehearing, after the determination in the proceeding is issued
under paragraph (1), on such matters as the Copyright Royalty Judges
determine to be appropriate.
(B) Timing for Filing motion. Any motion for a rehearing under
subparagraph (A) may only be filed within 15 days after the date on
which the Copyright Royalty Judges deliver to the participants in the
proceeding their initial determination.
(C) Participation by Opposing Party not Required. In any case in
which a rehearing is ordered, any opposing party shall not be required
to participate in the rehearing, except that nonparticipation may give rise
1146
to the limitations with respect to judicial review provided for in
subsection (d)(1).
(D) No Negative Inference. No negative inference shall be drawn
from lack of participation in a rehearing.
(E) Continuity of Rates and Terms.
(i) If the decision of the Copyright Royalty Judges on any motion
for a rehearing is not rendered before the expiration of the statutory
rates and terms that were previously in effect, in the case of a
proceeding to determine successors to rates and terms that expire on
a specified date, then—
(I) the initial determination of the Copyright Royalty Judges
that is the subject of the rehearing motion shall be effective as of
the day following the date on which the rates and terms that were
previously in effect expire; and
(II) in the case of a proceeding under section 114(f)(1)(C) or
114(f)(2)(C) [17 USCS § 114(f)(1)(C) or 114(f)(2)(C)], royalty
rates and terms shall, for purposes of section 114(f)(4)(B) [17
USCS § 114(f)(4)(B)], be deemed to have been set at those rates
and terms contained in the initial determination of the Copyright
Royalty Judges that is the subject of the rehearing motion, as of
the date of that determination.
( i i ) The pendency of a motion for a rehearing under this
paragraph shall not relieve persons obligated to make royalty
payments who would be affected by the determination on that motion
from providing the statements of account and any reports of use, to
the extent required, and paying the royalties required under the
relevant determination or regulations.
(iii) Notwithstanding clause (ii), whenever royalties described in
clause (ii) are paid to a person other than the Copyright Office, the
entity designated by the Copyright Royalty Judges to which such
royalties are paid by the copyright user (and any successor thereto)
shall, within 60 days after the motion for rehearing is resolved or, if
the motion is granted, within 60 days after the rehearing is
concluded, return any excess amounts previously paid to the extent
necessary to comply with the final determination of royalty rates by
the Copyright Royalty Judges. Any underpayment of royalties
resulting from a rehearing shall be paid within the same period.
(3) Contents of Determination. A determination of the Copyright
Royalty Judges shall be supported by the written record and shall set forth
1147
the findings of fact relied on by the Copyright Royalty Judges. Among other
terms adopted in a determination, the Copyright Royalty Judges may specify
notice and recordkeeping requirements of users of the copyrights at issue
that apply in lieu of those that would otherwise apply under regulations.
(4) Continuing Jurisdiction. The Copyright Royalty Judges may issue
an amendment to a written determination to correct any technical or clerical
errors in the determination or to modify the terms, but not the rates, of
royalty payments in response to unforeseen circumstances that would
frustrate the proper implementation of such determination. Such amendment
shall be set forth in a written addendum to the determination that shall be
distributed to the participants of the proceeding and shall be published in the
Federal Register.
(5) Protective Order. The Copyright Royalty Judges may issue such
orders as may be appropriate to protect confidential information, including
orders excluding confidential information from the record of the
determination that is published or made available to the public, except that
any terms or rates of royalty payments or distributions may not be excluded.
(6) Publication of Determination. By no later than the end of the 60-day
period provided in section 802(f)(1)(D) [17 USCS § 802(f)(1)(D)], the
Librarian of Congress shall cause the determination, and any corrections
thereto, to be published in the Federal Register. The Librarian of Congress
shall also publicize the determination and corrections in such other manner
as the Librarian considers appropriate, including, but not limited to,
publication on the Internet. The Librarian of Congress shall also make the
determination, corrections, and the accompanying record available for
public inspection and copying.
(7) Late Payment. A determination of the Copyright Royalty Judges
may include terms with respect to late payment, but in no way shall such
terms prevent the copyright holder from asserting other rights or remedies
provided under this title.
(d) Judicial Review.
(1) Appeal. Any determination of the Copyright Royalty Judges under
subsection (c) may, within 30 days after the publication of the determination
in the Federal Register, be appealed, to the United States Court of Appeals
for the District of Columbia Circuit, by any aggrieved participant in the
proceeding under subsection (b)(2) who fully participated in the proceeding
and who would be bound by the determination. Any participant that did not
participate in a rehearing may not raise any issue that was the subject of that
rehearing at any stage of judicial review of the hearing determination. If no
appeal is brought within that 30-day period, the determination of the
1148
Copyright Royalty Judges shall be final, and the royalty fee or determination
with respect to the distribution of fees, as the case may be, shall take effect
as set forth in paragraph (2).
(2) Effect of Rates.
(A) Expiration on Specified Date. When this title provides that the
royalty rates and terms that were previously in effect are to expire on a
specified date, any adjustment or determination by the Copyright Royalty
Judges of successor rates and terms for an ensuing statutory license
period shall be effective as of the day following the date of expiration of
the rates and terms that were previously in effect, even if the
determination of the Copyright Royalty Judges is rendered on a later
date. A licensee shall be obligated to continue making payments under
the rates and terms previously in effect until such time as rates and terms
for the successor period are established. Whenever royalties pursuant to
this section are paid to a person other than the Copyright Office, the
shall, within 60 days after the final determination of the Copyright
Royalty Judges establishing rates and terms for a successor period or the
exhaustion of all rehearings or appeals of such determination, if any,
return any excess amounts previously paid to the extent necessary to
comply with the final determination of royalty rates. Any underpayment
of royalties by a copyright user shall be paid to the entity designated by
the Copyright Royalty Judges within the same period.
(B) Other Cases. In cases where rates and terms have not, prior to
the inception of an activity, been established for that particular activity
under the relevant license, such rates and terms shall be retroactive to
the inception of activity under the relevant license covered by such rates
and terms. In other cases where rates and terms do not expire on a
specified date, successor rates and terms shall take effect on the first day
of the second month that begins after the publication of the determination
of the Copyright Royalty Judges in the Federal Register, except as
otherwise provided in this title, or by the Copyright Royalty Judges, or
as agreed by the participants in a proceeding that would be bound by the
rates and terms. Except as otherwise provided in this title, the rates and
terms, to the extent applicable, shall remain in effect until such
successor rates and terms become effective.
(C) Obligation to Make Payments.
( i ) The pendency of an appeal under this subsection shall not
relieve persons obligated to make royalty payments under section
1149
111, 112, 114, 115, 116, 118, 119, or 1003 [ 17 USCS § 111, 112,
114, 115, 116, 118, 119, or 1003], who would be affected by the
determination on appeal, from—
(I) providing the applicable statements of account and reports
of use; and
( I I ) paying the royalties required under the relevant
determination or regulations.
(ii) Notwithstanding clause (i), whenever royalties described in
clause (i) are paid to a person other than the Copyright Office, the
shall, within 60 days after the final resolution of the appeal, return
any excess amounts previously paid (and interest thereon, if ordered
pursuant to paragraph (3)) to the extent necessary to comply with the
final determination of royalty rates on appeal. Any underpayment of
royalties resulting from an appeal (and interest thereon, if ordered
pursuant to paragraph (3)) shall be paid within the same period.
(3) Jurisdiction of Court. Section 706 of title 5 shall apply with respect
to review by the court of appeals under this subsection. If the court modifies
or vacates a determination of the Copyright Royalty Judges, the court may
enter its own determination with respect to the amount or distribution of
royalty fees and costs, and order the repayment of any excess fees, the
payment of any underpaid fees, and the payment of interest pertaining
respectively thereto, in accordance with its final judgment. The court may
also vacate the determination of the Copyright Royalty Judges and remand
the case to the Copyright Royalty Judges for further proceedings in
accordance with subsection (a).
(e) Administrative Matters.
(1) Deduction of Costs of Library of Congress and Copyright Office
from Filing Fees.
(A) Deduction from Filing Fees. The Librarian of Congress may, to
the extent not otherwise provided under this title, deduct from the filing
fees collected under subsection (b) for a particular proceeding under
this chapter [17 USCS §§ 801 et seq.] the reasonable costs incurred by
the Librarian of Congress, the Copyright Office, and the Copyright
Royalty Judges in conducting that proceeding, other than the salaries of
the Copyright Royalty Judges and the 3 staff members appointed under
section 802(b) [17 USCS § 802(b)].
(B) Authorization of Appropriations. There are authorized to be
1150
appropriated such sums as may be necessary to pay the costs incurred
under this chapter [17 USCS §§ 801 et seq.] not covered by the filing
fees collected under subsection (b). All funds made available pursuant
to this subparagraph shall remain available until expended.
(2) Positions Required for Administration of Compulsory Licensing.
Section 307 of the Legislative Branch Appropriations Act, 1994 [ 2 USCS §
60-1 note], shall not apply to employee positions in the Library of Congress
that are required to be filled in order to carry out section 111, 112, 114,
115, 116, 118, or 119 [ 17 USCS § 111, 112, 114, 115, 116, 118, or 119] or
chapter 10 [17 USCS §§ 1001 et seq.].
Leg. H. Nov. 30, 2004, P.L. 108-419, § 3(a), 118 Stat. 2348; Dec. 8, 2004, P.L. 108-
447, Div J, Title IX, Title I, § 112, 118 Stat. 3409; Oct. 6, 2006, P.L. 109-303, § 3(5)-(11),
120 Stat. 1479; Dec. 9, 2010, P.L. 111-295, § 5(b), 124 Stat. 3181.
Amendment
2010. Act Dec. 9, 2010, in subsec. (b)(6)(A), substituted the sentence beginning “All
regulations issued …” for “All regulations issued by the Copyright Royalty Judges are
subject to the approval of the Librarian of Congress.”.

(a) Filing of Petition. With respect to proceedings referred to in
paragraphs (1) and (2) of section 801(b) [17 USCS § 801(b)] concerning the
determination or adjustment of royalty rates as provided in sections 111, 112,
114, 115, 116, 118, 119, and 1004 [ 17 USCS §§ 111, 112, 114, 115, 116, 118,
119, and 1004], during the calendar years specified in the schedule set forth in
subsection (b), any owner or user of a copyrighted work whose royalty rates are
specified by this title, or are established under this chapter [17 USCS §§ 801 et
seq.] before or after the enactment of the Copyright Royalty and Distribution
Reform Act of 2004 [enacted Nov. 30, 2004], may file a petition with the
Copyright Royalty Judges declaring that the petitioner requests a determination
or adjustment of the rate. The Copyright Royalty Judges shall make a
determination as to whether the petitioner has such a significant interest in the
royalty rate in which a determination or adjustment is requested. If the Copyright
Royalty Judges determine that the petitioner has such a significant interest, the
Copyright Royalty Judges shall cause notice of this determination, with the
reasons for such determination, to be published in the Federal Register, together
with the notice of commencement of proceedings under this chapter [17 USCS
§§ 801 et seq.]. With respect to proceedings under paragraph (1) of section
801(b) [17 USCS § 801(b)] concerning the determination or adjustment of
royalty rates as provided in sections 112 and 114, during the calendar years
specified in the schedule set forth in subsection (b), the Copyright Royalty
1151
Judges shall cause notice of commencement of proceedings under this chapter
[17 USCS §§ 801 et seq.] to be published in the Federal Register as provided in
section 803(b)(1)(A) [17 USCS § 803(b)(1)(A)].
(b) Timing of Proceedings.
(1) Section 111 Proceedings.
(A) A petition described in subsection (a) to initiate proceedings
under section 801(b)(2) [17 USCS § 801(b)(2)] concerning the
adjustment of royalty rates under section 111 [ 17 USCS § 111] to which
subparagraph (A) or (D) of section 801(b)(2) [17 USCS § 801(b)(2)]
applies may be filed during the year 2015 and in each subsequent fifth
calendar year.
( B) In order to initiate proceedings under section 801(b)(2) [17
USCS § 801(b)(2)] concerning the adjustment of royalty rates under
section 111 [ 17 USCS § 111] to which subparagraph (B) or (C) of
section 801(b)(2) [17 USCS § 801(b)(2)] applies, within 12 months
after an event described in either of those subsections, any owner or
user of a copyrighted work whose royalty rates are specified by section
111, or by a rate established under this chapter [ 17 USCS §§ 801 et
seq.] before or after the enactment of the Copyright Royalty and
Distribution Reform Act of 2004 [enacted Nov. 30, 2004], may file a
petition with the Copyright Royalty Judges declaring that the petitioner
requests an adjustment of the rate. The Copyright Royalty Judges shall
then proceed as set forth in subsection (a) of this section. Any change in
royalty rates made under this chapter [17 USCS §§ 801 et seq.] pursuant
to this subparagraph may be reconsidered in the year 2015, and each
fifth calendar year thereafter, in accordance with the provisions in
section 801(b)(2) (B) or (C) [17 USCS § 801(b)(2)(B) or (C)], as the
case may be. A petition for adjustment of rates established by section
111(d)(1)(B) [ 17 USCS § 111(d)(1)(B) ] as a result of a change in the
rules and regulations of the Federal Communications Commission shall
set forth the change on which the petition is based.
(C) Any adjustment of royalty rates under section 111 [ 17 USCS §
111] shall take effect as of the first accounting period commencing after
the publication of the determination of the Copyright Royalty Judges in
the Federal Register, or on such other date as is specified in that
determination.
(2) Certain Section 112 Proceedings. Proceedings under this chapter
[17 USCS §§ 801 et seq.] shall be commenced in the year 2007 to determine
reasonable terms and rates of royalty payments for the activities described
in section 112(e)(1) [17 USCS § 112(e)(1)] relating to the limitation on
1152
exclusive rights specified by section 114(d)(1)(C)(iv) [17 USCS § 114(d)
(1)(C)(iv)], to become effective on January 1, 2009. Such proceedings shall
be repeated in each subsequent fifth calendar year.
(3) Section 114 and Corresponding 112 Proceedings.
( A ) For eligible nonsubscription services and new subscription
services. Proceedings under this chapter [17 USCS §§ 801 et seq.] shall
be commenced as soon as practicable after the date of enactment of the
Copyright Royalty and Distribution Reform Act of 2004 [enacted Nov.
30, 2004] to determine reasonable terms and rates of royalty payments
under sections 114 and 112 [ 17 USCS §§ 114 and 112] for the activities
of eligible nonsubscription transmission services and new subscription
services, to be effective for the period beginning on January 1, 2006,
and ending on December 31, 2010. Such proceedings shall next be
commenced in January 2009 to determine reasonable terms and rates of
royalty payments, to become effective on January 1, 2011. Thereafter,
such proceedings shall be repeated in each subsequent fifth calendar
year.
( B) For preexisting subscription and satellite digital audio radio
services. Proceedings under this chapter [17 USCS §§ 801 et seq.] shall
be commenced in January 2006 to determine reasonable terms and rates
of royalty payments under sections 114 and 112 [ 17 USCS §§ 114 and
112] for the activities of preexisting subscription services, to be
effective during the period beginning on January 1, 2008, and ending on
December 31, 2012, and preexisting satellite digital audio radio
services, to be effective during the period beginning on January 1, 2007,
and ending on December 31, 2012. Such proceedings shall next be
commenced in 2011 to determine reasonable terms and rates of royalty
payments, to become effective on January 1, 2013. Thereafter, such
proceedings shall be repeated in each subsequent fifth calendar year.
(C)
(i) Notwithstanding any other provision of this chapter [17 USCS
§§ 801 et seq.], this subparagraph shall govern proceedings
commenced pursuant to section 114(f)(1)(C) and 114(f)(2)(C) [ 17
USCS §§ 114(f)(1)(C) and 114(f)(2)(C)] concerning new types of
services.
(ii) Not later than 30 days after a petition to determine rates and
terms for a new type of service is filed by any copyright owner of
sound recordings, or such new type of service, indicating that such
new type of service is or is about to become operational, the
Copyright Royalty Judges shall issue a notice for a proceeding to
1153
determine rates and terms for such service.
( i i i ) The proceeding shall follow the schedule set forth in
subsections (b), (c), and (d) of section 803 [17 USCS § 803], except
that—
( I) the determination shall be issued by not later than 24
months after the publication of the notice under clause (ii); and
(II) the decision shall take effect as provided in subsections
(c)(2) and (d)(2) of section 803 [17 USCS § 803] and section
114(f)(4)(B)(ii) and (C) [17 USCS § 114(f)(4)(B)(ii) and (C)].
(iv) The rates and terms shall remain in effect for the period set
forth in section 114(f)(1)(C) or 114(f)(2)(C) [ 17 USCS § 114(f)(1)
(C) or 114(f)(2)(C)], as the case may be.
(4) Section 115 Proceedings. A petition described in subsection (a) to
initiate proceedings under section 801(b)(1) [17 USCS § 801(b)(1)]
concerning the adjustment or determination of royalty rates as provided in
section 115 [17 USCS § 115] may be filed in the year 2006 and in each
subsequent fifth calendar year, or at such other times as the parties have
agreed under section 115(c)(3) (B) and (C) [17 USCS § 115(c)(3)(B) and
(C)].
(5) Section 116 Proceedings.
(A) A petition described in subsection (a) to initiate proceedings
under section 801(b) [17 USCS § 801(b)] concerning the determination
of royalty rates and terms as provided in section 116 [17 USCS § 116]
may be filed at any time within 1 year after negotiated licenses
authorized by section 116 [17 USCS § 116] are terminated or expire and
are not replaced by subsequent agreements.
(B) If a negotiated license authorized by section 116 [17 USCS §
116] is terminated or expires and is not replaced by another such license
agreement which provides permission to use a quantity of musical works
not substantially smaller than the quantity of such works performed on
coin-operated phonorecord players during the 1-year period ending
March 1, 1989, the Copyright Royalty Judges shall, upon petition filed
under paragraph (1) within 1 year after such termination or expiration,
commence a proceeding to promptly establish an interim royalty rate or
rates for the public performance by means of a coin-operated
phonorecord player of nondramatic musical works embodied in
phonorecords which had been subject to the terminated or expired
negotiated license agreement. Such rate or rates shall be the same as the
last such rate or rates and shall remain in force until the conclusion of
1154
proceedings by the Copyright Royalty Judges, in accordance with
section 803 [17 USCS § 803], to adjust the royalty rates applicable to
such works, or until superseded by a new negotiated license agreement,
as provided in section 116(b) [17 USCS § 116(b)].
(6) Section 118 Proceedings. A petition described in subsection (a) to
initiate proceedings under section 801(b)(1) [17 USCS § 801(b)(1)]
concerning the determination of reasonable terms and rates of royalty
payments as provided in section 118 [17 USCS § 118] may be filed in the
year 2006 and in each subsequent fifth calendar year.
(7) Section 1004 Proceedings. A petition described in subsection (a)
to initiate proceedings under section 801(b)(1) [17 USCS § 801(b)(1)]
concerning the adjustment of reasonable royalty rates under section 1004
[17 USCS § 1004] may be filed as provided in section 1004(a)(3) [17
USCS § 1004(a)(3)].
(8) Proceedings Concerning Distribution of Royalty Fees. With respect
to proceedings under section 801(b)(3) concerning the distribution of
royalty fees in certain circumstances under section 111, 119, or 1007 [ 17
USCS § 111, 119, or 1007], the Copyright Royalty Judges shall, upon a
determination that a controversy exists concerning such distribution, cause
to be published in the Federal Register notice of commencement of
Leg. H. Nov. 30, 2004, P.L. 108-419, § 3(a), 118 Stat. 2357; Oct. 6, 2006, P.L. 109-
303, § 3(12), (13), 120 Stat. 1481; May 27, 2010, P.L. 111-175, Title I, § 104(f), 124 Stat.
1238.
Amendment
2010. Act May 27, 2010 (effective 2/27/2010, as provided by § 307(a) of such Act, which
appears as 17 USCS § 111 note), in subsec. (b)(1), in subparas. (A) and (B), substituted
“2015” for “2005”.
§ 805. General Rule for Voluntarily Negotiated

Agreements.
Any rates or terms under this title that—
(1) are agreed to by participants to a proceeding under section 803(b)
(3),
( 2 ) are adopted by the Copyright Royalty Judges as part of a
determination under this chapter, and
(3) are in effect for a period shorter than would otherwise apply under a
1155
determination pursuant to this chapter, shall remain in effect for such period
of time as would otherwise apply under such determination, except that the
Copyright Royalty Judges shall adjust the rates pursuant to the voluntary
negotiations to reflect national monetary inflation during the additional
period the rates remain in effect.
Leg.H. Nov. 30, 2004, P.L. 108-419, § 3(a), 118 Stat. 2341.
CHAPTER 9
PROTECTION OF SEMICONDUCTOR
CHIP PRODUCTS
(a) As used in this chapter—
(1) a “semiconductor chip product” is the final or intermediate form of
any product—
( A ) having two or more layers of metallic, insulating, or
semiconductor material, deposited or otherwise placed on, or etched
away or otherwise removed from, a piece of semiconductor material in
accordance with a predetermined pattern; and
(B) intended to perform electronic circuitry functions;
( 2) a “mask work” is a series of related images, however fixed or
encoded—
( A ) having or representing the predetermined, three-dimensional
pattern of metallic, insulating, or semiconductor material present or
removed from the layers of a semiconductor chip product; and
(B) in which series the relation of the images to one another is that
each image has the pattern of the surface of one form of the
semiconductor chip product;
(3) a mask work is “fixed” in a semiconductor chip product when its
embodiment in the product is sufficiently permanent or stable to permit the
mask work to be perceived or reproduced from the product for a period of
more than transitory duration;
(4) to “distribute” means to sell, or to lease, bail, or otherwise transfer,
or to offer to sell, lease, bail, or otherwise transfer;
1156
(5) to “commercially exploit” a mask work is to distribute to the public
for commercial purposes a semiconductor chip product embodying the mask
work; except that such term includes an offer to sell or transfer a
semiconductor chip product only when the offer is in writing and occurs
after the mask work is fixed in the semiconductor chip product;
(6) the “owner” of a mask work is the person who created the mask
work, the legal representative of that person if that person is deceased or
under a legal incapacity, or a party to whom all the rights under this chapter
of such person or representative are transferred in accordance with section
903(b); except that, in the case of a work made within the scope of a
person’s employment, the owner is the employer for whom the person
created the mask work or a party to whom all the rights under this chapter of
the employer are transferred in accordance with section 903(b).
(7) an “innocent purchaser” is a person who purchases a semiconductor
chip product in good faith and without having notice of protection with
respect to the semiconductor chip product;
(8) having “notice of protection” means having actual knowledge that, or
reasonable grounds to believe that, a mask work is protected under this
chapter; and
(9) an “infringing semiconductor chip product” is a semiconductor chip
product which is made, imported, or distributed in violation of the exclusive
rights of the owner of a mask work under this chapter.
(b) For purposes of this chapter, the distribution or importation of a product
incorporating a semiconductor chip product as a part thereof is a distribution or
importation of that semiconductor chip product.

(a)
(1) Subject to the provisions of subsection (b), a mask work fixed in a
semiconductor chip product, by or under the authority of the owner of the
mask work, is eligible for protection under this chapter if—
(A) on the date on which the mask work is registered under section
908, or is first commercially exploited anywhere in the world,
whichever occurs first, the owner of the mask work is (i) a national or
domiciliary of the United States, (ii) a national, domiciliary, or
sovereign authority of a foreign nation that is a party to a treaty affording
protection to mask works to which the United States is also a party, or
1157
(iii) a stateless person, wherever that person may be domiciled;
( B) the mask work is first commercially exploited in the United
States; or
( C ) the mask work comes within the scope of a Presidential
proclamation issued under paragraph (2).
(2) Whenever the President finds that a foreign nation extends, to mask
works of owners who are nationals or domiciliaries of the United States
protection (A) on substantially the same basis as that on which the foreign
nation extends protection to mask works of its own nationals and
domiciliaries and mask works first commercially exploited in that nation, or
(B) on substantially the same basis as provided in this chapter, the President
may by proclamation extend protection under this chapter to mask works (i)
of owners who are, on the date on which the mask works are registered
under section 908, or the date on which the mask works are first
commercially exploited anywhere in the world, whichever occurs first,
nationals, domiciliaries, or sovereign authorities of that nation, or (ii) which
are first commercially exploited in that nation. The President may revise,
suspend, or revoke any such proclamation or impose any conditions or
limitations on protection extended under any such proclamation.
(b) Protection under this chapter shall not be available for a mask work that
—
(1) is not original; or
(2) consists of designs that are staple, commonplace, or familiar in the
semiconductor industry, or variations of such designs, combined in a way
that, considered as a whole, is not original.
(c) In no case does protection under this chapter for a mask work extend to
any idea, procedure, process, system, method of operation, concept, principle,
or discovery, regardless of the form in which it is described, explained,
illustrated, or embodied in such work.
Leg.H. November 8, 1984, P.L. 98-620 § 302, 98 Stat. 3348; November 9, 1987, P.L.
100-159 § 3, 101 Stat. 900.
§ 903. Ownership, Transfer, Licensing, and

Recordation.
(a) The exclusive rights in a mask work subject to protection under this
chapter belong to the owner of the mask work.
(b) The owner of the exclusive rights in a mask work may transfer all of
1158
those rights, or license all or less than all of those rights, by any written
instrument signed by such owner or a duly authorized agent of the owner. Such
rights may be transferred or licensed by operation of law, may be bequeathed by
will, and may pass as personal property by the applicable laws of intestate
succession.
(c)
(1) Any document pertaining to a mask work may be recorded in the
Copyright Office if the document filed for recordation bears the actual
signature of the person who executed it, or if it is accompanied by a sworn
or official certification that it is a true copy of the original, signed document.
The Register of Copyrights shall, upon receipt of the document and the fee
specified pursuant to section 908(d), record the document and return it with
a certificate of recordation. The recordation of any transfer or license under
this paragraph gives all persons constructive notice of the facts stated in the
recorded document concerning the transfer or license.
(2) In any case in which conflicting transfers of the exclusive rights in a
mask work are made, the transfer first executed shall be void as against a
subsequent transfer which is made for a valuable consideration and without
notice of the first transfer, unless the first transfer is recorded in accordance
with paragraph (1) within three months after the date on which it is
executed, but in no case later than the day before the date of such subsequent
transfer.
(d) Mask works prepared by an officer or employee of the United States
Government as part of that person’s official duties are not protected under this
chapter, but the United States Government is not precluded from receiving and
holding exclusive rights in mask works transferred to the Government under
subsection (b).

( a ) The protection provided for a mask work under this chapter shall
commence on the date on which the mask work is registered under section 908,
or the date on which the mask work is first commercially exploited anywhere in
the world, whichever occurs first.
( b ) Subject to subsection (c) and the provisions of this chapter, the
protection provided under this chapter to a mask work shall end ten years after
the date on which such protection commences under subsection (a).
(c) All terms of protection provided in this section shall run to the end of the
1159
calendar year in which they would otherwise expire.

The owner of a mask work provided protection under this chapter has the
exclusive rights to do and to authorize any of the following:
(1) to reproduce the mask work by optical, electronic, or any other
means;
(2) to import or distribute a semiconductor chip product in which the
mask work is embodied; and
(3) to induce or knowingly to cause another person to do any of the
acts described in paragraphs (1) and (2).
§ 906. Limitation on Exclusive Rights: Reverse

Engineering; First Sale.
(a) Notwithstanding the provisions of section 905, it is not an infringement
of the exclusive rights of the owner of a mask work for—
( 1) a person to reproduce the mask work solely for the purpose of
teaching, analyzing, or evaluating the concepts or techniques embodied in
the mask work or the circuitry, logic flow, or organization of components
used in the mask work; or
( 2 ) a person who performs the analysis or evaluation described in
paragraph (1) to incorporate the results of such conduct in an original mask
work which is made to be distributed.
( b ) Notwithstanding the provisions of section 905(2), the owner of a
particular semiconductor chip product made by the owner of the mask work, or
by any person authorized by the owner of the mask work, may import, distribute,
or otherwise dispose of or use, but not reproduce, that particular semiconductor
chip product without the authority of the owner of the mask work.
§ 907. Limitation on Exclusive Rights: Innocent

Infringement.
( a ) Notwithstanding any other provision of this chapter, an innocent
purchaser of an infringing semiconductor chip product—
1160
( 1 ) shall incur no liability under this chapter with respect to the
importation or distribution of units of the infringing semiconductor chip
product that occurs before the innocent purchaser has notice of protection
with respect to the mask work embodied in the semiconductor chip product;
and
(2) shall be liable only for a reasonable royalty on each unit of the
infringing semiconductor chip product that the innocent purchaser imports or
distributes after having notice of protection with respect to the mask work
embodied in the semiconductor chip product.
( b) The amount of the royalty referred to in subsection (a)(2) shall be
determined by the court in a civil action for infringement unless the parties
resolve the issue by voluntary negotiation, mediation, or binding arbitration.
( c ) The immunity of an innocent purchaser from liability referred to in
subsection (a)(1) and the limitation of remedies with respect to an innocent
purchaser referred to in subsection (a)(2) shall extend to any person who
directly or indirectly purchases an infringing semiconductor chip product from
an innocent purchaser.
(d) The provisions of subsections (a), (b), and (c) apply only with respect to
those units of an infringing semiconductor chip product that an innocent
purchaser purchased before having notice of protection with respect to the mask
work embodied in the semiconductor chip product.

(a) The owner of a mask work may apply to the Register of Copyrights for
registration of a claim of protection in a mask work. Protection of a mask work
under this chapter shall terminate if application for registration of a claim of
protection in the mask work is not made as provided in this chapter within two
years after the date on which the mask work is first commercially exploited
anywhere in the world.
(b) The Register of Copyrights shall be responsible for all administrative
functions and duties under this chapter. Except for section 708, the provisions of
chapter 7 of this title relating to the general responsibilities, organization,
regulatory authority, actions, records, and publications of the Copyright Office
shall apply to this chapter, except that the Register of Copyrights may make such
changes as may be necessary in applying those provisions to this chapter.
(c) The application for registration of a mask work shall be made on a form
prescribed by the Register of Copyrights. Such form may require any
1161
information regarded by the Register as bearing upon the preparation or
identification of the mask work, the existence or duration of protection of the
mask work under this chapter, or ownership of the mask work. The application
shall be accompanied by the fee set pursuant to subsection (d) and the
identifying material specified pursuant to such subsection.
(d) The Register of Copyrights shall by regulation set reasonable fees for
the filing of applications to register claims of protection in mask works under
this chapter, and for other services relating to the administration of this chapter
or the rights under this chapter, taking into consideration the cost of providing
those services, the benefits of a public record, and statutory fee schedules under
this title. The Register shall also specify the identifying material to be deposited
in connection with the claim for registration.
( e ) If the Register of Copyrights, after examining an application for
registration, determines, in accordance with the provisions of this chapter, that
the application relates to a mask work which is entitled to protection under this
chapter, then the Register shall register the claim of protection and issue to the
applicant a certificate of registration of the claim of protection under the seal of
the Copyright Office. The effective date of registration of a claim of protection
shall be the date on which an application, deposit of identifying material, and
fee, which are determined by the Register of Copyrights or by a court of
competent jurisdiction to be acceptable for registration of the claim, have all
been received in the Copyright Office.
( f) In any action for infringement under this chapter, the certificate of
registration of a mask work shall constitute prima facie evidence (1) of the facts
stated in the certificate, and (2) that the applicant issued the certificate has met
the requirements of this chapter, and the regulations issued under this chapter,
with respect to the registration of claims.
(g) Any applicant for registration under this section who is dissatisfied with
the refusal of the Register of Copyrights to issue a certificate of registration
under this section may seek judicial review of that refusal by bringing an action
for such review in an appropriate United States district court not later than sixty
days after the refusal. The provisions of chapter 7 of title 5 shall apply to such
judicial review. The failure of the Register of Copyrights to issue a certificate
of registration within four months after an application for registration is filed
shall be deemed to be a refusal to issue a certificate of registration for purposes
of this subsection and section 910(b)(2), except that, upon a showing of good
cause, the district court may shorten such four-month period.
1162
(a) The owner of a mask work provided protection under this chapter may
affix notice to the mask work, and to masks and semiconductor chip products
embodying the mask work, in such manner and location as to give reasonable
notice of such protection. The Register of Copyrights shall prescribe by
regulation, as examples, specific methods of affixation and positions of notice
for purposes of this section, but these specifications shall not be considered
exhaustive. The affixation of such notice is not a condition of protection under
this chapter, but shall constitute prima facie evidence of notice of protection.
(b) The notice referred to in subsection (a) shall consist of—
(1) the words “mask work”, the symbol *M*, or the symbol Ⓜ (the
letter M in a circle); and
( 2 ) the name of the owner or owners of the mask work or an
abbreviation by which the name is recognized or is generally known.
105-80 § 12(a)(22), 111 Stat. 1535.

(a) Except as otherwise provided in this chapter, any person who violates
any of the exclusive rights of the owner of a mask work under this chapter, by
conduct in or affecting commerce, shall be liable as an infringer of such rights.
As used in this subsection, the term “any person” includes any State, any
instrumentality of a State, and any officer or employee of a State or
instrumentality of a State acting in his or her official capacity. Any State, and
any such instrumentality, officer, or employee, shall be subject to the provisions
of this chapter in the same manner and to the same extent as any
nongovernmental entity.
(b)
( 1) The owner of a mask work protected under this chapter, or the
exclusive licensee of all rights under this chapter, with respect to the mask
work, shall, after a certificate of registration of a claim of protection in that
mask work has been issued under section 908, be entitled to institute a civil
action for any infringement with respect to the mask work which is
committed after the commencement of protection of the mask work under
section 904(a).
(2) In any case in which an application for registration of a claim of
protection in a mask work and the required deposit of identifying material
and fee have been received in the Copyright Office in proper form and
registration of the mask work has been refused, the applicant is entitled to
institute a civil action for infringement under this chapter with respect to the
1163
mask work if notice of the action, together with a copy of the complaint, is
served on the Register of Copyrights, in accordance with the Federal Rules
of Civil Procedure. The Register may, at his or her option, become a party
to the action with respect to the issue of whether the claim of protection is
eligible for registration by entering an appearance within sixty days after
such service, but the failure of the Register to become a party to the action
shall not deprive the court of jurisdiction to determine that issue.
(c)
(1) The Secretary of the Treasury and the United States Postal Service
shall separately or jointly issue regulations for the enforcement of the rights
set forth in section 905 with respect to importation. These regulations may
require, as a condition for the exclusion of articles from the United States,
that the person seeking exclusion take any one or more of the following
actions:
( A) Obtain a court order enjoining, or an order of the International
Trade Commission under section 337 of the Tariff Act of 1930 excluding,
importation of the articles.
(B) Furnish proof that the mask work involved is protected under this
chapter and that the importation of the articles would infringe the rights in
the mask work under this chapter.
(C) Post a surety bond for any injury that may result if the detention or
exclusion of the articles proves to be unjustified.
(2) Articles imported in violation of the rights set forth in section 905 are
subject to seizure and forfeiture in the same manner as property imported in
violation of the customs laws. Any such forfeited articles shall be destroyed as
directed by the Secretary of the Treasury or the court, as the case may be, except
that the articles may be returned to the country of export whenever it is shown to
the satisfaction of the Secretary of the Treasury that the importer had no
reasonable grounds for believing that his or her acts constituted a violation of
the law.
101-553 § 2(b)(1), 104 Stat. 2750; November 13, 1997, P.L. 105-80 § 12(a)(23), 111 Stat.
1535.

(a) Any court having jurisdiction of a civil action arising under this chapter
may grant temporary restraining orders, preliminary injunctions, and permanent
injunctions on such terms as the court may deem reasonable to prevent or
restrain infringement of the exclusive rights in a mask work under this chapter.
1164
( b) Upon finding an infringer liable, to a person entitled under section
910(b)(1) to institute a civil action, for an infringement of any exclusive right
under this chapter, the court shall award such person actual damages suffered by
the person as a result of the infringement. The court shall also award such
person the infringer’s profits that are attributable to the infringement and are not
taken into account in computing the award of actual damages. In establishing the
infringer’s profits, such person is required to present proof only of the
infringer’s gross revenue, and the infringer is required to prove his or her
deductible expenses and the elements of profit attributable to factors other than
the mask work.
( c ) At any time before final judgment is rendered, a person entitled to
institute a civil action for infringement may elect, instead of actual damages and
profits as provided by subsection (b), an award of statutory damages for all
infringements involved in the action, with respect to any one mask work for
which any one infringer is liable individually, or for which any two or more
infringers are liable jointly and severally, in an amount not more than $250,000
as the court considers just.
(d) An action for infringement under this chapter shall be barred unless the
action is commenced within three years after the claim accrues.
(e)
(1) At any time while an action for infringement of the exclusive rights
in a mask work under this chapter is pending, the court may order the
impounding, on such terms as it may deem reasonable, of all semiconductor
chip products, and any drawings, tapes, masks, or other products by means
of which such products may be reproduced, that are claimed to have been
made, imported, or used in violation of those exclusive rights. Insofar as
practicable, applications for orders under this paragraph shall be heard and
determined in the same manner as an application for a temporary restraining
order or preliminary injunction.
( 2) As part of a final judgment or decree, the court may order the
destruction or other disposition of any infringing semiconductor chip
products, and any masks, tapes, or other articles by means of which such
products may be reproduced.
(f) In any civil action arising under this chapter, the court in its discretion
may allow the recovery of full costs, including reasonable attorneys’ fees, to the
prevailing party.
(g)
( 1 ) Any State, any instrumentality of a State, and any officer or
1165
employee of a State or instrumentality of a State acting in his or her official
capacity, shall not be immune, under the Eleventh Amendment of the
immunity, from suit in Federal court by any person, including any
governmental or nongovernmental entity, for a violation of any of the
exclusive rights of the owner of a mask work under this chapter, or for any
other violation under this chapter.
(2) In a suit described in paragraph (1) for a violation described in that
paragraph, remedies (including remedies both at law and in equity) are
available for the violation to the same extent as such remedies are available
for such a violation in a suit against any public or private entity other than a
State, instrumentality of a State, or officer or employee of a State acting in
his or her official capacity. Such remedies include actual damages and
profits under subsection (b), statutory damages under subsection (c),
impounding and disposition of infringing articles under subsection (e), and
costs and attorney’s fees under subsection (f).
101-553 § 2(b)(2), 104 Stat. 2750.

( a ) Nothing in this chapter shall affect any right or remedy held by any
person under chapters 1 through 8 or 10 of this title, or under title 35.
(b) Except as provided in section 908(b) of this title, references to “this
title” or “title 17” in chapters 1 through 8 or 10 of this title shall be deemed not
to apply to this chapter.
(c) The provisions of this chapter shall preempt the laws of any State to the
extent those laws provide any rights or remedies with respect to a mask work
which are equivalent to those rights or remedies provided by this chapter,
except that such preemption shall be effective only with respect to actions filed
on or after January 1, 1986.
(d) Notwithstanding subsection (c), nothing in this chapter shall detract from
any rights of a mask work owner, whether under Federal law (exclusive of this
chapter) or under the common law or the statutes of a State, heretofore or
hereafter declared or enacted, with respect to any mask work first commercially
exploited before July 1, 1983.
100-702 § 1020(b), 102 Stat. 4672; October 28, 1992, P.L. 102-563 § 3(c), 106 Stat. 4248.
1166
(a) No application for registration under section 908 may be filed, and no
civil action under section 910 or other enforcement proceeding under this
chapter may be instituted, until sixty days after the date of the enactment of this
chapter.
(b) No monetary relief under section 911 may be granted with respect to any
conduct that occurred before the date of the enactment of this chapter, except as
provided in subsection (d).
(c) Subject to subsection (a), the provisions of this chapter apply to all mask
works that are first commercially exploited or are registered under this chapter,
or both, on or after the date of the enactment of this chapter.
(d)
(1) Subject to subsection (a), protection is available under this chapter
to any mask work that was first commercially exploited on or after July 1,
1983, and before the date of the enactment of this chapter, if a claim of
protection in the mask work is registered in the Copyright Office before July
1, 1985, under section 908.
(2) In the case of any mask work described in paragraph (1) that is
provided protection under this chapter, infringing semiconductor chip
product units manufactured before the date of the enactment of this chapter
may, without liability under sections 910 and 911, be imported into or
distributed in the United States, or both, until two years after the date of
registration of the mask work under section 908, but only if the importer or
distributor, as the case may be, first pays or offers to pay the reasonable
royalty referred to in section 907(a)(2) to the mask work owner, on all such
units imported or distributed, or both, after the date of the enactment of this
chapter.
( 3 ) In the event that a person imports or distributes infringing
semiconductor chip product units described in paragraph (2) of this
subsection without first paying or offering to pay the reasonable royalty
specified in such paragraph, or if the person refuses or fails to make such
payment, the mask work owner shall be entitled to the relief provided in
sections 910 and 911.

(a) Notwithstanding the conditions set forth in subparagraphs (A) and (C) of
section 902(a)(1) with respect to the availability of protection under this
chapter to nationals, domiciliaries, and sovereign authorities of a foreign nation,
1167
the Secretary of Commerce may, upon the petition of any person, or upon the
Secretary’s own motion, issue an order extending protection under this chapter
to such foreign nationals, domiciliaries, and sovereign authorities if the
Secretary finds—
(1) that the foreign nation is making good faith efforts and reasonable
progress toward—
(A) entering into a treaty described in section 902(a)(1)(A); or
( B ) enacting or implementing legislation that would be in
compliance with subparagraph (A) or (B) or section 902(a)(2); and
( 2) that the nationals, domiciliaries, and sovereign authorities of the
foreign nation, and persons controlled by them, are not engaged in the
misappropriation, or unauthorized distribution or commercial exploitation,
of mask works; and
(3) that issuing the order would promote the purposes of this chapter and
international comity with respect to the protection of mask works.
(b) While an order under subsection (a) is in effect with respect to a foreign
nation, no application for registration of a claim for protection in a mask work
under this chapter may be denied solely because the owner of the mask work is
a national, domiciliary, or sovereign authority of that foreign nation, or solely
because the mask work was first commercially exploited in that foreign nation.
(c) Any order issued by the Secretary of Commerce under subsection (a)
shall be effective for such period as the Secretary designates in the order,
except that no such order may be effective after the date on which the authority
of the Secretary of Commerce terminates under subsection (e). The effective
date of any such order shall also be designated in the order. In the case of an
order issued upon the petition of a person, such effective date may be no earlier
than the date on which the Secretary receives such petition.
(d)
(1) Any order issued under this section shall terminate if—
(A) the Secretary of Commerce finds that any of the conditions set
forth in paragraphs (1), (2), and (3) of subsection (a) no longer exist; or
( B ) mask works of nationals, domiciliaries, and sovereign
authorities of that foreign nation or mask works first commercially
exploited in that foreign nation become eligible for protection under
subparagraphs (A) or (C) of section 902(a)(1).
(2) Upon the termination or expiration of an order issued under this
1168
section, registrations of claims of protection in mask works made
pursuant to that order shall remain valid for the period specified in
section 904.
( e ) The authority of the Secretary of Commerce under this section shall
commence on the date of the enactment of this chapter, and shall terminate on
July 1, 1995.
(f)
(1) The Secretary of Commerce shall promptly notify the Register of
Copyrights and the Committees on the Judiciary of the Senate and the House
of Representatives of the issuance or termination of any order under this
section, together with a statement of the reasons for such action. The
Secretary shall also publish such notification and statement of reasons in the
Federal Register.
( 2 ) Two years after the date of the enactment of this chapter, the
Secretary of Commerce, in consultation with the Register of Copyrights,
shall transmit to the Committees on the Judiciary of the Senate and the
House of Representatives a report on the actions taken under this section
and on the current status of international recognition of mask work
protection. The report shall include such recommendations for modifications
of the protection accorded under this chapter to mask works owned by
nationals, domiciliaries, or sovereign authorities of foreign nations as the
Secretary, in consultation with the Register of Copyrights, considers would
promote the purposes of this chapter and international comity with respect to
mask work protection. Not later than July 1, 1994, the Secretary of
Commerce, in consultation with the Register of Copyrights, shall transmit to
the Committees on the Judiciary of the Senate and the House of
Representatives a report updating the matters contained in the report
transmitted under the preceding sentence.
100-159 §§ 2, 4, 101 Stat. 899, 900; June 28, 1991, P.L. 102-64 §§ 3, 4, 105 Stat. 520, 521.
CHAPTER 10
DIGITAL AUDIO RECORDING DEVICES

AND MEDIA
SUBCHAPTER A
1169
Definitions
As used in this chapter, the following terms have the following meanings:
(1) A “digital audio copied recording” is a reproduction in a digital
recording format of a digital musical recording, whether that reproduction is
made directly from another digital musical recording or indirectly from a
transmission.
(2) A “digital audio interface device” is any machine or device that is
designed specifically to communicate digital audio information and related
interface data to a digital audio recording device through a nonprofessional
interface.
(3) A “digital audio recording device” is any machine or device of a
type commonly distributed to individuals for use by individuals, whether or
not included with or as part of some other machine or device, the digital
recording function of which is designed or marketed for the primary purpose
of, and that is capable of, making a digital audio copied recording for
private use, except for—
(A) professional model products, and
( B ) dictation machines, answering machines, and other audio
recording equipment that is designed and marketed primarily for the
creation of sound recordings resulting from the fixation of nonmusical
sounds.
(4)
(A) A “digital audio recording medium” is any material object in a
form commonly distributed for use by individuals, that is primarily
marketed or most commonly used by consumers for the purpose of
making digital audio copied recordings by use of a digital audio
recording device.
(B) Such term does not include any material object—
( i ) that embodies a sound recording at the time it is first
distributed by the importer or manufacturer; or
( i i ) that is primarily marketed and most commonly used by
consumers either for the purpose of making copies of motion pictures
or other audiovisual works or for the purpose of making copies of
1170
nonmusical literary works, including computer programs or data
bases.
(5)
(A) A “digital musical recording” is a material object—
(i) in which are fixed, in a digital recording format, only sounds,
and material, statements, or instructions incidental to those fixed
sounds, if any, and
( i i ) from which the sounds and material can be perceived,
reproduced, or otherwise communicated, either directly or with the
aid of a machine or device.
(B) A “digital musical recording” does not include a material
object—
(i) in which the fixed sounds consist entirely of spoken word
recordings, or
( i i ) in which one or more computer programs are fixed,
except that a digital musical recording may contain statements or
instructions constituting the fixed sounds and incidental material,
and statements or instructions to be used directly or indirectly in
order to bring about the perception, reproduction, or
communication of the fixed sounds and incidental material.
(C) For purposes of this paragraph—
(i) a “spoken word recording” is a sound recording in which
are fixed only a series of spoken words, except that the spoken
words may be accompanied by incidental musical or other
sounds, and
( i i ) the term “incidental” means related to and relatively
minor by comparison.
(6) “Distribute” means to sell, lease, or assign a product to consumers
in the United States, or to sell, lease, or assign a product in the United States
for ultimate transfer to consumers in the United States.
(7) An “interested copyright party” is—
(A) the owner of the exclusive right under section 106(1) of this title
to reproduce a sound recording of a musical work that has been
embodied in a digital musical recording or analog musical recording
lawfully made under this title that has been distributed;
(B) the legal or beneficial owner of, or the person that controls, the
1171
right to reproduce in a digital musical recording or analog musical
recording a musical work that has been embodied in a digital musical
recording or analog musical recording lawfully made under this title that
has been distributed;
(C) a featured recording artist who performs on a sound recording
that has been distributed; or
(D) any association or other organization—
(i) representing persons specified in subparagraph (A), (B), or
(C), or
(ii) engaged in licensing rights in musical works to music users
on behalf of writers and publishers.
(8) To “manufacture” means to produce or assemble a product in the
United States. A “manufacturer” is a person who manufactures.
(9) A “music publisher” is a person that is authorized to license the
reproduction of a particular musical work in a sound recording.
(10) A “professional model product” is an audio recording device that
is designed, manufactured, marketed, and intended for use by recording
professionals in the ordinary course of a lawful business, in accordance
with such requirements as the Secretary of Commerce shall establish by
regulation.
(11) The term “serial copying” means the duplication in a digital format
of a copyrighted musical work or sound recording from a digital
reproduction of a digital musical recording. The term “digital reproduction
of a digital musical recording” does not include a digital musical recording
as distributed, by authority of the copyright owner, for ultimate sale to
consumers.
(12) The “transfer price” of a digital audio recording device or a digital
audio recording medium—
(A) is, subject to subparagraph (B)—
(i) in the case of an imported product, the actual entered value at
United States Customs (exclusive of any freight, insurance, and
applicable duty), and
(ii) in the case of a domestic product, the manufacturer’s transfer
price (FOB the manufacturer, and exclusive of any direct sales taxes
or excise taxes incurred in connection with the sale); and
(B) shall, in a case in which the transferor and transferee are related
1172
entities or within a single entity, not be less than a reasonable arms-
length price under the principles of the regulations adopted pursuant to
section 482 of the Internal Revenue Code of 1986, or any successor
provision to such section.
(13) A “writer” is the composer or lyricist of a particular musical work.
Leg.H. October 28, 1992, P.L. 102–563 § 2, 106 Stat. 4237.
SUBCHAPTER B
Copying Controls

(a) Prohibition on Importation, Manufacture, and Distribution. No person
shall import, manufacture, or distribute any digital audio recording device or
digital audio interface device that does not conform to—
(1) the Serial Copy Management System;
(2) a system that has the same functional characteristics as the Serial
Copy Management System and requires that copyright and generation status
information be accurately sent, received, and acted upon between devices
using the system’s method of serial copying regulation and devices using the
Serial Copy Management System; or
( 3 ) any other system certified by the Secretary of Commerce as
prohibiting unauthorized serial copying.
(b) Development of Verification Procedure. The Secretary of Commerce
shall establish a procedure to verify, upon the petition of an interested party, that
a system meets the standards set forth in subsection (a)(2).
(c) Prohibition on Circumvention of the System. No person shall import,
manufacture, or distribute any device, or offer or perform any service, the
primary purpose or effect of which is to avoid, bypass, remove, deactivate, or
otherwise circumvent any program or circuit which implements, in whole or in
part, a system described in subsection (a).
(d) Encoding of Information on Digital Musical Recordings.
(1) Prohibition on Encoding Inaccurate Information. No person shall
encode a digital musical recording of a sound recording with inaccurate
information relating to the category code, copyright status, or generation
status of the source material for the recording.
1173
(2) Encoding of Copyright Status Not Required. Nothing in this chapter
requires any person engaged in the importation or manufacture of digital
musical recordings to encode any such digital musical recording with
respect to its copyright status.
(e) Information Accompanying Transmissions in Digital Format. Any
person who transmits or otherwise communicates to the public any sound
recording in digital format is not required under this chapter to transmit or
otherwise communicate the information relating to the copyright status of the
sound recording. Any such person who does transmit or otherwise communicate
such copyright status information shall transmit or communicate such
information accurately.
SUBCHAPTER C
Royalty Payments

(a) Prohibition on Importation and Manufacture. No person shall import
into and distribute, or manufacture and distribute, any digital audio recording
device or digital audio recording medium unless such person records the notice
specified by this section and subsequently deposits the statements of account and
applicable royalty payments for such device or medium specified in section
1004.
(b) Filing of Notice. The importer or manufacturer of any digital audio
recording device or digital audio recording medium, within a product category
or utilizing a technology with respect to which such manufacturer or importer
has not previously filed a notice under this subsection, shall file with the
Register of Copyrights a notice with respect to such device or medium, in such
form and content as the Register shall prescribe by regulation.
(c) Filing of Quarterly and Annual Statements of Account.
(1) Generally. Any importer or manufacturer that distributes any digital
audio recording device or digital audio recording medium that it
manufactured or imported shall file with the Register of Copyrights, in such
form and content as the Register shall prescribe by regulation, such
quarterly and annual statements of account with respect to such distribution
as the Register shall prescribe by regulation.
1174
(2) Certification, Verification, and Confidentiality. Each such statement
shall be certified as accurate by an authorized officer or principal of the
importer or manufacturer. The Register shall issue regulations to provide for
the verification and audit of such statements and to protect the
confidentiality of the information contained in such statements. Such
regulations shall provide for the disclosure, in confidence, of such
statements to interested copyright parties.
(3) Royalty Payments. Each such statement shall be accompanied by
the royalty payments specified in section 1004.

(a) Digital Audio Recording Devices.
(1) Amount of Payment. The royalty payment due under section 1003
for each digital audio recording device imported into and distributed in the
United States, or manufactured and distributed in the United States, shall be
2 percent of the transfer price. Only the first person to manufacture and
distribute or import and distribute such device shall be required to pay the
royalty with respect to such device.
(2) Calculation for Devices Distributed With Other Devices. With
respect to a digital audio recording device first distributed in combination
with one or more devices, either as a physically integrated unit or as
separate components, the royalty payment shall be calculated as follows:
(A) If the digital audio recording device and such other devices are
part of a physically integrated unit, the royalty payment shall be based
on the transfer price of the unit, but shall be reduced by any royalty
payment made on any digital audio recording device included within the
unit that was not first distributed in combination with the unit.
(B) If the digital audio recording device is not part of a physically
integrated unit and substantially similar devices have been distributed
separately at any time during the preceding 4 calendar quarters, the
royalty payment shall be based on the average transfer price of such
devices during those 4 quarters.
(C) If the digital audio recording device is not part of a physically
integrated unit and substantially similar devices have not been
distributed separately at any time during the preceding 4 calendar
quarters, the royalty payment shall be based on a constructed price
reflecting the proportional value of such device to the combination as a
1175
whole.
(3) Limits on Royalties. Notwithstanding paragraph (1) or (2), the
amount of the royalty payment for each digital audio recording device shall
not be less than $1 nor more than the royalty maximum. The royalty
maximum shall be $8 per device, except that in the case of a physically
integrated unit containing more than 1 digital audio recording device, the
royalty maximum for such unit shall be $12. During the 6th year after the
effective date of this chapter [Oct. 28, 1992], and not more than once each
year thereafter, any interested copyright party may petition the Copyright
Royalty Judges to increase the royalty maximum and, if more than 20 percent
of the royalty payments are at the relevant royalty maximum, the Copyright
Royalty Judges shall prospectively increase such royalty maximum with the
goal of having no more than 10 percent of such payments at the new royalty
maximum; however the amount of any such increase as a percentage of the
royalty maximum shall in no event exceed the percentage increase in the
Consumer Price Index during the period under review.
(b) Digital Audio Recording Media. The royalty payment due under
section 1003 for each digital audio recording medium imported into and
distributed in the United States, or manufactured and distributed in the United
States, shall be 3 percent of the transfer price. Only the first person to
manufacture and distribute or import and distribute such medium shall be
required to pay the royalty with respect to such medium.
Leg.H. October 28, 1992, P.L. 102-563 § 2, 106 Stat. 4241, effective October 28,
1992; December 17, 1993, P.L. 103-198 § 6(b)(1), 107 Stat. 2312; November 30, 2004,
P.L. 108-419, § 5(i)(1), 118 Stat. 2368.
§ 1005. Deposit of Royalty Payments and Deduction of

Expenses.
The Register of Copyrights shall receive all royalty payments deposited
under this chapter and, after deducting the reasonable costs incurred by the
Copyright Office under this chapter, shall deposit the balance in the Treasury of
the United States as offsetting receipts, in such manner as the Secretary of the
Treasury directs. All funds held by the Secretary of the Treasury shall be
invested in interest-bearing United States securities for later distribution with
interest under section 1007. The Register may, in the Register’s discretion, 4
years after the close of any calendar year, close out the royalty payments
account for that calendar year, and may treat any funds remaining in such
account and any subsequent deposits that would otherwise be attributable to that
calendar year as attributable to the succeeding calendar year.
1176
103-198 § 6(b)(2), 107 Stat. 2312.

(a) Interested Copyright Parties. The royalty payments deposited pursuant
to section 1005 shall, in accordance with the procedures specified in section
1007, be distributed to any interested copyright party—
(1) whose musical work or sound recording has been—
(A) embodied in a digital musical recording or an analog musical
recording lawfully made under this title that has been distributed, and
(B) distributed in the form of digital musical recordings or analog
musical recordings or disseminated to the public in transmissions,
during the period to which such payments pertain; and
(2) who has filed a claim under section 1007.
(b) Allocation of Royalty Payments to Groups. The royalty payments shall
be divided into 2 funds as follows:
(1) The Sound Recordings Fund. 66 2/3 percent of the royalty
payments shall be allocated to the Sound Recordings Fund. 2 5/8 percent of
the royalty payments allocated to the Sound Recordings Fund shall be
placed in an escrow account managed by an independent administrator
jointly appointed by the interested copyright parties described in section
1001(7)(A) and the American Federation of Musicians (or any successor
entity) to be distributed to nonfeatured musicians (whether or not members
of the American Federation of Musicians or any successor entity) who have
performed on sound recordings distributed in the United States. 1 3/8
percent of the royalty payments allocated to the Sound Recordings Fund
shall be placed in an escrow account managed by an independent
administrator jointly appointed by the interested copyright parties described
in section 1001(7)(A) and the American Federation of Television and Radio
Artists (or any successor entity) to be distributed to nonfeatured vocalists
(whether or not members of the American Federation of Television and
Radio Artists or any successor entity) who have performed on sound
recordings distributed in the United States. 40 percent of the remaining
royalty payments in the Sound Recordings Fund shall be distributed to the
interested copyright parties described in section 1001(7)(C), and 60 percent
of such remaining royalty payments shall be distributed to the interested
copyright parties described in section 1001(7)(A).
(2) The Musical Works Fund.
(A) 33 1/3 percent of the royalty payments shall be allocated to the
1177
Musical Works Fund for distribution to interested copyright parties
described in section 1001(7)(B).
(B)
(i) Music publishers shall be entitled to 50 percent of the royalty
payments allocated to the Musical Works Fund.
(ii) Writers shall be entitled to the other 50 percent of the
royalty payments allocated to the Musical Works Fund.
(c) Allocation of royalty payments within groups. If all interested copyright
parties within a group specified in subsection (b) do not agree on a voluntary
proposal for the distribution of the royalty payments within each group, the
Copyright Royalty Judges shall, pursuant to the procedures specified under
section 1007(c), allocate royalty payments under this section based on the extent
to which, during the relevant period—
( 1 ) for the Sound Recordings Fund, each sound recording was
distributed in the form of digital musical recordings or analog musical
recordings; and
(2) for the Musical Works Fund, each musical work was distributed in
the form of digital musical recordings or analog musical recordings or
disseminated to the public in transmissions.
1992; December 17, 1993, P.L. 103-198 § 6(b)(3), 107 Stat. 2312; November 13, 1997,
P.L. 105-80 § 12(a)(24), 111 Stat. 1535; November 30, 2004, P.L. 108-419, § 5(i)(2), 118
Stat. 2368.

(a) Filing of Claims and Negotiations.
(1) Filing of Claims. During the first 2 months of each calendar year,
every interested copyright party seeking to receive royalty payments to
which such party is entitled under section 1006 [17 USCS § 1006] shall file
with the Copyright Royalty Judges a claim for payments collected during the
preceding year in such form and manner as the Copyright Royalty Judges
shall prescribe by regulation.
(2) Negotiations. Notwithstanding any provision of the antitrust laws,
for purposes of this section interested copyright parties within each group
specified in section 1006(b) [17 USCS § 1006(b)] may agree among
themselves to the proportionate division of royalty payments, may lump their
claims together and file them jointly or as a single claim, or may designate a
common agent, including any organization described in section 1001(7)(D)
1178
[17 USCS § 1001(7)(D)], to negotiate or receive payment on their behalf;
except that no agreement under this subsection may modify the allocation of
royalties specified in section 1006(b) [17 USCS § 1006(b)].
(b) Distribution of Payments in the Absence of a Dispute. After the period
established for the filing of claims under subsection (a), in each year, the
Copyright Royalty Judges shall determine whether there exists a controversy
concerning the distribution of royalty payments under section 1006(c) [17 USCS
§ 1006(c)]. If the Copyright Royalty Judges determine that no such controversy
exists, the Copyright Royalty Judges shall, within 30 days after such
determination, authorize the distribution of the royalty payments as set forth in
the agreements regarding the distribution of royalty payments entered into
pursuant to subsection (a). The Librarian of Congress shall, before such royalty
payments are distributed, deduct the reasonable administrative costs incurred
under this section.
(c) Resolution of Disputes. If the Copyright Royalty Judges find the
existence of a controversy, the Copyright Royalty Judges shall, pursuant to
chapter 8 of this title [17 USCS §§ 801 et seq.], conduct a proceeding to
determine the distribution of royalty payments. During the pendency of such a
proceeding, the Copyright Royalty Judges shall withhold from distribution an
amount sufficient to satisfy all claims with respect to which a controversy
exists, but shall, to the extent feasible, authorize the distribution of any amounts
that are not in controversy. The Librarian of Congress shall, before such royalty
payments are distributed, deduct the reasonable administrative costs incurred
under this section.
History:
(Added Oct. 28, 1992, P.L. 102-563, § 2, 106 Stat. 4244; Dec. 17, 1993, P.L. 103-198,
§ 6(b)(4), 107 Stat. 2312; Nov. 13, 1997, P.L. 105-80, §§ 9, 12(25), 111 Stat. 1534, 1535.)
(As amended Nov. 30, 2004, P.L. 108-419, § 5(i)(3), 118 Stat. 2368; Oct. 6, 2006, P.L.
109-303, § 4(f), 120 Stat. 1483.)
SUBCHAPTER D
Prohibition on Certain Infringement Actions,

Remedies, and Arbitration

No action may be brought under this title alleging infringement of copyright
based on the manufacture, importation, or distribution of a digital audio
1179
recording device, a digital audio recording medium, an analog recording
device, or an analog recording medium, or based on the noncommercial use by a
consumer of such a device or medium for making digital musical recordings or
analog musical recordings.

(a) Civil Actions. Any interested copyright party injured by a violation of
section 1002 or 1003 may bring a civil action in an appropriate United States
district court against any person for such violation.
(b) Other Civil Actions. Any person injured by a violation of this chapter
may bring a civil action in an appropriate United States district court for actual
damages incurred as a result of such violation.
(c) Powers of the Court. In an action brought under subsection (a), the
court—
(1) may grant temporary and permanent injunctions on such terms as it
deems reasonable to prevent or restrain such violation;
(2) in the case of a violation of section 1002, or in the case of an injury
resulting from a failure to make royalty payments required by section 1003,
shall award damages under subsection (d);
(3) in its discretion may allow the recovery of costs by or against any
party other than the United States or an officer thereof; and
( 4 ) in its discretion may award a reasonable attorney’s fee to the
prevailing party.
(d) Award of Damages.
(1) Damages for section 1002 or 1003 violations.
(A) Actual damages.
(i) In an action brought under subsection (a), if the court finds that
a violation of section 1002 or 1003 has occurred, the court shall
award to the complaining party its actual damages if the complaining
party elects such damages at any time before final judgment is
entered.
(ii) In the case of section 1003, actual damages shall constitute
the royalty payments that should have been paid under section 1004
and deposited under section 1005. In such a case, the court, in its
discretion, may award an additional amount of not to exceed 50
1180
percent of the actual damages.
(B) Statutory damages for section 1002 violations.
(i) Device. A complaining party may recover an award of
statutory damages for each violation of section 1002 (a) or (c) in the
sum of not more than $2,500 per device involved in such violation or
per device on which a service prohibited by section 1002(c) has
been performed, as the court considers just.
(ii) Digital Musical Recording. A complaining party may
recover an award of statutory damages for each violation of section
1002(d) in the sum of not more than $25 per digital musical
recording involved in such violation, as the court considers just.
(iii) Transmission. A complaining party may recover an award
of damages for each transmission or communication that violates
section 1002(e) in the sum of not more than $10,000, as the court
considers just.
(2) Repeated Violations. In any case in which the court finds that a
person has violated section 1002 or 1003 within 3 years after a final
judgment against that person for another such violation was entered, the
court may increase the award of damages to not more than double the
amounts that would otherwise be awarded under paragraph (1), as the court
considers just.
(3) Innocent Violations of Section 1002. The court in its discretion may
reduce the total award of damages against a person violating section 1002 to
a sum of not less than $250 in any case in which the court finds that the
violator was not aware and had no reason to believe that its acts constituted
a violation of section 1002.
(e) Payment of Damages. Any award of damages under subsection (d) shall
be deposited with the Register pursuant to section 1005 for distribution to
interested copyright parties as though such funds were royalty payments made
pursuant to section 1003.
(f) Impounding of Articles. At any time while an action under subsection
(a) is pending, the court may order the impounding, on such terms as it deems
reasonable, of any digital audio recording device, digital musical recording, or
device specified in section 1002(c) that is in the custody or control of the
alleged violator and that the court has reasonable cause to believe does not
comply with, or was involved in a violation of, section 1002.
(g) Remedial Modification and Destruction of Articles. In an action
brought under subsection (a), the court may, as part of a final judgment or decree
1181
finding a violation of section 1002, order the remedial modification or the
destruction of any digital audio recording device, digital musical recording, or
device specified in section 1002(c) that—
(1) does not comply with, or was involved in a violation of, section
1002, and
(2) is in the custody or control of the violator or has been impounded
under subsection (f).

(a) Scope of Determination. Before the date of first distribution in the
United States of a digital audio recording device or a digital audio interface
device, any party manufacturing, importing, or distributing such device, and any
interested copyright party may mutually agree to petition the Copyright Royalty
Judges to determine whether such device is subject to section 1002, or the basis
on which royalty payments for such device are to be made under section 1003.
(b) Initiation of Proceedings. The parties under subsection (a) shall file the
petition with the Copyright Royalty Judges requesting the commencement of a
proceeding. Within 2 weeks after receiving such a petition, the Chief Copyright
Royalty Judge shall cause notice to be published in the Federal Register of the
initiation of the proceeding.
(c) Stay of Judicial Proceedings. Any civil action brought under section
1009 against a party to a proceeding under this section shall, on application of
one of the parties to the proceeding, be stayed until completion of the
proceeding.
(d) Proceeding. The Copyright Royalty Judges shall conduct a proceeding
with respect to the matter concerned, in accordance with such procedures as the
Copyright Royalty Judges may adopt. The Copyright Royalty Judges shall act on
the basis of a fully documented written record. Any party to the proceeding may
submit relevant information and proposals to the Copyright Royalty Judges. The
parties to the proceeding shall each bear their respective costs of participation.
(e) Judicial Review. Any determination of the Copyright Royalty Judges
under subsection (d) may be appealed, by a party to the proceeding, in
accordance with section 803(d) of this title. The pendency of an appeal under
this subsection shall not stay the determination of the Copyright Royalty Judges.
If the court modifies the determination of the Copyright Royalty Judges, the court
shall have jurisdiction to enter its own decision in accordance with its final
judgment. The court may further vacate the determination of the Copyright
1182
Royalty Judges and remand the case for proceedings as provided in this section.
1992; December 17, 1993, P.L. 103-198 § 6(b)(5), 107 Stat. 2312; Nov. 30, 2004, P.L.
108-419, § 5(i)(4)(A), 118 Stat. 2368.
CHAPTER 11
SOUND RECORDINGS AND MUSIC

VIDEOS
§ 1101. Unauthorized Fixation and Trafficking in
Sound Recordings and Music Videos.
(a) Unauthorized acts. Anyone who, without the consent of the performer or
performers involved—
(1) fixes the sounds or sounds and images of a live musical performance
in a copy or phonorecord, or reproduces copies or phonorecords of such a
performance from an unauthorized fixation,
(2) transmits or otherwise communicates to the public the sounds or
sounds and images of a live musical performance, or
(3) distributes or offers to distribute, sells or offers to sell, rents or
offers to rent, or traffics in any copy or phonorecord fixed as described in
paragraph (1), regardless of whether the fixations occurred in the United
States,
shall be subject to the remedies provided in sections 502 through 505 [17
USCS §§ 502–505], to the same extent as an infringer of copyright.
(b) Definition. In this section, the term “traffic” has the same meaning as in
section 2320(e) of title 18 [18 USCS § 2320(e)].
(c) Applicability. This section shall apply to any act or acts that occur on
or after the date of the enactment of the Uruguay Round Agreements Act [enacted
Dec. 8, 1994].
(d) State Law Not Preempted. Nothing in this section may be construed to
annul or limit any rights or remedies under the common law or statutes of any
State.
History:
(Added Dec. 8, 1994, P.L. 103-465, Title V, Subtitle A, § 512(a), 108 Stat. 4974.)
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(As amended March 16, 2006, P.L. 109-181, § 2(c)(3), 120 Stat. 288.)
CHAPTER 12
COPYRIGHT PROTECTION AND

MANAGEMENT SYSTEMS
§ 1201. Circumvention of Copyright Protection
Systems.
(a) Violations Regarding Circumvention of Technological Measures.
(1)
( A ) No person shall circumvent a technological measure that
effectively controls access to a work protected under this title. The
prohibition contained in the preceding sentence shall take effect at the
end of the 2-year period beginning on the date of the enactment of this
chapter.
(B) The prohibition contained in subparagraph (A) shall not apply to
persons who are users of a copyrighted work which is in a particular
class of works, if such persons are, or are likely to be in the succeeding
3-year period, adversely affected by virtue of such prohibition in their
ability to make noninfringing uses of that particular class of works under
this title, as determined under subparagraph (C).
(C) During the 2-year period described in subparagraph (A), and
during each succeeding 3-year period, the Librarian of Congress, upon
the recommendation of the Register of Copyrights, who shall consult
with the Assistant Secretary for Communications and Information of the
Department of Commerce and report and comment on his or her views in
making such recommendation, shall make the determination in a
rulemaking proceeding for purposes of subparagraph (B) of whether
persons who are users of a copyrighted work are, or are likely to be in
the succeeding 3-year period, adversely affected by the prohibition
under subparagraph (A) in their ability to make noninfringing uses under
this title of a particular class of copyrighted works. In conducting such
rulemaking, the Librarian shall examine—
(i) the availability for use of copyrighted works;
(i i ) the availability for use of works for nonprofit archival,
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preservation, and educational purposes;
(iii) the impact that the prohibition on the circumvention of
technological measures applied to copyrighted works has on
criticism, comment, news reporting, teaching, scholarship, or
research;
(iv) the effect of circumvention of technological measures on the
market for or value of copyrighted works; and
(v) such other factors as the Librarian considers appropriate.
(D) The Librarian shall publish any class of copyrighted works for
which the Librarian has determined, pursuant to the rulemaking
conducted under subparagraph (C), that noninfringing uses by persons
who are users of a copyrighted work are, or are likely to be, adversely
affected, and the prohibition contained in subparagraph (A) shall not
apply to such users with respect to such class of works for the ensuing
3-year period.
( E ) Neither the exception under subparagraph (B) from the
applicability of the prohibition contained in subparagraph (A), nor any
determination made in a rulemaking conducted under subparagraph (C),
may be used as a defense in any action to enforce any provision of this
title other than this paragraph.
(2) No person shall manufacture, import, offer to the public, provide, or
otherwise traffic in any technology, product, service, device, component, or
part thereof, that—
( A ) is primarily designed or produced for the purpose of
circumventing a technological measure that effectively controls access
to a work protected under this title;
(B) has only limited commercially significant purpose or use other
than to circumvent a technological measure that effectively controls
access to a work protected under this title; or
(C) is marketed by that person or another acting in concert with that
person with that person’s knowledge for use in circumventing a
technological measure that effectively controls access to a work
protected under this title.
(3) As used in this subsection—
(A) to “circumvent a technological measure” means to descramble a
scrambled work, to decrypt an encrypted work, or otherwise to avoid,
bypass, remove, deactivate, or impair a technological measure, without
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the authority of the copyright owner; and
(B) a technological measure “effectively controls access to a work”
if the measure, in the ordinary course of its operation, requires the
application of information, or a process or a treatment, with the authority
of the copyright owner, to gain access to the work.
(b) Additional Violations.
(1) No person shall manufacture, import, offer to the public, provide, or
otherwise traffic in any technology, product, service, device, component, or
part thereof, that—
( A ) is primarily designed or produced for the purpose of
circumventing protection afforded by a technological measure that
effectively protects a right of a copyright owner under this title in a
work or a portion thereof;
(B) has only limited commercially significant purpose or use other
than to circumvent protection afforded by a technological measure that
effectively protects a right of a copyright owner under this title in a
work or a portion thereof; or
(C) is marketed by that person or another acting in concert with that
person with that person’s knowledge for use in circumventing protection
afforded by a technological measure that effectively protects a right of a
copyright owner under this title in a work or a portion thereof.
(2) As used in this subsection—
(A) to “circumvent protection afforded by a technological measure”
means avoiding, bypassing, removing, deactivating, or otherwise
impairing a technological measure; and
( B ) a technological measure “effectively protects a right of a
copyright owner under this title” if the measure, in the ordinary course
of its operation, prevents, restricts, or otherwise limits the exercise of a
right of a copyright owner under this title.
(c) Other Rights, Etc., Not Affected.
(1) Nothing in this section shall affect rights, remedies, limitations, or
defenses to copyright infringement, including fair use, under this title.
( 2 ) Nothing in this section shall enlarge or diminish vicarious or
contributory liability for copyright infringement in connection with any
technology, product, service, device, component, or part thereof.
(3) Nothing in this section shall require that the design of, or design and
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selection of parts and components for, a consumer electronics,
telecommunications, or computing product provide for a response to any
particular technological measure, so long as such part or component, or the
product in which such part or component is integrated, does not otherwise
fall within the prohibitions of subsection (a)(2) or (b)(1).
(4) Nothing in this section shall enlarge or diminish any rights of free
speech or the press for activities using consumer electronics,
telecommunications, or computing products.
(d) Exemption for Nonprofit Libraries, Archives, and Educational
Institutions.
(1) A nonprofit library, archives, or educational institution which gains
access to a commercially exploited copyrighted work solely in order to
make a good faith determination of whether to acquire a copy of that work
for the sole purpose of engaging in conduct permitted under this title shall
not be in violation of subsection (a)(1)(A). A copy of a work to which
access has been gained under this paragraph—
(A) may not be retained longer than necessary to make such good
faith determination; and
(B) may not be used for any other purpose.
(2) The exemption made available under paragraph (1) shall only apply
with respect to a work when an identical copy of that work is not reasonably
available in another form.
(3) A nonprofit library, archives, or educational institution that willfully
for the purpose of commercial advantage or financial gain violates
paragraph (1)—
(A) shall, for the first offense, be subject to the civil remedies under
section 1203; and
( B) shall, for repeated or subsequent offenses, in addition to the
civil remedies under section 1203, forfeit the exemption provided under
paragraph (1).
( 4) This subsection may not be used as a defense to a claim under
subsection (a)(2) or (b), nor may this subsection permit a nonprofit library,
archives, or educational institution to manufacture, import, offer to the
public, provide, or otherwise traffic in any technology, product, service,
component, or part thereof, which circumvents a technological measure.
(5) In order for a library or archives to qualify for the exemption under
this subsection, the collections of that library or archives shall be—
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(A) open to the public; or
(B) available not only to researchers affiliated with the library or
archives or with the institution of which it is a part, but also to other
persons doing research in a specialized field.
(e) Law Enforcement, Intelligence, and Other Government Activities. This
section does not prohibit any lawfully authorized investigative, protective,
information security, or intelligence activity of an officer, agent, or employee of
the United States, a State, or a political subdivision of a State, or a person
acting pursuant to a contract with the United States, a State, or a political
subdivision of a State. For purposes of this subsection, the term “information
security” means activities carried out in order to identify and address the
vulnerabilities of a government computer, computer system, or computer
network.
(f) Reverse Engineering.
(1) Notwithstanding the provisions of subsection (a)(1)(A), a person
who has lawfully obtained the right to use a copy of a computer program
may circumvent a technological measure that effectively controls access to a
particular portion of that program for the sole purpose of identifying and
analyzing those elements of the program that are necessary to achieve
interoperability of an independently created computer program with other
programs, and that have not previously been readily available to the person
engaging in the circumvention, to the extent any such acts of identification
and analysis do not constitute infringement under this title.
( 2 ) Notwithstanding the provisions of subsections (a)(2) and (b), a
person may develop and employ technological means to circumvent a
technological measure, or to circumvent protection afforded by a
technological measure, in order to enable the identification and analysis
under paragraph (1), or for the purpose of enabling interoperability of an
independently created computer program with other programs, if such means
are necessary to achieve such interoperability, to the extent that doing so
does not constitute infringement under this title.
(3) The information acquired through the acts permitted under paragraph
(1), and the means permitted under paragraph (2), may be made available to
others if the person referred to in paragraph (1) or (2), as the case may be,
provides such information or means solely for the purpose of enabling
interoperability of an independently created computer program with other
programs, and to the extent that doing so does not constitute infringement
under this title or violate applicable law other than this section.
(4) For purposes of this subsection, the term “interoperability” means
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the ability of computer programs to exchange information, and of such
programs mutually to use the information which has been exchanged.
(g) Encryption Research.
(1) Definitions. For purposes of this subsection—
( A) the term “encryption research” means activities necessary to
identify and analyze flaws and vulnerabilities of encryption technologies
applied to copyrighted works, if these activities are conducted to
advance the state of knowledge in the field of encryption technology or
to assist in the development of encryption products; and
( B ) the term “encryption technology” means the scrambling and
descrambling of information using mathematical formulas or algorithms.
(2) Permissible Acts of Encryption Research. Notwithstanding the
provisions of subsection (a)(1)(A), it is not a violation of that subsection for
a person to circumvent a technological measure as applied to a copy,
phonorecord, performance, or display of a published work in the course of
an act of good faith encryption research if—
(A) the person lawfully obtained the encrypted copy, phonorecord,
performance, or display of the published work;
(B) such act is necessary to conduct such encryption research;
(C) the person made a good faith effort to obtain authorization before
the circumvention; and
(D) such act does not constitute infringement under this title or a
violation of applicable law other than this section, including section
1030 of title 18 and those provisions of title 18 amended by the
Computer Fraud and Abuse Act of 1986.
(3) Factors in Determining Exemption. In determining whether a person
qualifies for the exemption under paragraph (2), the factors to be considered
shall include—
(A) whether the information derived from the encryption research
was disseminated, and if so, whether it was disseminated in a manner
reasonably calculated to advance the state of knowledge or development
of encryption technology, versus whether it was disseminated in a
manner that facilitates infringement under this title or a violation of
applicable law other than this section, including a violation of privacy
or breach of security;
(B) whether the person is engaged in a legitimate course of study, is
1189
employed, or is appropriately trained or experienced, in the field of
encryption technology; and
(C) whether the person provides the copyright owner of the work to
which the technological measure is applied with notice of the findings
and documentation of the research, and the time when such notice is
provided.
(4) Use of Technological Means for Research Activities.
Notwithstanding the provisions of subsection (a)(2), it is not a violation of
that subsection for a person to—
( A ) develop and employ technological means to circumvent a
technological measure for the sole purpose of that person performing the
acts of good faith encryption research described in paragraph (2); and
(B) provide the technological means to another person with whom
he or she is working collaboratively for the purpose of conducting the
acts of good faith encryption research described in paragraph (2) or for
the purpose of having that other person verify his or her acts of good
faith encryption research described in paragraph (2).
(5) Report to Congress. Not later than 1 year after the date of the
enactment of this chapter, the Register of Copyrights and the Assistant
Secretary for Communications and Information of the Department of
Commerce shall jointly report to the Congress on the effect this subsection
has had on—
( A ) encryption research and the development of encryption
technology;
( B ) the adequacy and effectiveness of technological measures
designed to protect copyrighted works; and
(C) protection of copyright owners against the unauthorized access
to their encrypted copyrighted works. The report shall include
legislative recommendations, if any.
(h) Exceptions Regarding Minors. In applying subsection (a) to a
component or part, the court may consider the necessity for its intended and
actual incorporation in a technology, product, service, or device, which—
(1) does not itself violate the provisions of this title; and
(2) has the sole purpose to prevent the access of minors to material on
the Internet.
(i) Protection of Personally Identifying Information.
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(1) Circumvention Permitted. Notwithstanding the provisions of
subsection (a)(1)(A), it is not a violation of that subsection for a person to
circumvent a technological measure that effectively controls access to a
work protected under this title, if—
(A) the technological measure, or the work it protects, contains the
capability of collecting or disseminating personally identifying
information reflecting the online activities of a natural person who seeks
to gain access to the work protected;
(B) in the normal course of its operation, the technological measure,
or the work it protects, collects or disseminates personally identifying
information about the person who seeks to gain access to the work
protected, without providing conspicuous notice of such collection or
dissemination to such person, and without providing such person with
the capability to prevent or restrict such collection or dissemination;
(C) the act of circumvention has the sole effect of identifying and
disabling the capability described in subparagraph (A), and has no other
effect on the ability of any person to gain access to any work; and
(D) the act of circumvention is carried out solely for the purpose of
preventing the collection or dissemination of personally identifying
information about a natural person who seeks to gain access to the work
protected, and is not in violation of any other law.
(2) Inapplicability to Certain Technological Measures. This subsection
does not apply to a technological measure, or a work it protects, that does
not collect or disseminate personally identifying information and that is
disclosed to a user as not having or using such capability.
(j) Security Testing.
(1) Definition. For purposes of this subsection, the term “security
testing” means accessing a computer, computer system, or computer
network, solely for the purpose of good faith testing, investigating, or
correcting, a security flaw or vulnerability, with the authorization of the
owner or operator of such computer, computer system, or computer network.
(2) Permissible Acts of Security Testing. Notwithstanding the
provisions of subsection (a)(1)(A), it is not a violation of that subsection for
a person to engage in an act of security testing, if such act does not constitute
infringement under this title or a violation of applicable law other than this
section, including section 1030 of title 18 and those provisions of title 18
amended by the Computer Fraud and Abuse Act of 1986.
(3) Factors in Determining Exemption. In determining whether a person
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qualifies for the exemption under paragraph (2), the factors to be considered
shall include—
(A) whether the information derived from the security testing was
used solely to promote the security of the owner or operator of such
computer, computer system or computer network, or shared directly with
the developer of such computer, computer system, or computer network;
and
(B) whether the information derived from the security testing was
used or maintained in a manner that does not facilitate infringement
under this title or a violation of applicable law other than this section,
including a violation of privacy or breach of security.
(4) Use of Technological Means for Security Testing. Notwithstanding
the provisions of subsection (a)(2), it is not a violation of that subsection for
a person to develop, produce, distribute or employ technological means for
the sole purpose of performing the acts of security testing described in
subsection (2), provided such technological means does not otherwise
violate section (a)(2).
(k) Certain Analog Devices and Certain Technological Measures.
(1) Certain Analog Devices.
( A ) Effective 18 months after the date of the enactment of this
chapter, no person shall manufacture, import, offer to the public, provide
or otherwise traffic in any—
( i ) VHS format analog video cassette recorder unless such
recorder conforms to the automatic gain control copy control
technology;
(ii) 8mm format analog video cassette camcorder unless such
camcorder conforms to the automatic gain control technology;
(iii) Beta format analog video cassette recorder, unless such
recorder conforms to the automatic gain control copy control
technology, except that this requirement shall not apply until there
are 1,000 Beta format analog video cassette recorders sold in the
United States in any one calendar year after the date of the enactment
of this chapter;
(iv) 8mm format analog video cassette recorder that is not an
analog video cassette camcorder, unless such recorder conforms to
the automatic gain control copy control technology, except that this
requirement shall not apply until there are 20,000 such recorders
sold in the United States in any one calendar year after the date of the
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enactment of this chapter; or
(v) analog video cassette recorder that records using an NTSC
format video input and that is not otherwise covered under clauses
(i) through (iv), unless such device conforms to the automatic gain
control copy control technology.
(B) Effective on the date of the enactment of this chapter, no person
shall manufacture, import, offer to the public, provide or otherwise
traffic in—
(i) any VHS format analog video cassette recorder or any 8mm
format analog video cassette recorder if the design of the model of
such recorder has been modified after such date of enactment so that
a model of recorder that previously conformed to the automatic gain
control copy control technology no longer conforms to such
technology; or
(ii) any VHS format analog video cassette recorder, or any 8mm
format analog video cassette recorder that is not an 8mm analog
video cassette camcorder, if the design of the model of such recorder
has been modified after such date of enactment so that a model of
recorder that previously conformed to the four-line colorstripe copy
control technology no longer conforms to such technology.
Manufacturers that have not previously manufactured or sold a VHS
format analog video cassette recorder, or an 8mm format analog
cassette recorder, shall be required to conform to the four-line
colorstripe copy control technology in the initial model of any such
recorder manufactured after the date of the enactment of this chapter,
and thereafter to continue conforming to the four-line colorstripe
copy control technology. For purposes of this subparagraph, an
analog video cassette recorder “conforms to” the four-line
colorstripe copy control technology if it records a signal that, when
played back by the playback function of that recorder in the normal
viewing mode, exhibits, on a reference display device, a display
containing distracting visible lines through portions of the viewable
picture.
(2) Certain Encoding Restrictions. No person shall apply the automatic
gain control copy control technology or colorstripe copy control technology
to prevent or limit consumer copying except such copying—
(A) of a single transmission, or specified group of transmissions, of
live events or of audiovisual works for which a member of the public
has exercised choice in selecting the transmissions, including the content
of the transmissions or the time of receipt of such transmissions, or both,
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and as to which such member is charged a separate fee for each such
transmission or specified group of transmissions;
(B) from a copy of a transmission of a live event or an audiovisual
work if such transmission is provided by a channel or service where
payment is made by a member of the public for such channel or service
in the form of a subscription fee that entitles the member of the public to
receive all of the programming contained in such channel or service;
(C) from a physical medium containing one or more prerecorded
audiovisual works; or
(D) from a copy of a transmission described in subparagraph (A) or
from a copy made from a physical medium described in subparagraph
(C). In the event that a transmission meets both the conditions set forth in
subparagraph (A) and those set forth in subparagraph (B), the
transmission shall be treated as a transmission described in
subparagraph (A).
(3) Inapplicability. This subsection shall not—
(A) require any analog video cassette camcorder to conform to the
automatic gain control copy control technology with respect to any video
signal received through a camera lens;
(B) apply to the manufacture, importation, offer for sale, provision
of, or other trafficking in, any professional analog video cassette
recorder; or
(C) apply to the offer for sale or provision of, or other trafficking in,
any previously owned analog video cassette recorder, if such recorder
was legally manufactured and sold when new and not subsequently
modified in violation of paragraph (1)(B).
(4) Definitions. For purposes of this subsection:
( A ) An “analog video cassette recorder” means a device that
records, or a device that includes a function that records, on
electromagnetic tape in an analog format the electronic impulses
produced by the video and audio portions of a television program,
motion picture, or other form of audiovisual work.
(B) An “analog video cassette camcorder” means an analog video
cassette recorder that contains a recording function that operates through
a camera lens and through a video input that may be connected with a
television or other video playback device.
(C) An analog video cassette recorder “conforms” to the automatic
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gain control copy control technology if it—
(i) detects one or more of the elements of such technology and
does not record the motion picture or transmission protected by such
technology; or
( i i ) records a signal that, when played back, exhibits a
meaningfully distorted or degraded display.
(D) The term “professional analog video cassette recorder” means
an analog video cassette recorder that is designed, manufactured,
marketed, and intended for use by a person who regularly employs such
a device for a lawful business or industrial use, including making,
performing, displaying, distributing, or transmitting copies of motion
pictures on a commercial scale.
( E ) The terms “VHS format”, “8mm format”, “Beta format”,
“automatic gain control copy control technology”, “colorstripe copy
control technology”, “four-line version of the colorstripe copy control
technology”, and “NTSC” have the meanings that are commonly
understood in the consumer electronics and motion picture industries as
of the date of the enactment of this chapter.
(5) Violations. Any violation of paragraph (1) of this subsection shall
be treated as a violation of subsection (b)(1) of this section. Any violation
of paragraph (2) of this subsection shall be deemed an “act of
circumvention” for the purposes of section 1203(c)(3)(A) of this chapter.
Leg.H. Added Oct. 28, 1998, P.L. 105-304, Title I, § 103(a), 112 Stat. 2863; Nov. 29,
1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536.
§ 1202. Integrity of Copyright Management

Information.
(a) False Copyright Management Information. No person shall knowingly
and with the intent to induce, enable, facilitate, or conceal infringement—
(1) provide copyright management information that is false, or
( 2 ) distribute or import for distribution copyright management
information that is false.
(b) Removal or Alteration of Copyright Management Information. No
person shall, without the authority of the copyright owner or the law—
(1) intentionally remove or alter any copyright management information,
( 2 ) distribute or import for distribution copyright management
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information knowing that the copyright management information has been
removed or altered without authority of the copyright owner or the law, or
(3) distribute, import for distribution, or publicly perform works, copies
of works, or phonorecords, knowing that copyright management information
has been removed or altered without authority of the copyright owner or the
law, knowing, or, with respect to civil remedies under section 1203, having
reasonable grounds to know, that it will induce, enable, facilitate, or
conceal an infringement of any right under this title.
(c) Definition. As used in this section, the term “copyright management
information” means any of the following information conveyed in connection
with copies or phonorecords of a work or performances or displays of a work,
including in digital form, except that such term does not include any personally
identifying information about a user of a work or of a copy, phonorecord,
performance, or display of a work:
(1) The title and other information identifying the work, including the
information set forth on a notice of copyright.
(2) The name of, and other identifying information about, the author of a
work.
(3) The name of, and other identifying information about, the copyright
owner of the work, including the information set forth in a notice of
copyright.
(4) With the exception of public performances of works by radio and
television broadcast stations, the name of, and other identifying information
about, a performer whose performance is fixed in a work other than an
audiovisual work.
(5) With the exception of public performances of works by radio and
television broadcast stations, in the case of an audiovisual work, the name
of, and other identifying information about, a writer, performer, or director
who is credited in the audiovisual work.
(6) Terms and conditions for use of the work.
(7) Identifying numbers or symbols referring to such information or links
to such information.
(8) Such other information as the Register of Copyrights may prescribe
by regulation, except that the Register of Copyrights may not require the
provision of any information concerning the user of a copyrighted work.
(d) Law Enforcement, Intelligence, and Other Government Activities. This
section does not prohibit any lawfully authorized investigative, protective,
1196
information security, or intelligence activity of an officer, agent, or employee of
the United States, a State, or a political subdivision of a State, or a person
acting pursuant to a contract with the United States, a State, or a political
subdivision of a State. For purposes of this subsection, the term “information
security” means activities carried out in order to identify and address the
vulnerabilities of a government computer, computer system, or computer
network.
(e) Limitations on Liability.
(1) Analog Transmissions. In the case of an analog transmission, a
person who is making transmissions in its capacity as a broadcast station, or
as a cable system, or someone who provides programming to such station or
system, shall not be liable for a violation of subsection (b) if—
( A ) avoiding the activity that constitutes such violation is not
technically feasible or would create an undue financial hardship on such
person; and
( B) such person did not intend, by engaging in such activity, to
induce, enable, facilitate, or conceal infringement of a right under this
title.
(2) Digital Transmissions.
(A) If a digital transmission standard for the placement of copyright
management information for a category of works is set in a voluntary,
consensus standard-setting process involving a representative cross-
section of broadcast stations or cable systems and copyright owners of a
category of works that are intended for public performance by such
stations or systems, a person identified in paragraph (1) shall not be
liable for a violation of subsection (b) with respect to the particular
copyright management information addressed by such standard if—
(i) the placement of such information by someone other than such
person is not in accordance with such standard; and
(ii) the activity that constitutes such violation is not intended to
induce, enable, facilitate, or conceal infringement of a right under
this title.
(B) Until a digital transmission standard has been set pursuant to
subparagraph (A) with respect to the placement of copyright
management information for a category of works, a person identified in
paragraph (1) shall not be liable for a violation of subsection (b) with
respect to such copyright management information, if the activity that
constitutes such violation is not intended to induce, enable, facilitate, or
1197
conceal infringement of a right under this title, and if—
(i) the transmission of such information by such person would
result in a perceptible visual or aural degradation of the digital
signal; or
(ii) the transmission of such information by such person would
conflict with—
( I ) an applicable government regulation relating to
transmission of information in a digital signal;
( II) an applicable industry-wide standard relating to the
transmission of information in a digital signal that was adopted
by a voluntary consensus standards body prior to the effective
date of this chapter; or
(III) an applicable industry-wide standard relating to the
transmission of information in a digital signal that was adopted in
a voluntary, consensus standards-setting process open to
participation by a representative cross-section of broadcast
stations or cable systems and copyright owners of a category of
works that are intended for public performance by such stations
or systems.
(3) Definitions. As used in this subsection—
(A) the term “broadcast station” has the meaning given that term in
section 3 of the Communications Act of 1934 (47 U.S.C. 153); and
( B) the term “cable system” has the meaning given that term in
section 602 of the Communications Act of 1934 (47 U.S.C. 522).
Leg.H. October 28, 1998, P.L. 105-304 § 103(a), 112 Stat. 2872; August 5, 1999, P.L.
106-44 § 1(e), 113 Stat. 222.

(a) Civil Actions. Any person injured by a violation of section 1201 or
1202 [17 USCS § 1201 or 1202] may bring a civil action in an appropriate
United States district court for such violation.
(b) Powers of the Court. In an action brought under subsection (a), the
court—
(1) may grant temporary and permanent injunctions on such terms as it
deems reasonable to prevent or restrain a violation, but in no event shall
impose a prior restraint on free speech or the press protected under the 1st
amendment to the Constitution;
1198
(2) at any time while an action is pending, may order the impounding, on
such terms as it deems reasonable, of any device or product that is in the
custody or control of the alleged violator and that the court has reasonable
cause to believe was involved in a violation;
(3) may award damages under subsection (c);
(4) in its discretion may allow the recovery of costs by or against any
party other than the United States or an officer thereof;
( 5 ) in its discretion may award reasonable attorney’s fees to the
prevailing party; and
(6) may, as part of a final judgment or decree finding a violation, order
the remedial modification or the destruction of any device or product
involved in the violation that is in the custody or control of the violator or
has been impounded under paragraph (2).
(c) Award of Damages.
(1) In General. Except as otherwise provided in this title, a person
committing a violation of section 1201 or 1202 [17 USCS § 1201 or 1202]
is liable for either—
(A) the actual damages and any additional profits of the violator, as
provided in paragraph (2), or
(B) statutory damages, as provided in paragraph (3).
(2) Actual Damages. The court shall award to the complaining party
the actual damages suffered by the party as a result of the violation, and any
profits of the violator that are attributable to the violation and are not taken
into account in computing the actual damages, if the complaining party elects
such damages at any time before final judgment is entered.
(3) Statutory Damages.
( A) At any time before final judgment is entered, a complaining
party may elect to recover an award of statutory damages for each
violation of section 1201 [17 USCS § 1201] in the sum of not less than
$200 or more than $2,500 per act of circumvention, device, product,
component, offer, or performance of service, as the court considers just.
(B) At any time before final judgment is entered, a complaining party
may elect to recover an award of statutory damages for each violation of
section 1202 [17 USCS § 1202] in the sum of not less than $2,500 or
more than $25,000.
(4) Repeated Violations. In any case in which the injured party sustains
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the burden of proving, and the court finds, that a person has violated section
1201 or 1202 [17 USCS § 1201 or 1202] within 3 years after a final
judgment was entered against the person for another such violation, the court
may increase the award of damages up to triple the amount that would
otherwise be awarded, as the court considers just.
(5) Innocent Violations.
(A) In General. The court in its discretion may reduce or remit the
total award of damages in any case in which the violator sustains the
burden of proving, and the court finds, that the violator was not aware
and had no reason to believe that its acts constituted a violation.
(B) Nonprofit library, archives, educational institutions, or public
broadcasting entities.
(i) Definition. In this subparagraph, the term “public
broadcasting entity” has the meaning given such term under section
118(f) [17 USCS § 118(f)].
(ii) In General. In the case of a nonprofit library, archives,
educational institution, or public broadcasting entity, the court shall
remit damages in any case in which the library, archives, educational
institution, or public broadcasting entity sustains the burden of
proving, and the court finds, that the library, archives, educational
institution, or public broadcasting entity was not aware and had no
reason to believe that its acts constituted a violation.
Leg. H. Oct. 28, 1998, P.L. 105-304, Title I, § 103(a), 112 Stat. 2874; Nov. 29, 1999,
P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Dec. 9, 2010, P.L. 111-295, § 6(f)(3),
124 Stat. 3181.
Amendment
2010. Act Dec. 9, 2010, in subsec. (c)(5)(B)(i), substituted “118(f)” for “118(g)”.

(a) In General. Any person who violates section 1201 or 1202 [17 USCS §
1201 or 1202] willfully and for purposes of commercial advantage or private
financial gain—
(1) shall be fined not more than $500,000 or imprisoned for not more
than 5 years, or both, for the first offense; and
(2) shall be fined not more than $1,000,000 or imprisoned for not more
than 10 years, or both, for any subsequent offense.
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( b ) Limitation for nonprofit library, archives, educational institution, or
public broadcasting entity. Subsection (a) shall not apply to a nonprofit library,
archives, educational institution, or public broadcasting entity (as defined under
section 118(f) [17 USCS § 118(f)].
(c) Statute of Limitations. No criminal proceeding shall be brought under
this section unless such proceeding is commenced within 5 years after the cause
of action arose.
Leg. H. Oct. 28, 1998, P.L. 105-304, Title I, § 103(a), 112 Stat. 2876; Nov. 29, 1999,
P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Dec. 9, 2010, P.L. 111-295, § 6(f)(3),
124 Stat. 3181.
Amendment
2010. Act Dec. 9, 2010, in subsec. (b), substituted “118(f)” for “118(g)”.

Nothing in this chapter abrogates, diminishes, or weakens the provisions of,
nor provides any defense or element of mitigation in a criminal prosecution or
civil action under, any Federal or State law that prevents the violation of the
privacy of an individual in connection with the individual’s use of the Internet.
Leg.H. October 28, 1998, P.L. 105-304 § 103(a), 112 Stat. 2876.
CHAPTER 13
PROTECTION OF ORIGINAL DESIGNS

(a) Designs Protected.
(1) In General. The designer or other owner of an original design of a
useful article which makes the article attractive or distinctive in appearance
to the purchasing or using public may secure the protection provided by this
chapter [17 USCS § 1301 et seq.] upon complying with and subject to this
chapter [17 USCS § 1301 et seq.].
(2) Vessel Features. The design of a vessel hull, deck, or combination
of a hull and deck, including a plug or mold, is subject to protection under
this chapter, notwithstanding section 1302(4) [17 USCS § 1302(4)].
(3) Exceptions. Department of Defense rights in a registered design
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under this chapter, including the right to build to such registered design,
shall be determined solely by operation of section 2320 of title 10 [10
USCS § 2320] or by the instrument under which the design was developed
for the United States Government.
(b) Definitions. For the purpose of this chapter [17 USCS § 1301 et seq.],
the following terms have the following meanings:
(1) A design is “original” if it is the result of the designer’s creative
endeavor that provides a distinguishable variation over prior work
pertaining to similar articles which is more than merely trivial and has not
been copied from another source.
(2) A “useful article” is a vessel hull or deck, including a plug or mold,
which in normal use has an intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey information. An article
which normally is part of a useful article shall be deemed to be a useful
article.
(3) A “vessel” is a craft—
(A) that is designed and capable of independently steering a course
on or through water through its own means of propulsion; and
(B) that is designed and capable of carrying and transporting one or
more passengers.
(4) A “hull” is the exterior frame or body of a vessel, exclusive of the
deck, superstructure, masts, sails, yards, rigging, hardware, fixtures, and
other attachments.
(5) A “plug” means a device or model used to make a mold for the
purpose of exact duplication, regardless of whether the device or model has
an intrinsic utilitarian function that is not only to portray the appearance of
the product or to convey information.
(6) A “mold” means a matrix or form in which a substance for material
is used, regardless of whether the matrix or form has an intrinsic utilitarian
function that is not only to portray the appearance of the product or to
convey information.
(7) A “deck” is the horizontal surface of a vessel that covers the hull,
including exterior cabin and cockpit surfaces, and exclusive of masts, sails,
yards, rigging, hardware, fixtures, and other attachments.
Leg.H. Oct. 28, 1998, P.L. 105-304, Title V, § 502, 112 Stat. 2905; Nov. 29, 1999, P.L.
106-113, Div B, § 1000(a)(9), 113 Stat. 1536; Oct. 16, 2008, P.L. 110-434, § 1(b)–(d), 122
Stat. 4972.
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Protection under this chapter shall not be available for a design that is—
(1) not original;
( 2 ) staple or commonplace, such as a standard geometric figure, a
familiar symbol, an emblem, or a motif, or another shape, pattern, or
configuration which has become standard, common, prevalent, or ordinary;
( 3 ) different from a design excluded by paragraph (2) only in
insignificant details or in elements which are variants commonly used in the
relevant trades;
(4) dictated solely by a utilitarian function of the article that embodies
it; or
(5) embodied in a useful article that was made public by the designer or
owner in the United States or a foreign country more than 2 years before the
date of the application for registration under this chapter.
Leg.H. October 28, 1998, P.L. 105-304 § 502, 112 Stat. 2906; August 5, 1999, P.L.
106-44 § 1(f)(1), 113 Stat. 222.

Protection for a design under this chapter shall be available notwithstanding
the employment in the design of subject matter excluded from protection under
section 1302 if the design is a substantial revision, adaptation, or rearrangement
of such subject matter. Such protection shall be independent of any subsisting
protection in subject matter employed in the design, and shall not be construed
as securing any right to subject matter excluded from protection under this
chapter or as extending any subsisting protection under this chapter.

The protection provided for a design under this chapter shall commence
upon the earlier of the date of publication of the registration under section
1313(a) or the date the design is first made public as defined by section
1310(b).

(a) In General. Subject to subsection (b), the protection provided under
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this chapter for a design shall continue for a term of 10 years beginning on the
date of the commencement of protection under section 1304.
(b) Expiration. All terms of protection provided in this section shall run to
the end of the calendar year in which they would otherwise expire.
(c) Termination of Rights. Upon expiration or termination of protection in a
particular design under this chapter, all rights under this chapter in the design
shall terminate, regardless of the number of different articles in which the design
may have been used during the term of its protection.

(a) Contents of Design Notice.
( 1 ) Whenever any design for which protection is sought under this
chapter is made public under section 1310(b), the owner of the design shall,
subject to the provisions of section 1307, mark it or have it marked legibly
with a design notice consisting of—
(A) the words “Protected Design”, the abbreviation “Prot’d Des.”,
or the letter “D” with a circle, or the symbol “*D*”;
( B ) the year of the date on which protection for the design
commenced; and
(C) the name of the owner, an abbreviation by which the name can
be recognized, or a generally accepted alternative designation of the
owner. Any distinctive identification of the owner may be used for
purposes of subparagraph (C) if it has been recorded by the
Administrator before the design marked with such identification is
registered.
(2) After registration, the registration number may be used instead of the
elements specified in subparagraphs (B) and (C) of paragraph (1).
(b) Location of Notice. The design notice shall be so located and applied
as to give reasonable notice of design protection while the useful article
embodying the design is passing through its normal channels of commerce.
(c) Subsequent Removal of Notice. When the owner of a design has
complied with the provisions of this section, protection under this chapter shall
not be affected by the removal, destruction, or obliteration by others of the
design notice on an article.
1204
(a) Actions With Notice. Except as provided in subsection (b), the
omission of the notice prescribed in section 1306 shall not cause loss of the
protection under this chapter or prevent recovery for infringement under this
chapter against any person who, after receiving written notice of the design
protection, begins an undertaking leading to infringement under this chapter.
(b) Actions Without Notice. The omission of the notice prescribed in
section 1306 shall prevent any recovery under section 1323 against a person
who began an undertaking leading to infringement under this chapter before
receiving written notice of the design protection. No injunction shall be issued
under this chapter with respect to such undertaking unless the owner of the
design reimburses that person for any reasonable expenditure or contractual
obligation in connection with such undertaking that was incurred before
receiving written notice of the design protection, as the court in its discretion
directs. The burden of providing written notice of design protection shall be on
the owner of the design.

The owner of a design protected under this chapter has the exclusive right to
—
(1) make, have made, or import, for sale or for use in trade, any useful
article embodying that design; and
( 2) sell or distribute for sale or for use in trade any useful article
embodying that design.
(a) Acts of Infringement. Except as provided in subsection (b), it shall be
infringement of the exclusive rights in a design protected under this chapter for
any person, without the consent of the owner of the design, within the United
States and during the term of such protection, to—
( 1 ) make, have made, or import, for sale or for use in trade, any
infringing article as defined in subsection (e); or
(2) sell or distribute for sale or for use in trade any such infringing
article.
1205
(b) Acts of Sellers and Distributors. A seller or distributor of an infringing
article who did not make or import the article shall be deemed to have infringed
on a design protected under this chapter only if that person—
(1) induced or acted in collusion with a manufacturer to make, or an
importer to import such article, except that merely purchasing or giving an
order to purchase such article in the ordinary course of business shall not of
itself constitute such inducement or collusion; or
(2) refused or failed, upon the request of the owner of the design, to
make a prompt and full disclosure of that person’s source of such article,
and that person orders or reorders such article after receiving notice by
registered or certified mail of the protection subsisting in the design.
(c) Acts Without Knowledge. It shall not be infringement under this section
to make, have made, import, sell, or distribute, any article embodying a design
which was created without knowledge that a design was protected under this
chapter and was copied from such protected design.
(d) Acts in Ordinary Course of Business. A person who incorporates into
that person’s product of manufacture an infringing article acquired from others
in the ordinary course of business, or who, without knowledge of the protected
design embodied in an infringing article, makes or processes the infringing
article for the account of another person in the ordinary course of business, shall
not be deemed to have infringed the rights in that design under this chapter
except under a condition contained in paragraph (1) or (2) of subsection (b).
Accepting an order or reorder from the source of the infringing article shall be
deemed ordering or reordering within the meaning of subsection (b)(2).
(e) Infringing Article Defined. As used in this section, an “infringing
article” is any article the design of which has been copied from a design
protected under this chapter, without the consent of the owner of the protected
design. An infringing article is not an illustration or picture of a protected
design in an advertisement, book, periodical, newspaper, photograph,
broadcast, motion picture, or similar medium. A design shall not be deemed to
have been copied from a protected design if it is original and not substantially
similar in appearance to a protected design.
(f) Establishing Originality. The party to any action or proceeding under
this chapter who alleges rights under this chapter in a design shall have the
burden of establishing the design’s originality whenever the opposing party
introduces an earlier work which is identical to such design, or so similar as to
make prima facie showing that such design was copied from such work.
(g) Reproduction for Teaching or Analysis. It is not an infringement of the
exclusive rights of a design owner for a person to reproduce the design in a
1206
useful article or in any other form solely for the purpose of teaching, analyzing,
or evaluating the appearance, concepts, or techniques embodied in the design, or
the function of the useful article embodying the design.

(a) Time Limit for Application for Registration. Protection under this
chapter shall be lost if application for registration of the design is not made
within 2 years after the date on which the design is first made public.
(b) When Design is Made Public. A design is made public when an
existing useful article embodying the design is anywhere publicly exhibited,
publicly distributed, or offered for sale or sold to the public by the owner of the
design or with the owner’s consent.
(c) Application by Owner of Design. Application for registration may be
made by the owner of the design.
(d) Contents of Application. The application for registration shall be made
to the Administrator and shall state—
(1) the name and address of the designer or designers of the design;
(2) the name and address of the owner if different from the designer;
(3) the specific name of the useful article embodying the design;
(4) the date, if any, that the design was first made public, if such date
was earlier than the date of the application;
(5) affirmation that the design has been fixed in a useful article; and
(6) such other information as may be required by the Administrator. The
application for registration may include a description setting forth the salient
features of the design, but the absence of such a description shall not prevent
registration under this chapter.
(e) Sworn Statement. The application for registration shall be
accompanied by a statement under oath by the applicant or the applicant’s duly
authorized agent or representative, setting forth, to the best of the applicant’s
knowledge and belief—
( 1 ) that the design is original and was created by the designer or
designers named in the application;
(2) that the design has not previously been registered on behalf of the
applicant or the applicant’s predecessor in title; and
1207
( 3 ) that the applicant is the person entitled to protection and to
registration under this chapter. If the design has been made public with the
design notice prescribed in section 1306, the statement shall also describe
the exact form and position of the design notice.
(f) Effect of Errors.
(1) Error in any statement or assertion as to the utility of the useful
article named in the application under this section, the design of which is
sought to be registered, shall not affect the protection secured under this
chapter.
(2) Errors in omitting a joint designer or in naming an alleged joint
designer shall not affect the validity of the registration, or the actual
ownership or the protection of the design, unless it is shown that the error
occurred with deceptive intent.
(g) Design Made in Scope of Employment. In a case in which the design
was made within the regular scope of the designer’s employment and individual
authorship of the design is difficult or impossible to ascribe and the application
so states, the name and address of the employer for whom the design was made
may be stated instead of that of the individual designer.
(h) Pictorial Representation of Design. The application for registration
shall be accompanied by two copies of a drawing or other pictorial
representation of the useful article embodying the design, having one or more
views, adequate to show the design, in a form and style suitable for
reproduction, which shall be deemed a part of the application.
(i) Design in More Than One Useful Article. If the distinguishing elements
of a design are in substantially the same form in different useful articles, the
design shall be protected as to all such useful articles when protected as to one
of them, but not more than one registration shall be required for the design.
(j) Application for More Than One Design. More than one design may be
included in the same application under such conditions as may be prescribed by
the Administrator. For each design included in an application the fee prescribed
for a single design shall be paid.
§ 1311. Benefit of Earlier Filing Date in Foreign

Country.
An application for registration of a design filed in the United States by any
person who has, or whose legal representative or predecessor or successor in
title has, previously filed an application for registration of the same design in a
1208
foreign country which extends to designs of owners who are citizens of the
United States, or to applications filed under this chapter, similar protection to
that provided under this chapter shall have that same effect as if filed in the
United States on the date on which the application was first filed in such foreign
country, if the application in the United States is filed within 6 months after the
earliest date on which any such foreign application was filed.

(a) In General. Oaths and acknowledgments required by this chapter—
(1) may be made—
( A) before any person in the United States authorized by law to
administer oaths; or
( B ) when made in a foreign country, before any diplomatic or
consular officer of the United States authorized to administer oaths, or
before any official authorized to administer oaths in the foreign country
concerned, whose authority shall be proved by a certificate of a
diplomatic or consular officer of the United States; and
(2) shall be valid if they comply with the laws of the State or country
where made.
(b) Written Declaration in Lieu of Oath.
(1) The Administrator may by rule prescribe that any document which is
to be filed under this chapter in the Office of the Administrator and which is
required by any law, rule, or other regulation to be under oath, may be
subscribed to by a written declaration in such form as the Administrator may
prescribe, and such declaration shall be in lieu of the oath otherwise
required.
(2) Whenever a written declaration under paragraph (1) is used, the
document containing the declaration shall state that willful false statements
are punishable by fine or imprisonment, or both, pursuant to section 1001 of
title 18, and may jeopardize the validity of the application or document or a
registration resulting therefrom.
§ 1313. Examination of Application and Issue or

Refusal of Registration.
1209
(a) Determination of Registrability of Design; Registration. Upon the filing
of an application for registration in proper form under section 1310, and upon
payment of the fee prescribed under section 1316, the Administrator shall
determine whether or not the application relates to a design which on its face
appears to be subject to protection under this chapter, and, if so, the Register
shall register the design. Registration under this subsection shall be announced
by publication. The date of registration shall be the date of publication.
(b) Refusal to Register; Reconsideration. If, in the judgment of the
Administrator, the application for registration relates to a design which on its
face is not subject to protection under this chapter, the Administrator shall send
to the applicant a notice of refusal to register and the grounds for the refusal.
Within 3 months after the date on which the notice of refusal is sent, the
applicant may, by written request, seek reconsideration of the application. After
consideration of such a request, the Administrator shall either register the design
or send to the applicant a notice of final refusal to register.
(c) Application to Cancel Registration. Any person who believes he or she
is or will be damaged by a registration under this chapter may, upon payment of
the prescribed fee, apply to the Administrator at any time to cancel the
registration on the ground that the design is not subject to protection under this
chapter, stating the reasons for the request. Upon receipt of an application for
cancellation, the Administrator shall send to the owner of the design, as shown
in the records of the Office of the Administrator, a notice of the application, and
the owner shall have a period of 3 months after the date on which such notice is
mailed in which to present arguments to the Administrator for support of the
validity of the registration. The Administrator shall also have the authority to
establish, by regulation, conditions under which the opposing parties may
appear and be heard in support of their arguments. If, after the periods provided
for the presentation of arguments have expired, the Administrator determines
that the applicant for cancellation has established that the design is not subject to
protection under this chapter, the Administrator shall order the registration
stricken from the record. Cancellation under this subsection shall be announced
by publication, and notice of the Administrator’s final determination with
respect to any application for cancellation shall be sent to the applicant and to
the owner of record. Costs of the cancellation procedure under this subsection
shall be borne by the nonprevailing party or parties, and the Administrator shall
have the authority to assess and collect such costs.
Leg.H. Added Oct. 28, 1998, P.L. 105-304, Title V, § 502, 112 Stat. 2911; Nov. 29,
1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536.

Certificates of registration shall be issued in the name of the United States
1210
under the seal of the Office of the Administrator and shall be recorded in the
official records of the Office. The certificate shall state the name of the useful
article, the date of filing of the application, the date of registration, and the date
the design was made public, if earlier than the date of filing of the application,
and shall contain a reproduction of the drawing or other pictorial representation
of the design. If a description of the salient features of the design appears in the
application, the description shall also appear in the certificate. A certificate of
registration shall be admitted in any court as prima facie evidence of the facts
stated in the certificate.

(a) Publications of the Administrator. The Administrator shall publish lists
and indexes of registered designs and cancellations of designs and may also
publish the drawings or other pictorial representations of registered designs for
sale or other distribution.
(b) File of Representatives of Registered Designs. The Administrator shall
establish and maintain a file of the drawings or other pictorial representations of
registered designs. The file shall be available for use by the public under such
conditions as the Administrator may prescribe.
§ 1316. Fees.
The Administrator shall by regulation set reasonable fees for the filing of
applications to register designs under this chapter and for other services relating
to the administration of this chapter, taking into consideration the cost of
providing these services and the benefit of a public record.
The Administrator may establish regulations for the administration of this
chapter.

Upon payment of the prescribed fee, any person may obtain a certified copy
of any official record of the Office of the Administrator that relates to this
chapter. That copy shall be admissible in evidence with the same effect as the
1211
original.

The Administrator may, by a certificate of correction under seal, correct any
error in a registration incurred through the fault of the Office, or, upon payment
of the required fee, any error of a clerical or typographical nature occurring in
good faith but not through the fault of the Office. Such registration, together with
the certificate, shall thereafter have the same effect as if it had been originally
issued in such corrected form.

(a) Property Right in Design. The property right in a design subject to
protection under this chapter shall vest in the designer, the legal representatives
of a deceased designer or of one under legal incapacity, the employer for whom
the designer created the design in the case of a design made within the regular
scope of the designer’s employment, or a person to whom the rights of the
designer or of such employer have been transferred. The person in whom the
property right is vested shall be considered the owner of the design.
(b) Transfer of Property Right. The property right in a registered design, or
a design for which an application for registration has been or may be filed, may
be assigned, granted, conveyed, or mortgaged by an instrument in writing,
signed by the owner, or may be bequeathed by will.
(c) Oath or Acknowledgment of Transfer. An oath or acknowledgment
under section 1312 shall be prima facie evidence of the execution of an
assignment, grant, conveyance, or mortgage under subsection (b).
(d) Recordation of Transfer. An assignment, grant, conveyance, or
mortgage under subsection (b) shall be void as against any subsequent purchaser
or mortgagee for a valuable consideration, unless it is recorded in the Office of
the Administrator within 3 months after its date of execution or before the date
of such subsequent purchase or mortgage.
Leg.H. October 28, 1998, P.L. 105-304 § 502, 112 Stat. 2913; August 5, 1999, P.L.
106-44 § 1(f)(2), 113 Stat. 222.

(a) In General. The owner of a design is entitled, after issuance of a
certificate of registration of the design under this chapter, to institute an action
1212
for any infringement of the design.
(b) Review of Refusal to Register.
(1) Subject to paragraph (2), the owner of a design may seek judicial
review of a final refusal of the Administrator to register the design under
this chapter by bringing a civil action, and may in the same action, if the
court adjudges the design subject to protection under this chapter, enforce
the rights in that design under this chapter.
(2) The owner of a design may seek judicial review under this section if
—
( A) the owner has previously duly filed and prosecuted to final
refusal an application in proper form for registration of the design;
(B) the owner causes a copy of the complaint in the action to be
delivered to the Administrator within 10 days after the commencement
of the action; and
(C) the defendant has committed acts in respect to the design which
would constitute infringement with respect to a design protected under
this chapter.
(c) Administrator as Party to Action. The Administrator may, at the
Administrator’s option, become a party to the action with respect to the issue of
registrability of the design claim by entering an appearance within 60 days after
being served with the complaint, but the failure of the Administrator to become
a party shall not deprive the court of jurisdiction to determine that issue.
(d) Use of Arbitration to Resolve Dispute. The parties to an infringement
dispute under this chapter, within such time as may be specified by the
Administrator by regulation, may determine the dispute, or any aspect of the
dispute, by arbitration. Arbitration shall be governed by title 9. The parties shall
give notice of any arbitration award to the Administrator, and such award shall,
as between the parties to the arbitration, be dispositive of the issues to which it
relates. The arbitration award shall be unenforceable until such notice is given.
Nothing in this subsection shall preclude the Administrator from determining
whether a design is subject to registration in a cancellation proceeding under
section 1313(c).
(a) In General. A court having jurisdiction over actions under this chapter
may grant injunctions in accordance with the principles of equity to prevent
1213
infringement of a design under this chapter, including, in its discretion, prompt
relief by temporary restraining orders and preliminary injunctions.
(b) Damages for Injunctive Relief Wrongfully Obtained. A seller or
distributor who suffers damage by reason of injunctive relief wrongfully
obtained under this section has a cause of action against the applicant for such
injunctive relief and may recover such relief as may be appropriate, including
damages for lost profits, cost of materials, loss of good will, and punitive
damages in instances where the injunctive relief was sought in bad faith, and,
unless the court finds extenuating circumstances, reasonable attorney’s fees.

(a) Damages. Upon a finding for the claimant in an action for infringement
under this chapter, the court shall award the claimant damages adequate to
compensate for the infringement. In addition, the court may increase the damages
to such amount, not exceeding $50,000 or $1 per copy, whichever is greater, as
the court determines to be just. The damages awarded shall constitute
compensation and not a penalty. The court may receive expert testimony as an
aid to the determination of damages.
(b) Infringer’s Profits. As an alternative to the remedies provided in
subsection (a), the court may award the claimant the infringer’s profits resulting
from the sale of the copies if the court finds that the infringer’s sales are
reasonably related to the use of the claimant’s design. In such a case, the
claimant shall be required to prove only the amount of the infringer’s sales and
the infringer shall be required to prove its expenses against such sales.
(c) Statute of Limitations. No recovery under subsection (a) or (b) shall be
had for any infringement committed more than 3 years before the date on which
the complaint is filed.
(d) Attorney’s Fees. In an action for infringement under this chapter, the
court may award reasonable attorney’s fees to the prevailing party.
(e) Disposition of Infringing and Other Articles. The court may order that
all infringing articles, and any plates, molds, patterns, models, or other means
specifically adapted for making the articles, be delivered up for destruction or
other disposition as the court may direct.

In any action involving the protection of a design under this chapter, the
1214
court, when appropriate, may order registration of a design under this chapter or
the cancellation of such a registration. Any such order shall be certified by the
court to the Administrator, who shall make an appropriate entry upon the record.
§ 1325. Liability for Action on Registration

Fraudulently Obtained.
Any person who brings an action for infringement knowing that registration
of the design was obtained by a false or fraudulent representation materially
affecting the rights under this chapter, shall be liable in the sum of $10,000, or
such part of that amount as the court may determine. That amount shall be to
compensate the defendant and shall be charged against the plaintiff and paid to
the defendant, in addition to such costs and attorney’s fees of the defendant as
may be assessed by the court.

(a) In General. Whoever, for the purpose of deceiving the public, marks
upon, applies to, or uses in advertising in connection with an article made, used,
distributed, or sold, a design which is not protected under this chapter, a design
notice specified in section 1306, or any other words or symbols importing that
the design is protected under this chapter, knowing that the design is not so
protected, shall pay a civil fine of not more than $500 for each such offense.
(b) Suit by Private Persons. Any person may sue for the penalty established
by subsection (a), in which event one-half of the penalty shall be awarded to the
person suing and the remainder shall be awarded to the United States.

Whoever knowingly makes a false representation materially affecting the
rights obtainable under this chapter for the purpose of obtaining registration of a
design under this chapter shall pay a penalty of not less than $500 and not more
than $1,000, and any rights or privileges that individual may have in the design
under this chapter shall be forfeited.
1215
(a) Regulations. The Secretary of the Treasury and the United States Postal
Service shall separately or jointly issue regulations for the enforcement of the
rights set forth in section 1308 with respect to importation. Such regulations may
require, as a condition for the exclusion of articles from the United States, that
the person seeking exclusion take any one or more of the following actions:
(1) Obtain a court order enjoining, or an order of the International Trade
Commission under section 337 of the Tariff Act of 1930 excluding,
importation of the articles.
(2) Furnish proof that the design involved is protected under this chapter
and that the importation of the articles would infringe the rights in the design
under this chapter.
(3) Post a surety bond for any injury that may result if the detention or
exclusion of the articles proves to be unjustified.
(b) Seizure and Forfeiture. Articles imported in violation of the rights set
forth in section 1308 are subject to seizure and forfeiture in the same manner as
property imported in violation of the customs laws. Any such forfeited articles
shall be destroyed as directed by the Secretary of the Treasury or the court, as
the case may be, except that the articles may be returned to the country of export
whenever it is shown to the satisfaction of the Secretary of the Treasury that the
importer had no reasonable grounds for believing that his or her acts constituted
a violation of the law.

The issuance of a design patent under title 35, United States Code, for an
original design for an article of manufacture shall terminate any protection of the
original design under this chapter.

Nothing in this chapter shall annul or limit—
(1) common law or other rights or remedies, if any, available to or held
by any person with respect to a design which has not been registered under
this chapter; or
(2) any right under the trademark laws or any right protected against
unfair competition.
1216
In this chapter, the “Administrator” is the Register of Copyrights, and the
“Office of the Administrator” and the “Office” refer to the Copyright Office of
the Library of Congress.

Protection under this chapter shall not be available for any design that has
been made public under section 1310(b) before the effective date of this
chapter.
TITLE 18
CRIMES AND CRIMINAL PROCEDURE
Contents
PART I Crimes
CHAPTER 53 INDIANS
§ 1158. Counterfeiting Indian Arts and Crafts Board Trade Mark.
§ 1159. Misrepresentation of Indian Produced Goods and Products.
CHAPTER 113 STOLEN PROPERTY
§ 2314. Transportation of stolen goods, securities, moneys, fraudulent State tax
stamps, or articles used in counterfeiting.
§ 2318. Trafficking in Counterfeit Labels, Illicit Labels, or Counterfeit
Documentation or Packaging.
§ 2319A. Unauthorized Fixation of and Trafficking in Sound Recordings and Music
Videos of Live Musical Performances.
§ 2319B. Unauthorized Recording of Motion Pictures in a Motion Picture
Exhibition Facility.
PART I
Crimes
CHAPTER 53
1217
INDIANS
§ 1158. Counterfeiting Indian Arts and Crafts Board
Trade Mark.
Whoever counterfeits or colorably imitates any Government trade mark used
or devised by the Indian Arts and Crafts Board in the Department of the Interior
as provided in section 305a of Title 25, or, except as authorized by the Board,
affixes any such Government trade mark, or knowingly, willfully, and corruptly
affixes any reproduction, counterfeit, copy, or colorable imitation thereof upon
any products, or to any labels, signs, prints, packages, wrappers, or receptacles
intended to be used upon or in connection with the sale of such products; or
Whoever knowingly makes any false statement for the purpose of obtaining the
use of any such Government trade mark—Shall (1) in the case of a first
violation, if an individual, be fined under this title or imprisoned not more than
five years, or both, and, if a person other than an individual, be fined not more
than $1,000,000; and (2) in the case of subsequent violations, if an individual,
be fined not more than $1,000,000 or imprisoned not more than fifteen years, or
both, and, if a person other than an individual, be fined not more than
$5,000,000; and (3) shall be enjoined from further carrying on the act or acts
complained of.
Leg.H. June 25, 1948, ch. 645 § 1, 62 Stat. 759; November 29, 1990, P.L. 101-644 §
106, 104 Stat. 4665; September 13, 1994, P.L. 103-322 § 330016(1)(U), 108 Stat. 2148.
§ 1159. Misrepresentation of Indian Produced Goods

and Products.
(a) It is unlawful to offer or display for sale or sell any good, with or
without a Government trademark, in a manner that falsely suggests it is Indian
produced, an Indian product, or the product of a particular Indian or Indian tribe
or Indian arts and crafts organization, resident within the United States.
(b) Penalty. Any person that knowingly violates subsection (a) shall—
(1) in the case of a first violation by that person—
(A) if the applicable goods are offered or displayed for sale at a
total price of $1,000 or more, or if the applicable goods are sold for a
total price of $1,000 or more—
(i) in the case of an individual, be fined not more than $250,000,
imprisoned for not more than 5 years, or both; and
1218
(ii) in the case of a person other than an individual, be fined not
more than $1,000,000; and
(B) if the applicable goods are offered or displayed for sale at a
total price of less than $1,000, or if the applicable goods are sold for a
total price of less than $1,000—
(i) in the case of an individual, be fined not more than $25,000,
imprisoned for not more than 1 year, or both; and
(ii) in the case of a person other than an individual, be fined not
more than $100,000; and
(2) in the case of a subsequent violation by that person, regardless of the
amount for which any good is offered or displayed for sale or sold—
(A) in the case of an individual, be fined under this title, imprisoned
for not more than 15 years, or both; and
(B) in the case of a person other than an individual, be fined not
more than $5,000,000.
1219
(c) As used in this section—
( 1) the term “Indian” means any individual who is a member of an
Indian tribe, or for the purposes of this section is certified as an Indian
artisan by an Indian tribe;
(2) the terms “Indian product” and ‘product of a particular Indian tribe
or Indian arts and crafts organization’ has the meaning given such term in
regulations which may be promulgated by the Secretary of the Interior;
(3) the term “Indian tribe”—
(A) has the meaning given the term in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b); and
(B) includes, for purposes of this section only, an Indian group that
has been formally recognized as an Indian tribe by—
(i) a State legislature;
(ii) a State commission; or
(iii) another similar organization vested with State legislative
tribal recognition authority; and
( 4) the term “Indian arts and crafts organization” means any legally
established arts and crafts marketing organization composed of members of
Indian tribes.
(d) In the event that any provision of this section is held invalid, it is the
intent of Congress that the remaining provisions of this section shall continue in
full force and effect.
Leg. H. June 25, 1948, ch. 645, § 1, 62 Stat. 759; Nov. 29, 1990, P.L. 101-644, Title I,
§ 104(a), 104 Stat. 4663; July 29, 2010, P.L. 111-211, Title I, § 103, 124 Stat. 2260.
Amendment
2010. Act July 29, 2010, substituted subsec. (b) for one which read:
“(b) Whoever knowingly violates subsection (a) shall—
“(1) in the case of a first violation, if an individual, be fined not more than
$250,000 or imprisoned not more than five years, or both, and, if a person other
than an individual, be fined not more than $1,000,000; and
“(2) in the case of subsequent violations, if an individual, be fined not more than
$1,000,000 or imprisoned not more than fifteen years, or both, and, if a person
other than an individual, be fined not more than $5,000,000.”;
and in subsec. (c), substituted para. (3) for one which read:
“(3) the term ‘Indian tribe’ means—
1220
“(A) any Indian tribe, band, nation, Alaska Native village, or other organized
group or community which is recognized as eligible for the special programs
and services provided by the United States to Indians because of their status as
Indians; or
“(B) any Indian group that has been formally recognized as an Indian tribe by
a State legislature or by a State commission or similar organization legislatively
vested with State tribal recognition authority; and”.
CHAPTER 113
STOLEN PROPERTY
§ 2314. Transportation of stolen goods, securities,
moneys, fraudulent State tax stamps, or articles used
in counterfeiting.
Whoever transports, transmits, or transfers in interstate or foreign commerce
any goods, wares, merchandise, securities or money, of the value of $5,000 or
more, knowing the same to have been stolen, converted or taken by fraud; or
Whoever, having devised or intending to devise any scheme or artifice to
defraud, or for obtaining money or property by means of false or fraudulent
pretenses, representations, or promises, transports or causes to be transported,
or induces any person or persons to travel in, or to be transported in interstate
or foreign commerce in the execution or concealment of a scheme or artifice to
defraud that person or those persons of money or property having a value of
$5,000 or more; or
Whoever, with unlawful or fraudulent intent, transports in interstate or
foreign commerce any falsely made, forged, altered, or counterfeited securities
or tax stamps, knowing the same to have been falsely made, forged, altered, or
counterfeited; or
foreign commerce any traveler’s check bearing a forged countersignature; or
foreign commerce, any tool, implement, or thing used or fitted to be used in
falsely making, forging, altering, or counterfeiting any security or tax stamps, or
any part thereof; or
Whoever transports, transmits, or transfers in interstate or foreign commerce
any veterans’ memorial object, knowing the same to have been stolen, converted
1221
or taken by fraud—
Shall be fined under this title or imprisoned not more than ten years, or both.
If the offense involves a pre-retail medical product (as defined in section 670
[18 USCS § 670]) the punishment for the offense shall be the same as the
punishment for an offense under section 670 [18 USCS § 670] unless the
punishment under this section is greater. If the offense involves the
transportation, transmission, or transfer in interstate or foreign commerce of
veterans’ memorial objects with a value, in the aggregate, of less than $1,000,
the defendant shall be fined under this title or imprisoned not more than one
year, or both.
This section shall not apply to any falsely made, forged, altered,
counterfeited or spurious representation of an obligation or other security of the
United States, or of an obligation, bond, certificate, security, treasury note, bill,
promise to pay or bank note issued by any foreign government. This section also
shall not apply to any falsely made, forged, altered, counterfeited, or spurious
representation of any bank note or bill issued by a bank or corporation of any
foreign country which is intended by the laws or usage of such country to
circulate as money.
For purposes of this section the term “veterans’ memorial object” means a
grave marker, headstone, monument, or other object, intended to permanently
honor a veteran or mark a veteran’s grave, or any monument that signifies an
event of national military historical significance.
Leg.H. June 25, 1948, ch 645, § 1, 62 Stat. 806; May 24, 1949, ch 139, § 45, 63 Stat.
96; July 9, 1956, ch 519, 70 Stat. 507; Oct. 4, 1961, P.L. 87-371, § 2, 75 Stat. 802; Sept. 28,
1968, P.L. 90-535, 82 Stat. 885; Nov. 18, 1988, P.L. 100-690, Title VII, Subtitle B, §§ 7057,
7080, 102 Stat. 4402, 4406; Nov. 29, 1990, P.L. 101-647, Title XII, § 1208, 104 Stat. 4832;
Sept. 13, 1994, P.L. 103-322, Title XXXIII, § 330016(1)(K), (L), 108 Stat. 2147.
As amended Oct. 5, 2012, P.L. 112-186, § 4(d)(1), 126 Stat. 1429; Jan. 2, 2013, P.L.
112-239, Div A, Title X, Subtitle H, § 1084(a), 126 Stat. 1963.
Amendments
2012. Act Oct. 5, 2012, in the sixth undesignated paragraph, added the sentence beginning “If
the offense involves …”.
2013. Act Jan. 2, 2013, in the fifth undesignated paragraph, substituted “thereof; or” for
“thereof—”, inserted the paragraph beginning “Whoever transports, …”, in the seventh
undesignated paragraph, added the sentence beginning “If the offense involves the
transportation …”, and added the ninth undesignated paragraph.
§ 2318. Trafficking in Counterfeit Labels, Illicit Labels,

or Counterfeit Documentation or Packaging.
1222
(a)
(1) Whoever, in any of the circumstances described in subsection (c),
knowingly traffics in—
( A ) a counterfeit label or illicit label affixed to, enclosing, or
accompanying, or designed to be affixed to, enclose, or accompany—
(i) a phonorecord;
(ii) a copy of a computer program;
(iii) a copy of a motion picture or other audiovisual work;
(iv) a copy of a literary work;
(v) a copy of a pictorial, graphic, or sculptural work;
(vi) a work of visual art; or
(vii) documentation or packaging; or
(B) counterfeit documentation or packaging, shall be fined under this
title or imprisoned for not more than 5 years, or both.
(b) As used in this section—
(1) the term “counterfeit label” means an identifying label or container
that appears to be genuine, but is not;
(2) the term “traffic” has the same meaning as in section 2320(e) of this
title [18 USCS § 2320(e)];
( 3 ) the terms “copy”, “phonorecord”, “motion picture”, “computer
program”, “audiovisual work”, “literary work”, “pictorial, graphic, or
sculptural work”, “sound recording”, “work of visual art”, and “copyright
owner” have, respectively, the meanings given those terms in section 101
(relating to definitions) of title 17;
( 4 ) the term “illicit label” means a genuine certificate, licensing
document, registration card, or similar labeling component—
(A) that is used by the copyright owner to verify that a phonorecord,
a copy of a computer program, a copy of a motion picture or other
audiovisual work, a copy of a literary work, a copy of a pictorial,
graphic, or sculptural work, a work of visual art, or documentation or
packaging is not counterfeit or infringing of any copyright; and
(B) that is, without the authorization of the copyright owner—
(i) distributed or intended for distribution not in connection with
the copy, phonorecord, or work of visual art to which such labeling
1223
component was intended to be affixed by the respective copyright
owner; or
( i i ) in connection with a genuine certificate or licensing
document, knowingly falsified in order to designate a higher number
of licensed users or copies than authorized by the copyright owner,
unless that certificate or document is used by the copyright owner
solely for the purpose of monitoring or tracking the copyright
owner’s distribution channel and not for the purpose of verifying that
a copy or phonorecord is noninfringing;
( 5 ) the term “documentation or packaging” means documentation or
packaging, in physical form, for a phonorecord, copy of a computer
program, copy of a motion picture or other audiovisual work, copy of a
literary work, copy of a pictorial, graphic, or sculptural work, or work of
visual art; and
( 6 ) the term “counterfeit documentation or packaging” means
documentation or packaging that appears to be genuine, but is not.
(c) The circumstances referred to in subsection (a) of this section are—
(1) the offense is committed within the special maritime and territorial
jurisdiction of the United States; or within the special aircraft jurisdiction of
the United States (as defined in section 46501 of title 49;
(2) the mail or a facility of interstate or foreign commerce is used or
intended to be used in the commission of the offense;
( 3 ) the counterfeit label or illicit label is affixed to, encloses, or
accompanies, or is designed to be affixed to, enclose, or accompany—
(A) a phonorecord of a copyrighted sound recording or copyrighted
musical work;
(B) a copy of a copyrighted computer program;
( C) a copy of a copyrighted motion picture or other audiovisual
work;
(D) a copy of a literary work;
(E) a copy of a pictorial, graphic, or sculptural work;
(F) a work of visual art; or
(G) copyrighted documentation or packaging; or
(4) the counterfeited documentation or packaging is copyrighted.
1224
(d) Forfeiture and Destruction of Property; Restitution. Forfeiture,
destruction, and restitution relating to this section shall be subject to section
2323 [18 USCS § 2323], to the extent provided in that section, in addition to any
other similar remedies provided by law.
(e) Civil Remedies.
(1) In General. Any copyright owner who is injured, or is threatened
with injury, by a violation of subsection (a) may bring a civil action in an
appropriate United States district court.
(2) Discretion of Court. In any action brought under paragraph (1), the
court—
(A) may grant 1 or more temporary or permanent injunctions on such
terms as the court determines to be reasonable to prevent or restrain a
violation of subsection (a);
( B ) at any time while the action is pending, may order the
impounding, on such terms as the court determines to be reasonable, of
any article that is in the custody or control of the alleged violator and
that the court has reasonable cause to believe was involved in a
violation of subsection (a); and
(C) may award to the injured party—
(i) reasonable attorney fees and costs; and
(ii)
(I) actual damages and any additional profits of the violator,
as provided in paragraph (3); or
(II) statutory damages, as provided in paragraph (4).
(3) Actual Damages and Profits.
(A) In General. The injured party is entitled to recover—
(i) the actual damages suffered by the injured party as a result of
a violation of subsection (a), as provided in subparagraph (B) of this
paragraph; and
(ii) any profits of the violator that are attributable to a violation
of subsection (a) and are not taken into account in computing the
actual damages.
(B) Calculation of Damages. The court shall calculate actual
damages by multiplying—
(i) the value of the phonorecords, copies, or works of visual art
1225
which are, or are intended to be, affixed with, enclosed in, or
accompanied by any counterfeit labels, illicit labels, or counterfeit
documentation or packaging, by
(ii) the number of phonorecords, copies, or works of visual art
which are, or are intended to be, affixed with, enclosed in, or
accompanied by any counterfeit labels, illicit labels, or counterfeit
documentation or packaging.
(C) Definition. For purposes of this paragraph, the “value” of a
phonorecord, copy, or work of visual art is—
(i) in the case of a copyrighted sound recording or copyrighted
musical work, the retail value of an authorized phonorecord of that
sound recording or musical work;
(ii) in the case of a copyrighted computer program, the retail
value of an authorized copy of that computer program;
( i i i ) in the case of a copyrighted motion picture or other
audiovisual work, the retail value of an authorized copy of that
motion picture or audiovisual work;
(iv) in the case of a copyrighted literary work, the retail value of
an authorized copy of that literary work;
(v) in the case of a pictorial, graphic, or sculptural work, the
retail value of an authorized copy of that work; and
(vi) in the case of a work of visual art, the retail value of that
work.
(4) Statutory Damages. The injured party may elect, at any time before
final judgment is rendered, to recover, instead of actual damages and
profits, an award of statutory damages for each violation of subsection (a) in
a sum of not less than $2,500 or more than $25,000, as the court considers
appropriate.
(5) Subsequent Violation. The court may increase an award of damages
under this subsection by 3 times the amount that would otherwise be
awarded, as the court considers appropriate, if the court finds that a person
has subsequently violated subsection (a) within 3 years after a final
judgment was entered against that person for a violation of that subsection.
(6) Limitation on Actions. A civil action may not be commenced under
this subsection unless it is commenced within 3 years after the date on
which the claimant discovers the violation of subsection (a).
(f) [Redesignated]
1226
Leg. H. Oct. 9, 1962, P.L. 87-773, § 1, 76 Stat. 775; Dec. 31, 1974, P.L. 93-573, Title
I, § 103, 88 Stat. 1873; Oct. 19, 1976, P.L. 94-553, Title I, § 111, 90 Stat. 2600; May 24,
1982, P.L. 97-180, § 2, 96 Stat. 91; Nov. 29, 1990, P.L. 101-647, Title XXXV, § 3567, 104
Stat. 4928; July 5, 1994, P.L. 103-272, § 5(e)(10), 108 Stat. 1374; Sept. 13, 1994, P.L. 103-
322, Title XXXIII, § 330016(1)(U), 108 Stat. 2148; July 2, 1996, P.L. 104-153, § 4(a), (b)
(1), 110 Stat. 1386; Dec. 23, 2004, P.L. 108-482, Title I, § 102(a), (b), 118 Stat. 3912;
March 16, 2006, P.L. 109-181, § 2(c)(2), 120 Stat. 288; Oct. 13, 2008, P.L. 110-403, Title
II, § 202, 122 Stat. 4260; Dec. 9, 2010, P.L. 111-295, § 6(i), 124 Stat. 3182.
Amendments
2010. Act Dec. 9, 2010, in subsec. (e)(6), substituted “under this subsection” for “under
section”.

(a) Any person who violates section 506(a) (relating to criminal offenses)
of title 17 [17 USCS § 506(a)] shall be punished as provided in subsections (b),
(c), and (d) and such penalties shall be in addition to any other provisions of
title 17 or any other law.
(b) Any person who commits an offense under section 506(a)(1)(A) of title
17 [17 USCS § 506(a)(1)(A)]—
(1) shall be imprisoned not more than 5 years, or fined in the amount set
forth in this title, or both, if the offense consists of the reproduction or
distribution, including by electronic means, during any 180-day period, of at
least 10 copies or phonorecords, of 1 or more copyrighted works, which
have a total retail value of more than $2,500;
(2) shall be imprisoned not more than 10 years, or fined in the amount
set forth in this title, or both, if the offense is a felony and is a second or
subsequent offense under subsection (a); and
(3) shall be imprisoned not more than 1 year, or fined in the amount set
forth in this title, or both, in any other case.
(c) Any person who commits an offense under section 506(a)(1)(B) of title
17 [17 USCS § 506(a)(1)(B)]—
distribution of 10 or more copies or phonorecords of 1 or more copyrighted
works, which have a total retail value of $2,500 or more;
forth in this title, or both, if the offense is a felony and is a second or
subsequent offense under subsection (a); and
1227
(3) shall be imprisoned not more than 1 year, or fined in the amount set
distribution of 1 or more copies or phonorecords of 1 or more copyrighted
works, which have a total retail value of more than $1,000.
(d) Any person who commits an offense under section 506(a)(1)(C) of title
17 [17 USCS § 506(a)(1)(C)]—
(1) shall be imprisoned not more than 3 years, fined under this title, or
both;
both, if the offense was committed for purposes of commercial advantage or
private financial gain;
both, if the offense is a felony and is a second or subsequent offense under
subsection (a); and
both, if the offense is a felony and is a second or subsequent offense under
paragraph (2).
(e)
(1) During preparation of the presentence report pursuant to Rule 32(c)
of the Federal Rules of Criminal Procedure, victims of the offense shall be
permitted to submit, and the probation officer shall receive, a victim impact
statement that identifies the victim of the offense and the extent and scope of
the injury and loss suffered by the victim, including the estimated economic
impact of the offense on that victim.
( 2 ) Persons permitted to submit victim impact statements shall
include—
( A ) producers and sellers of legitimate works affected by
conduct involved in the offense;
(B) holders of intellectual property rights in such works; and
( C ) the legal representatives of such producers, sellers, and
holders.
(f) As used in this section—
( 1 ) the terms “phonorecord” and “copies” have, respectively, the
meanings set forth in section 101 (relating to definitions) of title 17 [17
USCS § 101];
1228
(2) the terms “reproduction” and “distribution” refer to the exclusive
rights of a copyright owner under clauses (1) and (3) respectively of section
106 [18 USCS § 106] (relating to exclusive rights in copyrighted works), as
limited by sections 107 through 122, of title 17 [17 USCS §§ 107 through
122];
(3) the term “financial gain” has the meaning given the term in section
101 of title 17 [17 USCS § 101]; and
(4) the term “work being prepared for commercial distribution” has the
meaning given the term in section 506(a) of title 17 [17 USCS § 506(a)].
Leg.H. May 24, 1982, P.L. 97-180, § 3, 96 Stat. 92; Oct. 28, 1992, P.L. 102-561, § 1,
106 Stat. 4233; Nov. 13, 1997, P.L. 105-80, § 12(b)(2), 111 Stat. 1536; Dec. 16, 1997, P.L.
105-147, § 2(d), 111 Stat. 2678; Nov. 2, 2002, P.L. 107-273, Div C, Title III, Subtitle B, §
13211(a), 116 Stat. 1910; April 27, 2005, P.L. 109-9, Title I, § 103(b), 119 Stat. 220; Oct.
13, 2008, P.L. 110-403, Title II, § 208, 122 Stat. 4263.
§ 2319A. Unauthorized Fixation of and Trafficking in

Sound Recordings and Music Videos of Live Musical
Performances.
(a) Offense. Whoever, without the consent of the performer or performers
involved, knowingly and for purposes of commercial advantage or private
financial gain—
(1) fixes the sounds or sounds and images of a live musical performance
in a copy or phonorecord, or reproduces copies or phonorecords of such a
performance from an unauthorized fixation;
(2) transmits or otherwise communicates to the public the sounds or
sounds and images of a live musical performance; or
(3) distributes or offers to distribute, sells or offers to sell, rents or
offers to rent, or traffics in any copy or phonorecord fixed as described in
paragraph (1), regardless of whether the fixations occurred in the United
States;
shall be imprisoned for not more than 5 years or fined in the amount set forth
in this title, or both, or if the offense is a second or subsequent offense, shall be
imprisoned for not more than 10 years or fined in the amount set forth in this
title, or both.
(b) Forfeiture and Destruction of Property; Restitution. Forfeiture,
2323 [18 USCS § 2319A], to the extent provided in that section, in addition to
any other similar remedies provided by law.
1229
(c) Seizure and Forfeiture. If copies or phonorecords of sounds or sounds
and images of a live musical performance are fixed outside of the United States
without the consent of the performer or performers involved, such copies or
phonorecords are subject to seizure and forfeiture in the United States in the
same manner as property imported in violation of the customs laws. The
Secretary of Homeland Security shall issue regulations by which any performer
may, upon payment of a specified fee, be entitled to notification by United States
Customs and Border Protection of the importation of copies or phonorecords
that appear to consist of unauthorized fixations of the sounds or sounds and
images of a live musical performance.
(d) Victim Impact Statement.
(2) Persons permitted to submit victim impact statements shall include—
(A) producers and sellers of legitimate works affected by conduct
involved in the offense;
(B) holders of intellectual property rights in such works; and
(C) the legal representatives of such producers, sellers, and holders.
(e) Definitions. As used in this section—
( 1 ) the terms “copy”, “fixed”, “musical work”, “phonorecord”,
“reproduce”, “sound recordings”, and “transmit” mean those terms within
the meaning of title 17; and
(2) the term “traffic” has the same meaning as in section 2320(e) of this
title [18 USCS § 2320(e)].
(f) Use. This section shall apply to any Act or Acts that occur on or after
the date of the enactment of the Uruguay Round Agreements Act [enacted Dec. 8,
1994].
History:
Leg.H. Dec. 8, 1994, P.L. 103-465, Title V, Subtitle A, § 513(a), 108 Stat. 4974; Dec.
16, 1997, P.L. 105-147, § 2(e), 111 Stat. 2679; March 16, 2006, P.L. 109-181, § 2(c)(1),
120 Stat. 288; Oct. 13, 2008, P.L. 110-403, Title II, § 203, 122 Stat. 4261.
§ 2319B. Unauthorized Recording of Motion Pictures in
1230
a Motion Picture Exhibition Facility.
(a) Offense. Any person who, without the authorization of the copyright
owner, knowingly uses or attempts to use an audiovisual recording device to
transmit or make a copy of a motion picture or other audiovisual work protected
under title 17, or any part thereof, from a performance of such work in a motion
picture exhibition facility, shall—
(1) be imprisoned for not more than 3 years, fined under this title, or
both; or
(2) if the offense is a second or subsequent offense, be imprisoned for
no more than 6 years, fined under this title, or both. The possession by a
person of an audiovisual recording device in a motion picture exhibition
facility may be considered as evidence in any proceeding to determine
whether that person committed an offense under this subsection, but shall
not, by itself, be sufficient to support a conviction of that person for such
offense.
(b) Forfeiture and Destruction of Property; Restitution. Forfeiture,
(c) Authorized Activities. This section does not prevent any lawfully
authorized investigative, protective, or intelligence activity by an officer, agent,
or employee of the United States, a State, or a political subdivision of a State,
or by a person acting under a contract with the United States, a State, or a
political subdivision of a State.
(d) Immunity for Theaters. With reasonable cause, the owner or lessee of a
motion picture exhibition facility where a motion picture or other audiovisual
work is being exhibited, the authorized agent or employee of such owner or
lessee, the licensor of the motion picture or other audiovisual work being
exhibited, or the agent or employee of such licensor—
(1) may detain, in a reasonable manner and for a reasonable time, any
person suspected of a violation of this section with respect to that motion
picture or audiovisual work for the purpose of questioning or summoning a
law enforcement officer; and
(2) shall not be held liable in any civil or criminal action arising out of
a detention under paragraph (1)
(e) Victim Impact Statement.
(1) In General. During the preparation of the presentence report under
1231
rule 32(c) of the Federal Rules of Criminal Procedure, victims of an offense
under this section shall be permitted to submit to the probation officer a
victim impact statement that identifies the victim of the offense and the
extent and scope of the injury and loss suffered by the victim, including the
estimated economic impact of the offense on that victim.
(2) Contents. A victim impact statement submitted under this subsection
shall include—
(A) producers and sellers of legitimate works affected by conduct
involved in the offense;
(B) holders of intellectual property rights in the works described in
subparagraph (A); and
(f) State Law not Preempted. Nothing in this section may be construed to
annul or limit any rights or remedies under the laws of any State.
(g) Definitions. In this section, the following definitions shall apply:
(1) Title 17 Definitions. The terms “audiovisual work”, “copy”,
“copyright owner”, “motion picture”, “motion picture exhibition facility”,
and “transmit” have, respectively, the meanings given those terms in section
101 of title 17 [17 USCS § 101].
(2) Audiovisual Recording Device. The term “audiovisual recording
device” means a digital or analog photographic or video camera, or any
other technology or device capable of enabling the recording or
transmission of a copyrighted motion picture or other audiovisual work, or
any part thereof, regardless of whether audiovisual recording is the sole or
primary purpose of the device.
Leg.H. April 27, 2005, P.L. 109-9, Title I, § 102(a), 119 Stat. 218; Oct. 13, 2008, P.L.
110-403, Title II, § 204, 122 Stat. 4261.

(a) Offenses. Whoever intentionally—
(1) traffics in goods or services and knowingly uses a counterfeit mark
on or in connection with such goods or services,
( 2) traffics in labels, patches, stickers, wrappers, badges, emblems,
documentation, or packaging of any type or nature, knowing that a
counterfeit mark has been applied thereto, the use of which is likely to cause
1232
confusion, to cause mistake, or to deceive,
(3) traffics in goods or services knowing that such good or service is a
counterfeit military good or service the use, malfunction, or failure of which
is likely to cause serious bodily injury or death, the disclosure of classified
information, impairment of combat operations, or other significant harm to a
combat operation, a member of the Armed Forces, or to national security, or
(4) traffics in a counterfeit drug,
or attempts or conspires to violate any of paragraphs (1) through (4)
shall be punished as provided in subsection (b).
(b) Penalties.
(1) In general. Whoever commits an offense under subsection (a)—
( A) if an individual, shall be fined not more than $2,000,000 or
imprisoned not more than 10 years, or both, and, if a person other than
an individual, shall be fined not more than $5,000,000; and
(B) for a second or subsequent offense under subsection (a), if an
individual, shall be fined not more than $5,000,000 or imprisoned not
more than 20 years, or both, and if other than an individual, shall be
fined not more than $15,000,000.
(2) Serious bodily injury or death.
(A) Serious bodily injury. Whoever knowingly or recklessly causes
or attempts to cause serious bodily injury from conduct in violation of
subsection (a), if an individual, shall be fined not more than $5,000,000
or imprisoned for not more than 20 years, or both, and if other than an
individual, shall be fined not more than $15,000,000.
(B) Death. Whoever knowingly or recklessly causes or attempts to
cause death from conduct in violation of subsection (a), if an individual,
shall be fined not more than $5,000,000 or imprisoned for any term of
years or for life, or both, and if other than an individual, shall be fined
not more than $15,000,000.
(3) Counterfeit military goods or services and counterfeit drugs.
Whoever commits an offense under subsection (a) involving a counterfeit
military good or service or counterfeit drug—
( A ) if an individual, shall be fined not more than $5,000,000,
imprisoned not more than 20 years, or both, and if other than an
individual, be fined not more than $15,000,000; and
(B) for a second or subsequent offense, if an individual, shall be
1233
fined not more than $15,000,000, imprisoned not more than 30 years, or
both, and if other than an individual, shall be fined not more than
$30,000,000.
(c) Forfeiture and destruction of property; restitution. Forfeiture,
(d) Defenses. All defenses, affirmative defenses, and limitations on
remedies that would be applicable in an action under the Lanham Act shall be
applicable in a prosecution under this section. In a prosecution under this
section, the defendant shall have the burden of proof, by a preponderance of the
evidence, of any such affirmative defense.
(e) Presentence report.
(2) Persons permitted to submit victim impact statements shall include—
(A) producers and sellers of legitimate goods or services affected
by conduct involved in the offense;
(B) holders of intellectual property rights in such goods or services;
and
(f) Definitions. For the purposes of this section—
(1) the term “counterfeit mark” means—
(A) a spurious mark—
( i ) that is used in connection with trafficking in any goods,
services, labels, patches, stickers, wrappers, badges, emblems,
documentation, or packaging of any type or nature;
(ii) that is identical with, or substantially indistinguishable from,
a mark registered on the principal register in the United States Patent
and Trademark Office and in use, whether or not the defendant knew
such mark was so registered;
1234
(iii) that is applied to or used in connection with the goods or
services for which the mark is registered with the United States
Patent and Trademark Office, or is applied to or consists of a label,
patch, sticker, wrapper, badge, emblem, medallion, charm, box,
container, can, case, hangtag, documentation, or packaging of any
type or nature that is designed, marketed, or otherwise intended to be
used on or in connection with the goods or services for which the
mark is registered in the United States Patent and Trademark Office;
and
(i v) the use of which is likely to cause confusion, to cause
mistake, or to deceive; or
( B) a spurious designation that is identical with, or substantially
indistinguishable from, a designation as to which the remedies of the
Lanham Act are made available by reason of section 220506 of title 36;
but such term does not include any mark or designation used in
connection with goods or services, or a mark or designation applied to
labels, patches, stickers, wrappers, badges, emblems, medallions,
charms, boxes, containers, cans, cases, hangtags, documentation, or
packaging of any type or nature used in connection with such goods or
services, of which the manufacturer or producer was, at the time of the
manufacture or production in question, authorized to use the mark or
designation for the type of goods or services so manufactured or
produced, by the holder of the right to use such mark or designation;
(2) the term “financial gain” includes the receipt, or expected receipt, of
anything of value;
(3) the term “Lanham Act” means the Act entitled “An Act to provide
for the registration and protection of trademarks used in commerce, to carry
out the provisions of certain international conventions, and for other
purposes”, approved July 5, 1946 (15 U.S.C. 1051 et seq.);
( 4) the term “counterfeit military good or service” means a good or
service that uses a counterfeit mark on or in connection with such good or
service and that—
( A ) is falsely identified or labeled as meeting military
specifications, or
(B) is intended for use in a military or national security application;
(5) the term “traffic” means to transport, transfer, or otherwise dispose
of, to another, for purposes of commercial advantage or private financial
gain, or to make, import, export, obtain control of, or possess, with intent to
1235
so transport, transfer, or otherwise dispose of; and
(6) the term “counterfeit drug” means a drug, as defined by section 201
of the Federal Food, Drug, and Cosmetic Act [21 USCS § 321], that uses a
counterfeit mark on or in connection with the drug.
(g) Limitation on cause of action. Nothing in this section shall entitle the
United States to bring a criminal cause of action under this section for the
repackaging of genuine goods or services not intended to deceive or confuse.
(h) Report to Congress.
( 1) Beginning with the first year after the date of enactment of this
subsection, the Attorney General shall include in the report of the Attorney
General to Congress on the business of the Department of Justice prepared
pursuant to section 522 of title 28, an accounting, on a district by district
basis, of the following with respect to all actions taken by the Department of
Justice that involve trafficking in counterfeit labels for phonorecords, copies
of computer programs or computer program documentation or packaging,
copies of motion pictures or other audiovisual works (as defined in section
2318 of this title [18 USCS § 2318]), criminal infringement of copyrights
(as defined in section 2319 of this title [18 USCS § 2319]), unauthorized
fixation of and trafficking in sound recordings and music videos of live
musical performances (as defined in section 2319A of this title [18 USCS §
2319A]), or trafficking in goods or services bearing counterfeit marks (as
defined in section 2320 of this title [18 USCS § 2320]):
(A) The number of open investigations.
( B) The number of cases referred by the United States Customs
Service.
(C) The number of cases referred by other agencies or sources.
( D ) The number and outcome, including settlements, sentences,
recoveries, and penalties, of all prosecutions brought under sections
2318, 2319, 2319A, and 2320 of title 18 [18 USCS §§ 2318, 2319,
2319A, and 2320].
(2)
( A ) The report under paragraph (1), with respect to criminal
infringement of copyright, shall include the following:
( i ) The number of infringement cases in these categories:
audiovisual (videos and films); audio (sound recordings); literary
works (books and musical compositions); computer programs; video
games; and, others.
1236
(ii) The number of online infringement cases.
(iii) The number and dollar amounts of fines assessed in specific
categories of dollar amounts. These categories shall be: no fines
ordered; fines under $500; fines from $500 to $1,000; fines from
$1,000 to $5,000; fines from $5,000 to $10,000; and fines over
$10,000.
( i v) The total amount of restitution ordered in all copyright
infringement cases.
(B) In this paragraph, the term “online infringement cases” as used in
paragraph (2) means those cases where the infringer—
(i) advertised or publicized the infringing work on the Internet; or
( i i ) made the infringing work available on the Internet for
download, reproduction, performance, or distribution by other
persons.
( C ) The information required under subparagraph (A) shall be
submitted in the report required in fiscal year 2005 and thereafter.
(i) Transshipment and exportation. No goods or services, the trafficking in
of which is prohibited by this section, shall be transshipped through or exported
from the United States. Any such transshipment or exportation shall be deemed a
violation of section 42 of an Act to provide for the registration of trademarks
used in commerce, to carry out the provisions of certain international
conventions, and for other purposes, approved July 5, 1946 [15 USCS § 1124]
(commonly referred to as the “Trademark Act of 1946” or the “Lanham Act”).
Leg.H (Added Oct. 12, 1984, P.L. 98-473, Title II, Ch XV, § 1502(a), 98 Stat. 2178;
Sept. 13, 1994, P.L. 103-322, Title XXXII, Subtitle A, § 320104(a), Title XXXIII, §
330016(1)(U), 108 Stat. 2110, 2148; July 2, 1996, P.L. 104-153, § 5, 110 Stat. 1387; Dec.
16, 1997, P.L. 105-147, § 2(f), 111 Stat. 2679; Aug. 12, 1998, P.L. 105-225, § 4(b), 112
Stat. 1499; Nov. 3, 1998, P.L. 105-354, § 2(c), 112 Stat. 3244; Feb. 8, 2002, P.L. 107-140,
§ 1, 116 Stat. 12; Nov. 2, 2002, P.L. 107-273, Div A, Title II, § 205(e), 116 Stat. 1778;
March 16, 2006, P.L. 109-181, §§ 1(b), 2(b), 120 Stat. 285, 288.)
(As amended Oct. 13, 2008, P.L. 110-403, Title II, § 205, 122 Stat. 4262; Dec. 31,
2011, P.L. 112-81, Div A, Title VIII, Subtitle B, § 818(h), 125 Stat. 1497; July 9, 2012, P.L.
112-144, Title VII, § 717(a)(1)-(3), 126 Stat. 1076.)
Amendments
2012. Act July 9, 2012, in subsec. (a), in para. (2), deleted “or” following the concluding
comma, in para. (3), added “or” at the end, added para. (4), and in the concluding matter,
substituted “through (4)” for “through (3)”; in subsec. (b), in para. (3), in the heading, inserted
“and counterfeit drugs”, and in the introductory matter, inserted “or counterfeit drug”; and in
subsec. (f), in para. (4), deleted “and” following the concluding semicolon, in para. (5),
1237
substituted “; and” for a concluding period, and added para. (6).
2012 Note: Priority given to certain investigations and prosecutions. Act July 9,
2012, P.L. 112-144, Title VII, § 717(a)(4), 126 Stat. 1076, provides: “The Attorney General
shall give increased priority to efforts to investigate and prosecute offenses under section
2320 of title 18, United States Code, that involve counterfeit drugs.”.
TITLE 19
CUSTOMS DUTIES
Contents
CHAPTER 4 TARIFF ACT OF 1930

SUBTITLE II Special Provisions
PART I Miscellaneous
PART II United States International Trade Commission
SUBTITLE III Administrative Provisions
PART III Ascertainment, Collection, and Recovery of Duties
CHAPTER 12 TRADE ACT OF 1974
SUBCHAPTER I Negotiating and Other Authority
PART 8 Identification of Market Barriers and Certain Unfair Trade Actions
§ 2242. Identification of Countries That Deny Adequate Protection, or Market
Access, for Intellectual Property Rights.
CHAPTER 4
TARIFF ACT OF 1930

SUBTITLE II
Special Provisions
PART I
Miscellaneous

1238
(a) Marking of Articles. Except as hereinafter provided, every article of
foreign origin (or its container, as provided in subsection (b) hereof) imported
into the United States shall be marked in a conspicuous place as legibly,
indelibly, and permanently as the nature of the article (or container) will permit
in such manner as to indicate to an ultimate purchaser in the United States the
English name of the country of origin of the article. The Secretary of the
Treasury may by regulations—
( 1 ) Determine the character of words and phrases or abbreviations
thereof which shall be acceptable as indicating the country of origin and
prescribe any reasonable method of marking, whether by printing, stenciling,
stamping, branding, labeling, or by any other reasonable method, and a
conspicuous place on the article (or container) where the marking shall
appear;
(2) Require the addition of any other words or symbols which may be
appropriate to prevent deception or mistake as to the origin of the article or
as to the origin of any other article with which such imported article is
usually combined subsequent to importation but before delivery to an
ultimate purchaser; and
( 3 ) Authorize the exception of any article from the requirements of
marking if—
(A) Such article is incapable of being marked;
(B) Such article cannot be marked prior to shipment to the United
States without injury;
(C) Such article cannot be marked prior to shipment to the United
States, except at an expense economically prohibitive of its importation;
( D ) The marking of a container of such article will reasonably
indicate the origin of such article;
(E) Such article is a crude substance;
(F) Such article is imported for use by the importer and not intended
for sale in its imported or any other form;
( G) Such article is to be processed in the United States by the
importer or for his account otherwise than for the purpose of concealing
the origin of such article and in such manner that any mark contemplated
by this section would necessarily be obliterated, destroyed, or
permanently concealed;
(H) An ultimate purchaser, by reason of the character of such article
or by reason of the circumstances of its importation, must necessarily
1239
know the country of origin of such article even though it is not marked to
indicate its origin;
(I) Such article was produced more than twenty years prior to its
importation into the United States;
( J ) Such article is of a class or kind with respect to which the
Secretary of the Treasury has given notice by publication in the weekly
Treasury Decisions within two years after July 1, 1937, that articles of
such class or kind were imported in substantial quantities during the
five-year period immediately preceding January 1, 1937, and were not
required during such period to be marked to indicate their origin:
Provided, That this subdivision (J) shall not apply after September 1,
1938, to sawed lumber and timbers, telephone, trolley, electric-light,
and telegraph poles of wood, and bundles of shingles; but the President
is authorized to suspend the effectiveness of this proviso if he finds such
action required to carry out any trade agreement entered into under the
authority of sections 1351, 1352, 1353 and 1354 of this title, as
extended; or
(K) Such article cannot be marked after importation except at an
expense which is economically prohibitive, and the failure to mark the
article before importation was not due to any purpose of the importer,
producer, seller, or shipper to avoid compliance with this section.
(b) Marking of Containers. Whenever an article is excepted under
subdivision (3) of subsection (a) of this section from the requirements of
marking, the immediate container, if any, of such article, or such other container
or containers of such article as may be prescribed by the Secretary of the
Treasury, shall be marked in such manner as to indicate to an ultimate purchaser
in the United States the English name of the country of origin of such article,
subject to all provisions of this section, including the same exceptions as are
applicable to articles under subdivision (3) of subsection (a) of this section. If
articles are excepted from marking requirements under clause (F), (G), or (H) of
subdivision (3) of subsection (a) of this section, their usual containers shall not
be subject to the marking requirements of this section. Usual containers in use as
such at the time of importation shall in no case be required to be marked to
show the country of their own origin.
(c) Marking of Certain Pipe and Fittings.
(1) Except as provided in paragraph (2), no exception may be made
under subsection (a)(3) of this section with respect to pipes of iron, steel, or
stainless steel, to pipe fittings of steel, stainless steel, chrome-moly steel, or
cast and malleable iron each of which shall be marked with the English
name of the country of origin by means of die stamping, cast-in-mold
1240
lettering, etching, engraving, or continuous paint stenciling.
( 2 ) If, because of the nature of an article, it is technically or
commercially infeasible to mark it by one of the five methods specified in
paragraph (1), the article may be marked by an equally permanent method of
marking or, in the case of small diameter pipe, tube, and fittings, by tagging
the containers or bundles.
(d) Marking of Compressed Gas Cylinders. No exception may be made
under subsection (a)(3) of this section with respect to compressed gas cylinders
designed to be used for the transport and storage of compressed gases whether
or not certified prior to exportation to have been made in accordance with the
safety requirements of sections 178.36 through 178.68 of title 49, Code of
Federal Regulations, each of which shall be marked with the English name of
the country of origin by means of die stamping, molding, etching, raised
lettering, or an equally permanent method of marking.
(e) Marking of Certain Manhole Rings or Frames, Covers, and Assemblies
Thereof. No exception may be made under subsection (a)(3) of this section with
respect to manhole rings or frames, covers, and assemblies thereof each of
which shall be marked on the top surface with the English name of the country of
origin by means of die stamping, cast-in-mold lettering, etching, engraving, or an
equally permanent method of marking.
(f) Marking of Certain Coffee and Tea Products. The marking requirements
of subsections (a) and (b) shall not apply to articles described in subheadings
0901.21, 0901.22, 0902.10, 0902.20, 0902.30, 0902.40, 2101.10, and 2101.20
of the Harmonized Tariff Schedule of the United States, as in effect on January
1, 1995.
(g) Marking of Spices. The marking requirements of subsections (a) and
(b) shall not apply to articles provided for under subheadings 0904.11, 0904.12,
0904.20, 0905.00, 0906.10, 0906.20, 0907.00, 0908.10, 0908.20, 0908.30,
0909.10, 0909.20, 0909.30, 0909.40, 0909.50, 0910.10, 0910.20, 0910.30,
0910.40, 0910.50, 0910.91, 0910.99, 1106.20, 1207.40, 1207.50, 1207.91,
1404.90, and 3302.10, and items classifiable in categories 0712.90.60,
0712.90.8080, 1209.91.2000, 1211.90.2000, 1211.90.8040, 1211.90.8050,
1211.90.8090, 2006.00.3000, 2918.13.2000, 3203.00.8000, 3301.90.1010,
3301.90.1020, and 3301.90.1050 of the Harmonized Tariff Schedule of the
United States, as in effect on January 1, 1995.
(h) Marking of Certain Silk Products. The marking requirements of
subsections (a) and (b) shall not apply either to—
(1) articles provided for in subheading 6214.10.10 of the Harmonized
Tariff Schedule of the United States, as in effect on January 1, 1997; or
1241
( 2) articles provided for in heading 5007 of the Harmonized Tariff
Schedule of the United States as in effect on January 1, 1997.
(i) Additional Duties for Failure to Mark. If at the time of importation any
article (or its container, as provided in subsection (b) of this section) is not
marked in accordance with the requirements of this section, and if such article is
not exported or destroyed or the article (or its container, as provided in
subsection (b) of this section) marked after importation in accordance with the
requirements of this section (such exportation, destruction, or marking to be
accomplished under customs supervision prior to the liquidation of the entry
covering the article, and to be allowed whether or not the article has remained
in continuous customs custody), there shall be levied, collected, and paid upon
such article a duty of 10 per centum ad valorem, which shall be deemed to have
accrued at the time of importation, shall not be construed to be penal, and shall
not be remitted wholly or in part nor shall payment thereof be avoidable for any
cause. Such duty shall be levied, collected, and paid in addition to any other
duty imposed by law and whether or not the article is exempt from the payment
of ordinary customs duties. The compensation and expenses of customs officers
and employees assigned to supervise the exportation, destruction, or marking to
exempt articles from the application of the duty provided for in this subsection
shall be reimbursed to the Government by the importer.
(j) Delivery withheld Until Marked. No imported article held in customs
custody for inspection, examination, or appraisement shall be delivered until
such article and every other article of the importation (or their containers),
whether or not released from customs custody, shall have been marked in
accordance with the requirements of this section or until the amount of duty
estimated to be payable under subsection (i) of this section has been deposited.
Nothing in this section shall be construed as excepting any article (or its
container) from the particular requirements of marking provided for in any other
provision of law.
(k) Treatment of Goods of a NAFTA Country.
(1) Application of Section. In applying this section to an article that
qualifies as a good of a NAFTA country (as defined in section 2(4) of the
North American Free Trade Agreement Implementation Act) under the
regulations issued by the Secretary to implement Annex 311 of the North
American Free Trade Agreement—
(A) the exemption under subsection (a)(3)(H) shall be applied by
substituting “reasonably know” for “necessarily know”;
(B) the Secretary shall exempt the good from the requirements for
marking under subsection (a) if the good—
1242
(i) is an original work of art, or
(ii) is provided for under subheading 6904.10, heading 8541, or
heading 8542 of the Harmonized Tariff Schedule of the United
States; and
(C) subsection (b) does not apply to the usual container of any good
described in subsection (a)(3)(E) or (I) or subparagraph (B)(i) or (ii) of
this paragraph.
(2) Petition Rights of NAFTA Exporters and Producers Regarding
Marking Determinations.
(A) Definitions. For purposes of this paragraph:
(i) The term “adverse marking decision” means a determination
by the Customs Service which an exporter or producer of
merchandise believes to be contrary to Annex 311 of the North
American Free Trade Agreement.
(ii) A person may not be treated as the exporter or producer of
merchandise regarding which an adverse marking decision was
made unless such person—
(I) if claiming to be the exporter, is located in a NAFTA country
and is required to maintain records in that country regarding
exportations to NAFTA countries; or
(II) if claiming to be the producer, grows, mines, harvests, fishes,
traps, hunts, manufactures, processes, or assembles such
merchandise in a NAFTA country.
(B) Intervention or Petition Regarding Adverse Marking Decisions.
If the Customs Service makes an adverse marking decision regarding
any merchandise, the Customs Service shall, upon written request by the
exporter or producer of the merchandise, provide to the exporter or
producer a statement of the basis for the decision. If the exporter or
producer believes that the decision is not correct, it may intervene in any
protest proceeding initiated by the importer of the merchandise. If the
importer does not file a protest with regard to the decision, the exporter
or producer may file a petition with the Customs Service setting forth—
(i) a description of the merchandise; and
(ii) the basis for its claim that the merchandise should be marked
as a good of a NAFTA country.
(C) Effect of Determination Regarding Decision. If, after receipt
and consideration of a petition filed by an exporter or producer under
1243
subparagraph (B), the Customs Service determines that the adverse
marking decision—
(i) is not correct, the Customs Service shall notify the petitioner
of the determination and all merchandise entered, or withdrawn from
warehouse for consumption, more than 30 days after the date that
notice of the determination under this clause is published in the
weekly Custom Bulletin shall be marked in conformity with the
determination; or
(ii) is correct, the Customs Service shall notify the petitioner that
the petition is denied.
(D) Judicial Review. For purposes of judicial review, the denial of
a petition under subparagraph (C)(ii) shall be treated as if it were a
denial of a petition of an interested party under section 516 regarding an
issue arising under any of the preceding provisions of this section.
(l ) Penalties. Any person who, with intent to conceal the information given
thereby or contained therein, defaces, destroys, removes, alters, covers,
obscures, or obliterates any mark required under the provisions of this chapter
shall—
(1) upon conviction for the first violation of this subsection, be fined not
more than $100,000, or imprisoned for not more than 1 year, or both; and
(2) upon conviction for the second or any subsequent violation of this
subsection, be fined not more than $250,000, or imprisoned for not more
than 1 year, or both.
Leg.H. June 17, 1930, ch. 497 § 304, 46 Stat. 687; June 25, 1938, ch. 679 § 3, 52 Stat.
1077; August 8, 1953, ch. 397 § 4(c), 67 Stat. 509; October 30, 1984, P.L. 98-573 § 207, 98
Stat. 2976; October 22, 1986, P.L. 99-514 § 1888(1), 100 Stat. 2924; August 23, 1988, P.L.
100-418 § 1907(a)(1), 102 Stat. 1314; December 8, 1993, P.L. 103-182 § 207(a), 107 Stat.
2096; October 11, 1996, P.L. 104-295 § 14(a), (b), 110 Stat. 3521; June 25, 1999, P.L. 106-
36 § 2423(a), (b), 113 Stat. 180.
PART II
United States International Trade Commission

(a) Unfair Methods of Competition Declared Unlawful.
( 1) Subject to paragraph (2), the following are unlawful, and when
1244
found by the Commission to exist shall be dealt with, in addition to any
other provision of law, as provided in this section:
(A) Unfair methods of competition and unfair acts in the importation
of articles (other than articles provided for in subparagraphs (B), (C),
(D), and (E)) into the United States, or in the sale of such articles by the
owner, importer, or consignee, the threat or effect of which is—
( i ) to destroy or substantially injure an industry in the United
States;
(ii) to prevent the establishment of such an industry; or
(iii) to restrain or monopolize trade and commerce in the United
States.
(B) The importation into the United States, the sale for importation,
or the sale within the United States after importation by the owner,
importer, or consignee, of articles that—
( i ) infringe a valid and enforceable United States patent or a
valid and enforceable United States copyright registered under title
17, United States Code; or
(ii) are made, produced, processed, or mined under, or by means
of, a process covered by the claims of a valid and enforceable
United States patent.
(C) The importation into the United States, the sale for importation,
importer, or consignee, of articles that infringe a valid and enforceable
United States trademark registered under the Trademark Act of 1946.
(D) The importation into the United States, the sale for importation,
importer, or consignee, of a semiconductor chip product in a manner that
constitutes infringement of a mask work registered under chapter 9 of
title 17, United States Code [17 USCS §§ 901 et seq.].
(E) The importation into the United States, the sale for importation,
importer, or consigner, of an article that constitutes infringement of the
exclusive rights in a design protected under chapter 13 of title 17,
United States Code [17 USCS §§ 1301 et seq.].
(2) Subparagraphs (B), (C), (D), and (E) of paragraph (1) apply only if
an industry in the United States, relating to the articles protected by the
patent, copyright, trademark, mask work, or design concerned, exists or is in
1245
the process of being established.
(3) For purposes of paragraph (2), an industry in the United States shall
be considered to exist if there is in the United States, with respect to the
articles protected by the patent, copyright, trademark, mask work, or design
concerned—
(A) significant investment in plant and equipment;
(B) significant employment of labor or capital; or
(C) substantial investment in its exploitation, including engineering,
research and development, or licensing.
(4) For the purposes of this section, the phrase “owner, importer, or
consignee” includes any agent of the owner, importer, or consignee.
(b) Investigation of Violations by Commission.
( 1 ) The Commission shall investigate any alleged violation of this
section on complaint under oath or upon its initiative. Upon commencing any
such investigation, the Commission shall publish notice thereof in the
Federal Register. The Commission shall conclude any such investigation
and make its determination under this section at the earliest practicable time
after the date of publication of notice of such investigation. To promote
expeditious adjudication, the Commission shall, within 45 days after an
investigation is initiated, establish a target date for its final determination.
( 2 ) During the course of each investigation under this section, the
Commission shall consult with, and seek advice and information from, the
Department of Health and Human Services, the Department of Justice, the
Federal Trade Commission, and such other departments and agencies as it
considers appropriate.
(3) Whenever, in the course of an investigation under this section, the
Commission has reason to believe, based on information before it, that a
matter, in whole or in part, may come within the purview of subtitle B of
title VII of this Act, it shall promptly notify the Secretary of Commerce so
that such action may be taken as is otherwise authorized by such subtitle. If
the Commission has reason to believe that the matter before it (A) is based
solely on alleged acts and effects which are within the purview of section
701 or 731, or (B) relates to an alleged copyright infringement with respect
to which action is prohibited by section 1008 of title 17, United States
Code, the Commission shall terminate, or not institute, any investigation into
the matter. If the Commission has reason to believe the matter before it is
based in part on alleged acts and effects which are within the purview of
section 701 or 731 of this Act, and in part on alleged acts and effects which
1246
may, independently from or in conjunction with those within the purview of
such section, establish a basis for relief under this section, then it may
institute or continue an investigation into the matter. If the Commission
notifies the Secretary or the administering authority (as defined in section
771(1) of this Act) with respect to a matter under this paragraph, the
Commission may suspend its investigation during the time the matter is
before the Secretary or administering authority for final decision. Any final
decision by the administering authority under section 701 or 731 of this Act
with respect to the matter within such section 701 or 731 of which the
Commission has notified the Secretary or administering authority shall be
conclusive upon the Commission with respect to the issue of less-than-fair-
value sales or subsidization and the matters necessary for such decision.
(c) Determinations; Review. The Commission shall determine, with
respect to each investigation conducted by it under this section, whether or not
there is a violation of this section, except that the Commission may, by issuing a
consent order or on the basis of an agreement between the private parties to the
investigation, including an agreement to present the matter for arbitration,
terminate any such investigation, in whole or in part, without making such a
determination. Each determination under subsection (d) or (e) shall be made on
the record after notice and opportunity for a hearing in conformity with the
provisions of subchapter II of chapter 5 of title 5, United States Code. All legal
and equitable defenses may be presented in all cases. A respondent may raise
any counterclaim in a manner prescribed by the Commission. Immediately after
a counterclaim is received by the Commission, the respondent raising such
counterclaim shall file a notice of removal with a United States district court in
which venue for any of the counterclaims raised by the party would exist under
section 1391 of title 28, United States Code. Any counterclaim raised pursuant
to this section shall relate back to the date of the original complaint in the
proceeding before the Commission. Action on such counterclaim shall not delay
or affect the proceeding under this section, including the legal and equitable
defenses that may be raised under this subsection. Any person adversely
affected by a final determination of the Commission under subsection (d), (e),
(f), or (g) may appeal such determination, within 60 days after the determination
becomes final, to the United States Court of Appeals for the Federal Circuit for
review in accordance with chapter 7 of title 5, United States Code.
Notwithstanding the foregoing provisions of this subsection, Commission
determinations under subsections (d), (e), (f), and (g) with respect to its findings
on the public health and welfare, competitive conditions in the United States
economy, the production of like or directly competitive articles in the United
States, and United States consumers, the amount and nature of bond, or the
appropriate remedy shall be reviewable in accordance with section 706 of title
5, United States Code. Determinations by the Commission under subsections (e),
1247
(f), and (j) with respect to forfeiture of bonds and under subsection (h) with
respect to the imposition of sanctions for abuse of discovery or abuse of process
shall also be reviewable in accordance with section 706 of title 5, United States
Code.
(d) Exclusion of Articles From Entry.
(1) If the Commission determines, as a result of an investigation under
this section, that there is a violation of this section, it shall direct that the
articles concerned, imported by any person violating the provision of this
section, be excluded from entry into the United States, unless, after
considering the effect of such exclusion upon the public health and welfare,
competitive conditions in the United States economy, the production of like
or directly competitive articles in the United States, and United States
consumers, it finds that such articles should not be excluded from entry. The
Commission shall notify the Secretary of the Treasury of its action under this
subsection directing such exclusion from entry, and upon receipt of such
notice, the Secretary shall, through the proper officers, refuse such entry.
(2) The authority of the Commission to order an exclusion from entry of
articles shall be limited to persons determined by the Commission to be
violating this section unless the Commission determines that—
(A) a general exclusion from entry of articles is necessary to prevent
circumvention of an exclusion order limited to products of named
persons; or
(B) there is a pattern of violation of this section and it is difficult to
identify the source of infringing products.
(e) Exclusion of Articles From Entry During Investigation Except Under
Bond.
( 1 ) If, during the course of an investigation under this section, the
Commission determines that there is reason to believe that there is a
violation of this section, it may direct that the articles concerned, imported
by any person with respect to whom there is reason to believe that such
person is violating this section, be excluded from entry into the United
States, unless, after considering the effect of such exclusion upon the public
health and welfare, competitive conditions in the United States economy, the
production of like or directly competitive articles in the United States, and
United States consumers, it finds that such articles should not be excluded
from entry. The Commission shall notify the Secretary of the Treasury of its
action under this subsection directing such exclusion from entry, and upon
receipt of such notice, the Secretary shall, through the proper officers, refuse
such entry, except that such articles shall be entitled to entry under bond
1248
prescribed by the Secretary in an amount determined by the Commission to
be sufficient to protect the complainant from any injury. If the Commission
later determines that the respondent has violated the provisions of this
section, the bond may be forfeited to the complainant.
(2) A complainant may petition the Commission for the issuance of an
order under this subsection. The Commission shall make a determination
with regard to such petition by no later than the 90th day after the date on
which the Commission’s notice of investigation is published in the Federal
Register. The Commission may extend the 90-day period for an additional
60 days in a case it designates as a more complicated case. The
Commission shall publish in the Federal Register its reasons why it
designated the case as being more complicated. The Commission may
require the complainant to post a bond as a prerequisite to the issuance of an
order under this subsection. If the Commission later determines that the
respondent has not violated the provisions of this section, the bond may be
forfeited to the respondent.
(3) The Commission may grant preliminary relief under this subsection
or subsection (f) to the same extent as preliminary injunctions and temporary
restraining orders may be granted under the Federal Rules of Civil
Procedure.
( 4) The Commission shall prescribe the terms and conditions under
which bonds may be forfeited under paragraphs (1) and (2).
(f) Cease and Desist Orders; Civil Penalty for Violation of Orders.
(1) In addition to, or in lieu of, taking action under subsection (d) or (e),
the Commission may issue and cause to be served on any person violating
this section, or believed to be violating this section, as the case may be, an
order directing such person to cease and desist from engaging in the unfair
methods or acts involved, unless after considering the effect of such order
upon the public health and welfare, competitive conditions in the United
States economy, the production of like or directly competitive articles in the
United States, and United States consumers, it finds that such order should
not be issued. The Commission may at any time, upon such notice and in
such manner as it deems proper, modify or revoke any such order, and, in
the case of a revocation, may take action under subsection (d) or (e), as the
case may be. If a temporary cease and desist order is issued in addition to,
or in lieu of, an exclusion order under subsection (e), the Commission may
require the complainant to post a bond, in an amount determined by the
Commission to be sufficient to protect the respondent from any injury, as a
prerequisite to the issuance of an order under this subsection. If the
Commission later determines that the respondent has not violated the
1249
provisions of this section, the bond may be forfeited to the respondent. The
Commission shall prescribe the terms and conditions under which the bonds
may be forfeited under this paragraph.
(2) Any person who violates an order issued by the Commission under
paragraph (1) after it has become final shall forfeit and pay to the United
States a civil penalty for each day on which an importation of articles, or
their sale, occurs in violation of the order of not more than the greater of
$100,000 or twice the domestic value of the articles entered or sold on such
day in violation of the order. Such penalty shall accrue to the United States
and may be recovered for the United States in a civil action brought by the
Commission in the Federal District Court for the District of Columbia or for
the district in which the violation occurs. In such actions, the United States
district courts may issue mandatory injunctions incorporating the relief
sought by the Commission as they deem appropriate in the enforcement of
such final orders of the Commission.
(g) Filing of Complaint; Exclusion.
(1) If—
(A) a complaint is filed against a person under this section;
(B) the complaint and a notice of investigation are served on the
person;
( C ) the person fails to respond to the complaint and notice or
otherwise fails to appear to answer the complaint and notice;
(D) the person fails to show good cause why the person should not
be found in default; and
(E) the complainant seeks relief limited solely to that person; the
Commission shall presume the facts alleged in the complaint to be true
and shall, upon request, issue an exclusion from entry or a cease and
desist order, or both, limited to that person unless, after considering the
effect of such exclusion or order upon the public health and welfare,
competitive conditions in the United States economy, the production of
like or directly competitive articles in the United States, and United
States consumers, the Commission finds that such exclusion or order
should not be issued.
(2) In addition to the authority of the Commission to issue a general
exclusion from entry of articles when a respondent appears to contest an
investigation concerning a violation of the provisions of this section, a
general exclusion from entry of articles, regardless of the source or importer
of the articles, may be issued if—
1250
( A ) no person appears to contest an investigation concerning a
violation of the provisions of this section,
( B ) such a violation is established by substantial, reliable, and
probative evidence, and
(C) the requirements of subsection (d)(2) are met.
(h) Sanctions for Abuse of Discovery and Abuse of Process. The
Commission may by rule prescribe sanctions for abuse of discovery and abuse
of process to the extent authorized by Rule 11 and Rule 37 of the Federal Rules
of Civil Procedure.
(i) Forfeiture.
(1) In addition to taking action under subsection (d), the Commission
may issue an order providing that any article imported in violation of the
provisions of this section be seized and forfeited to the United States if—
( A ) the owner, importer, or consignee of the article previously
attempted to import the article into the United States;
(B) the article was previously denied entry into the United States by
reason of an order issued under subsection (d); and
(C) upon such previous denial of entry, the Secretary of the Treasury
provided the owner, importer, or consignee of the article written notice
of—
(i) such order, and
(ii) the seizure and forfeiture that would result from any further
attempt to import the article into the United States.
(2) The Commission shall notify the Secretary of the Treasury of any
order issued under this subsection and, upon receipt of such notice, the
Secretary of the Treasury shall enforce such order in accordance with the
(3) Upon the attempted entry of articles subject to an order issued under
this subsection, the Secretary of the Treasury shall immediately notify all
ports of entry of the attempted importation and shall identify the persons
notified under paragraph (1)(C).
(4) The Secretary of the Treasury shall provide—
(A) the written notice described in paragraph (1)(C) to the owner,
importer, or consignee of any article that is denied entry into the United
States by reason of an order issued under subsection (d); and
1251
(B) a copy of such written notice to the Commission.
(j) Referral to President.
(1) If the Commission determines that there is a violation of this section,
or that, for purposes of subsection (e), there is reason to believe that there is
such a violation, it shall—
(A) publish such determination in the Federal Register, and
(B) transmit to the President a copy of such determination and the
action taken under subsection (d), (e), (f), (g), or (i), with respect
thereto, together with the record upon which such determination is
based.
(2) If, before the close of the 60-day period beginning on the day after
the day on which he receives a copy of such determination, the President,
for policy reasons, disapproves such determination and notifies the
Commission of his disapproval, then, effective on the date of such notice,
such determination and the action taken under subsection (d), (e), (f), (g), or
(i) with respect thereto shall have no force or effect.
(3) Subject to the provisions of paragraph (2), such determination shall,
except for purposes of subsection (c), be effective upon publication thereof
in the Federal Register, and the action taken under subsection (d), (e), (f),
(g), or (i) with respect thereto shall be effective as provided in such
subsections, except that articles directed to be excluded from entry under
subsection (d) or subject to a cease and desist order under subsection (f)
shall, until such determination becomes final, be entitled to entry under bond
prescribed by the Secretary in an amount determined by the Commission to
be sufficient to protect the complainant from any injury. If the determination
becomes final, the bond may be forfeited to the complainant. The
Commission shall prescribe the terms and conditions under which bonds
may be forfeited under this paragraph.
(4) If the President does not disapprove such determination within such
60-day period, or if he notifies the Commission before the close of such
period that he approves such determination, then, for purposes of paragraph
(3) and subsection (c) such determination shall become final on the day after
the close of such period or the day on which the President notifies the
Commission of his approval, as the case may be.
(k) Period of Effectiveness; Termination of Violation or Modification or
Recission of Exclusion or Order.
(1) Except as provided in subsections (f) and (j), any exclusion from
entry or order under this section shall continue in effect until the
1252
Commission finds, and in the case of exclusion from entry notifies the
Secretary of the Treasury, that the conditions which led to such exclusion
from entry or order no longer exist.
(2) If any person who has previously been found by the Commission to
be in violation of this section petitions the Commission for a determination
that the petitioner is no longer in violation of this section or for a
modification or rescission of an exclusion from entry or order under
subsection (d), (e), (f), (g), or (i)—
(A) the burden of proof in any proceeding before the Commission
regarding such petition shall be on the petitioner; and
(B) relief may be granted by the Commission with respect to such
petition—
(i) on the basis of new evidence or evidence that could not have
been presented at the prior proceeding, or
(ii) on grounds which would permit relief from a judgment or
order under the Federal Rules of Civil Procedure.
(l) Importations by or for United States. Any exclusion from entry or order
under subsection (d), (e), (f), (g), or (i) in cases based on a proceeding
involving a patent copyright, mask work, or design under subsection (a)(1),
shall not apply to any articles imported by and for the use of the United States,
or imported for, and to be used for, the United States with the authorization or
consent of the Government. Whenever any article would have been excluded
from entry or would not have been entered pursuant to the provisions of such
subsections but for the operation of this subsection, an owner of the patent,
copyright, mask work, or design adversely affected shall be entitled to
reasonable and entire compensation in an action before the United States Court
of Federal Claims pursuant to the procedures of section 1498 of title 28, United
States Code.
(m) Definition of United States. For purposes of this section and sections
338 and 340, the term “United States” means the customs territory of the United
States as defined in general note 2 of the Harmonized Tariff Schedule of the
United States.
(n) Disclosure.
(1) Information submitted to the Commission or exchanged among the
parties in connection with proceedings under this section which is properly
designated as confidential pursuant to Commission rules may not be
disclosed (except under a protective order issued under regulations of the
Commission which authorizes limited disclosure of such information) to any
1253
person (other than a person described in paragraph (2)) without the consent
of the person submitting it.
( 2 ) Notwithstanding the prohibition contained in paragraph (1),
information referred to in that paragraph may be disclosed to—
( A ) an officer or employee of the Commission who is directly
concerned with—
( i ) carrying out the investigation or related proceeding in
connection with which the information is submitted,
(ii) the administration of a bond posted pursuant to subsection
(e), (f), or (j),
(iii) the administration or enforcement of an exclusion order
issued pursuant to subsection (d), (e), or (g), a cease and desist
order issued pursuant to subsection (f), or a consent order issued
pursuant to subsection (c),
( i v ) proceedings for the modification or rescission of a
temporary or permanent order issued under subsection (d), (e), (f),
(g), or (i), or a consent order issued under this section, or
(v) maintaining the administrative record of the investigation or
related proceeding,
(B) an officer or employee of the United States Government who is
directly involved in the review under subsection (j), or
(C) an officer or employee of the United States Customs Service
who is directly involved in administering an exclusion from entry under
subsection (d), (e), or (g) resulting from the investigation or related
proceeding in connection with which the information is submitted.
Leg.H. June 17, 1930, ch 497, Title III, Part II, § 337, 46 Stat. 703; Aug. 20, 1958, P.L.
85-686, § 9(c)(1), 72 Stat. 679; Jan. 3, 1975, P.L. 93-618, Title III, Ch 4, § 341(a), 88 Stat.
2053; July 26, 1979, P.L. 96-39, Title I, § 106(b)(1), Title XI, § 1105, 93 Stat. 193, 310;
Oct. 10, 1980, P.L. 96-417, Title VI, § 604, 94 Stat. 1744; April 2, 1982, P.L. 97-164, Title
I, Part B, §§ 160(a)(5), 163(a)(4), 96 Stat. 48, 49; Nov. 8, 1984, P.L. 98-620, Title IV,
Subtitle C, § 413, 98 Stat. 3362; Aug. 23, 1988, P.L. 100-418, Title I, Subtitle B, § 1214(h)
(3), Subtitle C, Part 3, § 1342(a), (b), 102 Stat. 1157, 1212; Nov. 10, 1988, P.L. 100-647,
Title IX, § 9001(a)(7), (12), 102 Stat. 3807; Oct. 28, 1992, P.L. 102-563, § 3(d), 104 Stat.
4248; Dec. 8, 1994, P.L. 103-465, Title II, Subtitle B, Part 2, § 261(d)(1)(B)(ii), Title III,
Subtitle C, § 321(a), 108 Stat. 4909, 4910, 4943; Oct. 11, 1996, P.L. 104-295, §§ 20(b)(11),
(12), (c)(2), 110 Stat. 3527, 3528; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113
Stat. 1536; Dec. 3, 2004, P.L. 108-429, Title II, Subtitle A, § 2004(d)(5), 118 Stat. 2592.
SUBTITLE III
1254
Administrative Provisions
PART III
Ascertainment, Collection, and Recovery of Duties

(a) Importation Prohibited. Except as provided in subsection (d) of this
section, it shall be unlawful to import into the United States any merchandise of
foreign manufacture if such merchandise, or the label, sign, print, package,
wrapper, or receptacle, bears a trademark owned by a citizen of, or by a
corporation or association created or organized within, the United States, and
registered in the Patent and Trademark Office by a person domiciled in the
United States, under the provisions of sections 81 to 109 of Title 15, and if a
copy of the certificate of registration of such trademark is filed with the
Secretary of the Treasury, in the manner provided in section 106 of said Title
15, unless written consent of the owner of such trademark is produced at the
time of making entry.
(b) Seizure and Forfeiture. Any such merchandise imported into the United
States in violation of the provisions of this section shall be subject to seizure
and forfeiture for violation of the customs laws.
(c) Injunction and Damages. Any person dealing in any such merchandise
may be enjoined from dealing therein within the United States or may be
required to export or destroy such merchandise or to remove or obliterate such
trademark and shall be liable for the same damages and profits provided for
wrongful use of a trademark, under the provisions of sections 81 to 109 of Title
15.
(d) Exemptions; Publication in Federal Register; Forfeitures; Rules and
Regulations.
(1) The trademark provisions of this section and section 1124 of Title
15, do not apply to the importation of articles accompanying any person
arriving in the United States when such articles are for his personal use and
not for sale if (A) such articles are within the limits of types and quantities
determined by the Secretary pursuant to paragraph (2) of this subsection,
and (B) such person has not been granted an exemption under this subsection
within thirty days immediately preceding his arrival.
(2) The Secretary shall determine and publish in the Federal Register
1255
lists of the types of articles and the quantities of each which shall be entitled
to the exemption provided by this subsection. In determining such quantities
of particular types of trade-marked articles, the Secretary shall give such
consideration as he deems necessary to the numbers of such articles usually
purchased at retail for personal use.
( 3) If any article which has been exempted from the restrictions on
importation of the trade-mark laws under this subsection is sold within one
year after the date of importation, such article, or its value (to be recovered
from the importer), is subject to forfeiture. A sale pursuant to a judicial
order or in liquidation of the estate of a decedent is not subject to the
provisions of this paragraph.
(4) The Secretary may prescribe such rules and regulations as may be
necessary to carry out the provisions of this subsection.
(e) Merchandise Bearing Counterfeit Mark; Seizure and Forfeiture;
Disposition of Seized Goods. Any such merchandise bearing a counterfeit mark
(within the meaning of section 1127 of Title 15) imported into the United States
in violation of the provisions of section 1124 of Title 15, shall be seized and, in
the absence of the written consent of the trademark owner, forfeited for
violations of the customs laws. Upon seizure of such merchandise, the Secretary
shall notify the owner of the trademark, and shall, after forfeiture, destroy the
merchandise. Alternatively, if the merchandise is not unsafe or a hazard to
health, and the Secretary has the consent of the trademark owner, the Secretary
may obliterate the trademark where feasible and dispose of the goods seized—
(1) by delivery to such Federal, State, and local government agencies as
in the opinion of the Secretary have a need for such merchandise,
(2) by gift to such eleemosynary institutions as in the opinion of the
Secretary have a need for such merchandise, or
(3) more than 90 days after the date of forfeiture, by sale by the Customs
Service at public auction under such regulations as the Secretary prescribes,
except that before making any such sale the Secretary shall determine that no
Federal, State, or local government agency or eleemosynary institution has
established a need for such merchandise under paragraph (1) or (2).
(f) Civil Penalties.
(1) Any person who directs, assists financially or otherwise, or aids and
abets the importation of merchandise for sale or public distribution that is
seized under subsection (e) shall be subject to a civil fine.
(2) For the first such seizure, the fine shall be not more than the value
that the merchandise would have had if it were genuine, according to the
1256
manufacturer’s suggested retail price, determined under regulations
promulgated by the Secretary.
(3) For the second seizure and thereafter, the fine shall be not more than
twice the value that the merchandise would have had if it were genuine, as
determined under regulations promulgated by the Secretary.
(4) The imposition of a fine under this subsection shall be within the
discretion of the Customs Service, and shall be in addition to any other civil
or criminal penalty or other remedy authorized by law.
Leg.H. June 17, 1930, ch. 497 § 526, 46 Stat. 741; October 3, 1978, P.L. 95-410 §
211(a), (c), 92 Stat. 903; December 8, 1993, P.L. 103-182 § 663, 107 Stat. 2214; July 2,
1996, P.L. 104-153 §§ 9, 10, 110 Stat. 1388.
CHAPTER 12
TRADE ACT OF 1974

SUBCHAPTER I
Negotiating and Other Authority

PART 8
Identification of Market Barriers and Certain Unfair

Trade Actions
§ 2242. Identification of Countries That Deny Adequate

Protection, or Market Access, for Intellectual
Property Rights.
(a) In General. By no later than the date that is 30 days after the date on
which the annual report is submitted to Congressional committees under section
2241(b) of this title, the United States Trade Representative (hereafter in this
section referred to as the “Trade Representative”) shall identify—
(1) those foreign countries that—
1257
(A) deny adequate and effective protection of intellectual property
rights, or
(B) deny fair and equitable market access to United States persons
that rely upon intellectual property protection, and
( 2 ) those foreign countries identified under paragraph (1) that are
determined by the Trade Representative to be priority foreign countries.
(b) Special Rules for Identifications.
(1) In identifying priority foreign countries under subsection (a)(2) of
this section, the Trade Representative shall only identify those foreign
countries—
( A ) that have the most onerous or egregious acts, policies, or
practices that—
(i) deny adequate and effective intellectual property rights, or
( i i ) deny fair and equitable market access to United States
persons that rely upon intellectual property protection,
( B) whose acts, policies, or practices described in subparagraph
(A) have the greatest adverse impact (actual or potential) on the relevant
United States products, and
(C) that are not—
(i) entering into good faith negotiations, or
( i i ) making significant progress in bilateral or multilateral
negotiations,
to provide adequate and effective protection of intellectual
property rights.
(2) In identifying priority foreign countries under subsection (a)(2) of
this section, the Trade Representative shall—
(A) consult with the Register of Copyrights, the Under Secretary of
Commerce for Intellectual Property and Director of the United States
Patent and Trademark Office, other appropriate officers of the Federal
Government, and
( B ) take into account information from such sources as may be
available to the Trade Representative and such information as may be
submitted to the Trade Representative by interested persons, including
information contained in reports submitted under section 2241(b) of this
title and petitions submitted under section 2412 of this title.
1258
( 3 ) The Trade Representative may identify a foreign country under
subsection (a)(1)(B) of this section only if the Trade Representative finds
that there is a factual basis for the denial of fair and equitable market access
as a result of the violation of international law or agreement, or the
existence of barriers, referred to in subsection (d)(3) of this section.
( 4) In identifying foreign countries under paragraphs (1) and (2) of
subsection (a), the Trade Representative shall take into account—
( A) the history of intellectual property laws and practices of the
foreign country, including any previous identification under subsection
(a)(2), and
(B) the history of efforts of the United States, and the response of the
foreign country, to achieve adequate and effective protection and
enforcement of intellectual property rights.
(c) Revocations and Additional Identifications.
(1) The Trade Representative may at any time—
( A) revoke the identification of any foreign country as a priority
foreign country under this section, or
(B) identify any foreign country as a priority foreign country under
this section,
if information available to the Trade Representative indicates that
such action is appropriate.
( 2) The Trade Representative shall include in the semiannual report
submitted to the Congress under section 2419(3) of this title a detailed
explanation of the reasons for the revocation under paragraph (1) of the
identification of any foreign country as a priority foreign country under this
section.
(d) Definitions. For purposes of this section—
(1) The term “persons that rely upon intellectual property protection”
means persons involved in—
( A) the creation, production or licensing of works of authorship
(within the meaning of sections 102 and 103 of Title 17) that are
copyrighted, or
(B) the manufacture of products that are patented or for which there
are process patents.
( 2 ) A foreign country denies adequate and effective protection of
1259
intellectual property rights if the foreign country denies adequate and
effective means under the laws of the foreign country for persons who are
not citizens or nationals of such foreign country to secure, exercise, and
enforce rights relating to patents, process patents, registered trademarks,
copyrights and mask works.
( 3) A foreign country denies fair and equitable market access if the
foreign country effectively denies access to a market for a product protected
by a copyright or related right, patent, trademark, mask work, trade secret,
or plant breeder’s right, through the use of laws, procedures, practices, or
regulations which—
( A ) violate provisions of international law or international
agreements to which both the United States and the foreign country are
parties, or
(B) constitute discriminatory nontariff trade barriers.
(4) A foreign country may be determined to deny adequate and effective
protection of intellectual property rights, notwithstanding the fact that the
foreign country may be in compliance with the specific obligations of the
Agreement on Trade-Related Aspects of Intellectual Property Rights
referred to in section 101(d)(15) of the Uruguay Round Agreements Act.
(e) Publication. The Trade Representative shall publish in the Federal
Register a list of foreign countries identified under subsection (a) of this section
and shall make such revisions to the list as may be required by reason of action
under subsection (c) of this section.
(f) Special Rule for Actions Affecting United States Cultural Industries.
(1) In General. By no later than the date that is 30 days after the date on
which the annual report is submitted to Congressional committees under
section 181(b), the Trade Representative shall identify any act, policy, or
practice of Canada which—
(A) affects cultural industries,
(B) is adopted or expanded after December 17, 1992, and
(C) is actionable under article 2106 of the North American Free
Trade Agreement.
(2) Special Rules for Identifications. For purposes of section 302(b)
(2)(A), an act, policy, or practice identified under this subsection shall be
treated as an act, policy, or practice that is the basis for identification of a
country under subsection (a)(2), unless the United States has already taken
action pursuant to article 2106 of the North American Free Trade
1260
Agreement in response to such act, policy, or practice. In deciding whether
to identify an act, policy, or practice under paragraph (1), the Trade
Representative shall—
(A) consult with and take into account the views of representatives
of the relevant domestic industries, appropriate committees established
pursuant to section 135, and appropriate officers of the Federal
Government, and
(B) take into account the information from such sources as may be
available to the Trade Representative and such information as may be
submitted to the Trade Representative by interested persons, including
information contained in reports submitted under section 181(b).
(3) Cultural Industries. For purposes of this subsection, the term
“cultural industries” means persons engaged in any of the following
activities:
( A ) The publication, distribution, or sale of books, magazines,
periodicals, or newspapers in print or machine readable form but not
including the sole activity of printing or typesetting any of the foregoing.
(B) The production, distribution, sale, or exhibition of film or video
recordings.
( C ) The production, distribution, sale, or exhibition of audio or
video music recordings.
( D ) The publication, distribution, or sale of music in print or
machine readable form.
(E) Radio communications in which the transmissions are intended
for direct reception by the general public, and all radio, television, and
cable broadcasting undertakings and all satellite programming and
broadcast network services.
(g) Annual Report. The Trade Representative shall, by not later than the
date by which countries are identified under subsection (a), transmit to the
Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate, a report on actions taken under this section
during the 12 months preceding such report, and the reasons for such actions,
including a description of progress made in achieving improved intellectual
property protection and market access for persons relying on intellectual
property rights.
Leg.H. Jan. 3, 1975, P.L. 93-618, Title III, Ch 8, § 182, as added Aug. 23, 1988, P.L.
100-418, Title I, Subtitle C, Part 1, § 1303(b), 102 Stat. 1179; Dec. 8, 1993, P.L. 103-182,
Title V, Subtitle B, § 513, 107 Stat. 2156; Dec. 8, 1994, P.L. 103-465, Title III, Subtitle B, §
1261
313, 108 Stat. 4938; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat. 1536.
TITLE 20
EDUCATION
Contents
CHAPTER 48 DEPARTMENT OF EDUCATION

SUBCHAPTER IV Administrative Provisions
PART B General Administrative Provisions
CHAPTER 48
DEPARTMENT OF EDUCATION
SUBCHAPTER IV
Administrative Provisions
PART B
General Administrative Provisions

The Secretary is authorized to acquire any of the following described rights
if the property acquired thereby is for use by or for, or useful to, the
Department:
( 1 ) copyrights, patents, and applications for patents, designs,
processes, and manufacturing data;
(2) licenses under copyrights, patents, and applications for patents;
and
(3) releases, before suit is brought, for past infringement of patents
or copyrights.
1262
TITLE 21
FOOD AND DRUGS
Contents
CHAPTER 9 FEDERAL FOOD, DRUG, AND COSMETIC ACT

SUBCHAPTER V Drugs and Devices
§ 355. New Drugs.
§ 355c. Research into pediatric uses for drugs and biological products.
§ 355c-1. Report.
§ 355d. Internal Committee for Review of Pediatric Plans, Assessments, Deferrals,
Deferral Extensions, and Waivers.
§ 355f. Extension of Exclusivity Period for New Qualified Infectious Disease
Products.
PART B Drugs for Rare Diseases or Conditions
§ 360aa. Recommendations for Investigations of Drugs for Rare Diseases or
Conditions.
§ 360bb. Designation of Drugs for Rare Diseases or Conditions.
§ 360cc. Protection for Unpatented Drugs for Rare Diseases or Conditions.
§ 360dd. Open Protocols for Investigations of Drugs for Rare Diseases or
Conditions.
§ 360ee. Grants and Contracts for Development of Drugs for Rare Diseases and
Conditions.
§ 360ff. Priority Review to Encourage Treatments for Rare Pediatric Diseases.
SUBCHAPTER VII General Administrative Provisions
CHAPTER 9
FEDERAL FOOD, DRUG, AND COSMETIC

ACT
SUBCHAPTER V
1263
Drugs and Devices
§ 355. New Drugs.

( a ) Necessity of effective approval of application. No person shall
introduce or deliver for introduction into interstate commerce any new drug,
unless an approval of an application filed pursuant to subsection (b) or (j) is
effective with respect to such drug.
(b) Filing application; contents.
(1) Any person may file with the Secretary an application with respect
to any drug subject to the provisions of subsection (a). Such person shall
submit to the Secretary as a part of the application (A) full reports of
investigations which have been made to show whether or not such drug is
safe for use and whether such drug is effective in use; (B) a full list of the
articles used as components of such drug; (C) a full statement of the
composition of such drug; (D) a full description of the methods used in, and
the facilities and controls used for, the manufacture, processing, and packing
of such drug; (E) such samples of such drug and of the articles used as
components thereof as the Secretary may require; (F) specimens of the
labeling proposed to be used for such drug, and (G) any assessments
required under section 505B [21 USCS § 355c]. The applicant shall file
with the application the patent number and the expiration date of any patent
which claims the drug for which the applicant submitted the application or
which claims a method of using such drug and with respect to which a claim
of patent infringement could reasonably be asserted if a person not licensed
by the owner engaged in the manufacture, use, or sale of the drug. If an
application is filed under this subsection for a drug and a patent which
claims such drug or a method of using such drug is issued after the filing
date but before approval of the application, the applicant shall amend the
application to include the information required by the preceding sentence.
Upon approval of the application, the Secretary shall publish information
submitted under the two preceding sentences. The Secretary shall, in
consultation with the Director of the National Institutes of Health and with
representatives of the drug manufacturing industry, review and develop
guidance, as appropriate, on the inclusion of women and minorities in
clinical trials required by clause (A).
(2) An application submitted under paragraph (1) for a drug for which
the investigations described in clause (A) of such paragraph and relied upon
by the applicant for approval of the application were not conducted by or
1264
for the applicant and for which the applicant has not obtained a right of
reference or use from the person by or for whom the investigations were
conducted shall also include—
(A) a certification, in the opinion of the applicant and to the best of
his knowledge, with respect to each patent which claims the drug for
which such investigations were conducted or which claims a use for
such drug for which the applicant is seeking approval under this
subsection and for which information is required to be filed under
paragraph (1) or subsection (c)—
(i) that such patent information has not been filed,
(ii) that such patent has expired,
(iii) of the date on which such patent will expire, or
(iv) that such patent is invalid or will not be infringed by the
manufacture, use, or sale of the new drug for which the application is
submitted; and
(B) if with respect to the drug for which investigations described in
paragraph (1)(A) were conducted information was filed under
paragraph (1) or subsection (c) for a method of use patent which does
not claim a use for which the applicant is seeking approval under this
subsection, a statement that the method of use patent does not claim such
a use.
(3) Notice of opinion that patent is invalid or will not be infringed.
(A) Agreement to give notice. An applicant that makes a
certification described in paragraph (2)(A)(iv) shall include in the
application a statement that the applicant will give notice as required by
this paragraph.
(B) Timing of notice. An applicant that makes a certification
described in paragraph (2)(A)(iv) shall give notice as required under
this paragraph—
(i) if the certification is in the application, not later than 20 days
after the date of the postmark on the notice with which the Secretary
informs the applicant that the application has been filed; or
(ii) if the certification is in an amendment or supplement to the
application, at the time at which the applicant submits the amendment
or supplement, regardless of whether the applicant has already given
notice with respect to another such certification contained in the
application or in an amendment or supplement to the application.
1265
(C) Recipients of notice. An applicant required under this
paragraph to give notice shall give notice to—
(i) each owner of the patent that is the subject of the certification
(or a representative of the owner designated to receive such a
notice); and
(ii) the holder of the approved application under this subsection
for the drug that is claimed by the patent or a use of which is claimed
by the patent (or a representative of the holder designated to receive
such a notice).
(D) Contents of notice. A notice required under this paragraph shall
—
(i) state that an application that contains data from bioavailability
or bioequivalence studies has been submitted under this subsection
for the drug with respect to which the certification is made to obtain
approval to engage in the commercial manufacture, use, or sale of the
drug before the expiration of the patent referred to in the
certification; and
(ii) include a detailed statement of the factual and legal basis of
the opinion of the applicant that the patent is invalid or will not be
infringed.
(4)
( A ) An applicant may not amend or supplement an application
referred to in paragraph (2) to seek approval of a drug that is a different
drug than the drug identified in the application as submitted to the
Secretary.
( B ) With respect to the drug for which such an application is
submitted, nothing in this subsection or subsection (c)(3) prohibits an
applicant from amending or supplementing the application to seek
approval of a different strength.
(5)
( A ) The Secretary shall issue guidance for the individuals who
review applications submitted under paragraph (1) or under section 351
of the Public Health Service Act [42 USCS § 262], which shall relate to
promptness in conducting the review, technical excellence, lack of bias
and conflict of interest, and knowledge of regulatory and scientific
standards, and which shall apply equally to all individuals who review
such applications.
1266
(B) The Secretary shall meet with a sponsor of an investigation or an
applicant for approval for a drug under this subsection or section 351 of
the Public Health Service Act [42 USCS § 262] if the sponsor or
applicant makes a reasonable written request for a meeting for the
purpose of reaching agreement on the design and size—
(i)
(I) of clinical trials intended to form the primary basis of an
effectiveness claim; or
(II) in the case where human efficacy studies are not ethical or
feasible, of animal and any associated clinical trials which, in
combination, are intended to form the primary basis of an
effectiveness claim; or
(ii) with respect to an application for approval of a biological
product under section 351(k) of the Public Health Service Act [42
USCS § 262(k)], of any necessary clinical study or studies.
The sponsor or applicant shall provide information necessary for
discussion and agreement on the design and size of the clinical trials.
Minutes of any such meeting shall be prepared by the Secretary and
made available to the sponsor or applicant upon request.
(C) Any agreement regarding the parameters of the design and size of
clinical trials of a new drug under this paragraph that is reached
between the Secretary and a sponsor or applicant shall be reduced to
writing and made part of the administrative record by the Secretary.
Such agreement shall not be changed after the testing begins, except—
(i) with the written agreement of the sponsor or applicant; or
( i i ) pursuant to a decision, made in accordance with
subparagraph (D) by the director of the reviewing division, that a
substantial scientific issue essential to determining the safety or
effectiveness of the drug has been identified after the testing has
begun.
(D) A decision under subparagraph (C)(ii) by the director shall be
in writing and the Secretary shall provide to the sponsor or applicant an
opportunity for a meeting at which the director and the sponsor or
applicant will be present and at which the director will document the
scientific issue involved.
(E) The written decisions of the reviewing division shall be binding
upon, and may not directly or indirectly be changed by, the field or
compliance division personnel unless such field or compliance division
1267
personnel demonstrate to the reviewing division why such decision
should be modified.
(F) No action by the reviewing division may be delayed because of
the unavailability of information from or action by field personnel unless
the reviewing division determines that a delay is necessary to assure the
marketing of a safe and effective drug.
(G) For purposes of this paragraph, the reviewing division is the
division responsible for the review of an application for approval of a
drug under this subsection or section 351 of the Public Health Service
Act [42 USCS § 262] (including all scientific and medical matters,
chemistry, manufacturing, and controls).
( 6 ) An application submitted under this subsection shall be
accompanied by the certification required under section 402(j)(5)(B) of the
Public Health Service Act [42 USCS § 282(j)(5)(B)]. Such certification
shall not be considered an element of such application.
( c ) Period for approval of application; period for, notice, and
expedition of hearing; period for issuance of order.
(1) Within one hundred and eighty days after the filing of an application
under subsection (b), or such additional period as may be agreed upon by
the Secretary and the applicant, the Secretary shall either—
(A) approve the application if he then finds that none of the grounds
for denying approval specified in subsection (d) applies, or
(B) give the applicant notice of an opportunity for a hearing before
the Secretary under subsection (d) on the question whether such
application is approvable. If the applicant elects to accept the
opportunity for hearing by written request within thirty days after such
notice, such hearing shall commence not more than ninety days after the
expiration of such thirty days unless the Secretary and the applicant
otherwise agree. Any such hearing shall thereafter be conducted on an
expedited basis and the Secretary’s order thereon shall be issued within
ninety days after the date fixed by the Secretary for filing final briefs.
(2) If the patent information described in subsection (b) could not be
filed with the submission of an application under subsection (b) because the
application was filed before the patent information was required under
subsection (b) or a patent was issued after the application was approved
under such subsection, the holder of an approved application shall file with
the Secretary the patent number and the expiration date of any patent which
claims the drug for which the application was submitted or which claims a
1268
method of using such drug and with respect to which a claim of patent
infringement could reasonably be asserted if a person not licensed by the
owner engaged in the manufacture, use, or sale of the drug. If the holder of
an approved application could not file patent information under subsection
(b) because it was not required at the time the application was approved,
the holder shall file such information under this subsection not later than
thirty days after the date of the enactment of this sentence, and if the holder
of an approved application could not file patent information under
subsection (b) because no patent had been issued when an application was
filed or approved, the holder shall file such information under this
subsection not later than thirty days after the date the patent involved is
issued. Upon the submission of patent information under this subsection, the
Secretary shall publish it.
(3) The approval of an application filed under subsection (b) which
contains a certification required by paragraph (2) of such subsection shall
be made effective on the last applicable date determined by applying the
following to each certification made under subsection (b)(2)(A):
(A) If the applicant only made a certification described in clause (i)
or (ii) of subsection (b)(2)(A) or in both such clauses, the approval may
be made effective immediately.
(B) If the applicant made a certification described in clause (iii) of
subsection (b)(2)(A), the approval may be made effective on the date
certified under clause (iii).
(C) If the applicant made a certification described in clause (iv) of
subsection (b)(2)(A), the approval shall be made effective immediately
unless, before the expiration of 45 days after the date on which the
notice described in subsection (b)(3) is received, an action is brought
for infringement of the patent that is the subject of the certification and
for which information was submitted to the Secretary under paragraph
(2) or subsection (b)(1) before the date on which the application
(excluding an amendment or supplement to the application) was
submitted. If such an action is brought before the expiration of such days,
the approval may be made effective upon the expiration of the thirty-
month period beginning on the date of the receipt of the notice provided
under subsection (b)(3) or such shorter or longer period as the court may
order because either party to the action failed to reasonably cooperate in
expediting the action, except that—
( i ) if before the expiration of such period the district court
decides that the patent is invalid or not infringed (including any
substantive determination that there is no cause of action for patent
1269
infringement or invalidity), the approval shall be made effective on
—
(I) the date on which the court enters judgment reflecting the
decision; or
(II) the date of a settlement order or consent decree signed
and entered by the court stating that the patent that is the subject
of the certification is invalid or not infringed;
(i i ) if before the expiration of such period the district court
decides that the patent has been infringed—
( I ) if the judgment of the district court is appealed, the
approval shall be made effective on—
(aa) the date on which the court of appeals decides that the
patent is invalid or not infringed (including any substantive
determination that there is no cause of action for patent
infringement or invalidity); or
(bb) the date of a settlement order or consent decree signed
and entered by the court of appeals stating that the patent that
is the subject of the certification is invalid or not infringed; or
(II) if the judgment of the district court is not appealed or is
affirmed, the approval shall be made effective on the date
specified by the district court in a court order under section
271(e)(4)(A) of title 35, United States Code;
(iii) if before the expiration of such period the court grants a
preliminary injunction prohibiting the applicant from engaging in the
commercial manufacture or sale of the drug until the court decides
the issues of patent validity and infringement and if the court decides
that such patent is invalid or not infringed, the approval shall be
made effective as provided in clause (i); or
(iv) if before the expiration of such period the court grants a
preliminary injunction prohibiting the applicant from engaging in the
commercial manufacture or sale of the drug until the court decides
the issues of patent validity and infringement and if the court decides
that such patent has been infringed, the approval shall be made
effective as provided in clause (ii). In such an action, each of the
parties shall reasonably cooperate in expediting the action.
(D) Civil action to obtain patent certainty.
(i) Declaratory judgment absent infringement action.
1270
(I) In general. No action may be brought under section 2201 of
title 28, United States Code, by an applicant referred to in
subsection (b)(2) for a declaratory judgment with respect to a
patent which is the subject of the certification referred to in
subparagraph (C) unless
(aa) the 45-day period referred to in such subparagraph has
expired;
(bb) neither the owner of such patent nor the holder of the
approved application under subsection (b) for the drug that is
claimed by the patent or a use of which is claimed by the
patent brought a civil action against the applicant for
infringement of the patent before the expiration of such period;
and
( c c ) in any case in which the notice provided under
paragraph (2)(B) relates to noninfringement, the notice was
accompanied by a document described in subclause (III).
(II) Filing of civil action. If the conditions described in items
(aa), (bb), and as applicable, (cc) of subclause (I) have been met,
the applicant referred to in such subclause may, in accordance
with section 2201 of title 28, United States Code, bring a civil
action under such section against the owner or holder referred to
in such subclause (but not against any owner or holder that has
brought such a civil action against the applicant, unless that civil
action was dismissed without prejudice) for a declaratory
judgment that the patent is invalid or will not be infringed by the
drug for which the applicant seeks approval, except that such
civil action may be brought for a declaratory judgment that the
patent will not be infringed only in a case in which the condition
described in subclause (I)(cc) is applicable. A civil action
referred to in this subclause shall be brought in the judicial
district where the defendant has its principal place of business or
a regular and established place of business.
(III) Offer of confidential access to application. For purposes
of subclause (I)(cc), the document described in this subclause is
a document providing an offer of confidential access to the
application that is in the custody of the applicant referred to in
subsection (b)(2) for the purpose of determining whether an
action referred to in subparagraph (C) should be brought. The
document providing the offer of confidential access shall contain
such restrictions as to persons entitled to access, and on the use
1271
and disposition of any information accessed, as would apply had
a protective order been entered for the purpose of protecting
trade secrets and other confidential business information. A
request for access to an application under an offer of confidential
access shall be considered acceptance of the offer of confidential
access with the restrictions as to persons entitled to access, and
on the use and disposition of any information accessed, contained
in the offer of confidential access, and those restrictions and
other terms of the offer of confidential access shall be considered
terms of an enforceable contract. Any person provided an offer of
confidential access shall review the application for the sole and
limited purpose of evaluating possible infringement of the patent
that is the subject of the certification under subsection (b)(2)(A)
(iv) and for no other purpose, and may not disclose information
of no relevance to any issue of patent infringement to any person
other than a person provided an offer of confidential access.
Further, the application may be redacted by the applicant to
remove any information of no relevance to any issue of patent
infringement.
(ii) Counterclaim to infringement action.
(I) In general. If an owner of the patent or the holder of the
claimed by the patent or a use of which is claimed by the patent
brings a patent infringement action against the applicant, the
applicant may assert a counterclaim seeking an order requiring
the holder to correct or delete the patent information submitted by
the holder under subsection (b) or this subsection on the ground
that the patent does not claim either—
(aa) the drug for which the application was approved; or
(bb) an approved method of using the drug.
(II) No independent cause of action. Subclause (I) does not
authorize the assertion of a claim described in subclause (I) in
any civil action or proceeding other than a counterclaim
described in subclause (I).
(iii) No damages. An applicant shall not be entitled to damages
in a civil action under clause (i) or a counterclaim under clause (ii).
(E)
( i ) If an application (other than an abbreviated new drug
application) submitted under subsection (b) for a drug, no active
1272
ingredient (including any ester or salt of the active ingredient) of
which has been approved in any other application under subsection
(b), was approved during the period beginning January 1, 1982, and
ending on the date of the enactment of this subsection, the Secretary
may not make the approval of another application for a drug for
which the investigations described in clause (A) of subsection (b)(1)
and relied upon by the applicant for approval of the application were
not conducted by or for the applicant and for which the applicant has
not obtained a right of reference or use from the person by or for
whom the investigations were conducted effective before the
expiration of ten years from the date of the approval of the
application previously approved under subsection (b).
(ii) If an application submitted under subsection (b) for a drug,
no active ingredient (including any ester or salt of the active
ingredient) of which has been approved in any other application
under subsection (b), is approved after the date of the enactment of
this clause [enacted Sept. 24, 1984], no application which refers to
the drug for which the subsection (b) application was submitted and
for which the investigations described in clause (A) of subsection
(b)(1) and relied upon by the applicant for approval of the
application were not conducted by or for the applicant and for which
the applicant has not obtained a right of reference or use from the
person by or for whom the investigations were conducted may be
submitted under subsection (b) before the expiration of five years
from the date of the approval of the application under subsection (b),
except that such an application may be submitted under subsection
(b) after the expiration of four years from the date of the approval of
the subsection (b) application if it contains a certification of patent
invalidity or noninfringement described in clause (iv) of subsection
(b)(2)(A). The approval of such an application shall be made
effective in accordance with this paragraph except that, if an action
for patent infringement is commenced during the one-year period
beginning forty-eight months after the date of the approval of the
subsection (b) application, the thirty-month period referred to in
subparagraph (C) shall be extended by such amount of time (if any)
which is required for seven and one-half years to have elapsed from
the date of approval of the subsection (b) application.
(iii) If an application submitted under subsection (b) for a drug,
which includes an active ingredient (including any ester or salt of the
active ingredient) that has been approved in another application
approved under subsection (b), is approved after the date of the
enactment of this clause [enacted Sept. 24, 1984] and if such
1273
application contains reports of new clinical investigations (other
than bioavailability studies) essential to the approval of the
application and conducted or sponsored by the applicant, the
Secretary may not make the approval of an application submitted
under subsection (b) for the conditions of approval of such drug in
the approved subsection (b) application effective before the
expiration of three years from the date of the approval of the
application under subsection (b) if the investigations described in
clause (A) of subsection (b)(1) and relied upon by the applicant for
approval of the application were not conducted by or for the
applicant and if the applicant has not obtained a right of reference or
use from the person by or for whom the investigations were
conducted.
(iv) If a supplement to an application approved under subsection
(b) is approved after the date of enactment of this clause [enacted
Sept. 24, 1984] and the supplement contains reports of new clinical
investigations (other than bioavailabilty [bioavailability] studies)
essential to the approval of the supplement and conducted or
sponsored by the person submitting the supplement, the Secretary
may not make the approval of an application submitted under
subsection (b) for a change approved in the supplement effective
before the expiration of three years from the date of the approval of
the supplement under subsection (b) if the investigations described in
applicant and if the applicant has not obtained a right of reference or
use from the person by or for whom the investigations were
conducted.
(v) If an application (or supplement to an application) submitted
under subsection (b) for a drug, which includes an active ingredient
(including any ester or salt of the active ingredient) that has been
approved in another application under subsection (b), was approved
during the period beginning January 1, 1982, and ending on the date
of the enactment of this clause [enacted Sept. 24, 1984], the
under this subsection and for which the investigations described in
applicant and for which the applicant has not obtained a right of
reference or use from the person by or for whom the investigations
were conducted and which refers to the drug for which the
subsection (b) application was submitted effective before the
1274
expiration of two years from the date of enactment of this clause
[enacted Sept. 24, 1984].
(4) A drug manufactured in a pilot or other small facility may be used to
demonstrate the safety and effectiveness of the drug and to obtain approval
for the drug prior to manufacture of the drug in a larger facility, unless the
Secretary makes a determination that a full scale production facility is
necessary to ensure the safety or effectiveness of the drug.
( d ) Grounds for refusing application; approval of application;
“substantial evidence” defined. If the Secretary finds, after due notice to the
applicant in accordance with subsection (c) and giving him an opportunity for a
hearing, in accordance with said subsection, that (1) the investigations, reports
of which are required to be submitted to the Secretary pursuant to subsection
(b), do not include adequate tests by all methods reasonably applicable to show
whether or not such drug is safe for use under the conditions prescribed,
recommended, or suggested in the proposed labeling thereof; (2) the results of
such tests show that such drug is unsafe for use under such conditions or do not
show that such drug is safe for use under such conditions; (3) the methods used
in, and the facilities and controls used for, the manufacture, processing, and
packing of such drug are inadequate to preserve its identity, strength, quality,
and purity; (4) upon the basis of the information submitted to him as part of the
application, or upon the basis of any other information before him with respect
to such drug, he has insufficient information to determine whether such drug is
safe for use under such conditions; or (5) evaluated on the basis of the
information submitted to him as part of the application and any other information
before him with respect to such drug, there is a lack of substantial evidence that
the drug will have the effect it purports or is represented to have under the
conditions of use prescribed, recommended, or suggested in the proposed
labeling thereof; or (6) the application failed to contain the patent information
prescribed by subsection (b); or (7) based on a fair evaluation of all material
facts, such labeling is false or misleading in any particular; he shall issue an
order refusing to approve the application. If, after such notice and opportunity
for hearing, the Secretary finds that clauses (1) through (6) do not apply, he shall
issue an order approving the application. As used in this subsection and
subsection (e), the term “substantial evidence” means evidence consisting of
adequate and well-controlled investigations, including clinical investigations,
by experts qualified by scientific training and experience to evaluate the
effectiveness of the drug involved, on the basis of which it could fairly and
responsibly be concluded by such experts that the drug will have the effect it
purports or is represented to have under the conditions of use prescribed,
recommended, or suggested in the labeling or proposed labeling thereof. If the
Secretary determines, based on relevant science, that data from one adequate
and well-controlled clinical investigation and confirmatory evidence (obtained
1275
prior to or after such investigation) are sufficient to establish effectiveness, the
Secretary may consider such data and evidence to constitute substantial
evidence for purposes of the preceding sentence. The Secretary shall implement
a structured risk-benefit assessment framework in the new drug approval
process to facilitate the balanced consideration of benefits and risks, a
consistent and systematic approach to the discussion and regulatory
decisionmaking, and the communication of the benefits and risks of new drugs.
Nothing in the preceding sentence shall alter the criteria for evaluating an
application for premarket approval of a drug.
( e ) Withdrawal of approval; grounds; immediate suspension upon
finding imminent hazard to public health. The Secretary shall, after due notice
and opportunity for hearing to the applicant, withdraw approval of an
application with respect to any drug under this section if the Secretary finds (1)
that clinical or other experience, tests, or other scientific data show that such
drug is unsafe for use under the conditions of use upon the basis of which the
application was approved; (2) that new evidence of clinical experience, not
contained in such application or not available to the Secretary until after such
application was approved, or tests by new methods, or tests by methods not
deemed reasonably applicable when such application was approved, evaluated
together with the evidence available to the Secretary when the application was
approved, shows that such drug is not shown to be safe for use under the
conditions of use upon the basis of which the application was approved; or (3)
on the basis of new information before him with respect to such drug, evaluated
together with the evidence available to him when the application was approved,
that there is a lack of substantial evidence that the drug will have the effect it
purports or is represented to have under the conditions of use prescribed,
recommended, or suggested in the labeling thereof; or (4) the patent information
prescribed by subsection (c) was not filed within thirty days after the receipt of
written notice from the Secretary specifying the failure to file such information;
or (5) that the application contains any untrue statement of a material fact:
Provided, That if the Secretary (or in his absence the officer acting as
Secretary) finds that there is an imminent hazard to the public health, he may
suspend the approval of such application immediately, and give the applicant
prompt notice of his action and afford the applicant the opportunity for an
expedited hearing under this subsection; but the authority conferred by this
proviso to suspend the approval of an application shall not be delegated. The
Secretary may also, after due notice and opportunity for hearing to the applicant,
withdraw the approval of an application submitted under subsection (b) or (j)
with respect to any drug under this section if the Secretary finds (1) that the
applicant has failed to establish a system for maintaining required records, or
has repeatedly or deliberately failed to maintain such records or to make
required reports, in accordance with a regulation or order under subsection (k)
1276
or to comply with the notice requirements of section 510(k)(2) [21 USCS §
360(k)(2)], or the applicant has refused to permit access to, or copying or
verification of, such records as required by paragraph (2) of such subsection; or
(2) that on the basis of new information before him, evaluated together with the
evidence before him when the application was approved, the methods used in,
or the facilities and controls used for, the manufacture, processing, and packing
of such drug are inadequate to assure and preserve its identity, strength, quality,
and purity and were not made adequate within a reasonable time after receipt of
written notice from the Secretary specifying the matter complained of; or (3) that
on the basis of new information before him, evaluated together with the
evidence before him when the application was approved, the labeling of such
drug, based on a fair evaluation of all material facts, is false or misleading in
any particular and was not corrected within a reasonable time after receipt of
written notice from the Secretary specifying the matter complained of. Any
order under this subsection shall state the findings upon which it is based. The
Secretary may withdraw the approval of an application submitted under this
section, or suspend the approval of such an application, as provided under this
subsection, without first ordering the applicant to submit an assessment of the
approved risk evaluation and mitigation strategy for the drug under section 505-
1(g)(2)(D) [21 USCS § 355-1(g)(2)(D)].
( f) Revocation of order refusing, withdrawing or suspending approval
of application. Whenever the Secretary finds that the facts so require, he shall
revoke any previous order under subsection (d) or (e) refusing, withdrawing, or
suspending approval of an application and shall approve such application or
reinstate such approval, as may be appropriate.
( g) Service of orders. Orders of the Secretary issued under this section
shall be served (1) in person by any officer or employee of the department
designated by the Secretary or (2) by mailing the order by registered mail or by
certified mail addressed to the applicant or respondent at his last-known
address in the records of the Secretary.
(h) Appeal from order. An appeal may be taken by the applicant from an
order of the Secretary refusing or withdrawing approval of an application under
this section. Such appeal shall be taken by filing in the United States court of
appeals for the circuit wherein such applicant resides or has his principal place
of business, or in the United States Court of Appeals for the District of
Columbia Circuit, within sixty days after the entry of such order, a written
petition praying that the order of the Secretary be set aside. A copy of such
petition shall be forthwith transmitted by the clerk of the court to the Secretary,
or any officer designated by him for that purpose, and thereupon the Secretary
shall certify and file in the court the record upon which the order complained of
was entered, as provided in section 2112 of title 28, United States Code. Upon
1277
the filing of such petition such court shall have exclusive jurisdiction to affirm
or set aside such order, except that until the filing of the record the Secretary
may modify or set aside his order. No objection to the order of the Secretary
shall be considered by the court unless such objection shall have been urged
before the Secretary or unless there were reasonable grounds for failure so to
do. The finding of the Secretary as to the facts, if supported by substantial
evidence, shall be conclusive. If any person shall apply to the court for leave to
adduce additional evidence, and shall show to the satisfaction of the court that
such additional evidence is material and that there were reasonable grounds for
failure to adduce such evidence in the proceeding before the Secretary, the court
may order such additional evidence to be taken before the Secretary and to be
adduced upon the hearing in such manner and upon such terms and conditions as
to the court may seem proper. The Secretary may modify his findings as to the
facts by reason of the additional evidence so taken, and he shall file with the
court such modified findings which, if supported by substantial evidence, shall
be conclusive, and his recommendation, if any, for the setting aside of the
original order. The judgment of the court affirming or setting aside any such
order of the Secretary shall be final, subject to review by the Supreme Court of
the United States upon certiorari or certification as provided in section 1254 of
title 28 of the United States Code. The commencement of proceedings under this
subsection shall not, unless specifically ordered by the court to the contrary,
operate as a stay of the Secretary’s order.
( i ) Exemptions of drugs for research; discretionary and mandatory
conditions; direct reports to Secretary.
(1) The Secretary shall promulgate regulations for exempting from the
operation of the foregoing subsections of this section drugs intended solely
for investigational use by experts qualified by scientific training and
experience to investigate the safety and effectiveness of drugs. Such
regulations may, within the discretion of the Secretary, among other
conditions relating to the protection of the public health, provide for
conditioning such exemption upon—
(A) the submission to the Secretary, before any clinical testing of a
new drug is undertaken, of reports, by the manufacturer or the sponsor of
the investigation of such drug, of preclinical tests (including tests on
animals) of such drug adequate to justify the proposed clinical testing;
(B) the manufacturer or the sponsor of the investigation of a new
drug proposed to be distributed to investigators for clinical testing
obtaining a signed agreement from each of such investigators that
patients to whom the drug is administered will be under his personal
supervision, or under the supervision of investigators responsible to
1278
him, and that he will not supply such drug to any other investigator, or to
clinics, for administration to human beings;
( C ) the establishment and maintenance of such records, and the
making of such reports to the Secretary, by the manufacturer or the
sponsor of the investigation of such drug, of data (including but not
limited to analytical reports by investigators) obtained as the result of
such investigational use of such drug, as the Secretary finds will enable
him to evaluate the safety and effectiveness of such drug in the event of
the filing of an application pursuant to subsection (b); and
( D ) the submission to the Secretary by the manufacturer or the
sponsor of the investigation of a new drug of a statement of intent
regarding whether the manufacturer or sponsor has plans for assessing
pediatric safety and efficacy.
(2) Subject to paragraph (3), a clinical investigation of a new drug may
begin 30 days after the Secretary has received from the manufacturer or
sponsor of the investigation a submission containing such information about
the drug and the clinical investigation, including—
(A) information on design of the investigation and adequate reports
of basic information, certified by the applicant to be accurate reports,
necessary to assess the safety of the drug for use in clinical
investigation; and
(B) adequate information on the chemistry and manufacturing of the
drug, controls available for the drug, and primary data tabulations from
animal or human studies.
(3)
( A ) At any time, the Secretary may prohibit the sponsor of an
investigation from conducting the investigation (referred to in this
paragraph as a “clinical hold”) if the Secretary makes a determination
described in subparagraph (B). The Secretary shall specify the basis for
the clinical hold, including the specific information available to the
Secretary which served as the basis for such clinical hold, and confirm
such determination in writing.
(B) For purposes of subparagraph (A), a determination described in
this subparagraph with respect to a clinical hold is that—
(i) the drug involved represents an unreasonable risk to the safety
of the persons who are the subjects of the clinical investigation,
taking into account the qualifications of the clinical investigators,
information about the drug, the design of the clinical investigation,
1279
the condition for which the drug is to be investigated, and the health
status of the subjects involved; or
(ii) the clinical hold should be issued for such other reasons as
the Secretary may by regulation establish (including reasons
established by regulation before the date of the enactment of the
Food and Drug Administration Modernization Act of 1997 [enacted
Nov. 21, 1997]).
( C) Any written request to the Secretary from the sponsor of an
investigation that a clinical hold be removed shall receive a decision, in
writing and specifying the reasons therefor, within 30 days after receipt
of such request. Any such request shall include sufficient information to
support the removal of such clinical hold.
(4) Regulations under paragraph (1) shall provide that such exemption
shall be conditioned upon the manufacturer, or the sponsor of the
investigation, requiring that experts using such drugs for investigational
purposes certify to such manufacturer or sponsor that they will inform any
human beings to whom such drugs, or any controls used in connection
therewith, are being administered, or their representatives, that such drugs
are being used for investigational purposes and will obtain the consent of
such human beings or their representatives, except where it is not feasible or
it is contrary to the best interests of such human beings. Nothing in this
subsection shall be construed to require any clinical investigator to submit
directly to the Secretary reports on the investigational use of drugs. The
Secretary shall update such regulations to require inclusion in the informed
consent documents and process a statement that clinical trial information for
such clinical investigation has been or will be submitted for inclusion in the
registry data bank pursuant to subsection (j) of section 402 of the Public
Health Service Act [42 USCS § 282].
(j) Abbreviated new drug applications.
(1) Any person may file with the Secretary an abbreviated application
for the approval of a new drug.
(2)
(A) An abbreviated application for a new drug shall contain—
( i ) information to show that the conditions of use prescribed,
recommended, or suggested in the labeling proposed for the new
drug have been previously approved for a drug listed under
paragraph (7) (hereinafter in this subsection referred to as a “listed
drug”);
1280
(ii)
(I) if the listed drug referred to in clause (i) has only one
active ingredient, information to show that the active ingredient
of the new drug is the same as that of the listed drug;
(II) if the listed drug referred to in clause (i) has more than
one active ingredient, information to show that the active
ingredients of the new drug are the same as those of the listed
drug, or
(III) if the listed drug referred to in clause (i) has more than
one active ingredient and if one of the active ingredients of the
new drug is different and the application is filed pursuant to the
approval of a petition filed under subparagraph (C), information
to show that the other active ingredients of the new drug are the
same as the active ingredients of the listed drug, information to
show that the different active ingredient is an active ingredient of
a listed drug or of a drug which does not meet the requirements of
section 201(p) [21 USCS § 321(p)], and such other information
respecting the different active ingredient with respect to which
the petition was filed as the Secretary may require;
(iii) information to show that the route of administration, the
dosage form, and the strength of the new drug are the same as those
of the listed drug referred to in clause (i) or, if the route of
administration, the dosage form, or the strength of the new drug is
different and the application is filed pursuant to the approval of a
petition filed under subparagraph (C), such information respecting
the route of administration, dosage form, or strength with respect to
which the petition was filed as the Secretary may require;
(iv) information to show that the new drug is bioequivalent to the
listed drug referred to in clause (i), except that if the application is
filed pursuant to the approval of a petition filed under subparagraph
(C), information to show that the active ingredients of the new drug
are of the same pharmacological or therapeutic class as those of the
listed drug referred to in clause (i) and the new drug can be expected
to have the same therapeutic effect as the listed drug when
administered to patients for a condition of use referred to in clause
(i);
(v) information to show that the labeling proposed for the new
drug is the same as the labeling approved for the listed drug referred
to in clause (i) except for changes required because of differences
approved under a petition filed under subparagraph (C) or because
1281
the new drug and the listed drug are produced or distributed by
different manufacturers;
(vi) the items specified in clauses (B) through (F) of subsection
(b)(1);
(vii) a certification, in the opinion of the applicant and to the best
of his knowledge, with respect to each patent which claims the listed
drug referred to in clause (i) or which claims a use for such listed
drug for which the applicant is seeking approval under this
subsection and for which information is required to be filed under
subsection (b) or (c)—
(I) that such patent information has not been filed,
(II) that such patent has expired,
(III) of the date on which such patent will expire, or
(IV) that such patent is invalid or will not be infringed by the
manufacture, use, or sale of the new drug for which the
application is submitted; and
(viii) if with respect to the listed drug referred to in clause (i)
information was filed under subsection (b) or (c) for a method of use
patent which does not claim a use for which the applicant is seeking
approval under this subsection, a statement that the method of use
patent does not claim such a use.
The Secretary may not require that an abbreviated application
contain information in addition to that required by clauses (i) through
(viii).
(B) Notice of opinion that patent is invalid or will not be infringed.
( i ) Agreement to give notice. An applicant that makes a
certification described in subparagraph (A)(vii)(IV) shall include in
the application a statement that the applicant will give notice as
required by this subparagraph.
(ii) Timing of notice. An applicant that makes a certification
described in subparagraph (A)(vii)(IV) shall give notice as required
under this subparagraph—
(I) if the certification is in the application, not later than 20
days after the date of the postmark on the notice with which the
Secretary informs the applicant that the application has been
filed; or
(II) if the certification is in an amendment or supplement to the
1282
application, at the time at which the applicant submits the
amendment or supplement, regardless of whether the applicant
has already given notice with respect to another such certification
contained in the application or in an amendment or supplement to
the application.
( i i i ) Recipients of notice. An applicant required under this
subparagraph to give notice shall give notice to—
( I ) each owner of the patent that is the subject of the
certification (or a representative of the owner designated to
receive such a notice); and
(II) the holder of the approved application under subsection
(b) for the drug that is claimed by the patent or a use of which is
claimed by the patent (or a representative of the holder
designated to receive such a notice).
( i v ) Contents of notice. A notice required under this
subparagraph shall—
( I ) state that an application that contains data from
bioavailability or bioequivalence studies has been submitted
under this subsection for the drug with respect to which the
certification is made to obtain approval to engage in the
commercial manufacture, use, or sale of the drug before the
expiration of the patent referred to in the certification; and
(II) include a detailed statement of the factual and legal basis
of the opinion of the applicant that the patent is invalid or will not
be infringed.
(C) If a person wants to submit an abbreviated application for a new
drug which has a different active ingredient or whose route of
administration, dosage form, or strength differ from that of a listed drug,
such person shall submit a petition to the Secretary seeking permission
to file such an application. The Secretary shall approve or disapprove a
petition submitted under this subparagraph within ninety days of the date
the petition is submitted. The Secretary shall approve such a petition
unless the Secretary finds—
(i) that investigations must be conducted to show the safety and
effectiveness of the drug or of any of its active ingredients, the route
of administration, the dosage form, or strength which differ from the
listed drug; or
(ii) that any drug with a different active ingredient may not be
1283
adequately evaluated for approval as safe and effective on the basis
of the information required to be submitted in an abbreviated
application.
(D)
(i) An applicant may not amend or supplement an application to
seek approval of a drug referring to a different listed drug from the
listed drug identified in the application as submitted to the Secretary.
(i i ) With respect to the drug for which an application is
submitted, nothing in this subsection prohibits an applicant from
amending or supplementing the application to seek approval of a
different strength.
(iii) Within 60 days after the date of the enactment of the
Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 [enacted Dec. 8, 2003], the Secretary shall issue
guidance defining the term “listed drug” for purposes of this
subparagraph.
(3)
( A ) The Secretary shall issue guidance for the individuals who
review applications submitted under paragraph (1), which shall relate to
promptness in conducting the review, technical excellence, lack of bias
and conflict of interest, and knowledge of regulatory and scientific
standards, and which shall apply equally to all individuals who review
such applications.
(B) The Secretary shall meet with a sponsor of an investigation or an
applicant for approval for a drug under this subsection if the sponsor or
applicant makes a reasonable written request for a meeting for the
purpose of reaching agreement on the design and size of bioavailability
and bioequivalence studies needed for approval of such application.
The sponsor or applicant shall provide information necessary for
discussion and agreement on the design and size of such studies. Minutes
of any such meeting shall be prepared by the Secretary and made
available to the sponsor or applicant.
(C) Any agreement regarding the parameters of design and size of
bioavailability and bioequivalence studies of a drug under this
paragraph that is reached between the Secretary and a sponsor or
applicant shall be reduced to writing and made part of the administrative
record by the Secretary. Such agreement shall not be changed after the
testing begins, except—
1284
(i) with the written agreement of the sponsor or applicant; or
( i i ) pursuant to a decision, made in accordance with
subparagraph (D) by the director of the reviewing division, that a
substantial scientific issue essential to determining the safety or
effectiveness of the drug has been identified after the testing has
begun.
(D) A decision under subparagraph (C)(ii) by the director shall be
in writing and the Secretary shall provide to the sponsor or applicant an
opportunity for a meeting at which the director and the sponsor or
applicant will be present and at which the director will document the
scientific issue involved.
(E) The written decisions of the reviewing division shall be binding
upon, and may not directly or indirectly be changed by, the field or
compliance office personnel unless such field or compliance office
personnel demonstrate to the reviewing division why such decision
should be modified.
(F) No action by the reviewing division may be delayed because of
the unavailability of information from or action by field personnel unless
the reviewing division determines that a delay is necessary to assure the
marketing of a safe and effective drug.
(G) For purposes of this paragraph, the reviewing division is the
division responsible for the review of an application for approval of a
drug under this subsection (including scientific matters, chemistry,
manufacturing, and controls).
(4) Subject to paragraph (5), the Secretary shall approve an application
for a drug unless the Secretary finds—
(A) the methods used in, or the facilities and controls used for, the
manufacture, processing, and packing of the drug are inadequate to
assure and preserve its identity, strength, quality, and purity;
( B ) information submitted with the application is insufficient to
show that each of the proposed conditions of use have been previously
approved for the listed drug referred to in the application;
(C)
(i) if the listed drug has only one active ingredient, information
submitted with the application is insufficient to show that the active
ingredient is the same as that of the listed drug;
( i i ) if the listed drug has more than one active ingredient,
1285
information submitted with the application is insufficient to show
that the active ingredients are the same as the active ingredients of
the listed drug, or
(iii) if the listed drug has more than one active ingredient and if
the application is for a drug which has an active ingredient different
from the listed drug, information submitted with the application is
insufficient to show—
(I) that the other active ingredients are the same as the active
ingredients of the listed drug, or
(II) that the different active ingredient is an active ingredient
of a listed drug or a drug which does not meet the requirements of
section 201(p) [21 USCS § 321(p)], or no petition to file an
application for the drug with the different ingredient was
approved under paragraph (2)(C);
(D)
(i) if the application is for a drug whose route of administration,
dosage form, or strength of the drug is the same as the route of
administration, dosage form, or strength of the listed drug referred to
in the application, information submitted in the application is
insufficient to show that the route of administration, dosage form, or
strength is the same as that of the listed drug, or
(ii) if the application is for a drug whose route of administration,
dosage form, or strength of the drug is different from that of the listed
drug referred to in the application, no petition to file an application
for the drug with the different route of administration, dosage form,
or strength was approved under paragraph (2)(C);
(E) if the application was filed pursuant to the approval of a petition
under paragraph (2)(C), the application did not contain the information
required by the Secretary respecting the active ingredient, route of
administration, dosage form, or strength which is not the same;
(F) information submitted in the application is insufficient to show
that the drug is bioequivalent to the listed drug referred to in the
application or, if the application was filed pursuant to a petition
approved under paragraph (2)(C), information submitted in the
application is insufficient to show that the active ingredients of the new
drug are of the same pharmacological or therapeutic class as those of the
listed drug referred to in paragraph (2)(A)(i) and that the new drug can
be expected to have the same therapeutic effect as the listed drug when
administered to patients for a condition of use referred to in such
1286
paragraph;
(G) information submitted in the application is insufficient to show
that the labeling proposed for the drug is the same as the labeling
approved for the listed drug referred to in the application except for
changes required because of differences approved under a petition filed
under paragraph (2)(C) or because the drug and the listed drug are
produced or distributed by different manufacturers;
(H) information submitted in the application or any other information
available to the Secretary shows that (i) the inactive ingredients of the
drug are unsafe for use under the conditions prescribed, recommended,
or suggested in the labeling proposed for the drug, or (ii) the
composition of the drug is unsafe under such conditions because of the
type or quantity of inactive ingredients included or the manner in which
the inactive ingredients are included;
(I) the approval under subsection (c) of the listed drug referred to in
the application under this subsection has been withdrawn or suspended
for grounds described in the first sentence of subsection (e), the
Secretary has published a notice of opportunity for hearing to withdraw
approval of the listed drug under subsection (c) for grounds described in
the first sentence of subsection (e), the approval under this subsection of
the listed drug referred to in the application under this subsection has
been withdrawn or suspended under paragraph (6), or the Secretary has
determined that the listed drug has been withdrawn from sale for safety
or effectiveness reasons;
(J) the application does not meet any other requirement of paragraph
(2)(A); or
(K) the application contains an untrue statement of material fact.
(5)
(A) Within one hundred and eighty days of the initial receipt of an
application under paragraph (2) or within such additional period as may
be agreed upon by the Secretary and the applicant, the Secretary shall
approve or disapprove the application.
(B) The approval of an application submitted under paragraph (2)
shall made effective on the last applicable date determined by applying
the following to each certification made under paragraph (2)(A)(vii):
( i ) If the applicant only made a certification described in
subclause (I) or (II) of paragraph (2)(A)(vii) or in both such
subclauses, the approval may be made effective immediately.
1287
(ii) If the applicant made a certification described in subclause
(III) of paragraph (2)(A)(vii), the approval may be made effective on
the date certified under subclause (III).
(iii) If the applicant made a certification described in subclause
(IV) of paragraph (2)(A)(vii), the approval shall be made effective
immediately unless, before the expiration of 45 days after the date on
which the notice described in paragraph (2)(B) is received, an
action is brought for infringement of the patent that is the subject of
the certification and for which information was submitted to the
Secretary under subsection (b)(1) or (c)(2) before the date on which
the application (excluding an amendment or supplement to the
application), which the Secretary later determines to be substantially
complete, was submitted. If such an action is brought before the
expiration of such days, the approval shall be made effective upon
the expiration of the thirty-month period beginning on the date of the
receipt of the notice provided under paragraph (2)(B)(i) or such
shorter or longer period as the court may order because either party
to the action failed to reasonably cooperate in expediting the action,
except that—
(I) if before the expiration of such period the district court
decides that the patent is invalid or not infringed (including any
substantive determination that there is no cause of action for
patent infringement or invalidity), the approval shall be made
effective on—
(aa) the date on which the court enters judgment reflecting
the decision; or
(bb) the date of a settlement order or consent decree signed
and entered by the court stating that the patent that is the
subject of the certification is invalid or not infringed;
(II) if before the expiration of such period the district court
decides that the patent has been infringed—
(aa) if the judgment of the district court is appealed, the
approval shall be made effective on—
(AA) the date on which the court of appeals decides that
the patent is invalid or not infringed (including any
substantive determination that there is no cause of action
for patent infringement or invalidity); or
(BB) the date of a settlement order or consent decree
signed and entered by the court of appeals stating that the
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patent that is the subject of the certification is invalid or not
infringed; or
(bb) if the judgment of the district court is not appealed or
is affirmed, the approval shall be made effective on the date
specified by the district court in a court order under section
271(e)(4)(A) of title 35, United States Code;
(III) if before the expiration of such period the court grants a
preliminary injunction prohibiting the applicant from engaging in
the commercial manufacture or sale of the drug until the court
decides the issues of patent validity and infringement and if the
court decides that such patent is invalid or not infringed, the
approval shall be made effective as provided in subclause (I); or
(IV) if before the expiration of such period the court grants a
preliminary injunction prohibiting the applicant from engaging in
the commercial manufacture or sale of the drug until the court
decides the issues of patent validity and infringement and if the
court decides that such patent has been infringed, the approval
shall be made effective as provided in subclause (II).
In such an action, each of the parties shall reasonably
cooperate in expediting the action.
(iv) 180-day exclusivity period.
(I) Effectiveness of application. Subject to subparagraph (D),
if the application contains a certification described in paragraph
(2)(A)(vii)(IV) and is for a drug for which a first applicant has
submitted an application containing such a certification, the
application shall be made effective on the date that is 180 days
after the date of the first commercial marketing of the drug
(including the commercial marketing of the listed drug) by any
first applicant.
(II) Definitions. In this paragraph:
( a a ) 180-day exclusivity period. The term “180-day
exclusivity period” means the 180-day period ending on the
day before the date on which an application submitted by an
applicant other than a first applicant could become effective
under this clause.
(bb) First applicant. As used in this subsection, the term
“first applicant” means an applicant that, on the first day on
which a substantially complete application containing a
certification described in paragraph (2)(A)(vii)(IV) is
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submitted for approval of a drug, submits a substantially
complete application that contains and lawfully maintains a
certification described in paragraph (2)(A)(vii)(IV) for the
drug.
(cc) Substantially complete application. As used in this
subsection, the term “substantially complete application”
means an application under this subsection that on its face is
sufficiently complete to permit a substantive review and
contains all the information required by paragraph (2)(A).
(dd) Tentative approval.
(AA) In general. The term “tentative approval” means
notification to an applicant by the Secretary that an
application under this subsection meets the requirements of
paragraph (2)(A), but cannot receive effective approval
because the application does not meet the requirements of
this subparagraph, there is a period of exclusivity for the
listed drug under subparagraph (F) or section 505A [21
USCS § 355a], or there is a 7-year period of exclusivity
for the listed drug under section 527 [21 USCS § 360cc].
( B B ) Limitation. A drug that is granted tentative
approval by the Secretary is not an approved drug and
shall not have an effective approval until the Secretary
issues an approval after any necessary additional review of
the application.
(C) Civil action to obtain patent certainty.
(i) Declaratory judgment absent infringement action.
(I) In general. No action may be brought under section 2201 of
title 28, United States Code, by an applicant under paragraph (2)
for a declaratory judgment with respect to a patent which is the
subject of the certification referred to in subparagraph (B)(iii)
unless—
(aa) the 45-day period referred to in such subparagraph has
expired;
(bb) neither the owner of such patent nor the holder of the
claimed by the patent or a use of which is claimed by the
patent brought a civil action against the applicant for
infringement of the patent before the expiration of such period;
and
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( c c ) in any case in which the notice provided under
paragraph (2)(B) relates to noninfringement, the notice was
accompanied by a document described in subclause (III).
(II) Filing of civil action. If the conditions described in items
(aa), (bb), and as applicable, (cc) of subclause (I) have been met,
the applicant referred to in such subclause may, in accordance
with section 2201 of title 28, United States Code, bring a civil
action under such section against the owner or holder referred to
in such subclause (but not against any owner or holder that has
brought such a civil action against the applicant, unless that civil
action was dismissed without prejudice) for a declaratory
judgment that the patent is invalid or will not be infringed by the
drug for which the applicant seeks approval, except that such
civil action may be brought for a declaratory judgment that the
patent will not be infringed only in a case in which the condition
described in subclause (I)(cc) is applicable. A civil action
referred to in this subclause shall be brought in the judicial
district where the defendant has its principal place of business or
a regular and established place of business.
(III) Offer of confidential access to application. For purposes
of subclause (I)(cc), the document described in this subclause is
a document providing an offer of confidential access to the
application that is in the custody of the applicant under paragraph
(2) for the purpose of determining whether an action referred to
in subparagraph (B)(iii) should be brought. The document
providing the offer of confidential access shall contain such
restrictions as to persons entitled to access, and on the use and
disposition of any information accessed, as would apply had a
protective order been entered for the purpose of protecting trade
secrets and other confidential business information. A request for
access to an application under an offer of confidential access
shall be considered acceptance of the offer of confidential access
with the restrictions as to persons entitled to access, and on the
use and disposition of any information accessed, contained in the
offer of confidential access, and those restrictions and other
terms of the offer of confidential access shall be considered
terms of an enforceable contract. Any person provided an offer of
confidential access shall review the application for the sole and
limited purpose of evaluating possible infringement of the patent
that is the subject of the certification under paragraph (2)(A)(vii)
(IV) and for no other purpose, and may not disclose information
of no relevance to any issue of patent infringement to any person
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other than a person provided an offer of confidential access.
Further, the application may be redacted by the applicant to
remove any information of no relevance to any issue of patent
infringement.
(ii) Counterclaim to infringement action.
(I) In general. If an owner of the patent or the holder of the
claimed by the patent or a use of which is claimed by the patent
brings a patent infringement action against the applicant, the
applicant may assert a counterclaim seeking an order requiring
the holder to correct or delete the patent information submitted by
the holder under subsection (b) or (c) on the ground that the
patent does not claim either—
(aa) the drug for which the application was approved; or
(bb) an approved method of using the drug.
(II) No independent cause of action. Subclause (I) does not
authorize the assertion of a claim described in subclause (I) in
any civil action or proceeding other than a counterclaim
described in subclause (I).
(iii) No damages. An applicant shall not be entitled to damages
in a civil action under clause (i) or a counterclaim under clause (ii).
(D) Forfeiture of 180-day exclusivity period.
(i) Definition of forfeiture event. In this subparagraph, the term
“forfeiture event”, with respect to an application under this
subsection, means the occurrence of any of the following:
(I) Failure to market. The first applicant fails to market the
drug by the later of—
(aa) the earlier of the date that is—
(AA) 75 days after the date on which the approval of the
application of the first applicant is made effective under
subparagraph (B)(iii); or
(BB) 30 months after the date of submission of the
application of the first applicant; or
( b b ) with respect to the first applicant or any other
applicant (which other applicant has received tentative
approval), the date that is 75 days after the date as of which,
as to each of the patents with respect to which the first
1292
applicant submitted and lawfully maintained a certification
qualifying the first applicant for the 180-day exclusivity
period under subparagraph (B)(iv), at least 1 of the following
has occurred:
( AA) In an infringement action brought against that
applicant with respect to the patent or in a declaratory
judgment action brought by that applicant with respect to
the patent, a court enters a final decision from which no
appeal (other than a petition to the Supreme Court for a
writ of certiorari) has been or can be taken that the patent
is invalid or not infringed.
( B B ) In an infringement action or a declaratory
judgment action described in subitem (AA), a court signs a
settlement order or consent decree that enters a final
judgment that includes a finding that the patent is invalid or
not infringed.
(CC) The patent information submitted under subsection
(b) or (c) is withdrawn by the holder of the application
approved under subsection (b).
(II) Withdrawal of application. The first applicant withdraws
the application or the Secretary considers the application to have
been withdrawn as a result of a determination by the Secretary
that the application does not meet the requirements for approval
under paragraph (4).
(III) Amendment of certification. The first applicant amends
or withdraws the certification for all of the patents with respect
to which that applicant submitted a certification qualifying the
applicant for the 180-day exclusivity period.
(IV) Failure to obtain tentative approval. The first applicant
fails to obtain tentative approval of the application within 30
months after the date on which the application is filed, unless the
failure is caused by a change in or a review of the requirements
for approval of the application imposed after the date on which
the application is filed.
( V ) Agreement with another applicant, the listed drug
application holder, or a patent owner. The first applicant enters
into an agreement with another applicant under this subsection for
the drug, the holder of the application for the listed drug, or an
owner of the patent that is the subject of the certification under
paragraph (2)(A)(vii)(IV), the Federal Trade Commission or the
1293
Attorney General files a complaint, and there is a final decision
of the Federal Trade Commission or the court with regard to the
complaint from which no appeal (other than a petition to the
Supreme Court for a writ of certiorari) has been or can be taken
that the agreement has violated the antitrust laws (as defined in
section 1 of the Clayton Act (15 U.S.C. 12), except that the term
includes section 5 of the Federal Trade Commission Act ( 15
U.S.C. 45) to the extent that that section applies to unfair methods
of competition).
(VI) Expiration of all patents. All of the patents as to which
the applicant submitted a certification qualifying it for the 180-
day exclusivity period have expired.
( i i ) Forfeiture. The 180-day exclusivity period described in
subparagraph (B)(iv) shall be forfeited by a first applicant if a
forfeiture event occurs with respect to that first applicant.
(iii) Subsequent applicant. If all first applicants forfeit the 180-
day exclusivity period under clause (ii)—
( I ) approval of any application containing a certification
described in paragraph (2)(A)(vii)(IV) shall be made effective in
accordance with subparagraph (B)(iii); and
(II) no applicant shall be eligible for a 180-day exclusivity
period.
( E ) If the Secretary decides to disapprove an application, the
Secretary shall give the applicant notice of an opportunity for a hearing
before the Secretary on the question of whether such application is
approvable. If the applicant elects to accept the opportunity for hearing
by written request within thirty days after such notice, such hearing shall
commence not more than ninety days after the expiration of such thirty
days unless the Secretary and the applicant otherwise agree. Any such
hearing shall thereafter be conducted on an expedited basis and the
Secretary’s order thereon shall be issued within ninety days after the
date fixed by the Secretary for filing final briefs.
(F)
( i ) If an application (other than an abbreviated new drug
application) submitted under subsection (b) for a drug, no active
ingredient (including any ester or salt of the active ingredient) of
which has been approved in any other application under subsection
(b), was approved during the period beginning January 1, 1982, and
ending on the date of the enactment of this subsection [enacted Sept.
1294
24, 1984], the Secretary may not make the approval of an application
submitted under this subsection which refers to the drug for which
the subsection (b) application was submitted effective before the
expiration of ten years from the date of the approval of the
application under subsection (b).
(ii) If an application submitted under subsection (b) for a drug,
no active ingredient (including any ester or salt of the active
ingredient) of which has been approved in any other application
under subsection (b), is approved after the date of the enactment of
this subsection, no application may be submitted under this
subsection which refers to the drug for which the subsection (b)
application was submitted before the expiration of five years from
the date of the approval of the application under subsection (b),
except that such an application may be submitted under this
subsection after the expiration of four years from the date of the
approval of the subsection (b) application if it contains a
certification of patent invalidity or noninfringement described in
subclause (IV) of paragraph (2)(A)(vii). The approval of such an
application shall be made effective in accordance with subparagraph
(B) except that, if an action for patent infringement is commenced
during the one-year period beginning forty-eight months after the date
of the approval of the subsection (b) application, the thirty-month
period referred to in subparagraph (B)(iii) shall be extended by such
amount of time (if any) which is required for seven and one-half
years to have elapsed from the date of approval of the subsection (b)
application.
(iii) If an application submitted under subsection (b) for a drug,
which includes an active ingredient (including any ester or salt of the
active ingredient) that has been approved in another application
approved under subsection (b), is approved after the date of
enactment of this subsection and if such application contains reports
of new clinical investigations (other than bioavailability studies)
essential to the approval of the application and conducted or
sponsored by the applicant, the Secretary may not make the approval
of an application submitted under this subsection for the conditions
of approval of such drug in the subsection (b) application effective
before the expiration of three years from the date of the approval of
the application under subsection (b) for such drug.
(iv) If a supplement to an application approved under subsection
(b) is approved after the date of enactment of this subsection
[enacted Sept. 24, 1984] and the supplement contains reports of new
1295
clinical investigations (other than bioavailability studies) essential
to the approval of the supplement and conducted or sponsored by the
person submitting the supplement, the Secretary may not make the
approval of an application submitted under this subsection for a
change approved in the supplement effective before the expiration of
three years from the date of the approval of the supplement under
subsection (b).
(v) If an application (or supplement to an application) submitted
under subsection (b) for a drug, which includes an active ingredient
(including any ester or salt of the active ingredient) that has been
approved in another application under subsection (b), was approved
during the period beginning January 1, 1982, and ending on the date
of the enactment of this subsection [enacted Sept. 24, 1984], the
under this subsection which refers to the drug for which the
subsection (b) application was submitted or which refers to a change
approved in a supplement to the subsection (b) application effective
before the expiration of two years from the date of enactment of this
subsection [enacted Sept. 24, 1984].
( 6) If a drug approved under this subsection refers in its approved
application to a drug the approval of which was withdrawn or suspended
for grounds described in the first sentence of subsection (e) or was
withdrawn or suspended under this paragraph or which, as determined by
the Secretary, has been withdrawn from sale for safety or effectiveness
reasons, the approval of the drug under this subsection shall be withdrawn
or suspended—
( A) for the same period as the withdrawal or suspension under
subsection (e) of this paragraph, or
(B) if the listed drug has been withdrawn from sale, for the period of
withdrawal from sale or, if earlier, the period ending on the date the
Secretary determines that the withdrawal from sale is not for safety or
effectiveness reasons.
(7)
(A)
( i ) Within sixty days of the date of the enactment of this
subsection [enacted Sept. 24, 1984] the Secretary shall publish and
make available to the public—
(I) a list in alphabetical order of the official and proprietary
name of each drug which has been approved for safety and
1296
effectiveness under subsection (c) before the date of the
enactment of this subsection [enacted Sept. 24, 1984];
(II) the date of approval if the drug is approved after 1981
and the number of the application which was approved; and
(III) whether in vitro or in vivo bioequivalence studies, or
both such studies, are required for applications filed under this
subsection which will refer to the drug published.
(ii) Every thirty days after the publication of the first list under
clause (i) the Secretary shall revise the list to include each drug
which has been approved for safety and effectiveness under
subsection (c) or approved under this subsection during the thirty-
day period.
(iii) When patent information submitted under subsection (b) or
(c) respecting a drug included on the list is to be published by the
Secretary, the Secretary shall, in revisions made under clause (ii),
include such information for such drug.
(B) A drug approved for safety and effectiveness under subsection
(c) or approved under this subsection shall, for purposes of this
subsection, be considered to have been published under subparagraph
(A) on the date of its approval or the date of enactment [enacted Sept.
24, 1984], whichever is later.
( C ) If the approval of a drug was withdrawn or suspended for
grounds described in the first sentence of subsection (e) or was
withdrawn or suspended under paragraph (6) or if the Secretary
determines that a drug has been withdrawn from sale for safety or
effectiveness reasons, it may not be published in the list under
subparagraph (A) or, if the withdrawal or suspension occurred after its
publication in such list, it shall be immediately removed from such list
—
(i) for the same period as the withdrawal or suspension under
subsection (e) or paragraph (6), or
(i i ) if the listed drug has been withdrawn from sale, for the
period of withdrawal from sale or, if earlier, the period ending on
the date the Secretary determines that the withdrawal from sale is not
for safety or effectiveness reasons.
A notice of the removal shall be published in the Federal
Register.
(8) For purposes of this subsection:
1297
(A)
(i) The term “bioavailability” means the rate and extent to which
the active ingredient or therapeutic ingredient is absorbed from a
drug and becomes available at the site of drug action.
(i i ) For a drug that is not intended to be absorbed into the
bloodstream, the Secretary may assess bioavailability by
scientifically valid measurements intended to reflect the rate and
extent to which the active ingredient or therapeutic ingredient
becomes available at the site of drug action.
(B) A drug shall be considered to be bioequivalent to a listed drug if
—
(i) the rate and extent of absorption of the drug do not show a
significant difference from the rate and extent of absorption of the
listed drug when administered at the same molar dose of the
therapeutic ingredient under similar experimental conditions in either
a single dose or multiple doses; or
( i i ) the extent of absorption of the drug does not show a
significant difference from the extent of absorption of the listed drug
when administered at the same molar dose of the therapeutic
ingredient under similar experimental conditions in either a single
dose or multiple doses and the difference from the listed drug in the
rate of absorption of the drug is intentional, is reflected in its
proposed labeling, is not essential to the attainment of effective body
drug concentrations on chronic use, and is considered medically
insignificant for the drug.
( C ) For a drug that is not intended to be absorbed into the
bloodstream, the Secretary may establish alternative, scientifically valid
methods to show bioequivalence if the alternative methods are expected
to detect a significant difference between the drug and the listed drug in
safety and therapeutic effect.
( 9 ) The Secretary shall, with respect to each application submitted
under this subsection, maintain a record of—
(A) the name of the applicant,
(B) the name of the drug covered by the application,
(C) the name of each person to whom the review of the chemistry of
the application was assigned and the date of such assignment, and
(D) the name of each person to whom the bioequivalence review for
1298
such application was assigned and the date of such assignment.
The information the Secretary is required to maintain under this
paragraph with respect to an application submitted under this subsection
shall be made available to the public after the approval of such
application.
(10)
( A) If the proposed labeling of a drug that is the subject of an
application under this subsection differs from the listed drug due to a
labeling revision described under clause (i), the drug that is the subject
of such application shall, notwithstanding any other provision of this Act
[21 USCS §§ 301 et seq.], be eligible for approval and shall not be
considered misbranded under section 502 [21 USCS § 352] if—
(i) the application is otherwise eligible for approval under this
subsection but for expiration of patent, an exclusivity period, or of a
delay in approval described in paragraph (5)(B)(iii), and a revision
to the labeling of the listed drug has been approved by the Secretary
within 60 days of such expiration;
(ii) the labeling revision described under clause (i) does not
include a change to the “Warnings” section of the labeling;
(iii) the sponsor of the application under this subsection agrees to
submit revised labeling of the drug that is the subject of such
application not later than 60 days after the notification of any
changes to such labeling required by the Secretary; and
( i v ) such application otherwise meets the applicable
requirements for approval under this subsection.
(B) If, after a labeling revision described in subparagraph (A)(i), the
Secretary determines that the continued presence in interstate commerce
of the labeling of the listed drug (as in effect before the revision
described in subparagraph (A)(i)) adversely impacts the safe use of the
drug, no application under this subsection shall be eligible for approval
with such labeling.
(k) Records and reports; required information; regulations and orders;
access to records.
(1) In the case of any drug for which an approval of an application filed
under subsection (b) or (j) is in effect, the applicant shall establish and
maintain such records, and make such reports to the Secretary, of data
relating to clinical experience and other data or information, received or
otherwise obtained by such applicant with respect to such drug, as the
1299
Secretary may by general regulation, or by order with respect to such
application, prescribe on the basis of a finding that such records and reports
are necessary in order to enable the Secretary to determine, or facilitate a
determination, whether there is or may be ground for invoking subsection (e)
of this section. Regulations and orders issued under this subsection and
under subsection (i) shall have due regard for the professional ethics of the
medical profession and the interests of patients and shall provide, where the
Secretary deems it to be appropriate, for the examination, upon request, by
the persons to whom such regulations or orders are applicable, of similar
information received or otherwise obtained by the Secretary.
(2) Every person required under this section to maintain records, and
every person in charge or custody thereof, shall, upon request of an officer
or employee designated by the Secretary, permit such officer or employee at
all reasonable times to have access to and copy and verify such records.
(3) Active postmarket risk identification.
( A ) Definition. In this paragraph, the term “data” refers to
information with respect to a drug approved under this section or under
section 351 of the Public Health Service Act [42 USCS § 262],
including claims data, patient survey data, standardized analytic files
that allow for the pooling and analysis of data from disparate data
environments, and any other data deemed appropriate by the Secretary.
( B ) Development of postmarket risk identification and analysis
methods. The Secretary shall, not later than 2 years after the date of the
enactment of the Food and Drug Administration Amendments Act of
2007 [enacted Sept. 27, 2007], in collaboration with public, academic,
and private entities—
(i) develop methods to obtain access to disparate data sources
including the data sources specified in subparagraph (C);
( i i ) develop validated methods for the establishment of a
postmarket risk identification and analysis system to link and analyze
safety data from multiple sources, with the goals of including, in
aggregate—
(I) at least 25,000,000 patients by July 1, 2010; and
(II) at least 100,000,000 patients by July 1, 2012; and
(iii) convene a committee of experts, including individuals who
are recognized in the field of protecting data privacy and security, to
make recommendations to the Secretary on the development of tools
and methods for the ethical and scientific uses for, and
1300
communication of, postmarketing data specified under subparagraph
(C), including recommendations on the development of effective
research methods for the study of drug safety questions.
(C) Establishment of the postmarket risk identification and analysis
system.
(i) In general. The Secretary shall, not later than 1 year after the
development of the risk identification and analysis methods under
subparagraph (B), establish and maintain procedures—
( I) for risk identification and analysis based on electronic
health data, in compliance with the regulations promulgated under
section 264(c) of the Health Insurance Portability and
Accountability Act of 1996 [42 USCS § 1320d-2 note], and in a
manner that does not disclose individually identifiable health
information in violation of paragraph (4)(B);
(II) for the reporting (in a standardized form) of data on all
serious adverse drug experiences (as defined in section 505-1(b)
[21 USCS § 355-1(b)]) submitted to the Secretary under
paragraph (1), and those adverse events submitted by patients,
providers, and drug sponsors, when appropriate;
(III) to provide for active adverse event surveillance using the
following data sources, as available:
(aa) Federal health-related electronic data (such as data
from the Medicare program and the health systems of the
Department of Veterans Affairs);
(bb) private sector health-related electronic data (such as
pharmaceutical purchase data and health insurance claims
data); and
(cc) other data as the Secretary deems necessary to create
a robust system to identify adverse events and potential drug
safety signals;
(IV) to identify certain trends and patterns with respect to data
accessed by the system;
( V) to provide regular reports to the Secretary concerning
adverse event trends, adverse event patterns, incidence and
prevalence of adverse events, and other information the Secretary
determines appropriate, which may include data on comparative
national adverse event trends; and
( VI ) to enable the program to export data in a form
1301
appropriate for further aggregation, statistical analysis, and
reporting.
(ii) Timeliness of reporting. The procedures established under
clause (i) shall ensure that such data are accessed, analyzed, and
reported in a timely, routine, and systematic manner, taking into
consideration the need for data completeness, coding, cleansing, and
standardized analysis and transmission.
(iii) Private sector resources. To ensure the establishment of the
active postmarket risk identification and analysis system under this
subsection not later than 1 year after the development of the risk
identification and analysis methods under subparagraph (B), as
required under clause (i), the Secretary may, on a temporary or
permanent basis, implement systems or products developed by
private entities.
( i v ) Complementary approaches. To the extent the active
postmarket risk identification and analysis system under this
subsection is not sufficient to gather data and information relevant to
a priority drug safety question, the Secretary shall develop, support,
and participate in complementary approaches to gather and analyze
such data and information, including—
( I ) approaches that are complementary with respect to
assessing the safety of use of a drug in domestic populations not
included, or underrepresented, in the trials used to approve the
drug (such as older people, people with comorbidities, pregnant
women, or children); and
(II) existing approaches such as the Vaccine Adverse Event
Reporting System and the Vaccine Safety Datalink or successor
databases.
( v ) Authority for contracts. The Secretary may enter into
contracts with public and private entities to fulfill the requirements
of this subparagraph.
(4) Advanced analysis of drug safety data.
( A ) Purpose. The Secretary shall establish collaborations with
public, academic, and private entities, which may include the Centers
for Education and Research on Therapeutics under section 912 of the
Public Health Service Act [42 USCS § 299b-1], to provide for
advanced analysis of drug safety data described in paragraph (3)(C) and
other information that is publicly available or is provided by the
Secretary, in order to—
1302
(i) improve the quality and efficiency of postmarket drug safety
risk-benefit analysis;
(ii) provide the Secretary with routine access to outside expertise
to study advanced drug safety questions; and
( i i i ) enhance the ability of the Secretary to make timely
assessments based on drug safety data.
( B ) Privacy. Such analysis shall not disclose individually
identifiable health information when presenting such drug safety signals
and trends or when responding to inquiries regarding such drug safety
signals and trends.
(C) Public process for priority questions. At least biannually, the
Secretary shall seek recommendations from the Drug Safety and Risk
Management Advisory Committee (or any successor committee) and
from other advisory committees, as appropriate, to the Food and Drug
Administration on—
(i) priority drug safety questions; and
(ii) mechanisms for answering such questions, including through
—
(I) active risk identification under paragraph (3); and
( I I ) when such risk identification is not sufficient,
postapproval studies and clinical trials under subsection (o)(3).
(D) Procedures for the development of drug safety collaborations.
( i ) In general. Not later than 180 days after the date of the
establishment of the active postmarket risk identification and
analysis system under this subsection, the Secretary shall establish
and implement procedures under which the Secretary may routinely
contract with one or more qualified entities to—
(I) classify, analyze, or aggregate data described in paragraph
(3)(C) and information that is publicly available or is provided
by the Secretary;
(II) allow for prompt investigation of priority drug safety
questions, including—
(aa) unresolved safety questions for drugs or classes of
drugs; and
(bb) for a newly-approved drugs [drug], safety signals
from clinical trials used to approve the drug and other
1303
preapproval trials; rare, serious drug side effects; and the
safety of use in domestic populations not included, or
underrepresented, in the trials used to approve the drug (such
as older people, people with comorbidities, pregnant women,
or children);
(III) perform advanced research and analysis on identified
drug safety risks;
( IV) focus postapproval studies and clinical trials under
subsection (o)(3) more effectively on cases for which reports
under paragraph (1) and other safety signal detection is not
sufficient to resolve whether there is an elevated risk of a serious
adverse event associated with the use of a drug; and
( V ) carry out other activities as the Secretary deems
necessary to carry out the purposes of this paragraph.
(ii) Request for specific methodology. The procedures described
in clause (i) shall permit the Secretary to request that a specific
methodology be used by the qualified entity. The qualified entity
shall work with the Secretary to finalize the methodology to be used.
( E ) Use of analyses. The Secretary shall provide the analyses
described in this paragraph, including the methods and results of such
analyses, about a drug to the sponsor or sponsors of such drug.
(F) Qualified entities.
( i ) In general. The Secretary shall enter into contracts with a
sufficient number of qualified entities to develop and provide
information to the Secretary in a timely manner.
(ii) Qualification. The Secretary shall enter into a contract with
an entity under clause (i) only if the Secretary determines that the
entity has a significant presence in the United States and has one or
more of the following qualifications:
( I ) The research, statistical, epidemiologic, or clinical
capability and expertise to conduct and complete the activities
under this paragraph, including the capability and expertise to
provide the Secretary de-identified data consistent with the
requirements of this subsection.
( II) An information technology infrastructure in place to
support electronic data and operational standards to provide
security for such data.
(III) Experience with, and expertise on, the development of
1304
drug safety and effectiveness research using electronic population
data.
(IV) An understanding of drug development or risk/benefit
balancing in a clinical setting.
(V) Other expertise which the Secretary deems necessary to
fulfill the activities under this paragraph.
( G ) Contract requirements. Each contract with a qualified entity
under subparagraph (F)(i) shall contain the following requirements:
(i) Ensuring privacy. The qualified entity shall ensure that the
entity will not use data under this subsection in a manner that—
(I) violates the regulations promulgated under section 264(c)
of the Health Insurance Portability and Accountability Act of
1996 [42 USCS § 1320d-2 note];
(II) violates sections 552 or 552a of title 5, United States
Code, with regard to the privacy of individually-identifiable
beneficiary health information; or
( III) discloses individually identifiable health information
when presenting drug safety signals and trends or when
responding to inquiries regarding drug safety signals and trends.
Nothing in this clause prohibits lawful disclosure for other
purposes.
(ii) Component of another organization. If a qualified entity is a
component of another organization—
( I) the qualified entity shall establish appropriate security
measures to maintain the confidentiality and privacy of such data;
and
(II) the entity shall not make an unauthorized disclosure of
such data to the other components of the organization in breach of
such confidentiality and privacy requirement.
(iii) Termination or nonrenewal. If a contract with a qualified
entity under this subparagraph is terminated or not renewed, the
following requirements shall apply:
(I) Confidentiality and privacy protections. The entity shall
continue to comply with the confidentiality and privacy
requirements under this paragraph with respect to all data
disclosed to the entity.
1305
( II) Disposition of data. The entity shall return any data
disclosed to such entity under this subsection to which it would
not otherwise have access or, if returning the data is not
practicable, destroy the data.
( H) Competitive procedures. The Secretary shall use competitive
procedures (as defined in section 4(5) of the Federal Procurement
Policy Act [Office of Federal Procurement Policy Act] [ 41 USCS §
132]) to enter into contracts under subparagraph (G).
(I) Review of contract in the event of a merger or acquisition. The
Secretary shall review the contract with a qualified entity under this
paragraph in the event of a merger or acquisition of the entity in order to
ensure that the requirements under this paragraph will continue to be
met.
(J) Coordination. In carrying out this paragraph, the Secretary shall
provide for appropriate communications to the public, scientific, public
health, and medical communities, and other key stakeholders, and to the
extent practicable shall coordinate with the activities of private entities,
professional associations, or other entities that may have sources of drug
safety data.
(5) The Secretary shall—
( A ) conduct regular, bi-weekly screening of the Adverse Event
Reporting System database and post a quarterly report on the Adverse
Event Reporting System Web site of any new safety information or
potential signal of a serious risk identified by [the] Adverse Event
Reporting System within the last quarter;
(B) report to Congress not later than 2 year [years] after the date of
the enactment of the Food and Drug Administration Amendments Act of
2007 [enacted Sept. 27, 2007] on procedures and processes of the Food
and Drug Administration for addressing ongoing post market safety
issues identified by the Office of Surveillance and Epidemiology and
how recommendations of the Office of Surveillance and Epidemiology
are handled within the agency; and
( C) on an annual basis, review the entire backlog of postmarket
safety commitments to determine which commitments require revision or
should be eliminated, report to the Congress on these determinations,
and assign start dates and estimated completion dates for such
commitments.
( l ) Public disclosure of safety and effectiveness data and action
1306
package.
( 1 ) Safety and effectiveness data and information which has been
submitted in an application under subsection (b) for a drug and which has
not previously been disclosed to the public shall be made available to the
public, upon request, unless extraordinary circumstances are shown—
(A) if no work is being or will be undertaken to have the application
approved,
( B ) if the Secretary has determined that the application is not
approvable and all legal appeals have been exhausted,
(C) if approval of the application under subsection (c) is withdrawn
and all legal appeals have been exhausted,
(D) if the Secretary has determined that such drug is not a new drug,
or
(E) upon the effective date of the approval of the first application
under subsection (j) which refers to such drug or upon the date upon
which the approval of an application under subsection (j) which refers
to such drug could be made effective if such an application had been
submitted.
(2) Action package for approval.
(A) Action package. The Secretary shall publish the action package
for approval of an application under subsection (b) or section 351 of the
Public Health Service Act [42 USCS § 262] on the Internet Web site of
the Food and Drug Administration—
( i ) not later than 30 days after the date of approval of such
application for a drug no active ingredient (including any ester or
salt of the active ingredient) of which has been approved in any other
application under this section or section 351 of the Public Health
Service Act [42 USCS § 262]; and
(ii) not later than 30 days after the third request for such action
package for approval received under section 552 of title 5, United
States Code, for any other drug.
( B ) Immediate publication of summary review. Notwithstanding
subparagraph (A), the Secretary shall publish, on the Internet Web site
of the Food and Drug Administration, the materials described in
subparagraph (C)(iv) not later than 48 hours after the date of approval of
the drug, except where such materials require redaction by the
Secretary.
1307
( C ) Contents. An action package for approval of an application
under subparagraph (A) shall be dated and shall include the following:
(i) Documents generated by the Food and Drug Administration
related to review of the application.
( i i ) Documents pertaining to the format and content of the
application generated during drug development.
(iii) Labeling submitted by the applicant.
(i v) A summary review that documents conclusions from all
reviewing disciplines about the drug, noting any critical issues and
disagreements with the applicant and within the review team and
how they were resolved, recommendations for action, and an
explanation of any nonconcurrence with review conclusions.
( v ) The Division Director and Office Director’s decision
document which includes—
(I) a brief statement of concurrence with the summary review;
( I I ) a separate review or addendum to the review if
disagreeing with the summary review; and
(III) a separate review or addendum to the review to add
further analysis.
(vi) Identification by name of each officer or employee of the
Food and Drug Administration who—
(I) participated in the decision to approve the application; and
(II) consents to have his or her name included in the package.
(D) Review. A scientific review of an application is considered the
work of the reviewer and shall not be altered by management or the
reviewer once final.
(E) Confidential information. This paragraph does not authorize the
disclosure of any trade secret, confidential commercial or financial
information, or other matter listed in section 552(b) of title 5, United
States Code.
( m ) “Patent” defined. For purposes of this section, the term “patent”
means a patent issued by the United States Patent and Trademark Office.
(n) Scientific advisory panels.
( 1 ) For the purpose of providing expert scientific advice and
recommendations to the Secretary regarding a clinical investigation of a
1308
drug or the approval for marketing of a drug under section 505 [this section]
or section 351 of the Public Health Service Act [42 USCS 262], the
Secretary shall establish panels of experts or use panels of experts
established before the date of enactment of the Food and Drug
Administration Modernization Act of 1997 [enacted Nov. 21, 1997], or
both.
(2) The Secretary may delegate the appointment and oversight authority
granted under section 1004 [21 USCS 394] to a director of a center or
successor entity within the Food and Drug Administration.
(3) The Secretary shall make appointments to each panel established
under paragraph (1) so that each panel shall consist of—
( A ) members who are qualified by training and experience to
evaluate the safety and effectiveness of the drugs to be referred to the
panel and who, to the extent feasible, possess skill and experience in the
development, manufacture, or utilization of such drugs;
(B) members with diverse expertise in such fields as clinical and
administrative medicine, pharmacy, pharmacology, pharmacoeconomics,
biological and physical sciences, and other related professions;
(C) a representative of consumer interests, and a representative of
interests of the drug manufacturing industry not directly affected by the
matter to be brought before the panel; and
( D ) two or more members who are specialists or have other
expertise in the particular disease or condition for which the drug under
review is proposed to be indicated.
Scientific, trade, and consumer organizations shall be afforded an
opportunity to nominate individuals for appointment to the panels. No
individual who is in the regular full-time employ of the United States
and engaged in the administration of this Act [21 USCS §§ 301 et seq.]
may be a voting member of any panel. The Secretary shall designate one
of the members of each panel to serve as chairman thereof.
(4) The Secretary shall, as appropriate, provide education and training
to each new panel member before such member participates in a panel’s
activities, including education regarding requirements under this Act [21
USCS §§ 301 et seq.] and related regulations of the Secretary, and the
administrative processes and procedures related to panel meetings.
( 5 ) Panel members (other than officers or employees of the United
States), while attending meetings or conferences of a panel or otherwise
engaged in its business, shall be entitled to receive compensation for each
1309
day so engaged, including traveltime, at rates to be fixed by the Secretary,
but not to exceed the daily equivalent of the rate in effect for positions
classified above grade GS-15 of the General Schedule. While serving away
from their homes or regular places of business, panel members may be
allowed travel expenses (including per diem in lieu of subsistence) as
authorized by section 5703 of title 5, United States Code, for persons in the
Government service employed intermittently.
( 6 ) The Secretary shall ensure that scientific advisory panels meet
regularly and at appropriate intervals so that any matter to be reviewed by
such a panel can be presented to the panel not more than 60 days after the
matter is ready for such review. Meetings of the panel may be held using
electronic communication to convene the meetings.
( 7 ) Within 90 days after a scientific advisory panel makes
recommendations on any matter under its review, the Food and Drug
Administration official responsible for the matter shall review the
conclusions and recommendations of the panel, and notify the affected
persons of the final decision on the matter, or of the reasons that no such
decision has been reached. Each such final decision shall be documented
including the rationale for the decision.
1310
(o) Postmarket studies and clinical trials; labeling.
(1) In general. A responsible person may not introduce or deliver for
introduction into interstate commerce the new drug involved if the person is
in violation of a requirement established under paragraph (3) or (4) with
respect to the drug.
(2) Definitions. For purposes of this subsection:
( A) Responsible person. The term “responsible person” means a
person who—
(i) has submitted to the Secretary a covered application that is
pending; or
(ii) is the holder of an approved covered application.
(B) Covered application. The term “covered application” means—
(i) an application under subsection (b) for a drug that is subject
to section 503(b) [21 USCS § 353(b)]; and
(ii) an application under section 351 of the Public Health Service
Act [42 USCS § 262].
( C) New safety information; serious risk. The terms “new safety
information”, “serious risk”, and “signal of a serious risk” have the
meanings given such terms in section 505-1(b) [21 USCS § 355-1(b)].
(3) Studies and clinical trials.
( A ) In general. For any or all of the purposes specified in
subparagraph (B), the Secretary may, subject to subparagraph (D),
require a responsible person for a drug to conduct a postapproval study
or studies of the drug, or a postapproval clinical trial or trials of the
drug, on the basis of scientific data deemed appropriate by the
Secretary, including information regarding chemically-related or
pharmacologically-related drugs.
(B) Purposes of study or clinical trial. The purposes referred to in
this subparagraph with respect to a postapproval study or postapproval
clinical trial are the following:
(i) To assess a known serious risk related to the use of the drug
involved.
(ii) To assess signals of serious risk related to the use of the
drug.
(iii) To identify an unexpected serious risk when available data
1311
indicates the potential for a serious risk.
( C ) Establishment of requirement after approval of covered
application. The Secretary may require a postapproval study or studies
or postapproval clinical trial or trials for a drug for which an approved
covered application is in effect as of the date on which the Secretary
seeks to establish such requirement only if the Secretary becomes aware
of new safety information.
(D) Determination by Secretary.
( i ) Postapproval studies. The Secretary may not require the
responsible person to conduct a study under this paragraph, unless
the Secretary makes a determination that the reports under subsection
(k)(1) and the active postmarket risk identification and analysis
system as available under subsection (k)(3) will not be sufficient to
meet the purposes set forth in subparagraph (B).
(ii) Postapproval clinical trials. The Secretary may not require
the responsible person to conduct a clinical trial under this
paragraph, unless the Secretary makes a determination that a
postapproval study or studies will not be sufficient to meet the
purposes set forth in subparagraph (B).
(E) Notification; timetables; periodic reports.
(i) Notification. The Secretary shall notify the responsible person
regarding a requirement under this paragraph to conduct a
postapproval study or clinical trial by the target dates for
communication of feedback from the review team to the responsible
person regarding proposed labeling and postmarketing study
commitments as set forth in the letters described in section 101(c) of
the Food and Drug Administration Amendments Act of 2007 [ 21
USCS § 379g note].
(ii) Timetable; periodic reports. For each study or clinical trial
required to be conducted under this paragraph, the Secretary shall
require that the responsible person submit a timetable for completion
of the study or clinical trial. With respect to each study required to
be conducted under this paragraph or otherwise undertaken by the
responsible person to investigate a safety issue, the Secretary shall
require the responsible person to periodically report to the Secretary
on the status of such study including whether any difficulties in
completing the study have been encountered. With respect to each
clinical trial required to be conducted under this paragraph or
otherwise undertaken by the responsible person to investigate a
1312
safety issue, the Secretary shall require the responsible person to
periodically report to the Secretary on the status of such clinical trial
including whether enrollment has begun, the number of participants
enrolled, the expected completion date, whether any difficulties
completing the clinical trial have been encountered, and registration
information with respect to the requirements under section 402(j) of
the Public Health Service Act [42 USCS § 282(j)]. If the responsible
person fails to comply with such timetable or violates any other
requirement of this subparagraph, the responsible person shall be
considered in violation of this subsection, unless the responsible
person demonstrates good cause for such noncompliance or such
other violation. The Secretary shall determine what constitutes good
cause under the preceding sentence.
( F ) Dispute resolution. The responsible person may appeal a
requirement to conduct a study or clinical trial under this paragraph
using dispute resolution procedures established by the Secretary in
regulation and guidance.
(4) Safety labeling changes requested by Secretary.
(A) New safety information. If the Secretary becomes aware of new
safety information that the Secretary believes should be included in the
labeling of the drug, the Secretary shall promptly notify the responsible
person or, if the same drug approved under section 505(b) [subsec. (b)
of this section] is not currently marketed, the holder of an approved
application under 505(j) [subsec. (j) of this section].
( B ) Response to notification. Following notification pursuant to
subparagraph (A), the responsible person or the holder of the approved
application under section 505(j) [subsec. (j) of this section] shall within
30 days—
( i ) submit a supplement proposing changes to the approved
labeling to reflect the new safety information, including changes to
boxed warnings, contraindications, warnings, precautions, or
adverse reactions; or
(ii) notify the Secretary that the responsible person or the holder
of the approved application under section 505(j) [subsec. (j) of this
section] does not believe a labeling change is warranted and submit
a statement detailing the reasons why such a change is not warranted.
(C) Review. Upon receipt of such supplement, the Secretary shall
promptly review and act upon such supplement. If the Secretary
disagrees with the proposed changes in the supplement or with the
1313
statement setting forth the reasons why no labeling change is necessary,
the Secretary shall initiate discussions to reach agreement on whether
the labeling for the drug should be modified to reflect the new safety
information, and if so, the contents of such labeling changes.
(D) Discussions. Such discussions shall not extend for more than 30
days after the response to the notification under subparagraph (B),
unless the Secretary determines an extension of such discussion period
is warranted.
(E) Order. Within 15 days of the conclusion of the discussions under
subparagraph (D), the Secretary may issue an order directing the
responsible person or the holder of the approved application under
section 505(j) [subsec. (j) of this section] to make such a labeling
change as the Secretary deems appropriate to address the new safety
information. Within 15 days of such an order, the responsible person or
the holder of the approved application under section 505(j) [subsec. (j)
of this section] shall submit a supplement containing the labeling change.
(F) Dispute resolution. Within 5 days of receiving an order under
subparagraph (E), the responsible person or the holder of the approved
application under section 505(j) may appeal using dispute resolution
procedures established by the Secretary in regulation and guidance.
( G ) Violation. If the responsible person or the holder of the
approved application under section 505(j) [subsec. (j) of this section]
has not submitted a supplement within 15 days of the date of such order
under subparagraph (E), and there is no appeal or dispute resolution
proceeding pending, the responsible person or holder shall be
considered to be in violation of this subsection. If at the conclusion of
any dispute resolution procedures the Secretary determines that a
supplement must be submitted and such a supplement is not submitted
within 15 days of the date of that determination, the responsible person
or holder shall be in violation of this subsection.
(H) Public health threat. Notwithstanding subparagraphs (A) through
(F), if the Secretary concludes that such a labeling change is necessary
to protect the public health, the Secretary may accelerate the timelines in
such subparagraphs.
(I) Rule of construction. This paragraph shall not be construed to
affect the responsibility of the responsible person or the holder of the
approved application under section 505(j) [subsec. (j) of this section] to
maintain its label in accordance with existing requirements, including
subpart B of part 201 and sections 314.70 and 601.12 of title 21, Code
of Federal Regulations (or any successor regulations).
1314
( 5 ) Non-delegation. Determinations by the Secretary under this
subsection for a drug shall be made by individuals at or above the level of
individuals empowered to approve a drug (such as division directors within
the Center for Drug Evaluation and Research).
(p) Risk evaluation and mitigation strategy.
(1) In general. A person may not introduce or deliver for introduction
into interstate commerce a new drug if—
(A) (i) the application for such drug is approved under subsection
(b) or (j) and is subject to section 503(b) [21 USCS § 353(b)]; or
(ii) the application for such drug is approved under section 351
of the Public Health Service Act [42 USCS § 262]; and
( B ) a risk evaluation and mitigation strategy is required under
section 505-1 [21 USCS § 355-1] with respect to the drug and the
person fails to maintain compliance with the requirements of the
approved strategy or with other requirements under section 505-1 [21
USCS § 355-1], including requirements regarding assessments of
approved strategies.
(2) Certain postmarket studies. The failure to conduct a postmarket study
under section 506 [21 USCS § 356], subpart H of part 314, or subpart E of
part 601 of title 21, Code of Federal Regulations (or any successor
regulations), is deemed to be a violation of paragraph (1).
( q ) Petitions and civil actions regarding approval of certain
applications.
(1) In general.
( A ) Determination. The Secretary shall not delay approval of a
pending application submitted under subsection (b)(2) or (j) of this
section or section 351(k) of the Public Health Service Act [42 USCS §
262(k)] because of any request to take any form of action relating to the
application, either before or during consideration of the request, unless
—
(i) the request is in writing and is a petition submitted to the
Secretary pursuant to section 10.30 or 10.35 of title 21, Code of
Federal Regulations (or any successor regulations); and
(ii) the Secretary determines, upon reviewing the petition, that a
delay is necessary to protect the public health.
Consideration of the petition shall be separate and apart from
1315
review and approval of any application.
(B) Notification. If the Secretary determines under subparagraph (A)
that a delay is necessary with respect to an application, the Secretary
shall provide to the applicant, not later than 30 days after making such
determination, the following information:
( i ) Notification of the fact that a determination under
subparagraph (A) has been made.
(ii) If applicable, any clarification or additional data that the
applicant should submit to the docket on the petition to allow the
Secretary to review the petition promptly.
(iii) A brief summary of the specific substantive issues raised in
the petition which form the basis of the determination.
(C) Format. The information described in subparagraph (B) shall be
conveyed via either, at the discretion of the Secretary—
(i) a document; or
(ii) a meeting with the applicant involved.
(D) Public disclosure. Any information conveyed by the Secretary
under subparagraph (C) shall be considered part of the application and
shall be subject to the disclosure requirements applicable to information
in such application.
(E) Denial based on intent to delay. If the Secretary determines that a
petition or a supplement to the petition was submitted with the primary
purpose of delaying the approval of an application and the petition does
not on its face raise valid scientific or regulatory issues, the Secretary
may deny the petition at any point based on such determination. The
Secretary may issue guidance to describe the factors that will be used to
determine under this subparagraph whether a petition is submitted with
the primary purpose of delaying the approval of an application.
(F) Final agency action. The Secretary shall take final agency action
on a petition not later than 150 days after the date on which the petition
is submitted. The Secretary shall not extend such period for any reason,
including—
(i) any determination made under subparagraph (A);
( i i ) the submission of comments relating to the petition or
supplemental information supplied by the petitioner; or
(iii) the consent of the petitioner.
1316
( G) Extension of 30-month period. If the filing of an application
resulted in first-applicant status under subsection (j)(5)(D)(i)(IV) and
approval of the application was delayed because of a petition, the 30-
month period under such subsection is deemed to be extended by a
period of time equal to the period beginning on the date on which the
Secretary received the petition and ending on the date of final agency
action on the petition (inclusive of such beginning and ending dates),
without regard to whether the Secretary grants, in whole or in part, or
denies, in whole or in part, the petition.
( H) Certification. The Secretary shall not consider a petition for
review unless the party submitting such petition does so in written form
and the subject document is signed and contains the following
certification: ‘I certify that, to my best knowledge and belief: (a) this
petition includes all information and views upon which the petition
relies; (b) this petition includes representative data and/or information
known to the petitioner which are unfavorable to the petition; and (c) I
have taken reasonable steps to ensure that any representative data and/or
information which are unfavorable to the petition were disclosed to me.
I further certify that the information upon which I have based the action
requested herein first became known to the party on whose behalf this
petition is submitted on or about the following date: ______. If I
received or expect to receive payments, including cash and other forms
of consideration, to file this information or its contents, I received or
expect to receive those payments from the following persons or
organizations: ________________. I verify under penalty of perjury that
the foregoing is true and correct as of the date of the submission of this
petition.’, with the date on which such information first became known
to such party and the names of such persons or organizations inserted in
the first and second blank space, respectively.
( I ) Verification. The Secretary shall not accept for review any
supplemental information or comments on a petition unless the party
submitting such information or comments does so in written form and the
subject document is signed and contains the following verification: ‘I
certify that, to my best knowledge and belief: (a) I have not intentionally
delayed submission of this document or its contents; and (b) the
information upon which I have based the action requested herein first
became known to me on or about ________. If I received or expect to
receive payments, including cash and other forms of consideration, to
file this information or its contents, I received or expect to receive those
payments from the following persons or organizations:
________________. I verify under penalty of perjury that the foregoing
is true and correct as of the date of the submission of this petition.’, with
1317
the date on which such information first became known to the party and
the names of such persons or organizations inserted in the first and
second blank space, respectively.
(2) Exhaustion of administrative remedies.
( A) Final agency action within 150 days. The Secretary shall be
considered to have taken final agency action on a petition if—
(i) during the 150-day period referred to in paragraph (1)(F), the
Secretary makes a final decision within the meaning of section
10.45(d) of title 21, Code of Federal Regulations (or any successor
regulation); or
(ii) such period expires without the Secretary having made such a
final decision.
( B ) Dismissal of certain civil actions. If a civil action is filed
against the Secretary with respect to any issue raised in the petition
before the Secretary has taken final agency action on the petition within
the meaning of subparagraph (A), the court shall dismiss without
prejudice the action for failure to exhaust administrative remedies.
(C) Administrative record. For purposes of judicial review related
to the approval of an application for which a petition under paragraph
(1) was submitted, the administrative record regarding any issue raised
by the petition shall include—
(i) the petition filed under paragraph (1) and any supplements and
comments thereto;
(ii) the Secretary’s response to such petition, if issued; and
(iii) other information, as designated by the Secretary, related to
the Secretary’s determinations regarding the issues raised in such
petition, as long as the information was considered by the agency no
later than the date of final agency action as defined under
subparagraph (2)(A), and regardless of whether the Secretary
responded to the petition at or before the approval of the application
at issue in the petition.
(3) Annual report on delays in approvals per petitions. The Secretary
shall annually submit to the Congress a report that specifies—
( A ) the number of applications that were approved during the
preceding 12-month period;
( B) the number of such applications whose effective dates were
delayed by petitions referred to in paragraph (1) during such period;
1318
(C) the number of days by which such applications were so delayed;
and
(D) the number of such petitions that were submitted during such
period.
(4) Exceptions.
(A) This subsection does not apply to—
(i) a petition that relates solely to the timing of the approval of an
application pursuant to subsection (j)(5)(B)(iv); or
(ii) a petition that is made by the sponsor of an application and
that seeks only to have the Secretary take or refrain from taking any
form of action with respect to that application.
( B) Paragraph (2) does not apply to a petition addressing issues
concerning an application submitted pursuant to section 351(k) of the
Public Health Service Act [42 USCS § 262(k)].
(5) Definitions.
( A ) Application. For purposes of this subsection, the term
“application” means an application submitted under subsection (b)(2) or
(j) of this section or section 351(k) of the Public Health Service Act [42
USCS § 262(k)].
(B) Petition. For purposes of this subsection, other than paragraph
(1)(A)(i), the term “petition” means a request described in paragraph
(1)(A)(i).
(r) Postmarket drug safety information for patients and providers.
(1) Establishment. Not later than 1 year after the date of the enactment of
the Food and Drug Administration Amendments Act of 2007 [enacted Sept.
27, 2007], the Secretary shall improve the transparency of information about
drugs and allow patients and health care providers better access to
information about drugs by developing and maintaining an Internet Web site
that—
(A) provides links to drug safety information listed in paragraph (2)
for prescription drugs that are approved under this section or licensed
under section 351 of the Public Health Service Act [42 USCS § 262];
and
(B) improves communication of drug safety information to patients
and providers.
1319
(2) Internet web site. The Secretary shall carry out paragraph (1) by—
(A) developing and maintaining an accessible, consolidated Internet
Web site with easily searchable drug safety information, including the
information found on United States Government Internet Web sites, such
as the United States National Library of Medicine’s Daily Med and
Medline Plus Web sites, in addition to other such Web sites maintained
by the Secretary;
(B) ensuring that the information provided on the Internet Web site is
comprehensive and includes, when available and appropriate—
(i) patient labeling and patient packaging inserts;
(ii) a link to a list of each drug, whether approved under this
section or licensed under such section 351 [42 USCS § 262], for
which a Medication Guide, as provided for under part 208 of title
21, Code of Federal Regulations (or any successor regulations), is
required;
(iii) a link to the registry and results data bank provided for
under subsections (i) and (j) of section 402 of the Public Health
Service Act [42 USCS § 282];
(iv) the most recent safety information and alerts issued by the
Food and Drug Administration for drugs approved by the Secretary
under this section, such as product recalls, warning letters, and
import alerts;
(v) publicly available information about implemented RiskMAPs
and risk evaluation and mitigation strategies under subsection (o);
(vi) guidance documents and regulations related to drug safety;
and
(vii) other material determined appropriate by the Secretary;
(C) providing access to summaries of the assessed and aggregated
data collected from the active surveillance infrastructure under
subsection (k)(3) to provide information of known and serious side-
effects for drugs approved under this section or licensed under such
section 351 [42 USCS § 262];
(D) preparing, by 18 months after approval of a drug or after use of
the drug by 10,000 individuals, whichever is later, a summary analysis
of the adverse drug reaction reports received for the drug, including
identification of any new risks not previously identified, potential new
risks, or known risks reported in unusual number;
1320
( E ) enabling patients, providers, and drug sponsors to submit
adverse event reports through the Internet Web site;
(F) providing educational materials for patients and providers about
the appropriate means of disposing of expired, damaged, or unusable
medications; and
(G) supporting initiatives that the Secretary determines to be useful
to fulfill the purposes of the Internet Web site.
(3) Posting of drug labeling. The Secretary shall post on the Internet
Web site established under paragraph (1) the approved professional
labeling and any required patient labeling of a drug approved under this
section or licensed under such section 351 [42 USCS § 262] not later than
21 days after the date the drug is approved or licensed, including in a
supplemental application with respect to a labeling change.
(4) Private sector resources. To ensure development of the Internet Web
site by the date described in paragraph (1), the Secretary may, on a
temporary or permanent basis, implement systems or products developed by
private entities.
(5) Authority for contracts. The Secretary may enter into contracts with
public and private entities to fulfill the requirements of this subsection.
(6) Review. The Advisory Committee on Risk Communication under
section 567 [21 USCS § 360bbb-6] shall, on a regular basis, perform a
comprehensive review and evaluation of the types of risk communication
information provided on the Internet Web site established under paragraph
(1) and, through other means, shall identify, clarify, and define the purposes
and types of information available to facilitate the efficient flow of
information to patients and providers, and shall recommend ways for the
Food and Drug Administration to work with outside entities to help
facilitate the dispensing of risk communication information to patients and
providers.
( s ) Referral to advisory committee. Prior to the approval of a drug no
active ingredient (including any ester or salt of the active ingredient) of which
has been approved in any other application under this section or section 351 of
the Public Health Service Act [42 USCS § 262], the Secretary shall—
( 1 ) refer such drug to a Food and Drug Administration advisory
committee for review at a meeting of such advisory committee; or
( 2) if the Secretary does not refer such a drug to a Food and Drug
Administration advisory committee prior to the approval of the drug,
provide in the action letter on the application for the drug a summary of the
1321
reasons why the Secretary did not refer the drug to an advisory committee
prior to approval.
(t) Database for authorized generic drugs.
(1) In general.
(A) Publication. The Commissioner shall—
(i) not later than 9 months after the date of the enactment of the
Food and Drug Administration Amendments Act of 2007 [enacted
Sept. 27, 2007], publish a complete list on the Internet Web site of
the Food and Drug Administration of all authorized generic drugs
(including drug trade name, brand company manufacturer, and the
date the authorized generic drug entered the market); and
(ii) update the list quarterly to include each authorized generic
drug included in an annual report submitted to the Secretary by the
sponsor of a listed drug during the preceding 3-month period.
( B) Notification. The Commissioner shall notify relevant Federal
agencies, including the Centers for Medicare & Medicaid Services and
the Federal Trade Commission, when the Commissioner first publishes
the information described in subparagraph (A) that the information has
been published and that the information will be updated quarterly.
(2) Inclusion. The Commissioner shall include in the list described in
paragraph (1) each authorized generic drug included in an annual report
submitted to the Secretary by the sponsor of a listed drug after January 1,
1999.
(3) Authorized generic drug. In this section, the term “authorized generic
drug” means a listed drug (as that term is used in subsection (j)) that—
(A) has been approved under subsection (c); and
(B) is marketed, sold, or distributed directly or indirectly to retail
class of trade under a different labeling, packaging (other than
repackaging as the listed drug in blister packs, unit doses, or similar
packaging for use in institutions), product code, labeler code, trade
name, or trade mark than the listed drug.
(u) Certain drugs containing single enantiomers.
(1) In general. For purposes of subsections (c)(3)(E)(ii) and (j)(5)(F)
(ii), if an application is submitted under subsection (b) for a non-racemic
drug containing as an active ingredient (including any ester or salt of the
active ingredient) a single enantiomer that is contained in a racemic drug
1322
approved in another application under subsection (b), the applicant may, in
the application for such non-racemic drug, elect to have the single
enantiomer not be considered the same active ingredient as that contained in
the approved racemic drug, if—
(A)
( i ) the single enantiomer has not been previously approved
except in the approved racemic drug; and
(ii) the application submitted under subsection (b) for such non-
racemic drug—
(I) includes full reports of new clinical investigations (other
than bioavailability studies)—
(aa) necessary for the approval of the application under
subsections (c) and (d); and
(bb) conducted or sponsored by the applicant; and
(II) does not rely on any clinical investigations that are part of
an application submitted under subsection (b) for approval of the
approved racemic drug; and
( B) the application submitted under subsection (b) for such non-
racemic drug is not submitted for approval of a condition of use—
(i) in a therapeutic category in which the approved racemic drug
has been approved; or
(ii) for which any other enantiomer of the racemic drug has been
approved.
(2) Limitation.
(A) No approval in certain therapeutic categories. Until the date that
is 10 years after the date of approval of a non-racemic drug described in
paragraph (1) and with respect to which the applicant has made the
election provided for by such paragraph, the Secretary shall not approve
such non-racemic drug for any condition of use in the therapeutic
category in which the racemic drug has been approved.
( B ) Labeling. If applicable, the labeling of a non-racemic drug
described in paragraph (1) and with respect to which the applicant has
made the election provided for by such paragraph shall include a
statement that the non-racemic drug is not approved, and has not been
shown to be safe and effective, for any condition of use of the racemic
drug.
1323
(3) Definition.
(A) In general. For purposes of this subsection, the term “therapeutic
category” means a therapeutic category identified in the list developed
by the United States Pharmacopeia pursuant to section 1860D-4(b)(3)
(C)(ii) of the Social Security Act [42 USCS § 1395w-104(b)(3)(C)(ii)]
and as in effect on the date of the enactment of this subsection [enacted
Sept. 27, 2007].
(B) Publication by Secretary. The Secretary shall publish the list
described in subparagraph (A) and may amend such list by regulation.
(4) Availability. The election referred to in paragraph (1) may be made
only in an application that is submitted to the Secretary after the date of the
enactment of this subsection [enacted Sept. 27, 2007] and before October 1,
2017.
(v) Antibiotic drugs submitted before November 21, 1997.
(1) Antibiotic drugs approved before November 21, 1997.
(A) In general. Notwithstanding any provision of the Food and Drug
Administration Modernization Act of 1997 or any other provision of
law, a sponsor of a drug that is the subject of an application described in
subparagraph (B)(i) shall be eligible for, with respect to the drug, the 3-
year exclusivity period referred to under clauses (iii) and (iv) of
subsection (c)(3)(E) and under clauses (iii) and (iv) of subsection (j)(5)
(F), subject to the requirements of such clauses, as applicable.
(B) Application; antibiotic drug described.
( i ) Application. An application described in this clause is an
application for marketing submitted under this section after the date
of the enactment of this subsection in which the drug that is the
subject of the application contains an antibiotic drug described in
clause (ii).
(ii) Antibiotic drug. An antibiotic drug described in this clause is
an antibiotic drug that was the subject of an application approved by
the Secretary under section 507 of this Act [former 21 USCS § 357]
(as in effect before November 21, 1997).
( 2 ) Antibiotic drugs submitted before November 21, 1997, but not
approved.
(A) In general. Notwithstanding any provision of the Food and Drug
Administration Modernization Act of 1997 or any other provision of
law, a sponsor of a drug that is the subject of an application described in
1324
subparagraph (B)(i) may elect to be eligible for, with respect to the drug
—
(i)
(I) the 3-year exclusivity period referred to under clauses (iii)
and (iv) of subsection (c)(3)(E) and under clauses (iii) and (iv)
of subsection (j)(5)(F), subject to the requirements of such
clauses, as applicable; and
(II) the 5-year exclusivity period referred to under clause (ii)
of subsection (c)(3)(E) and under clause (ii) of subsection (j)(5)
(F), subject to the requirements of such clauses, as applicable; or
(ii) a patent term extension under section 156 of title 35, United
States Code, subject to the requirements of such section.
(B) Application; antibiotic drug described.
( i ) Application. An application described in this clause is an
application for marketing submitted under this section after the date
of the enactment of this subsection in which the drug that is the
subject of the application contains an antibiotic drug described in
clause (ii).
(ii) Antibiotic drug. An antibiotic drug described in this clause is
an antibiotic drug that was the subject of 1 or more applications
received by the Secretary under section 507 of this Act [former 21
USCS § 357] (as in effect before November 21, 1997), none of
which was approved by the Secretary under such section.
(3) Limitations.
( A ) Exclusivities and extensions. Paragraphs (1)(A) and (2)(A)
shall not be construed to entitle a drug that is the subject of an approved
application described in subparagraphs [subparagraph] (1)(B)(i) or (2)
(B)(i), as applicable, to any market exclusivities or patent extensions
other than those exclusivities or extensions described in paragraph (1)
(A) or (2)(A).
( B) Conditions of use. Paragraphs (1)(A) and (2)(A)(i) shall not
apply to any condition of use for which the drug referred to in
subparagraph (1)(B)(i) or (2)(B)(i), as applicable, was approved
before the date of the enactment of this subsection.
(4) Application of certain provisions. Notwithstanding section 125, or
any other provision, of the Food and Drug Administration Modernization
Act of 1997, or any other provision of law, and subject to the limitations in
1325
paragraphs (1), (2), and (3), the provisions of the shall apply to any drug
subject to paragraph (1) or any drug with respect to which an election is
made under paragraph (2)(A).
(w) Deadline for determination on certain petitions. The Secretary shall
issue a final, substantive determination on a petition submitted pursuant to
subsection (b) of section 314.161 of title 21, Code of Federal Regulations (or
any successor regulations), no later than 270 days after the date the petition is
submitted.
Leg.H. June 25, 1938, ch 675, Ch. V, Subch A, § 505, 52 Stat. 1052; June 11, 1960, P.
L. 86-507, § 1(18), 74 Stat. 201; Oct. 10, 1962, P. L. 87-781, Title I, Part A, §§ 102(b)¬(d),
103(a), (b), 104(a)¬(d)(2), 76 Stat. 781-783, 784, 785; Aug. 16, 1972, P. L. 92-387, § 4(d),
86 Stat. 562; Jan. 4, 1983, P. L. 97-414, § 2(b), 96 Stat. 2051; Sept. 24, 1984, P. L. 98-417,
Title I, §§ 101, 102(a), (b)(1)¬(5), 103, 104, 98 Stat. 1585, 1592, 1593, 1597; May 13,
1992, P. L. 102-282, § 5, 106 Stat. 161; Aug. 13, 1993, P. L. 103-80, § 3(n), 107 Stat. 777;
Nov. 21, 1997, P. L. 105-115, Title I, Subtitle B, §§ 115, 117, 119, 120, 124(a), 111 Stat.
2313, 2315¬2318, 2324; Nov. 29, 1999, P. L. 106-113, Div B, § 1000(a)(9), 113 Stat.
1536; Jan. 4, 2002, P. L. 107-109, § 15(c)(1), 115 Stat. 1420; Dec. 3, 2003, P. L. 108-155,
§ 2(b)(1), 117 Stat. 1941; Dec. 8, 2003, P. L. 108-173, Title XI, Subtitle A, §§ 1101(a), (b),
1102(a), 1103(a), 117 Stat. 2448, 2457, 2460; Sept. 27, 2007, P. L. 110-85, Title VII, §
701(b), Title VIII, § 801(b)(3)(A), (B), Title IX, Subtitle A, §§ 901(a), 903, 905(a), Subtitle
B, §§ 914(a), 915, 916, 918, 920, 921, Title XI, Subtitle B, § 1113, 121 Stat. 903, 921, 922,
943, 944, 953, 957, 960, 961, 976; Aug. 14, 2008, P. L. 110-316, Title III, § 301, 122 Stat.
3524; Oct. 8, 2008, P. L. 110-379, § 4(a), 122 Stat. 4076; June 22, 2009, P. L. 111-31, Div
A, Title I, § 103(e), 123 Stat. 1837; March 23, 2010, P. L. 111-148, Title VII, Subtitle A, §
7002(d)(1), Title X, Subtitle F, § 10609, 124 Stat. 816, 1014; July 9, 2012, P. L. 112-144,
Title IX, § 905, Title XI, Subtitle A, § 1101, Subtitle C, §§ 1134(a), 1135, 126 Stat. 1092,
1108, 1123; March 13, 2013, P. L. 113-5, Title III, § 301, 127 Stat. 179.
Amendments
2010. Act March 23, 2010, in subsec. (b)(5)(B), inserted “or, with respect to an applicant for
approval of a biological product under section 351(k) of the Public Health Service Act, any
necessary clinical study or studies”; and added subsec. (j)(10).
2012. Act July 9, 2012, in subsec. (d), added the sentences beginning “The Secretary shall
implement …” and “Nothing in the preceding sentence …”; in subsec. (q), in para. (1), in
subpara. (A), inserted “of this section or section 351(k) of the Public Health Service Act”,
and in subpara. (F), substituted “150 days” for “180 days”, in para. (2)(A), in the heading
substituted “150” for “180”, and in the text, substituted “150-day” for “180-day”, in para. (4),
designated the existing provisions as subpara. (A), redeisgnated former subpara. (A) and (B)
as cls. (i) an (ii), and added new subpara. (B), and in para. (5), inserted “of this section or
section 351(k) of the Public Health Service Act”; and in subsec. (u), in para. (1)(A)(ii)(II),
inserted “clinical”, and in para. (4), substituted “2017” for “2012”.
Such Act further (applicable to petitions submitted on or after the date of enactment, as
provided by § 1134(b) of such Act, which appears as a note to this section), added subsec.
(w).
1326
2013. Act March 13, 2013, in subsec. (b)(5)(B), substituted “size—” and cls. (i) and (ii) for
“size of clinical trials intended to form the primary basis of an effectiveness claim or, with
respect to an applicant for approval of a biological product under section 351(k) of the
Public Health Service Act, any necessary clinical study or studies.”.

(a) Submission of proposed strategy.
(1) Initial approval. Initial approval. If the Secretary, in consultation
with the office responsible for reviewing the drug and the office responsible
for postapproval safety with respect to the drug, determines that a risk
evaluation and mitigation strategy is necessary to ensure that the benefits of
the drug outweigh the risks of the drug, and informs the person who submits
such application of such determination, then such person shall submit to the
Secretary as part of such application a proposed risk evaluation and
mitigation strategy. In making such a determination, the Secretary shall
consider the following factors:
( A ) The estimated size of the population likely to use the drug
involved.
(B) The seriousness of the disease or condition that is to be treated
with the drug.
(C) The expected benefit of the drug with respect to such disease or
condition.
(D) The expected or actual duration of treatment with the drug.
(E) The seriousness of any known or potential adverse events that
may be related to the drug and the background incidence of such events
in the population likely to use the drug.
(F) Whether the drug is a new molecular entity.
(2) Postapproval requirement.
(A) In general. If the Secretary has approved a covered application
(including an application approved before the effective date of this
section) and did not when approving the application require a risk
evaluation and mitigation strategy under paragraph (1), the Secretary, in
consultation with the offices described in paragraph (1), may
subsequently require such a strategy for the drug involved (including
when acting on a supplemental application seeking approval of a new
indication for use of the drug) if the Secretary becomes aware of new
safety information and makes a determination that such a strategy is
1327
necessary to ensure that the benefits of the drug outweigh the risks of the
drug.
(B) Submission of proposed strategy. Not later than 120 days after
the Secretary notifies the holder of an approved covered application that
the Secretary has made a determination under subparagraph (A) with
respect to the drug involved, or within such other reasonable time as the
Secretary requires to protect the public health, the holder shall submit to
the Secretary a proposed risk evaluation and mitigation strategy.
(3) Abbreviated new drug applications. The applicability of this
section to an application under section 505(j) [21 USCS § 355(j)] is subject
to subsection (i).
(4) Non-delegation. Determinations by the Secretary under this
subsection for a drug shall be made by individuals at or above the level of
individuals empowered to approve a drug (such as division directors within
the Center for Drug Evaluation and Research).
(b) Definitions. For purposes of this section:
(1) Adverse drug experience. Adverse drug experience. The term
“adverse drug experience” means any adverse event associated with the use
of a drug in humans, whether or not considered drug related, including—
(A) an adverse event occurring in the course of the use of the drug in
professional practice;
( B ) an adverse event occurring from an overdose of the drug,
whether accidental or intentional;
(C) an adverse event occurring from abuse of the drug;
(D) an adverse event occurring from withdrawal of the drug; and
(E) any failure of expected pharmacological action of the drug.
(2) Covered application. Covered application. The term “covered
application” means an application referred to in section 505(p)(1)(A) [21
USCS § 355(p)(1)(A)].
(3) New safety information. New safety information. The term “new
safety information”, with respect to a drug, means information derived from
a clinical trial, an adverse event report, a postapproval study (including a
study under section 505(o)(3) [21 USCS § 355(o)(3)]), or peer-reviewed
biomedical literature; data derived from the postmarket risk identification
and analysis system under section 505(k) [21 USCS § 355(k)]; or other
scientific data deemed appropriate by the Secretary about—
1328
(A) a serious risk or an unexpected serious risk associated with use
of the drug that the Secretary has become aware of (that may be based on
a new analysis of existing information) since the drug was approved,
since the risk evaluation and mitigation strategy was required, or since
the last assessment of the approved risk evaluation and mitigation
strategy for the drug; or
(B) the effectiveness of the approved risk evaluation and mitigation
strategy for the drug obtained since the last assessment of such strategy.
(4) Serious adverse drug experience. The term “serious adverse drug
experience” is an adverse drug experience that—
(A) results in—
(i) death;
( i i ) an adverse drug experience that places the patient at
immediate risk of death from the adverse drug experience as it
occurred (not including an adverse drug experience that might have
caused death had it occurred in a more severe form);
( i i i ) inpatient hospitalization or prolongation of existing
hospitalization;
(iv) a persistent or significant incapacity or substantial disruption
of the ability to conduct normal life functions; or
(v) a congenital anomaly or birth defect; or
( B ) based on appropriate medical judgment, may jeopardize the
patient and may require a medical or surgical intervention to prevent an
outcome described under subparagraph (A).
(5) Serious risk. The term “serious risk” means a risk of a serious
adverse drug experience.
(6) Signal of a serious risk. The term “signal of a serious risk” means
information related to a serious adverse drug experience associated with
use of a drug and derived from—
(A) a clinical trial;
(B) adverse event reports;
(C) a postapproval study, including a study under section 505(o)(3)
[21 USCS § 355(o)(3)];
(D) peer-reviewed biomedical literature;
(E) data derived from the postmarket risk identification and analysis
1329
system under section 505(k)(4) [21 USCS § 355(k)(4)]; or
(F) other scientific data deemed appropriate by the Secretary.
(7) Responsible person. The term “responsible person” means the
person submitting a covered application or the holder of the approved such
application.
(8) Unexpected serious risk. The term “unexpected serious risk” means
a serious adverse drug experience that is not listed in the labeling of a drug,
or that may be symptomatically and pathophysiologically related to an
adverse drug experience identified in the labeling, but differs from such
adverse drug experience because of greater severity, specificity, or
prevalence.
( c ) Contents. A proposed risk evaluation and mitigation strategy under
subsection (a) shall—
(1) include the timetable required under subsection (d); and
(2) to the extent required by the Secretary, in consultation with the office
responsible for reviewing the drug and the office responsible for
postapproval safety with respect to the drug, include additional elements
described in subsections (e) and (f).
( d ) Minimal strategy. For purposes of subsection (c)(1), the risk
evaluation and mitigation strategy for a drug shall require a timetable for
submission of assessments of the strategy that—
( 1 ) includes an assessment, by the date that is 18 months after the
strategy is initially approved;
(2) includes an assessment by the date that is 3 years after the strategy is
initially approved;
(3) includes an assessment in the seventh year after the strategy is so
approved; and
(4) subject to paragraphs (1), (2), and (3)—
(A) is at a frequency specified in the strategy;
(B) is increased or reduced in frequency as necessary as provided
for in subsection (g)(4)(A); and
(C) is eliminated after the 3-year period described in paragraph (1)
if the Secretary determines that serious risks of the drug have been
adequately identified and assessed and are being adequately managed.
(e) Additional potential elements of strategy.
1330
(1) In general. The Secretary, in consultation with the offices described
in subsection (c)(2), may under such subsection require that the risk
evaluation and mitigation strategy for a drug include 1 or more of the
additional elements described in this subsection if the Secretary makes the
determination required with respect to each element involved.
(2) Medication guide; patient package insert. The risk evaluation and
mitigation strategy for a drug may require that, as applicable, the
responsible person develop for distribution to each patient when the drug is
dispensed—
(A) a Medication Guide, as provided for under part 208 of title 21,
Code of Federal Regulations (or any successor regulations); and
(B) a patient package insert, if the Secretary determines that such
insert may help mitigate a serious risk of the drug.
(3) Communication plan. The risk evaluation and mitigation strategy
for a drug may require that the responsible person conduct a communication
plan to health care providers, if, with respect to such drug, the Secretary
determines that such plan may support implementation of an element of the
strategy (including under this paragraph). Such plan may include—
(A) sending letters to health care providers;
( B ) disseminating information about the elements of the risk
evaluation and mitigation strategy to encourage implementation by health
care providers of components that apply to such health care providers,
or to explain certain safety protocols (such as medical monitoring by
periodic laboratory tests); or
( C ) disseminating information to health care providers through
professional societies about any serious risks of the drug and any
protocol to assure safe use.
(f) Providing safe access for patients to drugs with known serious risks
that would otherwise be unavailable.
(1) Allowing safe access to drugs with known serious risks. Allowing
safe access to drugs with known serious risks. The Secretary, in
consultation with the offices described in subsection (c)(2), may require that
the risk evaluation and mitigation strategy for a drug include such elements
as are necessary to assure safe use of the drug, because of its inherent
toxicity or potential harmfulness, if the Secretary determines that—
(A) the drug, which has been shown to be effective, but is associated
with a serious adverse drug experience, can be approved only if, or
1331
would be withdrawn unless, such elements are required as part of such
strategy to mitigate a specific serious risk listed in the labeling of the
drug; and
(B) for a drug initially approved without elements to assure safe use,
other elements under subsections (c), (d), and (e) are not sufficient to
mitigate such serious risk.
(2) Assuring access and minimizing burden. Assuring access and
minimizing burden. Such elements to assure safe use under paragraph (1)
shall—
( A) be commensurate with the specific serious risk listed in the
labeling of the drug;
(B) within 30 days of the date on which any element under paragraph
(1) is imposed, be posted publicly by the Secretary with an explanation
of how such elements will mitigate the observed safety risk;
( C ) considering such risk, not be unduly burdensome on patient
access to the drug, considering in particular—
( i ) patients with serious or life-threatening diseases or
conditions; and
(ii) patients who have difficulty accessing health care (such as
patients in rural or medically underserved areas); and
(D) to the extent practicable, so as to minimize the burden on the
health care delivery system—
(i) conform with elements to assure safe use for other drugs with
similar, serious risks; and
(ii) be designed to be compatible with established distribution,
procurement, and dispensing systems for drugs.
(3) Elements to assure safe use. The elements to assure safe use under
paragraph (1) shall include 1 or more goals to mitigate a specific serious
risk listed in the labeling of the drug and, to mitigate such risk, may require
that—
(A) health care providers who prescribe the drug have particular
training or experience, or are specially certified (the opportunity to
obtain such training or certification with respect to the drug shall be
available to any willing provider from a frontier area in a widely
available training or certification method (including an on-line course or
via mail) as approved by the Secretary at reasonable cost to the
provider);
1332
(B) pharmacies, practitioners, or health care settings that dispense
the drug are specially certified (the opportunity to obtain such
certification shall be available to any willing provider from a frontier
area);
( C) the drug be dispensed to patients only in certain health care
settings, such as hospitals;
( D ) the drug be dispensed to patients with evidence or other
documentation of safe-use conditions, such as laboratory test results;
(E) each patient using the drug be subject to certain monitoring; or
(F) each patient using the drug be enrolled in a registry.
(4) Implementation system. The elements to assure safe use under
paragraph (1) that are described in subparagraphs (B), (C), and (D) of
paragraph (3) may include a system through which the applicant is able to
take reasonable steps to—
(A) monitor and evaluate implementation of such elements by health
care providers, pharmacists, and other parties in the health care system
who are responsible for implementing such elements; and
( B ) work to improve implementation of such elements by such
persons.
(5) Evaluation of elements to assure safe use. The Secretary, through
the Drug Safety and Risk Management Advisory Committee (or successor
committee) of the Food and Drug Administration, shall—
( A ) seek input from patients, physicians, pharmacists, and other
health care providers about how elements to assure safe use under this
subsection for 1 or more drugs may be standardized so as not to be—
(i) unduly burdensome on patient access to the drug; and
(ii) to the extent practicable, minimize the burden on the health
care delivery system;
(B) at least annually, evaluate, for 1 or more drugs, the elements to
assure safe use of such drug to assess whether the elements—
(i) assure safe use of the drug;
(ii) are not unduly burdensome on patient access to the drug; and
(iii) to the extent practicable, minimize the burden on the health
care delivery system; and
(C) considering such input and evaluations—
1333
(i) issue or modify agency guidance about how to implement the
requirements of this subsection; and
(ii) modify elements under this subsection for 1 or more drugs as
appropriate.
(6) Additional mechanisms to assure access. The mechanisms under
section 561 [21 USCS § 360bbb] to provide for expanded access for
patients with serious or life-threatening diseases or conditions may be used
to provide access for patients with a serious or life-threatening disease or
condition, the treatment of which is not an approved use for the drug, to a
drug that is subject to elements to assure safe use under this subsection. The
Secretary shall promulgate regulations for how a physician may provide the
drug under the mechanisms of section 561 [21 USCS § 360bbb].
(7) [Deleted]
(8) Limitation. No holder of an approved covered application shall use
any element to assure safe use required by the Secretary under this
subsection to block or delay approval of an application under section
505(b)(2) or (j) [21 USCS § 355(b)(2) or (j)] or to prevent application of
such element under subsection (i)(1)(B) to a drug that is the subject of an
abbreviated new drug application.
(g) Assessment and modification of approved strategy.
(1) Voluntary assessments. After the approval of a risk evaluation and
mitigation strategy under subsection (a), the responsible person involved
may, subject to paragraph (2), submit to the Secretary an assessment of the
approved strategy for the drug involved at any time.
(2) Required assessments. A responsible person shall submit an
assessment of the approved risk evaluation and mitigation strategy for a drug
—
(A) when submitting a supplemental application for a new indication
for use under section 505(b) [21 USCS § 355(b)] or under section 351
of the Public Health Service Act [42 USCS § 262], unless the drug is not
subject to section 503(b) [21 USCS § 353(b)] and the risk evaluation
and mitigation strategy for the drug includes only the timetable under
subsection (d);
(B) when required by the strategy, as provided for in such timetable
under subsection (d);
(C) within a time period to be determined by the Secretary, if the
Secretary, in consultation with the offices described in subsection (c)
1334
(2), determines that an assessment is needed to evaluate whether the
approved strategy should be modified to—
(i) ensure the benefits of the drug outweigh the risks of the drug;
or
(ii) minimize the burden on the health care delivery system of
complying with the strategy.
(D) [Deleted]
(3) Requirements for assessments. An assessment under paragraph (1)
or (2) of an approved risk evaluation and mitigation strategy for a drug shall
include, with respect to each goal included in the strategy, an assessment of
the extent to which the approved strategy, including each element of the
strategy, is meeting the goal or whether 1 or more such goals or such
elements should be modified.
(4) Modification.
(A) On initiative of responsible person. After the approval of a risk
evaluation and mitigation strategy by the Secretary, the responsible
person may, at any time, submit to the Secretary a proposal to modify the
approved strategy. Such proposal may propose the addition,
modification, or removal of any goal or element of the approved strategy
and shall include an adequate rationale to support such proposed
addition, modification, or removal of any goal or element of the strategy.
(B) On initiative of Secretary. After the approval of a risk
evaluation and mitigation strategy by the Secretary, the Secretary may, at
any time, require a responsible person to submit a proposed
modification to the strategy within 120 days or within such reasonable
time as the Secretary specifies, if the Secretary, in consultation with the
offices described in subsection (c)(2), determines that 1 or more goals
or elements should be added, modified, or removed from the approved
strategy to—
(i) ensure the benefits of the drug outweigh the risks of the drug;
or
(ii) minimize the burden on the health care delivery system of
complying with the strategy.
( h ) Review of proposed strategies; review of assessments and
modifications of approved strategies.
(1) In general. The Secretary, in consultation with the offices described
in subsection (c)(2), shall promptly review each proposed risk evaluation
1335
and mitigation strategy for a drug submitted under subsection (a) and each
assessment of and proposed modification to an approved risk evaluation and
mitigation strategy for a drug submitted under subsection (g), and, if
necessary, promptly initiate discussions with the responsible person about
such proposed strategy, assessment, or modification.
(2) Action.
(A) In general.
(i) Timeframe. Unless the dispute resolution process described
under paragraph (3) or (4) applies, and, except as provided in clause
(ii) or clause (iii) below, the Secretary, in consultation with the
offices described in subsection (c)(2), shall review and act on the
proposed risk evaluation and mitigation strategy for a drug or any
proposed modification to any required strategy within 180 days of
receipt of the proposed strategy or modification.
(ii) Minor modifications. The Secretary shall review and act on
a proposed minor modification, as defined by the Secretary in
guidance, within 60 days of receipt of such modification.
(iii) REMS modification due to safety label changes. Not later
than 60 days after the Secretary receives a proposed modification to
an approved risk evaluation and mitigation strategy to conform the
strategy to approved safety label changes, including safety labeling
changes initiated by the sponsor in accordance with FDA regulatory
requirements, or to a safety label change that the Secretary has
directed the holder of the application to make pursuant to section
505(o)(4) [21 USCS § 355(o)(4)], the Secretary shall review and act
on such proposed modification to the approved strategy.
(iv) Guidance. The Secretary shall establish, through guidance,
that responsible persons may implement certain modifications to an
approved risk evaluation and mitigation strategy following
notification to the Secretary.
(B) Inaction. An approved risk evaluation and mitigation strategy
shall remain in effect until the Secretary acts, if the Secretary fails to act
as provided under subparagraph (A).
(C) Public availability. Upon acting on a proposed risk evaluation
and mitigation strategy or proposed modification to a risk evaluation and
mitigation strategy under subparagraph (A), the Secretary shall make
publicly available an action letter describing the actions taken by the
Secretary under such subparagraph (A).
1336
(3) Dispute resolution at initial approval. If a proposed risk evaluation
and mitigation strategy is submitted under subsection (a)(1) in an
application for initial approval of a drug and there is a dispute about the
strategy, the responsible person shall use the major dispute resolution
procedures as set forth in the letters described in section 101(c) of the Food
and Drug Administration Amendments Act of 2007 [21 USCS § 379g note].
(4) Dispute resolution in all other cases.
(A) Request for review.
(i) In general. The responsible person may, after the sponsor is
required to make a submission under subsection (a)(2) or (g),
request in writing that a dispute about the strategy be reviewed by
the Drug Safety Oversight Board under subsection (j), except that the
determination of the Secretary to require a risk evaluation and
mitigation strategy is not subject to review under this paragraph. The
preceding sentence does not prohibit review under this paragraph of
the particular elements of such a strategy.
(ii) Scheduling. Upon receipt of a request under clause (i), the
Secretary shall schedule the dispute involved for review under
subparagraph (B) and, not later than 5 business days of scheduling
the dispute for review, shall publish by posting on the Internet or
otherwise a notice that the dispute will be reviewed by the Drug
Safety Oversight Board.
(B) Scheduling review. If a responsible person requests review
under subparagraph (A), the Secretary—
(i) shall schedule the dispute for review at 1 of the next 2 regular
meetings of the Drug Safety Oversight Board, whichever meeting
date is more practicable; or
(ii) may convene a special meeting of the Drug Safety Oversight
Board to review the matter more promptly, including to meet an
action deadline on an application (including a supplemental
application).
(C) Agreement after discussion or administrative appeals.
(i) Further discussion or administrative appeals. A request for
review under subparagraph (A) shall not preclude further
discussions to reach agreement on the risk evaluation and mitigation
strategy, and such a request shall not preclude the use of
administrative appeals within the Food and Drug Administration to
reach agreement on the strategy, including appeals as described in
1337
the letters described in section 101(c) of the Food and Drug
Administration Amendments Act of 2007 [ 21 USCS § 379g note] for
procedural or scientific matters involving the review of human drug
applications and supplemental applications that cannot be resolved
at the divisional level. At the time a review has been scheduled
under subparagraph (B) and notice of such review has been posted,
the responsible person shall either withdraw the request under
subparagraph (A) or terminate the use of such administrative
appeals.
(ii) Agreement terminates dispute resolution. At any time before
a decision and order is issued under subparagraph (G), the Secretary
(in consultation with the offices described in subsection (c)(2)) and
the responsible person may reach an agreement on the risk evaluation
and mitigation strategy through further discussion or administrative
appeals, terminating the dispute resolution process, and the Secretary
shall issue an action letter or order, as appropriate, that describes
the strategy.
(D) Meeting of the Board. At a meeting of the Drug Safety
Oversight Board described in subparagraph (B), the Board shall—
(i) hear from both parties via written or oral presentation; and
(ii) review the dispute.
(E) Record of proceedings. The Secretary shall ensure that the
proceedings of any such meeting are recorded, transcribed, and made
public within 90 days of the meeting. The Secretary shall redact the
transcript to protect any trade secrets and other information that is
exempted from disclosure under section 552 of title 5, United States
Code, or section 552a of title 5, United States Code.
(F) Recommendation of the Board. Not later than 5 days after any
such meeting, the Drug Safety Oversight Board shall provide a written
recommendation on resolving the dispute to the Secretary. Not later than
5 days after the Board provides such written recommendation to the
Secretary, the Secretary shall make the recommendation available to the
public.
(G) Action by the Secretary.
(i) Action letter. With respect to a proposal or assessment
referred to in paragraph (1), the Secretary shall issue an action letter
that resolves the dispute not later than the later of—
(I) the action deadline for the action letter on the application;
1338
or
(II) 7 days after receiving the recommendation of the Drug
Safety Oversight Board.
(ii) Order. With respect to an assessment of an approved risk
evaluation and mitigation strategy under subsection (g)(1) or under
any of subparagraphs (B) through (D) of subsection (g)(2), the
Secretary shall issue an order, which shall be made public, that
resolves the dispute not later than 7 days after receiving the
recommendation of the Drug Safety Oversight Board.
(H) Inaction. An approved risk evaluation and mitigation strategy
shall remain in effect until the Secretary acts, if the Secretary fails to act
as provided for under subparagraph (G).
(I) Effect on action deadline. With respect to a proposal or
assessment referred to in paragraph (1), the Secretary shall be
considered to have met the action deadline for the action letter on the
application if the responsible person requests the dispute resolution
process described in this paragraph and if the Secretary has complied
with the timing requirements of scheduling review by the Drug Safety
Oversight Board, providing a written recommendation, and issuing an
action letter under subparagraphs (B), (F), and (G), respectively.
(J) Disqualification. No individual who is an employee of the Food
and Drug Administration and who reviews a drug or who participated in
an administrative appeal under subparagraph (C)(i) with respect to such
drug may serve on the Drug Safety Oversight Board at a meeting under
subparagraph (D) to review a dispute about the risk evaluation and
mitigation strategy for such drug.
(K) Additional expertise. The Drug Safety Oversight Board may
add members with relevant expertise from the Food and Drug
Administration, including the Office of Pediatrics, the Office of
Women’s Health, or the Office of Rare Diseases, or from other Federal
public health or health care agencies, for a meeting under subparagraph
(D) of the Drug Safety Oversight Board.
(5) Use of advisory committees. The Secretary may convene a meeting
of 1 or more advisory committees of the Food and Drug Administration to—
(A) review a concern about the safety of a drug or class of drugs,
including before an assessment of the risk evaluation and mitigation
strategy or strategies of such drug or drugs is required to be submitted
under subparagraph (B) or (C) of subsection (g)(2);
1339
(B) review the risk evaluation and mitigation strategy or strategies
of a drug or group of drugs; or
(C) review a dispute under paragraph (3) or (4).
(6) Process for addressing drug class effects.
(A) In general. When a concern about a serious risk of a drug may
be related to the pharmacological class of the drug, the Secretary, in
consultation with the offices described in subsection (c)(2), may defer
assessments of the approved risk evaluation and mitigation strategies for
such drugs until the Secretary has convened 1 or more public meetings to
consider possible responses to such concern.
(B) Notice. If the Secretary defers an assessment under
subparagraph (A), the Secretary shall—
( i ) give notice of the deferral to the holder of the approved
covered application not later than 5 days after the deferral;
(ii) publish the deferral in the Federal Register; and
(iii) give notice to the public of any public meetings to be
convened under subparagraph (A), including a description of the
deferral.
(C) Public meetings. Such public meetings may include—
(i) 1 or more meetings of the responsible person for such drugs;
(ii) 1 or more meetings of 1 or more advisory committees of the
Food and Drug Administration, as provided for under paragraph (6);
or
( i i i ) 1 or more workshops of scientific experts and other
stakeholders.
(D) Action. After considering the discussions from any meetings
under subparagraph (A), the Secretary may—
(i) announce in the Federal Register a planned regulatory action,
including a modification to each risk evaluation and mitigation
strategy, for drugs in the pharmacological class;
(ii) seek public comment about such action; and
(iii) after seeking such comment, issue an order addressing such
regulatory action.
(7) International coordination. The Secretary, in consultation with the
offices described in subsection (c)(2), may coordinate the timetable for
1340
submission of assessments under subsection (d), or a study or clinical trial
under section 505(o)(3) [21 USCS § 355(o)(3)], with efforts to identify and
assess the serious risks of such drug by the marketing authorities of other
countries whose drug approval and risk management processes the
Secretary deems comparable to the drug approval and risk management
processes of the United States. If the Secretary takes action to coordinate
such timetable, the Secretary shall give notice to the responsible person.
(8) Effect. Use of the processes described in paragraphs (6) and (7)
shall not be the sole source of delay of action on an application or a
supplement to an application for a drug.
(9) [Redesignated]
(i) Abbreviated new drug applications.
(1) In general. A drug that is the subject of an abbreviated new drug
application under section 505(j) [21 USCS § 355(j)] is subject to only the
following elements of the risk evaluation and mitigation strategy required
under subsection (a) for the applicable listed drug:
(A) A Medication Guide or patient package insert, if required under
subsection (e) for the applicable listed drug.
(B) Elements to assure safe use, if required under subsection (f) for
the listed drug. A drug that is the subject of an abbreviated new drug
application and the listed drug shall use a single, shared system under
subsection (f). The Secretary may waive the requirement under the
preceding sentence for a drug that is the subject of an abbreviated new
drug application, and permit the applicant to use a different, comparable
aspect of the elements to assure safe use, if the Secretary determines that
—
(i) the burden of creating a single, shared system outweighs the
benefit of a single, system, taking into consideration the impact on
health care providers, patients, the applicant for the abbreviated new
drug application, and the holder of the reference drug product; or
(ii) an aspect of the elements to assure safe use for the applicable
listed drug is claimed by a patent that has not expired or is a method
or process that, as a trade secret, is entitled to protection, and the
applicant for the abbreviated new drug application certifies that it
has sought a license for use of an aspect of the elements to assure
safe use for the applicable listed drug and that it was unable to
obtain a license.
A certification under clause (ii) shall include a description of the efforts
1341
made by the applicant for the abbreviated new drug application to obtain a
license. In a case described in clause (ii), the Secretary may seek to
negotiate a voluntary agreement with the owner of the patent, method, or
process for a license under which the applicant for such abbreviated new
drug application may use an aspect of the elements to assure safe use, if
required under subsection (f) for the applicable listed drug, that is claimed
by a patent that has not expired or is a method or process that as a trade
secret is entitled to protection.
(2) Action by Secretary. For an applicable listed drug for which a drug
is approved under section 505(j) [21 USCS § 355(j)], the Secretary—
(A) shall undertake any communication plan to health care providers
required under subsection (e)(3) for the applicable listed drug; and
( B ) shall inform the responsible person for the drug that is so
approved if the risk evaluation and mitigation strategy for the applicable
listed drug is modified.
(j) Drug Safety Oversight Board.
(1) In general. There is established a Drug Safety Oversight Board.
(2) Composition; meetings. The Drug Safety Oversight Board shall—
( A ) be composed of scientists and health care practitioners
appointed by the Secretary, each of whom is an employee of the Federal
Government;
( B) include representatives from offices throughout the Food and
Drug Administration, including the offices responsible for postapproval
safety of drugs;
(C) include at least 1 representative each from the National Institutes
of Health and the Department of Health and Human Services (other than
the Food and Drug Administration);
( D) include such representatives as the Secretary shall designate
from other appropriate agencies that wish to provide representatives;
and
(E) meet at least monthly to provide oversight and advice to the
Secretary on the management of important drug safety issues.
( k) Waiver in public health emergencies. The Secretary may waive any
requirement of this section with respect to a qualified countermeasure (as
defined in section 319F-1(a)(2) of the Public Health Service Act [42 USCS §
247d-6a(a)(2)]) to which a requirement under this section has been applied, if
1342
the Secretary determines that such waiver is required to mitigate the effects of,
or reduce the severity of, the circumstances under which—
( 1 ) a determination described in subparagraph (A), (B), or (C) of
section 564(b)(1) [21 USCS § 360bbb-3(b)(1)] has been made by the
Secretary of Homeland Security, the Secretary of Defense, or the Secretary,
respectively; or
(2) the identification of a material threat described in subparagraph (D)
of section 564(b)(1) [21 USCS § 360bbb-3(b)(1)] has been made pursuant
to section 319F-2 of the Public Health Service Act [42 USCS § 247d-6b].
Leg.H. June 25, 1938, ch 675, Ch. V, Subch A, § 505-1, as added Sept. 27, 2007, P. L.
110-85, Title IX, Subtitle A, § 901(b), 121 Stat. 926; July 9, 2012, P. L. 112-144, Title XI,
Subtitle C, § 1132(a), (b), 126 Stat. 1119; March 13, 2013, P. L. 113-5, Title III, § 302(c),
127 Stat. 185.
Amendments:
2012. Act July 9, 2012, in subsec. (g), in para. (1), deleted “, and propose a modification to,”
following “assessment”, and in para. (2), in the introductory matter, deleted “, subject to
paragraph (5),” following “shall”, and deleted “, and may propose a modification to,”
following “assessment of”, in subpara. (C), substituted “an assessment is needed to evaluate
whether the approved strategy should be modified to—” and cls. (i) and (ii) for “new safety or
effectiveness information indicates that—
“(i) an element under subsection (d) or (e) should be modified or included in the
strategy; or
“(ii) an element under subsection (f) should be modified or included in the strategy;
or”,
and deleted subpara. (D), which read: “(D) within 15 days when ordered by the Secretary, in
consultation with the offices described in subsection (c)(2), if the Secretary determines that
there may be a cause for action by the Secretary under section 505(e).”, and substituted
paras. (3) and (4) for ones which read:
“(3) Requirements for assessments. An assessment under paragraph (1) or (2) of an
approved risk evaluation and mitigation strategy for a drug shall include—
“(A) with respect to any goal under subsection (f), an assessment of the extent
to which the elements to assure safe use are meeting the goal or whether the goal or
such elements should be modified;
“(B) with respect to any postapproval study required under section 505(o) or
otherwise undertaken by the responsible person to investigate a safety issue, the
status of such study, including whether any difficulties completing the study have
been encountered; and
“(C) with respect to any postapproval clinical trial required under section
505(o) or otherwise undertaken by the responsible party to investigate a safety
issue, the status of such clinical trial, including whether enrollment has begun, the
1343
number of participants enrolled, the expected completion date, whether any
difficulties completing the clinical trial have been encountered, and registration
information with respect to requirements under subsections (i) and (j) of section
402 of the Public Health Service Act.
“(4) Modification. A modification (whether an enhancement or a reduction) to the
approved risk evaluation and mitigation strategy for a drug may include the addition or
modification of any element under subsection (d) or the addition, modification, or
removal of any element under subsection (e) or (f), such as—
“(A) modifying the timetable for assessments of the strategy as provided in
subsection (d)(3), including to eliminate assessments; or
“(B) adding, modifying, or removing an element to assure safe use under
subsection (f).”;
and in subsec. (h), in the subsection heading, inserted “and modifications”, in para. (1),
inserted “and proposed modification to” and “, and, if necessary, promptly initiate
discussions with the responsible person about such proposed strategy, assessment, or
modification”, deleted para. (2), which read: “(2) Discussion. The Secretary, in consultation
with the offices described in subsection (c)(2), shall initiate discussions with the responsible
person for purposes of this subsection to determine a strategy not later than 60 days after any
such assessment is submitted or, in the case of an assessment submitted under subsection (g)
(2)(D), not later than 30 days after such assessment is submitted.”, redesignated paras. (3)–
(9) as paras. (2)–(8), respectively, in para. (2) as redesignated, substituted subpara. (A) for
one which read:
“(A) In general. Unless the dispute resolution process described under paragraph (4)
or (5) applies, the Secretary, in consultation with the offices described in subsection (c)
(2), shall describe any required risk evaluation and mitigation strategy for a drug, or any
modification to any required strategy—
“(i) as part of the action letter on the application, when a proposed strategy is
submitted under subsection (a) or a modification to the strategy is proposed as part
of an assessment of the strategy submitted under subsection (g)(1); or
“(ii) in an order issued not later than 90 days after the date discussions of such
modification begin under paragraph (2), when a modification to the strategy is
proposed as part of an assessment of the strategy submitted under subsection (g)(1)
or under any of subparagraphs (B) through (D) of subsection (g)(2).”,
and substituted subpara. (C) for one which read: “(C) Public availability. Any action letter
described in subparagraph (A)(i) or order described in subparagraph (A)(ii) shall be made
publicly available.”, in para. (4) as redesignated, in subpara. (A)(i), substituted “The
responsible” for “Not earlier than 15 days, and not later than 35 days, after discussions under
paragraph (2) have begun, the responsible”, and inserted “, after the sponsor is required to
make a submission under subsection (a)(2) or (g),”, and in subpara. (I), substituted “if the
Secretary has complied with the timing requirements of scheduling review by the Drug Safety
Oversight Board, providing a written recommendation, and issuing an action letter under
subparagraphs (B), (F), and (G), respectively.” for “if the Secretary—
“(i) has initiated the discussions described under paragraph (2) not less than 60 days
before such action deadline; and
1344
“(ii) has complied with the timing requirements of scheduling review by the Drug
Safety Oversight Board, providing a written recommendation, and issuing an action letter
under subparagraphs (B), (F), and (G), respectively.”,
in para. (5) as redesignated, in subpara. (A), substituted “subparagraph (B) or (C)” for “any of
subparagraphs (B) through (D)”, and in subpara. (C), substituted “paragraph (3) or (4)” for
“paragraph (4) or (5)”, and in para. (8) as redesignated, substituted “paragraphs (6) and (7)”
for “paragraphs (7) and (8)”.
2013. Act March 13, 2013, in subsec. (f), deleted para. (7), which read:
“(7) Waiver in public health emergencies. The Secretary may waive any requirement
of this subsection during the period described in section 319(a) of the Public Health
Service Act with respect to a qualified countermeasure described under section 319F-
1(a)(2) of such Act, to which a requirement under this subsection has been applied, if the
Secretary has—
“(A) declared a public health emergency under such section 319; and
“(B) determined that such waiver is required to mitigate the effects of, or
reduce the severity of, such public health emergency.”;
and added subsec. (k).

( a ) Definitions. As used in this section, the term “pediatric studies” or
“studies” means at least one clinical investigation (that, at the Secretary’s
discretion, may include pharmacokinetic studies) in pediatric age groups
(including neonates in appropriate cases) in which a drug is anticipated to be
used, and, at the discretion of the Secretary, may include preclinical studies.
(b) Market exclusivity for new drugs.
(1) In general. Except as provided in paragraph (2), if, prior to
approval of an application that is submitted under section 505(b)(1) [21
USCS § 355(b)(1)], the Secretary determines that information relating to the
use of a new drug in the pediatric population may produce health benefits in
that population, the Secretary makes a written request for pediatric studies
(which shall include a timeframe for completing such studies), the applicant
agrees to the request, such studies are completed using appropriate
formulations for each age group for which the study is requested within any
such timeframe, and the reports thereof are submitted and accepted in
accordance with subsection (d)(3)—
(A)
(i)
(I) the period referred to in subsection (c)(3)(E)(ii) of section
1345
505 [21 USCS § 355], and in subsection (j)(5)(F)(ii) of such
section, is deemed to be five years and six months rather than five
years, and the references in subsections (c)(3)(E)(ii) and (j)(5)
(F)(ii) of such section to four years, to forty-eight months, and to
seven and one-half years are deemed to be four and one-half
years, fifty-four months, and eight years, respectively; or
( I I ) the period referred to in clauses (iii) and (iv) of
subsection (c)(3)(E) of such section, and in clauses (iii) and (iv)
of subsection (j)(5)(F) of such section, is deemed to be three
years and six months rather than three years; and
(ii) if the drug is designated under section 526 [21 USCS §
360bb] for a rare disease or condition, the period referred to in
section 527(a) [21 USCS § 360cc(a)] is deemed to be seven years
and six months rather than seven years; and
(B)
(i) if the drug is the subject of—
(I) a listed patent for which a certification has been submitted
under subsection (b)(2)(A)(ii) or (j)(2)(A)(vii)(II) of section 505
[21 USCS § 355] and for which pediatric studies were submitted
prior to the expiration of the patent (including any patent
extensions); or
(II) a listed patent for which a certification has been submitted
under subsections (b)(2)(A)(iii) or (j)(2)(A)(vii)(III) of section
505 [21 USCS § 355],
the period during which an application may not be approved under
section 505(c)(3) [21 USCS § 355(c)(3)] or section 505(j)(5)(B) [21
USCS § 355(j)(3)(B)] shall be extended by a period of six months after
the date the patent expires (including any patent extensions); or
(i i ) if the drug is the subject of a listed patent for which a
certification has been submitted under subsection (b)(2)(A)(iv) or (j)
(2)(A)(vii)(IV) of section 505 [21 USCS § 355], and in the patent
infringement litigation resulting from the certification the court
determines that the patent is valid and would be infringed, the period
during which an application may not be approved under section
505(c)(3) [21 USCS § 355(c)(3)] or section 505(j)(5)(B) [21 USCS
§ 355(j)(5)(B)] shall be extended by a period of six months after the
date the patent expires (including any patent extensions).
(2) Exception. The Secretary shall not extend the period referred to in
1346
paragraph (1)(A) or (1)(B) if the determination made under subsection (d)
(3) is made later than 9 months prior to the expiration of such period.
(c) Market exclusivity for already-marketed drugs.
(1) In general. Except as provided in paragraph (2), if the Secretary
determines that information relating to the use of an approved drug in the
pediatric population may produce health benefits in that population and
makes a written request to the holder of an approved application under
section 505(b)(1) [21 USCS § 355(b)(1)] for pediatric studies (which shall
include a timeframe for completing such studies), the holder agrees to the
request, such studies are completed using appropriate formulations for each
age group for which the study is requested within any such timeframe, and
the reports thereof are submitted and accepted in accordance with
subsection (d)(3)—
(A)
(i)
(I) the period referred to in subsection (c)(3)(E)(ii) of section
505 [21 USCS § 355], and in subsection (j)(5)(F)(ii) of such
section, is deemed to be five years and six months rather than five
years, and the references in subsections (c)(3)(E)(ii) and (j)(5)
(F)(ii) of such section to four years, to forty-eight months, and to
seven and one-half years are deemed to be four and one-half
years, fifty-four months, and eight years, respectively; or
( I I ) the period referred to in clauses (iii) and (iv) of
subsection (c)(3)(D) of such section, and in clauses (iii) and (iv)
of subsection (j)(5)(F) of such section, is deemed to be three
years and six months rather than three years; and
(ii) if the drug is designated under section 526 [21 USCS §
360bb] for a rare disease or condition, the period referred to in
section 527(a) [21 USCS § 360cc(a)] is deemed to be seven years
and six months rather than seven years; and
(B)
(i) if the drug is the subject of—
(I) a listed patent for which a certification has been submitted
under subsection (b)(2)(A)(ii) or (j)(2)(A)(vii)(II) of section 505
[21 USCS § 355] and for which pediatric studies were submitted
prior to the expiration of the patent (including any patent
extensions); or
1347
(II) a listed patent for which a certification has been submitted
under subsection (b)(2)(A)(iii) or (j)(2)(A)(vii)(III) of section
505 [21 USCS § 355],
the period during which an application may not be approved
under section 505(c)(3) [21 USCS § 355(c)(3)] or section 505(j)
(5)(B)(ii) [21 USCS § 355(j)(5)(B)(ii)] shall be extended by a
period of six months after the date the patent expires (including
any patent extensions); or
(i i ) if the drug is the subject of a listed patent for which a
certification has been submitted under subsection (b)(2)(A)(iv) or (j)
(2)(A)(vii)(IV) of section 505 [21 USCS § 355], and in the patent
infringement litigation resulting from the certification the court
determines that the patent is valid and would be infringed, the period
during which an application may not be approved under section
505(c)(3) [21 USCS § 355(c)(3)] or section 505(j)(5)(B) [21 USCS
§ 355(j)(5)(B)] shall be extended by a period of six months after the
date the patent expires (including any patent extensions).
(2) Exception. The Secretary shall not extend the period referred to in
paragraph (1)(A) or (1)(B) if the determination made under subsection (d)
(3) is made later than 9 months prior to the expiration of such period.
(d) Conduct of pediatric studies.
(1) Request for studies.
(A) In general. The Secretary may, after consultation with the
sponsor of an application for an investigational new drug under section
505(i) [21 USCS § 355(i)], the sponsor of an application for a new drug
under section 505(b)(1) [21 USCS § 355(b)(1)], or the holder of an
approved application for a drug under section 505(b)(1) [21 USCS §
355(b)(1)], issue to the sponsor or holder a written request for the
conduct of pediatric studies for such drug. In issuing such request, the
Secretary shall take into account adequate representation of children of
ethnic and racial minorities. Such request to conduct pediatric studies
shall be in writing and shall include a timeframe for such studies and a
request to the sponsor or holder to propose pediatric labeling resulting
from such studies. If a request under this subparagraph does not request
studies in neonates, such request shall include a statement describing the
rationale for not requesting studies in neonates.
(B) Single written request. Single written request. A single written
request—
(i) may relate to more than one use of a drug; and
1348
(ii) may include uses that are both approved and unapproved.
(2) Written request for pediatric studies.
(A) Request and response.
(i) In general. If the Secretary makes a written request for
pediatric studies (including neonates, as appropriate) under
subsection (b) or (c), the applicant or holder, not later than 180 days
after receiving the written request, shall respond to the Secretary as
to the intention of the applicant or holder to act on the request by—
(I) indicating when the pediatric studies will be initiated, if
the applicant or holder agrees to the request; or
(II) indicating that the applicant or holder does not agree to
the request and stating the reasons for declining the request.
(ii) Disagree with request. Disagree with request. If, on or after
the date of the enactment of the Best Pharmaceuticals for Children
Act of 2007 [enacted Sept. 27, 2007], the applicant or holder does
not agree to the request on the grounds that it is not possible to
develop the appropriate pediatric formulation, the applicant or
holder shall submit to the Secretary the reasons such pediatric
formulation cannot be developed.
(B) Adverse event reports. Adverse event reports. An applicant or
holder that, on or after the date of the enactment of the Best
Pharmaceuticals for Children Act of 2007 [enacted Sept. 27, 2007],
agrees to the request for such studies shall provide the Secretary, at the
same time as the submission of the reports of such studies, with all
postmarket adverse event reports regarding the drug that is the subject of
such studies and are available prior to submission of such reports.
(3) Meeting the studies requirement. Not later than 180 days after the
submission of the reports of the studies, the Secretary shall accept or reject
such reports and so notify the sponsor or holder. The Secretary’s only
responsibility in accepting or rejecting the reports shall be to determine,
within the 180-day period, whether the studies fairly respond to the written
request, have been conducted in accordance with commonly accepted
scientific principles and protocols, and have been reported in accordance
with the requirements of the Secretary for filing.
(4) Effect of subsection. Nothing in this subsection alters or amends
section 301(j) of this Act [21 USCS § 331(j)] or section 552 of title 5 or
section 1905 of title 18, United States Code.
(5) Consultation. With respect to a drug that is a qualified
1349
countermeasure (as defined in section 319F-1 of the Public Health Service
Act [42 USCS § 247d-6a]), a security countermeasure (as defined in section
319F-2 of the Public Health Service Act [42 USCS § 247d-6b]), or a
qualified pandemic or epidemic product (as defined in section 319F-3 of the
Public Health Service Act [42 USCS § 247d-6d]), the Secretary shall solicit
input from the Assistant Secretary for Preparedness and Response regarding
the need for and, from the Director of the Biomedical Advanced Research
and Development Authority regarding the conduct of, pediatric studies under
this section.
(e) Notice of determinations on studies requirement.
(1) In general. The Secretary shall publish a notice of any
determination, made on or after the date of the enactment of the Best
Pharmaceuticals for Children Act of 2007 [enacted Sept. 27, 2007], that the
requirements of subsection (d) have been met and that submissions and
approvals under subsection (b)(2) or (j) of section 505 [21 USCS § 355] for
a drug will be subject to the provisions of this section. Such notice shall be
published not later than 30 days after the date of the Secretary’s
determination regarding market exclusivity and shall include a copy of the
written request made under subsection (b) or (c).
(2) Identification of certain drugs. The Secretary shall publish a notice
identifying any drug for which, on or after the date of the enactment of the
Best Pharmaceuticals for Children Act of 2007 [enacted Sept. 27, 2007], a
pediatric formulation was developed, studied, and found to be safe and
effective in the pediatric population (or specified subpopulation) if the
pediatric formulation for such drug is not introduced onto the market within
one year after the date that the Secretary publishes the notice described in
paragraph (1). Such notice identifying such drug shall be published not later
than 30 days after the date of the expiration of such one year period.
(f) Internal review of written requests and pediatric studies.
(1) Internal review. The Secretary shall utilize the internal review
committee established under section 505C [21 USCS § 355d] to review all
written requests issued on or after the date of the enactment of the Best
Pharmaceuticals for Children Act of 2007 [enacted Sept. 27, 2007], in
accordance with paragraph (2).
(2) Review of written requests. The committee referred to in paragraph
(1) shall review all written requests issued pursuant to this section prior to
being issued.
(3) Review of pediatric studies. The committee referred to in
paragraph (1) may review studies conducted pursuant to this section to make
1350
a recommendation to the Secretary whether to accept or reject such reports
under subsection (d)(3).
(4) Activity by committee. The committee referred to in paragraph (1)
may operate using appropriate members of such committee and need not
convene all members of the committee.
(5) Documentation of committee action. For each drug, the committee
referred to in paragraph (1) shall document, for each activity described in
paragraph (2) or (3), which members of the committee participated in such
activity.
(6) Tracking pediatric studies and labeling changes. The Secretary, in
consultation with the committee referred to in paragraph (1), shall track and
make available to the public, in an easily accessible manner, including
through posting on the Web site of the Food and Drug Administration—
(A) the number of studies conducted under this section and under
section 409I of the Public Health Service Act [42 USCS § 284m];
( B) the specific drugs and drug uses, including labeled and off-
labeled indications, studied under such sections;
(C) the types of studies conducted under such sections, including
trial design, the number of pediatric patients studied, and the number of
centers and countries involved;
(D) the number of pediatric formulations developed and the number
of pediatric formulations not developed and the reasons such
formulations were not developed;
(E) the labeling changes made as a result of studies conducted under
such sections;
( F) an annual summary of labeling changes made as a result of
studies conducted under such sections for distribution pursuant to
subsection (k)(2); and
(G) information regarding reports submitted on or after the date of
the enactment of the Best Pharmaceuticals for Children Act of 2007
[enacted Sept. 27, 2007].
( g ) Limitations. Notwithstanding subsection (c)(2), a drug to which the
six-month period under subsection (b) or (c) has already been applied—
(1) may receive an additional six-month period under subsection (c)(1)
(A)(i)(II) for a supplemental application if all other requirements under this
section are satisfied, except that such drug may not receive any additional
1351
such period under subsection (c)(1)(B); and
(2) may not receive any additional such period under subsection (c)(1)
(A)(ii).
( h) Relationship to pediatric research requirements. Exclusivity under
this section shall only be granted for the completion of a study or studies that are
the subject of a written request and for which reports are submitted and
accepted in accordance with subsection (d)(3). Written requests under this
section may consist of a study or studies required under section 505B [21 USCS
§ 355c].
(i) Labeling changes.
(1) Priority status for pediatric applications and supplements. Any
application or supplement to an application under section 505 [21 USCS §
355] proposing a labeling change as a result of any pediatric study
conducted pursuant to this section—
(A) shall be considered to be a priority application or supplement;
and
( B) shall be subject to the performance goals established by the
Commissioner for priority drugs.
(2) Dispute resolution.
(A) Request for labeling change and failure to agree. If, on or after
the date of the enactment of the Best Pharmaceuticals for Children Act of
2007 [enacted Sept. 27, 2007], the Commissioner determines that the
sponsor and the Commissioner have been unable to reach agreement on
appropriate changes to the labeling for the drug that is the subject of the
application, not later than 180 days after the date of submission of the
application—
( i ) the Commissioner shall request that the sponsor of the
application make any labeling change that the Commissioner
determines to be appropriate; and
(ii) if the sponsor of the application does not agree within 30
days after the Commissioner’s request to make a labeling change
requested by the Commissioner, the Commissioner shall refer the
matter to the Pediatric Advisory Committee.
(B) Action by the pediatric advisory committee. Not later than 90
days after receiving a referral under subparagraph (A)(ii), the Pediatric
Advisory Committee shall—
1352
(i) review the pediatric study reports; and
(i i ) make a recommendation to the Commissioner concerning
appropriate labeling changes, if any.
(C) Consideration of recommendations. The Commissioner shall
consider the recommendations of the Pediatric Advisory Committee and,
if appropriate, not later than 30 days after receiving the
recommendation, make a request to the sponsor of the application to
make any labeling change that the Commissioner determines to be
appropriate.
(D) Misbranding. If the sponsor of the application, within 30 days
after receiving a request under subparagraph (C), does not agree to make
a labeling change requested by the Commissioner, the Commissioner
may deem the drug that is the subject of the application to be
misbranded.
(E) No effect on authority. Nothing in this subsection limits the
authority of the United States to bring an enforcement action under this
Act when a drug lacks appropriate pediatric labeling. Neither course of
action (the Pediatric Advisory Committee process or an enforcement
action referred to in the preceding sentence) shall preclude, delay, or
serve as the basis to stay the other course of action.
(j) Other labeling changes. If, on or after the date of the enactment of the
Best Pharmaceuticals for Children Act of 2007 [enacted Sept. 27, 2007], the
Secretary determines that a pediatric study conducted under this section does or
does not demonstrate that the drug that is the subject of the study is safe and
effective, including whether such study results are inconclusive, in pediatric
populations or subpopulations, the Secretary shall order the labeling of such
product to include information about the results of the study and a statement of
the Secretary’s determination.
(k) Dissemination of pediatric information.
(1) In general. Not later than 210 days after the date of submission of a
report on a pediatric study under this section, the Secretary shall make
available to the public the medical, statistical, and clinical pharmacology
reviews of pediatric studies conducted under subsection (b) or (c).
(2) Dissemination of information regarding labeling changes.
Beginning on the date of the enactment of the Best Pharmaceuticals for
Children Act of 2007 [enacted Sept. 27, 2007], the Secretary shall include
as a requirement of a written request that the sponsors of the studies that
result in labeling changes that are reflected in the annual summary
1353
developed pursuant to subsection (f)(6)(F) distribute, at least annually (or
more frequently if the Secretary determines that it would be beneficial to the
public health), such information to physicians and other health care
providers.
(I) Adverse event reporting.
(1) Reporting in first 18-month period. Beginning on the date of the
enactment of the Best Pharmaceuticals for Children Act of 2007 [enacted
Sept. 27, 2007], during the 18-month period beginning on the date a labeling
change is approved pursuant to subsection (i), the Secretary shall ensure that
all adverse event reports that have been received for such drug (regardless
of when such report was received) are referred to the Office of Pediatric
Therapeutics established under section 6 of the Best Pharmaceuticals for
Children Act (Public Law 107-109) [21 USCS § 393a]. In considering the
reports, the Director of such Office shall provide for the review of the
reports by the Pediatric Advisory Committee, including obtaining any
recommendations of such Committee regarding whether the Secretary should
take action under this Act [21 USCS §§ 301 et seq.] in response to such
reports.
(2) Reporting in subsequent periods. Following the 18-month period
described in paragraph (1), the Secretary shall, as appropriate, refer to the
Office of Pediatric Therapeutics all pediatric adverse event reports for a
drug for which a pediatric study was conducted under this section. In
considering such reports, the Director of such Office may provide for the
review of such reports by the Pediatric Advisory Committee, including
obtaining any recommendation of such Committee regarding whether the
Secretary should take action in response to such reports.
(3) Preservation of authority. Nothing in this subsection shall prohibit
the Office of Pediatric Therapeutics from providing for the review of
adverse event reports by the Pediatric Advisory Committee prior to the 18-
month period referred to in paragraph (1), if such review is necessary to
ensure safe use of a drug in a pediatric population.
(4) Effect. The requirements of this subsection shall supplement, not
supplant, other review of such adverse event reports by the Secretary.
(m) Clarification of interaction of market exclusivity under this section
and market exclusivity awarded to an applicant for approval of a drug
under section 505(j) [21 USCS § 355(j)]. If a 180-day period under section
1354
505(j)(5)(B)(iv) [21 USCS § 355(j)(5)(B)(iv)] overlaps with a 6-month
exclusivity period under this section, so that the applicant for approval of a drug
under section 505(j) [21 USCS § 355(j)] entitled to the 180-day period under
that section loses a portion of the 180-day period to which the applicant is
entitled for the drug, the 180-day period shall be extended from—
(1) the date on which the 180-day period would have expired by the
number of days of the overlap, if the 180-day period would, but for the
application of this subsection, expire after the 6-month exclusivity period;
or
(2) the date on which the 6-month exclusivity period expires, by the
number of days of the overlap if the 180-day period would, but for the
application of this subsection, expire during the six-month exclusivity
period.
(n) Referral if pediatric studies not submitted.
(1) In general. Beginning on the date of the enactment of the Best
Pharmaceuticals for Children Act of 2007 [enacted Sept. 27, 2007], if
pediatric studies of a drug have not been submitted by the date specified in
the written request issued or if the applicant or holder does not agree to the
request under subsection (d) and if the Secretary, through the committee
established under section 505C [21 USCS § 355d], determines that there is
a continuing need for information relating to the use of the drug in the
pediatric population (including neonates, as appropriate), the Secretary
shall carry out the following:
( A) For a drug for which a listed patent has not expired, or for
which a period of exclusivity eligible for extension under subsection (b)
(1) or (c)(1) of this section or under subsection (m)(2) or (m)(3) of
section 351 of the Public Health Service Act [42 USCS § 262] has not
ended, make a determination regarding whether an assessment shall be
required to be submitted under section 505B(b) [21 USCS § 355c(b)].
(B) For a drug that has no unexpired listed patents and for which no
unexpired periods of exclusivity eligible for extension under subsection
(b)(1) or (c)(1) of this section or under subsection (m)(2) or (m)(3) of
section 351 of the Public Health Service Act [42 USCS § 262] apply,
the Secretary shall refer the drug for inclusion on the list established
under section 409I of the Public Health Service Act [21 USCS § 284m]
for the conduct of studies.
( C) For a drug that is a qualified countermeasure (as defined in
section 319F-1 of the Public Health Service Act [42 USCS § 247d-6a]),
a security countermeasure (as defined in section 319F-2 of the Public
1355
Health Service Act [42 USCS § 247d-6b]), or a qualified pandemic or
epidemic product (as defined in section 319F-3 of such Act [42 USCS §
247d-6d]), in addition to any action with respect to such drug under
subparagraph (A) or (B), the Secretary shall notify the Assistant
Secretary for Preparedness and Response and the Director of the
Biomedical Advanced Research and Development Authority of all
pediatric studies in the written request issued by the Commissioner of
Food and Drugs.
(2) Public notice. The Secretary shall give the public notice of a
decision under paragraph (1)(A) not to require an assessment under section
505B [21 USCS § 355c] and the basis for such decision.
(o) Prompt approval of drugs under section 505(j) [21 USCS § 355(j)]
when pediatric information is added to labeling.
(1) General rule. A drug for which an application has been submitted
or approved under section 505(j) [21 USCS § 355(j)] shall not be
considered ineligible for approval under that section or misbranded under
section 502 [21 USCS § 352] on the basis that the labeling of the drug omits
a pediatric indication or any other aspect of labeling pertaining to pediatric
use when the omitted indication or other aspect is protected by patent or by
exclusivity under clause (iii) or (iv) of section 505(j)(5)(F) [21 USCS §
355(j)(5)(F)].
(2) Labeling. Notwithstanding clauses (iii) and (iv) of section 505(j)
(5)(F) [21 USCS § 355(j)(5)(F)], the Secretary may require that the labeling
of a drug approved under section 505(j) [21 USCS § 355(j)] that omits a
pediatric indication or other aspect of labeling as described in paragraph
(1) include—
( A ) a statement that, because of marketing exclusivity for a
manufacturer—
(i) the drug is not labeled for pediatric use; or
(ii) in the case of a drug for which there is an additional pediatric
use not referred to in paragraph (1), the drug is not labeled for the
pediatric use under paragraph (1); and
( B ) a statement of any appropriate pediatric contraindications,
warnings, precautions, or other information that the Secretary considers
necessary to assure safe use.
1356
(3) Preservation of pediatric exclusivity and other provisions. This
subsection does not affect—
(A) the availability or scope of exclusivity under this section;
(B) the availability or scope of exclusivity under section 505 [21
USCS § 355] for pediatric formulations;
(C) the question of the eligibility for approval of any application
under section 505(j) [21 USCS § 355(j)] that omits any other conditions
of approval entitled to exclusivity under clause (iii) or (iv) of section
505(j)(5)(F) [21 USCS § 355(j)(5)(F)]; or
( D) except as expressly provided in paragraphs (1) and (2), the
operation of section 505 [21 USCS § 355].
(p) Institute of Medicine study. Not later than 3 years after the date of the
enactment of the Best Pharmaceuticals for Children Act of 2007 [enacted Sept.
27, 2007], the Secretary shall enter into a contract with the Institute of Medicine
to conduct a study and report to Congress regarding the written requests made
and the studies conducted pursuant to this section. The Institute of Medicine may
devise an appropriate mechanism to review a representative sample of requests
made and studies conducted pursuant to this section in order to conduct such
study. Such study shall—
(1) review such representative written requests issued by the Secretary
since 1997 under subsections (b) and (c);
(2) review and assess such representative pediatric studies conducted
under subsections (b) and (c) since 1997 and labeling changes made as a
result of such studies;
(3) review the use of extrapolation for pediatric subpopulations, the use
of alternative endpoints for pediatric populations, neonatal assessment
tools, and ethical issues in pediatric clinical trials;
(4) review and assess the number and importance of biological products
for children that are being tested as a result of the amendments made by the
Biologics Price Competition and Innovation Act of 2009 and the importance
for children, health care providers, parents, and others of labeling changes
made as a result of such testing;
(5) review and assess the number, importance, and prioritization of any
biological products that are not being tested for pediatric use; and
(6) offer recommendations for ensuring pediatric testing of biological
products, including consideration of any incentives, such as those provided
under this section or section 351(m) of the Public Health Service Act [42
1357
USCS § 262(m)].
(q) [Deleted]
Leg.H. June 25, 1938, ch 675, Ch. V, Subch A, § 505A, as added Nov. 21, 1997, P. L.
105-115, Title I, Subtitle B, § 111, 111 Stat. 2305; Jan. 4, 2002, P. L. 107-109, §§ 2, 4, 5(b)
(2), 710, 11(a), 18(a), 19, 115 Stat. 1408, 1411, 1413, 1423, 1424; Dec. 3, 2003, P. L. 108-
155, §§ 2(b)(2), 3(a), (b)(1), 117 Stat. 1941; Dec. 8, 2003, P. L. 108-173, Title XI, Subtitle
A, § 1104, 117 Stat. 2461; Sept. 27, 2007, P. L. 110-85, Title V, § 502(a)(1), 121 Stat. 876;
March 23, 2010, P. L. 111-148, Title VII, Subtitle A, § 7002(g)(2)(B), 124 Stat. 820; July 9,
2012, P. L. 112-144, Title V, §§ 501(a), 502(a)(1), (b), 509(a), 126 Stat. 1039, 1040, 1047;
March 13, 2013, P. L. 113-5, Title III, § 307(a), 127 Stat. 191.
Amendments:
2010. Act March 23, 2010, in subsec. (p), substituted paras. (4)–(6) for paras. (4) and (5)
which read:
“(4) review and assess the pediatric studies of biological products as required under
subsections (a) and (b) of section 505B; and
“( 5 ) make recommendations regarding appropriate incentives for encouraging
pediatric studies of biologics.”.
2012. Act July 9, 2012, in subsec. (d)(1)(A), added the sentence beginning “If a request …”;
substituted subsec. (h) for one which read: “(h) Relationship to pediatric research
requirements. Notwithstanding any other provision of law, if any pediatric study is required
by a provision of law (including a regulation) other than this section and such study meets the
completeness, timeliness, and other requirements of this section, such study shall be deemed
to satisfy the requirement for market exclusivity pursuant to this section.”; in subsec. (k)(2),
substituted “subsection (f)(6)(F)” for “subsection (f)(3)(F)”; in subsec. (l), in para. (1), in the
heading, substituted “first 18-month period” for “year one”, and in the text, substituted “18-
month” for “one-year”, in para. (2), in the heading, substituted “period” for “years”, and in the
text, substituted “18-month period” for “one-year period”, redesignated para. (3) as para. (4),
and inserted new para. (3); in subsec. (n), in the heading, substituted “submitted” for
“completed”, in para. (1), in the introductory matter, substituted “have not been submitted by
the date specified in the written request issued or if the applicant or holder does not agree to
the request” for “have not been completed”, in subpara. (A), inserted “, or for which a period
of exclusivity eligible for extension under subsection (b)(1) or (c)(1) of this section or
under subsection (m)(2) or (m)(3) of section 351 of the Public Health Service Act has not
ended”, and deleted “Prior to making such a determination, the Secretary may not take more
than 30 days to certify whether the Foundation for the National Institutes of Health has
sufficient funding at the time of such certification to initiate and fund all of the studies in the
written request in their entirety within the timeframes specified within the written request.
Only if the Secretary makes such certification in the affirmative, the Secretary shall refer all
pediatric studies in the written request to the Foundation for the National Institutes of Health
for the conduct of such studies, and such Foundation shall fund such studies. If no
certification has been made at the end of the 30-day period, or if the Secretary certifies that
funds are not sufficient to initiate and fund all the studies in their entirety, the Secretary shall
consider whether assessments shall be required under section 505B(b) for such drug.”
following “505B(b).”, and in subpara. (B), substituted “no unexpired listed patents and for
1358
which no unexpired periods of exclusivity eligible for extension under subsection (b)(1) or
(c)(1) of this section or under subsection (m)(2) or (m)(3) of section 351 of the Public
Health Service Act apply,” for “no listed patents or has 1 or more listed patents that have
expired,”; in subsec. (o)(2), substituted subpara. (B) for one which read: “(B) a statement of
any appropriate pediatric contraindications, warnings, or precautions that the Secretary
considers necessary.”; and deleted subsec. (q), which read:
“(q) Sunset. A drug may not receive any 6-month period under subsection (b) or (c)
unless—
“(1 ) on or before October 1, 2012, the Secretary makes a written request for
pediatric studies of the drug;
“(2) on or before October 1, 2012, an application for the drug is accepted for filing
under section 505(b); and
“(3) all requirements of this section are met.”.
2013. Act March 13, 2013, in subsec. (d), added para. (5); and in subsec. (n)(1), added
subpara. (C).

(a) Toll-Free Number In Labeling. Not later than one year after the date of
the enactment of this Act, the Secretary of Health and Human Services shall
promulgate a final rule requiring that the labeling of each drug for which an
application is approved under section 505 of the Federal Food, Drug, and
Cosmetic Act (regardless of the date on which approved) include the toll-free
number maintained by the Secretary for the purpose of receiving reports of
adverse events regarding drugs and a statement that such number is to be used
for reporting purposes only, not to receive medical advice. With respect to the
final rule:
( 1 ) The rule shall provide for the implementation of such labeling
requirement in a manner that the Secretary considers to be most likely to
reach the broadest consumer audience.
(2) In promulgating the rule, the Secretary shall seek to minimize the
cost of the rule on the pharmacy profession.
(3) The rule shall take effect not later than 60 days after the date on
which the rule is promulgated.
(b) Drugs With Pediatric Market Exclusivity.
(1) In General. During the one year beginning on the date on which a
drug receives a period of market exclusivity under 505A of the Federal
Food, Drug, and Cosmetic Act, any report of an adverse event regarding the
drug that the Secretary of Health and Human Services receives shall be
referred to the Office of Pediatric Therapeutics established under section 6
1359
of this Act. In considering the report, the Director of such Office shall
provide for the review of the report by the Pediatric Advisory Committee,
including obtaining any recommendations of such subcommittee regarding
whether the Secretary should take action under the Federal Food, Drug, and
Cosmetic Act in response to the report.
(2) Rule of Construction. Paragraph (1) may not be construed as
restricting the authority of the Secretary of Health and Human Services to
continue carrying out the activities described in such paragraph regarding a
drug after the one-year period described in such paragraph regarding the
drug has expired.
Leg.H. January 4, 2002, P.L. 107-109, § 17, 115 Stat. 1422; December 3, 2003, P.L.
108-155 § 3(b)(5), 117 Stat. 1942.
§ 355c. Research into pediatric uses for drugs and

biological products.
(a) New drugs and biological products.
(1) In general. A person that submits, on or after the date of the
enactment of the Pediatric Research Equity Act of 2007 [enacted Sept. 27,
2007], an application (or supplement to an application) for a drug—
(A) under section 505 [21 USCS § 355] for a new active ingredient,
new indication, new dosage form, new dosing regimen, or new route of
administration, or
(B) under section 351 of the Public Health Service Act (42 U.S.C.
262) for a new active ingredient, new indication, new dosage form, new
dosing regimen, or new route of administration,
shall submit with the application the assessments described in paragraph
(2).
(2) Assessments.
(A) In general. The assessments referred to in paragraph (1) shall
contain data, gathered using appropriate formulations for each age group
for which the assessment is required, that are adequate—
( i ) to assess the safety and effectiveness of the drug or the
biological product for the claimed indications in all relevant
pediatric subpopulations; and
( i i ) to support dosing and administration for each pediatric
subpopulation for which the drug or the biological product is safe
and effective.
1360
(B) Similar course of disease or similar effect of drug or biological
product.
(i) In general. If the course of the disease and the effects of the
drug are sufficiently similar in adults and pediatric patients, the
Secretary may conclude that pediatric effectiveness can be
extrapolated from adequate and well-controlled studies in adults,
usually supplemented with other information obtained in pediatric
patients, such as pharmacokinetic studies.
(ii) Extrapolation between age groups. A study may not be
needed in each pediatric age group if data from one age group can be
extrapolated to another age group.
(iii) Information on extrapolation. A brief documentation of the
scientific data supporting the conclusion under clauses (i) and (ii)
shall be included in any pertinent reviews for the application under
section 505 of this Act [21 USCS § 355] or section 351 of the Public
Health Service Act (42 U.S.C. 262).
(3) Deferral.
(A) In general. On the initiative of the Secretary or at the request of
the applicant, the Secretary may defer submission of some or all
assessments required under paragraph (1) until a specified date after
approval of the drug or issuance of the license for a biological product
if—
(i) the Secretary finds that—
(I) the drug or biological product is ready for approval for
use in adults before pediatric studies are complete;
(II) pediatric studies should be delayed until additional safety
or effectiveness data have been collected; or
(III) there is another appropriate reason for deferral; and
(ii) the applicant submits to the Secretary—
(I) certification of the grounds for deferring the assessments;
(II) a pediatric study plan as described in subsection (e);
(III) evidence that the studies are being conducted or will be
conducted with due diligence and at the earliest possible time;
and
(IV) a timeline for the completion of such studies.
(B) Deferral extension.
1361
(i) In general. On the initiative of the Secretary or at the request
of the applicant, the Secretary may grant an extension of a deferral
approved under subparagraph (A) for submission of some or all
assessments required under paragraph (1) if—
(I) the Secretary determines that the conditions described in
subclause (II) or (III) of subparagraph (A)(i) continue to be met;
and
(II) the applicant submits a new timeline under subparagraph
(A)(ii)(IV) and any significant updates to the information
required under subparagraph (A)(ii).
(ii) Timing and information. If the deferral extension under this
subparagraph is requested by the applicant, the applicant shall
submit the deferral extension request containing the information
described in this subparagraph not less than 90 days prior to the date
that the deferral would expire. The Secretary shall respond to such
request not later than 45 days after the receipt of such letter. If the
Secretary grants such an extension, the specified date shall be the
extended date. The sponsor of the required assessment under
paragraph (1) shall not be issued a letter described in subsection (d)
unless the specified or extended date of submission for such required
studies has passed or if the request for an extension is pending. For a
deferral that has expired prior to the date of enactment of the Food
and Drug Administration Safety and Innovation Act [enacted July 9,
2012] or that will expire prior to 270 days after the date of
enactment of such Act, a deferral extension shall be requested by an
applicant not later than 180 days after the date of enactment of such
Act. The Secretary shall respond to any such request as soon as
practicable, but not later than 1 year after the date of enactment of
such Act. Nothing in this clause shall prevent the Secretary from
updating the status of a study or studies publicly if components of
such study or studies are late or delayed.
(C) Annual review.
(i) In general. On an annual basis following the approval of a
deferral under subparagraph (A), the applicant shall submit to the
Secretary the following information:
( I ) Information detailing the progress made in conducting
pediatric studies.
(II) If no progress has been made in conducting such studies,
evidence and documentation that such studies will be conducted
1362
with due diligence and at the earliest possible time.
(III) Projected completion date for pediatric studies.
( IV) The reason or reasons why a deferral or deferral
extension continues to be necessary.
(ii) Public availability. Not later than 90 days after the
submission to the Secretary of the information submitted through the
annual review under clause (i), the Secretary shall make available to
the public in an easily accessible manner, including through the
Internet Web site of the Food and Drug Administration—
(I) such information;
(II) the name of the applicant for the product subject to the
assessment;
(III) the date on which the product was approved; and
(IV) the date of each deferral or deferral extension under this
paragraph for the product.
(4) Waivers.
(A) Full waiver. On the initiative of the Secretary or at the request
of an applicant, the Secretary shall grant a full waiver, as appropriate,
of the requirement to submit assessments for a drug or biological
product under this subsection if the applicant certifies and the Secretary
finds that—
( i ) necessary studies are impossible or highly impracticable
(because, for example, the number of patients is so small or the
patients are geographically dispersed);
( i i ) there is evidence strongly suggesting that the drug or
biological product would be ineffective or unsafe in all pediatric age
groups; or
(iii) the drug or biological product—
(I) does not represent a meaningful therapeutic benefit over
existing therapies for pediatric patients; and
( II) is not likely to be used in a substantial number of
pediatric patients.
(B) Partial waiver. On the initiative of the Secretary or at the
request of an applicant, the Secretary shall grant a partial waiver, as
appropriate, of the requirement to submit assessments for a drug or
biological product under this subsection with respect to a specific
1363
pediatric age group if the applicant certifies and the Secretary finds that
—
(because, for example, the number of patients in that age group is so
small or patients in that age group are geographically dispersed);
biological product would be ineffective or unsafe in that age group;
(iii) the drug or biological product—
(I) does not represent a meaningful therapeutic benefit over
existing therapies for pediatric patients in that age group; and
( II) is not likely to be used by a substantial number of
pediatric patients in that age group; or
(iv) the applicant can demonstrate that reasonable attempts to
produce a pediatric formulation necessary for that age group have
failed.
(C) Pediatric formulation not possible. If a partial waiver is
granted on the ground that it is not possible to develop a pediatric
formulation, the waiver shall cover only the pediatric groups requiring
that formulation. An applicant seeking such a partial waiver shall submit
to the Secretary documentation detailing why a pediatric formulation
cannot be developed and, if the waiver is granted, the applicant’s
submission shall promptly be made available to the public in an easily
accessible manner, including through posting on the Web site of the
Food and Drug Administration.
(D) Labeling requirement. If the Secretary grants a full or partial
waiver because there is evidence that a drug or biological product
would be ineffective or unsafe in pediatric populations, the information
shall be included in the labeling for the drug or biological product.
(b) Marketed drugs and biological products.
(1) In general. The Secretary may (by order in the form of a letter)
require the sponsor or holder of an approved application for a drug under
section 505 [21 USCS § 355] or the holder of a license for a biological
product under section 351 of the Public Health Service Act [42 USCS §
262] to submit by a specified date the assessments described in subsection
(a)(2), if the Secretary finds that—
(A)
(i) the drug or biological product is used for a substantial number
1364
of pediatric patients for the labeled indications; and
( i i ) adequate pediatric labeling could confer a benefit on
pediatric patients;
(B) there is reason to believe that the drug or biological product
would represent a meaningful therapeutic benefit over existing therapies
for pediatric patients for 1 or more of the claimed indications; or
(C) the absence of adequate pediatric labeling could pose a risk to
pediatric patients.
(2) Waivers.
(A) Full waiver. At the request of an applicant, the Secretary shall
grant a full waiver, as appropriate, of the requirement to submit
assessments under this subsection if the applicant certifies and the
Secretary finds that—
small or patients in that age group are geographically dispersed); or
biological product would be ineffective or unsafe in all pediatric age
groups.
(B) Partial waiver. At the request of an applicant, the Secretary
shall grant a partial waiver, as appropriate, of the requirement to submit
assessments under this subsection with respect to a specific pediatric
age group if the applicant certifies and the Secretary finds that—
small or patients in that age group are geographically dispersed);
biological product would be ineffective or unsafe in that age group;
(iii)
(I) the drug or biological product—
(aa) does not represent a meaningful therapeutic benefit
over existing therapies for pediatric patients in that age group;
and
(bb) is not likely to be used in a substantial number of
pediatric patients in that age group; and
1365
( I I ) the absence of adequate labeling could not pose
significant risks to pediatric patients; or
(iv) the applicant can demonstrate that reasonable attempts to
produce a pediatric formulation necessary for that age group have
failed.
(C) Pediatric formulation not possible. If a waiver is granted on the
ground that it is not possible to develop a pediatric formulation, the
waiver shall cover only the pediatric groups requiring that formulation.
An applicant seeking either a full or partial waiver shall submit to the
Secretary documentation detailing why a pediatric formulation cannot be
developed and, if the waiver is granted, the applicant’s submission shall
promptly be made available to the public in an easily accessible
manner, including through posting on the Web site of the Food and Drug
Administration.
(D) Labeling requirement. If the Secretary grants a full or partial
waiver because there is evidence that a drug or biological product
would be ineffective or unsafe in pediatric populations, the information
shall be included in the labeling for the drug or biological product.
section 301(j) of this Act [21 USCS § 331(j)] or section 552 of title 5 [5
USCS § 552] or section 1905 of title 18, United States Code [18 USCS §
1905].
(c) Meaningful therapeutic benefit. For the purposes of paragraph (4)(A)
(iii)(I) and (4)(B)(iii)(I) of subsection (a) and paragraphs (1)(B) and (2)(B)(iii)
(I)(aa) of subsection (b), a drug or biological product shall be considered to
represent a meaningful therapeutic benefit over existing therapies if the
Secretary determines that—
( 1 ) if approved, the drug or biological product could represent an
improvement in the treatment, diagnosis, or prevention of a disease,
compared with marketed products adequately labeled for that use in the
relevant pediatric population; or
(2) the drug or biological product is in a class of products or for an
indication for which there is a need for additional options.
(d) Submission of assessments. If a person fails to submit a required
assessment described in subsection (a)(2), fails to meet the applicable
requirements in subsection (a)(3), or fails to submit a request for approval of a
pediatric formulation described in subsection (a) or (b), in accordance with
applicable provisions of subsections (a) and (b), the following shall apply:
1366
(1) Beginning 270 days after the date of enactment of the Food and Drug
Administration Safety and Innovation Act [enacted July 9, 2012], the
Secretary shall issue a non-compliance letter to such person informing them
of such failure to submit or meet the requirements of the applicable
subsection. Such letter shall require the person to respond in writing within
45 calendar days of issuance of such letter. Such response may include the
person’s request for a deferral extension if applicable. Such letter and the
person’s written response to such letter shall be made publicly available on
the Internet Web site of the Food and Drug Administration 60 calendar days
after issuance, with redactions for any trade secrets and confidential
commercial information. If the Secretary determines that the letter was
issued in error, the requirements of this paragraph shall not apply.
(2) The drug or biological product that is the subject of an assessment
described in subsection (a)(2), applicable requirements in subsection (a)
(3), or request for approval of a pediatric formulation, may be considered
misbranded solely because of that failure and subject to relevant
enforcement action (except that the drug or biological product shall not be
subject to action under section 303 [21 USCS § 333]), but such failure shall
not be the basis for a proceeding—
(A) to withdraw approval for a drug under section 505(e) [21 USCS
§ 355(e)]; or
(B) to revoke the license for a biological product under section 351
of the Public Health Service Act [42 USCS § 262].
(e) Pediatric study plans.
(1) In general. An applicant subject to subsection (a) shall submit to
the Secretary an initial pediatric study plan prior to the submission of the
assessments described under subsection (a)(2).
(2) Timing; content; meeting.
( A ) An applicant shall submit the initial pediatric plan under
paragraph (1)—
( i ) before the date on which the applicant submits the
assessments under subsection (a)(2); and
(ii) not later than—
( I) 60 calendar days after the date of the end-of-Phase 2
meeting (as such term is used in section 312.47 of title 21, Code
of Federal Regulations, or successor regulations); or
(II) such other time as may be agreed upon between the
1367
Secretary and the applicant.
Nothing in this section shall preclude the Secretary from accepting
the submission of an initial pediatric plan earlier than the date otherwise
applicable under this subparagraph.
( B) Content of initial plan. The initial pediatric study plan shall
include—
(i) an outline of the pediatric study or studies that the applicant
plans to conduct (including, to the extent practicable study objectives
and design, age groups, relevant endpoints, and statistical approach);
(ii) any request for a deferral, partial waiver, or waiver under
this section, if applicable, along with any supporting information;
and
(iii) other information specified in the regulations promulgated
(C) Meeting. The Secretary—
(i) shall meet with the applicant to discuss the initial pediatric
study plan as soon as practicable, but not later than 90 calendar days
after the receipt of such plan under subparagraph (A);
(ii) may determine that a written response to the initial pediatric
study plan is sufficient to communicate comments on the initial
pediatric study plan, and that no meeting is necessary; and
(iii) if the Secretary determines that no meeting is necessary,
shall so notify the applicant and provide written comments of the
Secretary as soon as practicable, but not later than 90 calendar days
after the receipt of the initial pediatric study plan.
(3) Agreed initial pediatric study plan. Not later than 90 calendar days
following the meeting under paragraph (2)(C)(i) or the receipt of a written
response from the Secretary under paragraph (2)(C)(iii), the applicant shall
document agreement on the initial pediatric study plan in a submission to the
Secretary marked ‘Agreed Initial Pediatric Study Plan’, and the Secretary
shall confirm such agreement to the applicant in writing not later than 30
calendar days of receipt of such agreed initial pediatric study plan.
( 4 ) Deferral and waiver. If the agreed initial pediatric study plan
contains a request from the applicant for a deferral, partial waiver, or
waiver under this section, the written confirmation under paragraph (3) shall
include a recommendation from the Secretary as to whether such request
meets the standards under paragraphs (3) or (4) of subsection (a).
1368
(5) Amendments to the plan. At the initiative of the Secretary or the
applicant, the agreed initial pediatric study plan may be amended at any
time. The requirements of paragraph (2)(C) shall apply to any such
proposed amendment in the same manner and to the same extent as such
requirements apply to an initial pediatric study plan under paragraph (1).
The requirements of paragraphs (3) and (4) shall apply to any agreement
resulting from such proposed amendment in the same manner and to the same
extent as such requirements apply to an agreed initial pediatric study plan.
( 6 ) Internal committee. The Secretary shall consult the internal
committee under section 505C [21 USCS § 355d] on the review of the
initial pediatric study plan, agreed initial pediatric plan, and any significant
amendments to such plans.
( 7 ) Required rulemaking. Not later than 1 year after the date of
enactment of the Food and Drug Administration Safety and Innovation Act,
the Secretary shall promulgate proposed regulations and issue guidance to
implement the provisions of this subsection.
(f) Review of pediatric study plans, assessments, deferrals, deferral
extensions, and waivers.
(1) Review. Beginning not later than 30 days after the date of the
2007], the Secretary shall utilize the internal committee established under
section 505C [21 USCS § 355d] to provide consultation to reviewing
divisions on initial pediatric study plans, agreed initial pediatric study
plans, and assessments prior to approval of an application or supplement for
which a pediatric assessment is required under this section and all deferral,
deferral extension, and waiver requests granted pursuant to this section.
(2) Activity by committee. The committee referred to in paragraph (1)
may operate using appropriate members of such committee and need not
convene all members of the committee.
(3) Documentation of committee action. For each drug or biological
product, the committee referred to in paragraph (1) shall document, for each
activity described in paragraph (4) or (5), which members of the committee
participated in such activity.
(4) Review of pediatric study plans, assessments, deferrals, deferral
extensions, and waivers. Consultation on initial pediatric study plans,
agreed initial pediatric study plans, and assessments by the committee
referred to in paragraph (1) pursuant to this section shall occur prior to
approval of an application or supplement for which a pediatric assessment
is required under this section. The committee shall review all requests for
1369
deferrals, deferral extensions, and waivers from the requirement to submit a
pediatric assessment granted under this section and shall provide
recommendations as needed to reviewing divisions, including with respect
to whether such a supplement, when submitted, shall be considered for
priority review.
(5) Retrospective review of pediatric assessments, deferrals, and
waivers. Not later than 1 year after the date of the enactment of the Pediatric
Research Equity Act of 2007 [enacted Sept. 27, 2007], the committee
referred to in paragraph (1) shall conduct a retrospective review and
analysis of a representative sample of assessments submitted and deferrals
and waivers approved under this section since the enactment of the Pediatric
Research Equity Act of 2003 [enacted Sept. 27, 2007]. Such review shall
include an analysis of the quality and consistency of pediatric information in
pediatric assessments and the appropriateness of waivers and deferrals
granted. Based on such review, the Secretary shall issue recommendations
to the review divisions for improvements and initiate guidance to industry
related to the scope of pediatric studies required under this section.
(6) Tracking of assessments and labeling changes. Tracking of
assessments and labeling changes. The Secretary, in consultation with the
committee referred to in paragraph (1), shall track and make available to the
public in an easily accessible manner, including through posting on the Web
site of the Food and Drug Administration—
(A) the number of assessments conducted under this section;
( B ) the specific drugs and biological products and their uses
assessed under this section;
(C) the types of assessments conducted under this section, including
trial design, the number of pediatric patients studied, and the number of
centers and countries involved;
(D) aggregated on an annual basis—
(i) the total number of deferrals and deferral extensions requested
and granted under this section and, if granted, the reasons for each
such deferral or deferral extension;
(ii) the timeline for completion of the assessments;
(iii) the number of assessments completed and pending; and
( i v) the number of postmarket non-compliance letters issued
pursuant to subsection (d), and the recipients of such letters;
(E) the number of waivers requested and granted under this section
1370
and, if granted, the reasons for the waivers;
(F) the number of pediatric formulations developed and the number
of pediatric formulations not developed and the reasons any such
formulation was not developed;
(G) the labeling changes made as a result of assessments conducted
under this section;
( H) an annual summary of labeling changes made as a result of
assessments conducted under this section for distribution pursuant to
subsection (h)(2);
( I ) an annual summary of information submitted pursuant to
subsection (a)(3)(B); and
(J) the number of times the committee referred to in paragraph (1)
made a recommendation to the Secretary under paragraph (4) regarding
priority review, the number of times the Secretary followed or did not
follow such a recommendation, and, if not followed, the reasons why
such a recommendation was not followed.
(g) Labeling changes.
(1) Dispute resolution.
(A) Request for labeling change and failure to agree. If, on or after
the date of the enactment of the Pediatric Research Equity Act of 2007
[enacted Sept. 27, 2007], the Commissioner determines that a sponsor
and the Commissioner have been unable to reach agreement on
appropriate changes to the labeling for the drug that is the subject of the
application or supplement, not later than 180 days after the date of the
submission of the application or supplement that receives a priority
review or 330 days after the date of the submission of an application or
supplement that receives a standard review—
( i ) the Commissioner shall request that the sponsor of the
application make any labeling change that the Commissioner
determines to be appropriate; and
( i i ) if the sponsor does not agree within 30 days after the
Commissioner’s request to make a labeling change requested by the
Commissioner, the Commissioner shall refer the matter to the
Pediatric Advisory Committee.
(B) Action by the Pediatric Advisory Committee. Not later than 90
days after receiving a referral under subparagraph (A)(ii), the Pediatric
Advisory Committee shall—
1371
(i) review the pediatric study reports; and
(i i ) make a recommendation to the Commissioner concerning
appropriate labeling changes, if any.
(C) Consideration of recommendations. The Commissioner shall
consider the recommendations of the Pediatric Advisory Committee and,
if appropriate, not later than 30 days after receiving the
recommendation, make a request to the sponsor of the application or
supplement to make any labeling changes that the Commissioner
determines to be appropriate.
(D) Misbranding. If the sponsor of the application or supplement,
within 30 days after receiving a request under subparagraph (C), does
not agree to make a labeling change requested by the Commissioner, the
Commissioner may deem the drug that is the subject of the application or
supplement to be misbranded.
(E) No effect on authority. Nothing in this subsection limits the
authority of the United States to bring an enforcement action under this
Act when a drug lacks appropriate pediatric labeling. Neither course of
action (the Pediatric Advisory Committee process or an enforcement
action referred to in the preceding sentence) shall preclude, delay, or
serve as the basis to stay the other course of action.
(2) Other labeling changes. If, on or after the date of the enactment of
the Pediatric Research Equity Act of 2007 [enacted Sept. 27, 2007], the
Secretary makes a determination that a pediatric assessment conducted
under this section does or does not demonstrate that the drug that is the
subject of such assessment is safe and effective in pediatric populations or
subpopulations, including whether such assessment results are inconclusive,
the Secretary shall order the labeling of such product to include information
about the results of the assessment and a statement of the Secretary’s
determination.
(h) Dissemination of pediatric information.
(1) In general. Not later than 210 days after the date of submission of
an application (or supplement to an application) that contains a pediatric
assessment under this section, if the application (or supplement) receives a
priority review, or not later than 330 days after the date of submission of an
application (or supplement to an application) that contains a pediatric
assessment under this section, if the application (or supplement) receives a
standard review, the Secretary shall make available to the public in an
easily accessible manner the medical, statistical, and clinical pharmacology
reviews of such pediatric assessments, and shall post such assessments on
1372
the Web site of the Food and Drug Administration.
(2) Dissemination of information regarding labeling changes.
Beginning on the date of the enactment of the Pediatric Research Equity Act
of 2007 [enacted Sept. 27, 2007], the Secretary shall require that the
sponsors of the assessments that result in labeling changes that are reflected
in the annual summary developed pursuant to subsection (f)(6)(H) distribute
such information to physicians and other health care providers.
(3) Effect of subsection. Nothing in this subsection shall alter or amend
section 301(j) of this Act [21 USCS § 331(j)] or section 552 of title 5 [5
USCS § 552] or section 1905 of title 18, United States Code [18 USCS §
1905].
(i) Adverse event reporting.
(1) Reporting in first 18-month period. Beginning on the date of the
2007], during the 18-month period beginning on the date a labeling change is
made pursuant to subsection (g), the Secretary shall ensure that all adverse
event reports that have been received for such drug (regardless of when
such report was received) are referred to the Office of Pediatric
Therapeutics. In considering such reports, the Director of such Office shall
provide for the review of such reports by the Pediatric Advisory
Committee, including obtaining any recommendations of such committee
regarding whether the Secretary should take action under this Act in
response to such reports.
(2) Reporting in subsequent periods. Following the 18-month period
described in paragraph (1), the Secretary shall, as appropriate, refer to the
Office of Pediatric Therapeutics all pediatric adverse event reports for a
drug for which a pediatric study was conducted under this section. In
considering such reports, the Director of such Office may provide for the
review of such reports by the Pediatric Advisory Committee, including
obtaining any recommendation of such Committee regarding whether the
Secretary should take action in response to such reports.
(3) Preservation of authority. Nothing in this subsection shall prohibit
the Office of Pediatric Therapeutics from providing for the review of
adverse event reports by the Pediatric Advisory Committee prior to the 18-
month period referred to in paragraph (1), if such review is necessary to
ensure safe use of a drug in a pediatric population.
(4) Effect. The requirements of this subsection shall supplement, not
supplant, other review of such adverse event reports by the Secretary.
1373
(j) Scope of authority. Nothing in this section provides to the Secretary any
authority to require a pediatric assessment of any drug or biological product, or
any assessment regarding other populations or uses of a drug or biological
product, other than the pediatric assessments described in this section.
(k) Orphan drugs. Unless the Secretary requires otherwise by regulation,
this section does not apply to any drug for an indication for which orphan
designation has been granted under section 526 [21 USCS § 360bb].
(l) Institute of Medicine study.
(1) In general. Not later than three years after the date of the enactment
of the Pediatric Research Equity Act of 2007 [enacted Sept. 27, 2007], the
Secretary shall contract with the Institute of Medicine to conduct a study and
report to Congress regarding the pediatric studies conducted pursuant to this
section or precursor regulations since 1997 and labeling changes made as a
result of such studies.
(2) Content of study. The study under paragraph (1) shall review and
assess the use of extrapolation for pediatric subpopulations, the use of
alternative endpoints for pediatric populations, neonatal assessment tools,
the number and type of pediatric adverse events, and ethical issues in
pediatric clinical trials.
(3) Representative sample. The Institute of Medicine may devise an
appropriate mechanism to review a representative sample of studies
conducted pursuant to this section from each review division within the
Center for Drug Evaluation and Research in order to make the requested
assessment.
(m) New active ingredient.
(1) Non-interchangeable biosimilar biological product. A biological
product that is biosimilar to a reference product under section 351 of the
Public Health Service Act [42 USCS § 262], and that the Secretary has not
determined to meet the standards described in subsection (k)(4) of such
section for interchangeability with the reference product, shall be
considered to have a new active ingredient under this section.
(2) Interchangeable biosimilar biological product. A biological
product that is interchangeable with a reference product under section 351
of the Public Health Service Act [42 USCS § 262] shall not be considered
to have a new active ingredient under this section.
(n) [Redesignated]
Leg.H. June 25, 1938, ch 675, Ch. V, Subch A, § 505B, as added Dec. 3, 2003, P.L.
108-155, § 2(a), 117 Stat. 1936; Sept. 27, 2007, P.L. 110-85, Title IV, § 402(a), 121 Stat.
1374
866; March 23, 2010, P.L. 111-148, Title VII, Subtitle A, § 7002(d)(2), 124 Stat. 816.
As amended July 9, 2012, P.L. 112-144, Title V, §§ 501(b), 505, 506(a), (b), 509(b),
126 Stat. 1040, 1048.
Amendments
2010. Act March 23, 2010, added subsec. (n).
2012. Act July 9, 2012, in subsec. (a), in para. (1), in the introductory matter,
inserted “for a drug”, in para. (3), redesignated subpara. (B) as subpara. (C), inserted new
subpara. (B), and in subpara. (C) as redesignated, in cl. (i), added subcls. (III) and (IV),
and substituted cl. (ii) for one which read: “(ii) Public availability. The information
submitted through the annual review under clause (i) shall promptly be made available to
the public in an easily accessible manner, including through the Web site of the Food and
Drug Administration.”, and in para. (4)(C), inserted “partial” following “If a”, and
substituted “such a” for “either a full or”; in subsec. (b)(1), in the introductory matter,
substituted “The Secretary” for “After providing notice in the form of a letter (that, for a
drug approved under section 505, references a declined written request under section
505A for a labeled indication which written request is not referred under section
505A(n)(1)(A) to the Foundation of the National Institutes of Health for the pediatric
studies), the Secretary”; substituted subsec. (d) for one which read:
“(d) Submission of assessments. If a person fails to submit an assessment
described in subsection (a)(2), or a request for approval of a pediatric formulation
described in subsection (a) or (b), in accordance with applicable provisions of
subsections (a) and (b)—
“(1) the drug or biological product that is the subject of the assessment or
request may be considered misbranded solely because of that failure and subject
to relevant enforcement action (except that the drug or biological product shall
not be subject to action under section 303); but
“(2) the failure to submit the assessment or request shall not be the basis for
a proceeding—
“(A) to withdraw approval for a drug under section 505(e); or
“(B) to revoke the license for a biological product under section 351 of
the Public Health Service Act.”;
in subsec. (f), in the subsection heading, inserted “deferral extensions,”, in para.
(1), inserted “, deferral extension,”, in para. (4), in the heading, inserted “deferral
extensions,” and in the text, inserted “, deferral extensions,”, and in para. (6),
substituted subpara. (D) for one which read: “(D) the total number of deferrals
requested and granted under this section and, if granted, the reasons for such
deferrals, the timeline for completion, and the number completed and pending by
the specified date, as outlined in subsection (a)(3);”; in subsec. (g), in para. (1)(A),
inserted “that receives a priority review or 330 days after the date of the submission
of an application or supplement that receives a standard review”, and in para. (2),
substituted “labeling” for “label”; in subsec. (h)(1), inserted “an application (or
supplement to an application) that contains” and “if the application (or supplement)
receives a priority review, or not later than 330 days after the date of submission of
1375
an application (or supplement to an application) that contains a pediatric assessment
under this section, if the application (or supplement) receives a standard review,”; in
subsec. (i), in para. (1), in the heading, substituted “first 18-month period” for “year
one”, and in the text, substituted “18-month” for “one-year”, in para. (2), in the
heading, substituted “periods” for “years”, and in the text, substituted “18-month
period” for “one-year period”, redesignated para. (3) as para. (4), and inserted new
para. (3); deleted subsec. (m), which read: “(m) Integration with other pediatric
studies. The authority under this section shall remain in effect so long as an
application subject to this section may be accepted for filing by the Secretary on or
before the date specified in section 505A(q).”; and redesignated subsec. (n) as
subsec. (m).
Such Act further (effective 180 days after enactment, as provided by § 506(c)
(1) of such Act, which appears as a note to this section), in subsec. (a)(3)(A)(ii),
substituted subcl. (II) for one which read: “(II) a description of the planned or
ongoing studies;”; substituted subsec. (e) for one which read:
“(e) Meetings. Before and during the investigational process for a new drug or
biological product, the Secretary shall meet at appropriate times with the sponsor of
the new drug or biological product to discuss—
“( 1 ) information that the sponsor submits on plans and timelines for
pediatric studies; or
“(2) any planned request by the sponsor for waiver or deferral of pediatric
studies.”;
and in subsec. (f), in the subsection heading, inserted “study”, in para. (1),
substituted “initial pediatric study plans, agreed initial pediatric study plans,” for “all
pediatric plans”, and in para. (4), in the heading, inserted “study”, and in the text,
substituted “initial pediatric study plans, agreed initial pediatric study plans,” for
“pediatric plans”.
Other provisions:
Effective date of July 9, 2012 amendments. Act July 9, 2012, P.L. 112-144, Title V, §
506(c), 126 Stat. 1045, provides:
“(1) In general. Subject to paragraph (2), the amendments made by this section
[amending this section] shall take effect 180 calendar days after the date of enactment of
this Act, irrespective of whether the Secretary has promulgated final regulations to carry
out such amendments.
“( 2 ) Rule of construction. Paragraph (1) shall not be construed to affect the
deadline for promulgation of proposed regulations under section 505B(e)(7) of the
Federal Food, Drug, and Cosmetic Act [subsec. (e)(7) of this section], as added by
subsection (a) of this section.”.
§ 355c-1. Report.
(a) In general. Not later than four years after the date of enactment of this
Act [enacted July 9, 2012] and every five years thereafter, the Secretary shall
1376
prepare and submit to the Committee on Health, Education, Labor, and Pensions
of the Senate and the Committee on Energy and Commerce of the House of
Representatives, and make publicly available, including through posting on the
Internet Web site of the Food and Drug Administration, a report on the
implementation of sections 505A and 505B of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355a, 355c).
(b) Contents. Each report under subsection (a) shall include—
(1) an assessment of the effectiveness of sections 505A and 505B of the
Federal Food, Drug, and Cosmetic Act [21 USCS §§ 355a, 355c] in
improving information about pediatric uses for approved drugs and
biological products, including the number and type of labeling changes made
since the date of enactment of this Act [enacted July 9, 2012] and the
importance of such uses in the improvement of the health of children;
(2) the number of required studies under such section 505B [21 USCS §
355c] that have not met the initial deadline provided under such section
505B [21 USCS § 355c], including—
(A) the number of deferrals and deferral extensions granted and the
reasons such extensions were granted;
(B) the number of waivers and partial waivers granted; and
(C) the number of letters issued under subsection (d) of such section
505B [21 USCS § 355c];
(3) an assessment of the timeliness and effectiveness of pediatric study
planning since the date of enactment of this Act [enacted July 9, 2012],
including the number of initial pediatric study plans not submitted in
accordance with the requirements of subsection (e) of such section 505B
[21 USCS § 355c] and any resulting rulemaking;
(4) the number of written requests issued, accepted, and declined under
such section 505A [21 USCS § 355a] since the date of enactment of this Act
[enacted July 9, 2012], and a listing of any important gaps in pediatric
information as a result of such declined requests;
(5) a description and current status of referrals made under subsection
(n) of such section 505A [21 USCS § 355a];
(6) an assessment of the effectiveness of studying biological products in
pediatric populations under such sections 505A and 505B [21 USCS §§
355a, 355c] and section 409I of the Public Health Service Act (42 U.S.C.
284m);
(7)
1377
( A) the efforts made by the Secretary to increase the number of
studies conducted in the neonatal population (including efforts made to
encourage the conduct of appropriate studies in neonates by companies
with products that have sufficient safety and other information to make
the conduct of the studies ethical and safe); and
(B) the results of such efforts;
(8)
(A) the number and importance of drugs and biological products for
children with cancer that are being tested as a result of the programs
under such sections 505A and 505B [21 USCS §§ 355a, 355c] and under
section 409I of the Public Health Service Act [42 USCS § 284m]; and
(B) any recommendations for modifications to such programs that
would lead to new and better therapies for children with cancer,
including a detailed rationale for each recommendation;
(9) any recommendations for modifications to such programs that would
lead to new and better therapies for children with cancer, including a
detailed rationale for each recommendation;
(10) an assessment of the successes of and limitations to studying drugs
for rare diseases under such sections 505A and 505B [21 USCS §§ 355a,
355c]; and
(11) an assessment of the Secretary’s efforts to address the suggestions
and options described in any prior report issued by the Comptroller
General, Institute of Medicine, or the Secretary, and any subsequent reports,
including recommendations therein, regarding the topics addressed in the
reports under this section, including with respect to—
(A) improving public access to information from pediatric studies
conducted under such sections 505A and 505B [21 USCS §§ 355a,
355c]; and
(B) improving the timeliness of pediatric studies and pediatric study
planning under such sections 505A and 505B [21 USCS §§ 355a, 355c].
(c) Stakeholder comment. At least 180 days prior to the submission of each
report under subsection (a), the Secretary shall consult with representatives of
patient groups (including pediatric patient groups), consumer groups, regulated
industry, academia, and other interested parties to obtain any recommendations
or information relevant to the report including suggestions for modifications that
would improve pediatric drug research and pediatric labeling of drugs and
biological products.
Leg.H. (July 9, 2012, P.L. 112-144, Title V, § 508, 126 Stat. 1045.)
1378
Leg.H. (July 9, 2012, P.L. 112-144, Title V, § 508, 126 Stat. 1045.)
§ 355d. Internal Committee for Review of Pediatric

Plans, Assessments, Deferrals, Deferral Extensions,
and Waivers.
The Secretary shall establish an internal committee within the Food and
Drug Administration to carry out the activities as described in sections 505A(f)
and 505B(f) [21 USCS §§ 355a(f) and 355c(f)]. Such internal committee shall
include employees of the Food and Drug Administration, with expertise in
pediatrics (including representation from the Office of Pediatric Therapeutics),
biopharmacology, statistics, chemistry, legal issues, pediatric ethics,
neonatology, and the appropriate expertise pertaining to the pediatric product
under review, such as expertise in child and adolescent psychiatry, and other
individuals designated by the Secretary.
Leg.H. (June 25, 1938, ch 675, Ch. V, Subch A, § 505C, as added Sept. 27, 2007, P.L.
110-85, Title IV, § 403, 121 Stat. 875.)
(As amended July 9, 2012, P.L. 112-144, Title V, § 509(c), 126 Stat. 1049.)

(a) In General. The Secretary shall develop standards and identify and
validate effective technologies for the purpose of securing the drug supply chain
against counterfeit, diverted, subpotent, substandard, adulterated, misbranded,
or expired drugs.
(b) Standards Development.
(1) In General. The Secretary shall, in consultation with the agencies
specified in paragraph (4), manufacturers, distributors, pharmacies, and
other supply chain stakeholders, prioritize and develop standards for the
identification, validation, authentication, and tracking and tracing of
prescription drugs.
(2) Standardized Numeral Identifier. Not later than 30 months after the
date of the enactment of the Food and Drug Administration Amendments Act
of 2007 [enacted Sept. 27, 2007], the Secretary shall develop a
standardized numerical identifier (which, to the extent practicable, shall be
harmonized with international consensus standards for such an identifier) to
be applied to a prescription drug at the point of manufacturing and
repackaging (in which case the numerical identifier shall be linked to the
numerical identifier applied at the point of manufacturing) at the package or
pallet level, sufficient to facilitate the identification, validation,
authentication, and tracking and tracing of the prescription drug.
1379
(3) Promising Technologies. The standards developed under this
subsection shall address promising technologies, which may include—
(A) radio frequency identification technology;
(B) nanotechnology;
(C) encryption technologies; and
(D) other track-and-trace or authentication technologies.
(4) Interagency Collaboration. In carrying out this subsection, the
Secretary shall consult with Federal health and security agencies, including
—
(A) the Department of Justice;
(B) the Department of Homeland Security;
(C) the Department of Commerce; and
(D) other appropriate Federal and State agencies.
(c) Inspection and Enforcement.
(1) In General. The Secretary shall expand and enhance the resources
and facilities of agency components of the Food and Drug Administration
involved with regulatory and criminal enforcement of this Act [21 USCS §§
301 et seq.] to secure the drug supply chain against counterfeit, diverted,
subpotent, substandard, adulterated, misbranded, or expired drugs including
biological products and active pharmaceutical ingredients from domestic
and foreign sources.
(2) Activities. The Secretary shall undertake enhanced and joint
enforcement activities with other Federal and State agencies, and establish
regional capacities for the validation of prescription drugs and the
inspection of the prescription drug supply chain.
(d) Definition. In this section, the term “prescription drug” means a drug
subject to section 503(b)(1) [21 USCS § 353(b)(1)].
History:
(June 25, 1938, ch 675, Ch. V, Subch A, § 505D, as added Sept. 27, 2007, P.L. 110-85,
Title IX, Subtitle B, § 913, 121 Stat. 952.)
§ 355f. Extension of Exclusivity Period for New

Qualified Infectious Disease Products.
(a) Extension. If the Secretary approves an application pursuant to section
1380
505 [21 USCS § 355] for a drug that has been designated as a qualified
infectious disease product under subsection (d), the 4- and 5-year periods
described in subsections (c)(3)(E)(ii) and (j)(5)(F)(ii) of section 505 [21 USCS
§ 355], the 3-year periods described in clauses (iii) and (iv) of subsection (c)
(3)(E) and clauses (iii) and (iv) of subsection (j)(5)(F) of section 505 [21
USCS § 355], or the 7-year period described in section 527 [21 USCS §
360cc], as applicable, shall be extended by 5 years.
(b) Relation to pediatric exclusivity. Any extension under subsection (a) of
a period shall be in addition to any extension of the period under section 505A
[21 USCS § 355a] with respect to the drug.
(c) Limitations. Subsection (a) does not apply to the approval of—
(1) a supplement to an application under section 505(b) [21 USCS §
355(b)] for any qualified infectious disease product for which an extension
described in subsection (a) is in effect or has expired;
(2) a subsequent application filed with respect to a product approved
under section 505 [21 USCS § 355] for a change that results in a new
indication, route of administration, dosing schedule, dosage form, delivery
system, delivery device, or strength; or
(3) a product that does not meet the definition of a qualified infectious
disease product under subsection (g) based upon its approved uses.
(d) Designation.
(1) In general. The manufacturer or sponsor of a drug may request the
Secretary to designate a drug as a qualified infectious disease product at any
time before the submission of an application under section 505(b) [21 USCS
§ 355(b)] for such drug. The Secretary shall, not later than 60 days after the
submission of such a request, determine whether the drug is a qualified
infectious disease product.
(2) Limitation. Except as provided in paragraph (3), a designation
under this subsection shall not be withdrawn for any reason, including
modifications to the list of qualifying pathogens under subsection (f)(2)(C).
(3) Revocation of designation. The Secretary may revoke a designation
of a drug as a qualified infectious disease product if the Secretary finds that
the request for such designation contained an untrue statement of material
fact.
(e) Regulations.
(1) In general. Not later than 2 years after the date of enactment of the
Food and Drug Administration Safety and Innovation Act [enacted July 9,
1381
2012], the Secretary shall adopt final regulations implementing this section,
including developing the list of qualifying pathogens described in subsection
(f).
(2) Procedure. In promulgating a regulation implementing this section,
the Secretary shall—
(A) issue a notice of proposed rulemaking that includes the proposed
regulation;
(B) provide a period of not less than 60 days for comments on the
proposed regulation; and
( C) publish the final regulation not less than 30 days before the
effective date of the regulation.
(3) Restrictions. Notwithstanding any other provision of law, the
Secretary shall promulgate regulations implementing this section only as
described in paragraph (2), except that the Secretary may issue interim
guidance for sponsors seeking designation under subsection (d) prior to the
promulgation of such regulations.
(4) Designation prior to regulations. The Secretary shall designate
drugs as qualified infectious disease products under subsection (d) prior to
the promulgation of regulations under this subsection, if such drugs meet the
definition of a qualified infectious disease product described in subsection
(g).
(f) Qualifying pathogen.
(1) Definition. In this section, the term “qualifying pathogen” means a
pathogen identified and listed by the Secretary under paragraph (2) that has
the potential to pose a serious threat to public health, such as—
(A) resistant gram positive pathogens, including methicillin-resistant
Staphylococcus aureus, vancomycin-resistant Staphylococcus aureus,
and vancomycin-resistant enterococcus;
( B ) multi-drug resistant gram negative bacteria, including
Acinetobacter, Klebsiella, Pseudomonas, and E. coli species;
(C) multi-drug resistant tuberculosis; and
(D) Clostridium difficile.
(2) List of qualifying pathogens.
(A) In general. The Secretary shall establish and maintain a list of
qualifying pathogens, and shall make public the methodology for
1382
developing such list.
(B) Considerations. In establishing and maintaining the list of
pathogens described under this section, the Secretary shall—
(i) consider—
( I ) the impact on the public health due to drug-resistant
organisms in humans;
(II) the rate of growth of drug-resistant organisms in humans;
(III) the increase in resistance rates in humans; and
(IV) the morbidity and mortality in humans; and
(i i ) consult with experts in infectious diseases and antibiotic
resistance, including the Centers for Disease Control and Prevention,
the Food and Drug Administration, medical professionals, and the
clinical research community.
(C) Review. Every 5 years, or more often as needed, the Secretary
shall review, provide modifications to, and publish the list of qualifying
pathogens under subparagraph (A) and shall by regulation revise the list
as necessary, in accordance with subsection (e).
(g) Qualified infectious disease product. The term “qualified infectious
disease product” means an antibacterial or antifungal drug for human use
intended to treat serious or life-threatening infections, including those caused by
—
(1) an antibacterial or antifungal resistant pathogen, including novel or
emerging infectious pathogens; or
(2) qualifying pathogens listed by the Secretary under subsection (f).
Leg.H. (June 25, 1938, ch 675, Ch. V, Subch A, § 505E, as added July 9, 2012, P.L.
112-144, Title VIII, § 801(a), 126 Stat. 1077.)
2012 Note: Application of section. Act July 9, 2012, P.L. 112-144 , Title VIII, §
801(b), 126 Stat. 1079, provides: “Section 505E of the Federal Food, Drug, and Cosmetic
Act [this section], as added by subsection (a), applies only with respect to a drug that is first
approved under section 505(c) of such Act (21 U.S.C. 355(c)) on or after the date of the
enactment of this Act.”.
PART B
Drugs for Rare Diseases or Conditions
1383
§ 360aa. Recommendations for Investigations of Drugs
for Rare Diseases or Conditions.
(a) Request by Sponsor; Response by Secretary. The sponsor of a drug for
a disease or condition which is rare in the States may request the Secretary to
provide written recommendations for the non-clinical and clinical investigations
which must be conducted with the drug before—
(1) it may be approved for such disease or condition under section 355
of this title, or
( 2) if the drug is a biological product, it may be licensed for such
disease or condition under section 262 of Title 42.
If the Secretary has reason to believe that a drug for which a request is
made under this section is a drug for a disease or condition which is rare in
the States, the Secretary shall provide the person making the request written
recommendations for the non-clinical and clinical investigations which the
Secretary believes, on the basis of information available to the Secretary at
the time of the request under this section, would be necessary for approval
of such drug for such disease or condition under section 355 of this title or
licensing of such drug for such disease or condition under section 262 of
Title 42.
(b) Regulations. The Secretary shall by regulation promulgate procedures
for the implementation of subsection (a) of this section.
Leg.H. June 25, 1938, ch. 675 § 525; January 4, 1983, P.L. 97-414 § 2(a), 96 Stat 2049;
August 15, 1985, P.L. 99-91 § 3(a)(1), 99 Stat. 387; November 21, 1997, P.L. 105-115 §
125(b)(2)(F), (G), 111 Stat. 2325.
2009 Note: Review group for recommendation; preclinical, trial design, and
regulatory paradigms and optimal solutions for prevention, diagnosis, and treatment
of neglected diseases of the developing world. Act Oct. 21, 2009, P.L. 111-80 , Title VII,
§ 740, 123 Stat. 2127, provides:
“(a) The Commissioner of Food and Drugs shall establish within the Food and Drug
Administration a review group which shall recommend to the Commissioner of Food and
Drugs appropriate preclinical, trial design, and regulatory paradigms and optimal
solutions for the prevention, diagnosis, and treatment of rare diseases: Provided, That
the Commissioner of Food and Drugs shall appoint individuals employed by the Food
and Drug Administration to serve on the review group: Provided further, That members
of the review group shall have specific expertise relating to the development of articles
for use in the prevention, diagnosis, or treatment of rare diseases, including specific
expertise in developing or carrying out clinical trials.
“(b) The Commissioner of Food and Drugs shall establish within the Food and Drug
Administration a review group which shall recommend to the Commissioner of Food and
Drugs appropriate preclinical, trial design, and regulatory paradigms and optimal
1384
solutions for the prevention, diagnosis, and treatment of neglected diseases of the
developing world: Provided, That the Commissioner of Food and Drugs shall appoint
individuals employed by the Food and Drug Administration to serve on the review group:
Provided further, That members of the review group shall have specific expertise
relating to the development of articles for use in the prevention, diagnosis, or treatment
of neglected diseases of the developing world, including specific expertise in developing
or carrying out clinical trials: Provided further, That for the purposes of this section the
term ‘neglected disease of the developing world’ means a tropical disease, as defined in
section 524(a)(3) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360n(a)(3)).
“(c) The Commissioner of Food and Drugs shall—
“(1) submit, not later than 1 year after the date of the establishment of review
groups under subsections (a) and (b), a report to Congress that describes both the
findings and recommendations made by the review groups under subsections (a) and
(b);
“(2) issue, not later than 180 days after submission of the report to Congress
under paragraph (1), guidance based on such recommendations for articles for use in
the prevention, diagnosis, and treatment of rare diseases and for such uses in
neglected diseases of the developing world; and
“(3) develop, not later than 180 days after submission of the report to Congress
under paragraph (1), internal review standards based on such recommendations for
articles for use in the prevention, diagnosis, and treatment of rare diseases and for
such uses in neglected diseases of the developing world.”.
§ 360bb. Designation of Drugs for Rare Diseases or

Conditions.
(a) Request by sponsor; preconditions; definition.
(1) The manufacturer or the sponsor of a drug may request the Secretary
to designate the drug as a drug for a rare disease or condition. A request for
designation of a drug shall be made before the submission of an application
under section 355(b) of this title for the drug, or the submission of an
application for licensing of the drug under section 262 of Title 42. If the
Secretary finds that a drug for which a request is submitted under this
subsection is being or will be investigated for a rare disease or condition
and—
(A) if an application for such drug is approved under section 355 of
this title, or
(B) if a license for such drug is issued under section 262 of Title 42,
the approval, certification, or license would be for use for such disease
or condition, the Secretary shall designate the drug as a drug for such
disease or condition. A request for a designation of a drug under this
subsection shall contain the consent of the applicant to notice being
1385
given by the Secretary under subsection (b) of this section respecting the
designation of the drug.
(2) For purposes of paragraph (1), the term “rare disease or condition”
means any disease or condition which (A) affects less than 200,000 persons
in the United States, or (B) affects more than 200,000 in the United States
and for which there is no reasonable expectation that the cost of developing
and making available in the United States a drug for such disease or
condition will be recovered from sales in the United States of such drug.
Determinations under the preceding sentence with respect to any drug shall
be made on the basis of the facts and circumstances as of the date the request
for designation of the drug under this subsection is made.
(b) Notification of Discontinuance of Drug or Application as Condition. A
designation of a drug under subsection (a) of this section shall be subject to the
condition that—
(1) if an application was approved for the drug under section 355(b) of this
title, or a license was issued for the drug under section 262 of Title 42, the
manufacturer of the drug will notify the Secretary of any discontinuance of the
production of the drug at least one year before discontinuance, and
( 2) if an application has not been approved for the drug under section
355(b) of this title, or a license has not been issued for the drug under section
262 of Title 42 and if preclinical investigations or investigations under section
355(i) of this title are being conducted with the drug, the manufacturer or
sponsor of the drug will notify the Secretary of any decision to discontinue
active pursuit of approval of an application under section 355(b) of this title or
approval of a license under section 262 of Title 42.
(c) Notice to Public. Notice respecting the designation of a drug under
subsection (a) of this section shall be made available to the public.
(d) Regulations. The Secretary shall by regulation promulgate procedures
for the implementation of subsection (a) of this section.
Leg.H. June 25, 1938, ch. 675 § 526; January 4, 1983, P.L. 97-414 § 2(a), 96 Stat.
2050; October 30, 1984, P.L. 98-551 § 4(a), 98 Stat. 2817; August 15, 1985, P.L. 99-91 §
3(a)(2), 99 Stat. 397; April 18, 1988, P.L. 100-290 § 2, 102 Stat. 90; November 21, 1997,
P.L. 105-115 § 125(b)(2)(H), (I), 111 Stat. 2326.
§ 360cc. Protection for Unpatented Drugs for Rare

Diseases or Conditions.
(a) Exclusive Approval, Certification, or License. Except as provided in
subsection (b) of this section, if the Secretary—
1386
(1) approves an application filed pursuant to section 355 of this title, or
(2) issues a license under section 262 of Title 42 for a drug designated
under section 360bb of this title for a rare disease or condition, the
Secretary may not approve another application under section 355 of this title
or issue another license under section 262 of Title 42 for such drug for such
disease or condition for a person who is not the holder of such approved
application or of such license until the expiration of seven years from the
date of the approval of the approved application or the issuance of the
license. Section 355(c)(2) of this title does not apply to the refusal to
approve an application under the preceding sentence.
(b) Exceptions. If an application filed pursuant to section 355 of this title is
approved for a drug designated under section 360bb of this title for a rare
disease or condition or if a license is issued under section 262 of Title 42 for
such a drug, the Secretary may, during the seven-year period beginning on the
date of the application approval or of the issuance of the license, approve
another application under section 355 of this title or issue a license under
section 262 of Title 42, for such drug for such disease or condition for a person
who is not the holder of such approved application or of such license if—
(1) the Secretary finds, after providing the holder notice and opportunity
for the submission of views, that in such period the holder of the approved
application or of the license cannot assure the availability of sufficient
quantities of the drug to meet the needs of persons with the disease or
condition for which the drug was designated; or
(2) such holder provides the Secretary in writing the consent of such
holder for the approval of other applications or the issuance of other
licenses before the expiration of such seven-year period.
2050; September 24, 1984, P.L. 98-417 § 102(b)(6), 98 Stat. 1593; August 15, 1985, P.L.
99-91 §§ 2(1), (2), 3(a)(3), 99 Stat. 387, 388; August 13, 1993, P.L. 103-80 § 3(v), 107 Stat.
778; November 21, 1997, P.L. 105-115 § 125(b)(2)(J), (K), 111 Stat. 2326; November 6,
2002, P.L. 107-281 § 4, 116 Stat. 1993.
§ 360dd. Open Protocols for Investigations of Drugs for

If a drug is designated under section 360bb of this title as a drug for a rare
disease or condition and if notice of a claimed exemption under section 355 (i)
of this title or regulations issued thereunder is filed for such drug, the Secretary
shall encourage the sponsor of such drug to design protocols for clinical
investigations of the drug which may be conducted under the exemption to
permit the addition to the investigations of persons with the disease or condition
1387
who need the drug to treat the disease or condition and who cannot be
satisfactorily treated by available alternative drugs.
1051.
§ 360ee. Grants and Contracts for Development of

Drugs for Rare Diseases and Conditions.
(a) Authority of Secretary. The Secretary may make grants to and enter into
contracts with public and private entities and individuals to assist in (1)
defraying the costs of qualified testing expenses incurred in connection with the
development of drugs for rare diseases and conditions, (2) defraying the costs of
developing medical devices for rare diseases or conditions, and (3) defraying
the costs of developing medical foods for rare diseases or conditions.
(b) Definitions. For purposes of subsection (a):
(1) The term “qualified testing” means—
(A) human clinical testing—
(i) which is carried out under an exemption for a drug for a rare
disease or condition under section 505(i) of the Federal Food, Drug,
and Cosmetic Act [21 USCS § 355(i)] (or regulations issued under
such section); and
(ii) which occurs before the date on which an application with
respect to such drug is submitted under section 505(b) of such Act
[21 USCS §§ 355(b)] or under section 351 of the Public Health
Service Act [42 USCS § 262]; and
( B ) preclinical testing involving a drug for a rare disease or
condition which occurs after the date such drug is designated under
section 526 of such Act [21 USCS § 360bb] and before the date on
which an application with respect to such drug is submitted under
section 505(b) of such Act [21 USCS §§ 355(b)] or under section 351 of
the Public Health Service Act [42 USCS § 262].
(2) The term “rare disease or condition” means (1) in the case of a drug;
any disease or condition which (A) affects less than 200,000 persons in the
United States, or (b) affects more than 200,000 in the United States and for
which there is no reasonable expectation that the cost of developing and
making available in the United States a drug for such disease or condition
will be recovered from sales in the United States of such drug, (2) in the
case of a medical device, any disease or condition that occurs so
infrequently in the United States that there is no reasonable expectation that
1388
a medical device for such disease or condition will be developed without
assistance under subsection (a), and (3) in the case of a medical food, any
disease or condition that occurs so infrequently in the United States that
there is no reasonable expectation that a medical food for such disease or
condition will be developed without assistance under subsection (a).
Determinations under the preceding sentence with respect to any drug shall
be made on the basis of the facts and circumstances as of the date the request
for designation of the drug under section 526 of the Federal Food, Drug, and
Cosmetic Act [21 USCS § 360bb] is made.
(3) The term “medical food” means a food which is formulated to be
consumed or administered enterally under the supervision of a physician and
which is intended for the specific dietary management of a disease or
condition for which distinctive nutritional requirements, based on
recognized scientific principles, are established by medical evaluation.
(c) Authorization of appropriations. For grants and contracts under
subsection (a), there is authorized to be appropriated $30,000,000 for each of
fiscal years 2013 through 2017.
Leg.H (Jan. 4, 1983, P.L. 97-414, § 5, 96 Stat. 2056; Oct. 30, 1984, P.L. 98-551, §
4(b), 98 Stat. 2817; Aug. 15, 1985, P.L. 99-91, § 5, 99 Stat. 391; April 18, 1988, P.L. 100-
290, § 3(a)-(c), 102 Stat. 90; Nov. 21, 1997, P.L. 105-115, Title I, Subtitle B, § 125(b)(2)
(N), 111 Stat. 316; Nov. 6, 2002, P.L. 107-281, § 3, 116 Stat. 1993; Sept. 27, 2007, P.L.
110-85, Title XI, Subtitle B, § 1112(b), 121 Stat. 976.)
(As amended July 9, 2012, P.L. 112-144, Title IX, § 906, 126 Stat. 1092.)
§ 360ff. Priority Review to Encourage Treatments for

Rare Pediatric Diseases.
(a) Definitions. In this section:
(1) Priority review. The term “priority review”, with respect to a
human drug application as defined in section 735(1) [21 USCS § 379g(1)],
means review and action by the Secretary on such application not later than
6 months after receipt by the Secretary of such application, as described in
the Manual of Policies and Procedures of the Food and Drug Administration
and goals identified in the letters described in section 101(b) of the
Prescription Drug User Fee Amendments of 2012 [21 USCS § 379g note].
(2) Priority review voucher. The term “priority review voucher”
means a voucher issued by the Secretary to the sponsor of a rare pediatric
disease product application that entitles the holder of such voucher to
priority review of a single human drug application submitted under section
505(b)(1) [21 USCS § 355(b)(1)] or section 351(a) of the Public Health
Service Act [42 USCS § 262] after the date of approval of the rare pediatric
1389
disease product application.
(3) Rare pediatric disease. The term “rare pediatric disease” means a
disease that meets each of the following criteria:
(A) The disease primarily affects individuals aged from birth to 18
years, including age groups often called neonates, infants, children, and
adolescents.
(B) The disease is a rare disease or condition, within the meaning of
section 526 [21 USCS § 360bb].
(4) Rare pediatric disease product application. The term “rare
pediatric disease product application” means a human drug application, as
defined in section 735(1) [21 USCS § 379g(1)], that—
(A) is for a drug or biological product—
( i ) that is for the prevention or treatment of a rare pediatric
disease; and
(ii) that contains no active ingredient (including any ester or salt
of the active ingredient) that has been previously approved in any
other application under section 505(b)(1), 505(b)(2), or 505(j) of
this Act [21 USCS § 355(b)(1), (b)(2), or (j)] or section 351(a) or
351(k) of the Public Health Service Act [42 USCS § 262(a) or (k)];
(B) is submitted under section 505(b)(1) of this Act [21 USCS §
355(b)(1)] or section 351(a) of the Public Health Service Act [42 USCS
§ 262(a)];
(C) the Secretary deems eligible for priority review;
(D) that relies on clinical data derived from studies examining a
pediatric population and dosages of the drug intended for that
population;
(E) that does not seek approval for an adult indication in the original
rare pediatric disease product application; and
(F) is approved after the date of the enactment of the Prescription
Drug User Fee Amendments of 2012 [enacted July 9, 2012].
(b) Priority review voucher.
(1) In general. The Secretary shall award a priority review voucher to
the sponsor of a rare pediatric disease product application upon approval
by the Secretary of such rare pediatric disease product application.
(2) Transferability.
1390
(A) In general. The sponsor of a rare pediatric disease product
application that receives a priority review voucher under this section
may transfer (including by sale) the entitlement to such voucher. There is
no limit on the number of times a priority review voucher may be
transferred before such voucher is used.
(B) Notification of transfer. Each person to whom a voucher is
transferred shall notify the Secretary of such change in ownership of the
voucher not later than 30 days after such transfer.
(3) Limitation. A sponsor of a rare pediatric disease product
application may not receive a priority review voucher under this section if
the rare pediatric disease product application was submitted to the
Secretary prior to the date that is 90 days after the date of enactment of the
Prescription Drug User Fee Amendments of 2012 [enacted July 9, 2012].
(4) Notification.
(A) In general. The sponsor of a human drug application shall
notify the Secretary not later than 90 days prior to submission of the
human drug application that is the subject of a priority review voucher
of an intent to submit the human drug application, including the date on
which the sponsor intends to submit the application. Such notification
shall be a legally binding commitment to pay for the user fee to be
assessed in accordance with this section.
(B) Transfer after notice. The sponsor of a human drug application
that provides notification of the intent of such sponsor to use the voucher
for the human drug application under subparagraph (A) may transfer the
voucher after such notification is provided, if such sponsor has not yet
submitted the human drug application described in the notification.
(5) Termination of authority. The Secretary may not award any priority
review vouchers under paragraph (1) after the last day of the 1-year period
that begins on the date that the Secretary awards the third rare pediatric
disease priority voucher under this section.
(c) Priority review user fee.
(1) In general. The Secretary shall establish a user fee program under
which a sponsor of a human drug application that is the subject of a priority
review voucher shall pay to the Secretary a fee determined under paragraph
(2). Such fee shall be in addition to any fee required to be submitted by the
sponsor under chapter VII [21 USCS §§ 371 et seq.].
(2) Fee amount. The amount of the priority review user fee shall be
determined each fiscal year by the Secretary, based on the difference
1391
between—
(A) the average cost incurred by the Food and Drug Administration
in the review of a human drug application subject to priority review in
the previous fiscal year; and
(B) the average cost incurred by the Food and Drug Administration
in the review of a human drug application that is not subject to priority
review in the previous fiscal year.
(3) Annual fee setting. The Secretary shall establish, before the
beginning of each fiscal year beginning after September 30, 2012, the
amount of the priority review user fee for that fiscal year.
(4) Payment.
(A) In general. The priority review user fee required by this
subsection shall be due upon the notification by a sponsor of the intent of
such sponsor to use the voucher, as specified in subsection (b)(4)(A).
All other user fees associated with the human drug application shall be
due as required by the Secretary or under applicable law.
(B) Complete application. An application described under
subparagraph (A) for which the sponsor requests the use of a priority
review voucher shall be considered incomplete if the fee required by
this subsection and all other applicable user fees are not paid in
accordance with the Secretary’s procedures for paying such fees.
(C) No waivers, exemptions, reductions, or refunds. The Secretary
may not grant a waiver, exemption, reduction, or refund of any fees due
and payable under this section.
(5) Offsetting collections. Fees collected pursuant to this subsection for
any fiscal year—
(A) shall be deposited and credited as offsetting collections to the
account providing appropriations to the Food and Drug Administration;
and
(B) shall not be collected for any fiscal year except to the extent
provided in advance in appropriations Acts.
(d) Designation process.
(1) In general. Upon the request of the manufacturer or the sponsor of a
new drug, the Secretary may designate—
(A) the new drug as a drug for a rare pediatric disease; and
1392
( B) the application for the new drug as a rare pediatric disease
product application.
(2) Request for designation. The request for a designation under
paragraph (1) shall be made at the same time a request for designation of
orphan disease status under section 526 [21 USCS § 360bb] or fast-track
designation under section 506 [21 USCS § 356] is made. Requesting
designation under this subsection is not a prerequisite to receiving a priority
review voucher under this section.
(3) Determination by Secretary. Not later than 60 days after a request
is submitted under paragraph (1), the Secretary shall determine whether—
(A) the disease or condition that is the subject of such request is a
rare pediatric disease; and
( B) the application for the new drug is a rare pediatric disease
product application.
(e) Marketing of rare pediatric disease products.
(1) Revocation. The Secretary may revoke any priority review voucher
awarded under subsection (b) if the rare pediatric disease product for which
such voucher was awarded is not marketed in the United States within the
365-day period beginning on the date of the approval of such drug under
section 505 of this Act [21 USCS § 355] or section 351 of the Public Health
Service Act [42 USCS § 262].
(2) Postapproval production report. The sponsor of an approved rare
pediatric disease product shall submit a report to the Secretary not later than
5 years after the approval of the applicable rare pediatric disease product
application. Such report shall provide the following information, with
respect to each of the first 4 years after approval of such product:
(A) The estimated population in the United States suffering from the
rare pediatric disease.
(B) The estimated population in the United States suffering from the
rare pediatric disease.
( C ) The actual amount of such rare pediatric disease product
distributed in the United States.
(f) Notice and report.
(1) Notice of issuance of voucher and approval of products under
voucher. The Secretary shall publish a notice in the Federal Register and on
the Internet Web site of the Food and Drug Administration not later than 30
1393
days after the occurrence of each of the following:
( A ) The Secretary issues a priority review voucher under this
section.
( B ) The Secretary approves a drug pursuant to an application
submitted under section 505(b) of this Act [21 USCS § 355(b)] or
section 351(a) of the Public Health Service Act [42 USCS § 262(a)] for
which the sponsor of the application used a priority review voucher
under this section.
(2) Notification. If, after the last day of the 1-year period that begins on
the date that the Secretary awards the third rare pediatric disease priority
voucher under this section, a sponsor of an application submitted under
section 505(b) of this Act [21 USCS § 355(b)] or section 351(a) of the
Public Health Service Act [42 USCS § 262(a)] for a drug uses a priority
review voucher under this section for such application, the Secretary shall
submit to the Committee on Energy and Commerce of the House of
Representatives and the Committee on Health, Education, Labor, and
Pensions of the Senate a document—
(A) notifying such Committees of the use of such voucher; and
(B) identifying the drug for which such priority review voucher is
used.
(g) Eligibility for other programs. Nothing in this section precludes a
sponsor who seeks a priority review voucher under this section from
participating in any other incentive program, including under this Act [21 USCS
§§ 301 et seq.].
(h) Relation to other provisions. The provisions of this section shall
supplement, not supplant, any other provisions of this Act [21 USCS §§ 301 et
seq.] or the Public Health Service Act [42 USCS §§ 201 et seq.] that encourage
the development of drugs for tropical diseases and rare pediatric diseases.
1394
(i) GAO study and report.
(1) Study.
(A) In general. Beginning on the date that the Secretary awards the
third rare pediatric disease priority voucher under this section, the
Comptroller General of the United States shall conduct a study of the
effectiveness of awarding rare pediatric disease priority vouchers under
this section in the development of human drug products that treat or
prevent such diseases.
(B) Contents of study. In conducting the study under subparagraph
(A), the Comptroller General shall examine the following:
(i) The indications for which each rare disease product for which
a priority review voucher was awarded was approved under section
505 [21 USCS § 355] or section 351 of the Public Health Service
Act [42 USCS § 262].
(ii) Whether, and to what extent, an unmet need related to the
treatment or prevention of a rare pediatric disease was met through
the approval of such a rare disease product.
(iii) The value of the priority review voucher if transferred.
( i v) Identification of each drug for which a priority review
voucher was used.
(v) The length of the period of time between the date on which a
priority review voucher was awarded and the date on which it was
used.
(2) Report. Not later than 1 year after the date under paragraph (1)(A),
the Comptroller General shall submit to the Committee on Energy and
Commerce of the House of Representatives and the Committee on Health,
Education, Labor, and Pensions of the Senate, a report containing the results
of the study under paragraph (1).
Leg.H. (June 25, 1938, ch 675, Ch. V, Subch B, § 529, as added July 9, 2012, P.L. 112-
144, Title IX, § 908, 126 Stat. 1094.)
SUBCHAPTER VII
General Administrative Provisions
1395
(a) Authority to conduct.
(1)
( A ) The Secretary is authorized to conduct examinations and
investigations for the purposes of this Act [21 USCS § 301 et seq.]
through officers and employees of the Department or through any health,
food, or drug officer or employee of any State, Territory, or political
subdivision thereof, duly commissioned by the Secretary as an officer of
the Department.
(B)
(i) For a tobacco product, to the extent feasible, the Secretary
shall contract with the States in accordance with this paragraph to
carry out inspections of retailers within that State in connection with
the enforcement of this Act [21 USCS § 301 et seq.].
(ii) The Secretary shall not enter into any contract under clause
(i) with the government of any of the several States to exercise
enforcement authority under this Act [21 USCS § 301 et seq.] on
Indian country without the express written consent of the Indian tribe
involved.
(2)
( A) In addition to the authority established in paragraph (1), the
Secretary, pursuant to a memorandum of understanding between the
Secretary and the head of another Federal department or agency, is
authorized to conduct examinations and investigations for the purposes
of this Act [21 USCS § 301 et seq.] through the officers and employees
of such other department or agency, subject to subparagraph (B). Such a
memorandum shall include provisions to ensure adequate training of
such officers and employees to conduct the examinations and
investigations. The memorandum of understanding shall contain
provisions regarding reimbursement. Such provisions may, at the sole
discretion of the head of the other department or agency, require
reimbursement, in whole or in part, from the Secretary for the
examinations or investigations performed under this section by the
officers or employees of the other department or agency.
( B ) A memorandum of understanding under subparagraph (A)
between the Secretary and another Federal department or agency is
effective only in the case of examinations or inspections at facilities or
other locations that are jointly regulated by the Secretary and such
department or agency.
1396
( C ) For any fiscal year in which the Secretary and the head of
another Federal department or agency carries out one or more
examinations or inspections under a memorandum of understanding
under subparagraph (A), the Secretary and the head of such department
or agency shall with respect to their respective departments or agencies
submit to the committees of jurisdiction (authorizing and appropriating)
in the House of Representatives and the Senate a report that provides,
for such year—
(i) the number of officers or employees that carried out one or
more programs, projects, or activities under such memorandum;
(i i ) the number of additional articles that were inspected or
examined as a result of such memorandum; and
(iii) the number of additional examinations or investigations that
were carried out pursuant to such memorandum.
(3) In the case of food packed in the Commonwealth of Puerto Rico or a
Territory the Secretary shall attempt to make inspection of such food at the
first point of entry within the United States when, in his opinion and with
due regard to the enforcement of all the provisions of this Act [21 USCS §
301 et seq.], the facilities at his disposal will permit of such inspection.
(4) For the purposes of this subsection, the term “United States” means
the States and the District of Columbia.
(b) Availability to Owner of Part of Analysis Samples. Where a sample of
a food, drug, or cosmetic is collected for analysis under this Act [21 USCS §
301 et seq.] the Secretary shall, upon request, provide a part of such official
sample for examination or analysis by any person named on the label of the
article, or the owner thereof, or his attorney or agent; except that the Secretary is
authorized, by regulations, to make such reasonable exceptions from, and
impose such reasonable terms and conditions relating to, the operation of this
subsection as he finds necessary for the proper administration of the provisions
of this Act [21 USCS § 301 et seq.].
(c) Records of Other Departments and Agencies. For purposes of
enforcement of this Act [21 USCS § 301 et seq.], records of any department or
independent establishment in the executive branch of the Government shall be
open to inspection by any official of the Department duly authorized by the
Secretary to make such inspection.
(d) Information on Patents for Drugs. The Secretary is authorized and
directed, upon request from the Under Secretary of Commerce for Intellectual
Property and Director of the United States Patent and Trademark Office, to
furnish full and complete information with respect to such questions relating to
1397
drugs as the Director may submit concerning any patent application. The
Secretary is further authorized, upon receipt of any such request, to conduct or
cause to be conducted, such research as may be required.
(e) Powers of Enforcement Personnel. Any officer or employee of the
Department designated by the Secretary to conduct examinations, investigations,
or inspections under this Act [21 USCS § 301 et seq.] relating to counterfeit
drugs may, when so authorized by the Secretary—
(1) carry firearms;
(2) execute and serve search warrants and arrest warrants;
(3) execute seizure by process issued pursuant to libel under section 304
[21 USCS § 334];
(4) make arrests without warrant for offenses under this Act [21 USCS §
301 et seq.] with respect to such drugs if the offense is committed in his
presence or, in the case of a felony, if he has probable cause to believe that
the person so arrested has committed, or is committing, such offense; and
( 5) make, prior to the institution of libel proceedings under section
304(a)(2) [21 USCS § 334(a)(2)], seizures of drugs or containers or of
equipment, punches, dies, plates, stones, labeling, or other things, if they
are, or he has reasonable grounds to believe that they are, subject to seizure
and condemnation under such section 304(a)(2) [21 USCS § 334(a)(2)]. In
the event of seizure pursuant to this paragraph (5), libel proceedings under
section 304(a)(2) [21 USCS § 334(a)(2)] shall be instituted promptly and
the property seized be placed under the jurisdiction of the court.
Leg.H. June 25, 1938, ch 675, Ch. VII, Subch A, § 702, 52 Stat. 1056; Oct. 10, 1962,
P.L. 87-781, Title III, §§ 307(b), 308, 76 Stat. 796; July 15, 1965, P.L. 89-74, § 8(a), 79
Stat. 234; Oct. 27, 1970, P.L. 91-513, Title II, Part G, § 701(f), 84 Stat. 1282; June 16,
1992, P.L. 102-300, § 6(b)(2), 106 Stat. 240; Oct. 29, 1992, P.L. 102-571, Title I, § 106(2),
106 Stat. 4498; Aug. 13, 1993, P.L. 103-80, § 3(dd)(2), 107 Stat. 779; Nov. 29, 1999, P.L.
106-113, Div B, § 1000(a)(9), 113 Stat. 1536; June 12, 2002, P.L. 107-188, Title III,
Subtitle A, § 314, 116 Stat. 374; June 22, 2009, P.L. 111-31, Div A, Title I, § 103(g), 123
Stat. 1837.
TITLE 22
FOREIGN RELATIONS AND
INTERCOURSE
Contents
CHAPTER 10 HEMISPHERAL RELATIONS
1398
SUBCHAPTER II War Materials
CHAPTER 35 ARMS CONTROL AND DISARMAMENT
SUBCHAPTER III Functions
§ 2572. Patents; Availability to General Public; Protection of Background Rights.
CHAPTER 10
HEMISPHERAL RELATIONS
SUBCHAPTER II
War Materials

The Secretary of the Army and the Secretary of the Navy shall in all
contracts or agreements for the sale of such materiel fully protect the rights of
all citizens of the United States who have patent rights in and to any such
materiel which is authorized to be sold and the funds collected for royalties on
such patents shall be paid to the owners and holders of such patents.
Leg.H. June 15, 1940, ch. 365 § 6, 54 Stat. 397.
CHAPTER 35
ARMS CONTROL AND DISARMAMENT

SUBCHAPTER III
Functions
§ 2572. Patents; Availability to General Public;

Protection of Background Rights.
1399
All research within the United States contracted for, sponsored,
cosponsored, or authorized under authority of this chapter, shall be provided for
in such manner that all information as to uses, products, processes, patents, and
other developments resulting from such research developed by Government
expenditure will (with such exceptions and limitations, if any, as the Secretary
of State may find to be necessary in the public interest) be available to the
general public. This section shall not be so construed as to deprive the owner of
any background patent relating thereto of such rights as he may have thereunder.
Leg.H. September 26, 1961, P.L. 87-297 § 302, 75 Stat. 634; October 21, 1998, P.L.
105-277 § 1223(7), (21), 112 Stat. 2681–769, 2681–772, effective April 1, 1999 or on the
date of the abolition of the United States Arms Control and Disarmament Agency, pursuant to
the reorganization plan described in P.L. 105-277 § 1601, whichever is earlier.
TITLE 25
INDIANS
Contents
CHAPTER 7A PROMOTION OF SOCIAL AND ECONOMIC WELFARE

§ 305. Indian Arts and Crafts Board; Creation and Composition; Per Diem Payments.
CHAPTER 7A
PROMOTION OF SOCIAL AND

ECONOMIC WELFARE
§ 305. Indian Arts and Crafts Board; Creation and
Composition; Per Diem Payments.
A board is created in the Department of the Interior to be known as “Indian
Arts and Crafts Board”, and hereinafter referred to as the Board. The Board
shall be composed of five commissioners, who shall be appointed by the
Secretary of the Interior as soon as possible after August 27, 1935 and shall
continue in office, two for a term of two years, one for a term of three years, and
two for a term of four years from the date of their appointment, the term of each
to be designated by the Secretary of the Interior, but their successors shall be
appointed for a term of four years except that any person chosen to fill a
vacancy shall be appointed for the unexpired term of the commissioner whom he
succeeds. Both public officers and private citizens shall be eligible for
1400
membership on the Board. The Board shall elect one of the commissioners as
chairman. One or two vacancies on the Board shall not impair the right of the
remaining commissioners to exercise all the powers of the Board. The
commissioners shall serve without compensation: Provided, That each
Commissioner shall be paid per diem in lieu of subsistence and other expenses
at a rate that does not exceed the rate authorized by section 5703 of Title 5 to be
paid to persons serving without compensation.
Leg.H. August 27, 1935, ch. 748 § 1, 49 Stat. 891; April 24, 1961, P.L. 87-23 § 1, 75
Stat. 45.
2010 Note: Act July 29, 2010, P.L. 111-211, Title I, § 101(a), 124 Stat. 2258, provides:
“This title [amending 18 USCS § 1159, 25 USCS §§ 305d and 305e] may be cited as the
‘Indian Arts and Crafts Amendments Act of 2010’.”
TITLE 26
INTERNAL REVENUE CODE
Contents
SUBTITLE A Income Taxes

CHAPTER 1 NORMAL TAXES AND SURTAXES
SUBCHAPTER A Determination of Tax Liability
PART IV Credits Against Tax
SUBPART D Business Related Credits
§ 45c. Clinical testing expenses for certain drugs for rare diseases or
conditions.
SUBCHAPTER B Computation of Taxable Income
PART VI Itemized Deductions for Individuals and Corporations
SUBCHAPTER G Corporations Used to Avoid Income Tax on Shareholders
PART II Personal Holding Companies
SUBCHAPTER P Capital Gains and Losses
PART IV Special Rules for Determining Capital Gains and Losses
§ 1249. Gain From Certain Sales or Exchanges of Patents, Etc., to Foreign
Corporations.
§ 1253. Transfers of Franchises, Trademarks, and Trade Names.
SUBTITLE A
Income Taxes
CHAPTER 1
1401
NORMAL TAXES AND SURTAXES
SUBCHAPTER A
Determination of Tax Liability

PART IV
Credits Against Tax

SUBPART D
Business Related Credits
§ 45c. Clinical testing expenses for certain drugs for

rare diseases or conditions.
(a) General rule. For purposes of section 38 [26 USCS § 38], the credit
determined under this section for the taxable year is an amount equal to 50
percent of the qualified clinical testing expenses for the taxable year.
(b) Qualified clinical testing expenses. For purposes of this section—
(1) Qualified clinical testing expenses.
(A) In general. Except as otherwise provided in this paragraph, the
term “qualified clinical testing expenses” means the amounts which are
paid or incurred by the taxpayer during the taxable year which would be
described in subsection (b) of section 41 [26 USCS § 41] if such
subsection were applied with the modifications set forth in
subparagraph (B).
(B) Modifications. For purposes of subparagraph (A), subsection
(b) of section 41 [26 USCS § 41] shall be applied—
(i) by substituting “clinical testing” for “qualified research” each
place it appears in paragraphs (2) and (3) of such subsection, and
1402
(ii) by substituting “100 percent” for “65 percent” in paragraph
(3)(A) of such subsection.
(C) Exclusion for amounts funded by grants, etc. The term
“qualified clinical testing expenses” shall not include any amount to the
extent such amount is funded by any grant, contract, or otherwise by
another person (or any governmental entity).
(D) Special rule. For purposes of this paragraph, section 41 [26
USCS § 41] shall be deemed to remain in effect for periods after June
30, 1995, and before July 1, 1996, and periods after December 31,
2013.
(2) Clinical testing.
(A) In general. The term “clinical testing” means any human
clinical testing—
( i ) which is carried out under an exemption for a drug being
tested for a rare disease or condition under section 505(i) of the
Federal Food, Drug, and Cosmetic Act [21 USCS § 355(i)] (or
regulations issued under such section),
(ii) which occurs—
(I) after the date such drug is designated under section 526 of
such Act [21 USCS § 360bb], and
(II) before the date on which an application with respect to
such drug is approved under section 505(b) of such Act [21
USCS § 355(b)] or, if the drug is a biological product, before the
date on which a license for such drug is issued under section 351
of the Public Health Service Act [42 USCS § 262]; and
(iii) which is conducted by or on behalf of the taxpayer to whom
the designation under such section 526 [21 USCS § 360bb] applies.
(B) Testing must be related to use for rare disease or condition.
Human clinical testing shall be taken into account under subparagraph
(A) only to the extent such testing is related to the use of a drug for the
rare disease or condition for which it was designated under section 526
of the Federal Food, Drug, and Cosmetic Act [21 USCS § 360bb].
(c) Coordination with credit for increasing research expenditures.
(1) In general. Except as provided in paragraph (2), any qualified
clinical testing expenses for a taxable year to which an election under this
section applies shall not be taken into account for purposes of determining
the credit allowable under section 41 [26 USCS § 41] for such taxable year.
1403
(2) Expenses included in determining base period research expenses.
Any qualified clinical testing expenses for any taxable year which are
qualified research expenses (within the meaning of section 41(b) [26 USCS
§ 41(b)]) shall be taken into account in determining base period research
expenses for purposes of applying section 41 [26 USCS § 41] to subsequent
taxable years.
(d) Definition and special rules.
(1) Rare disease or condition. For purposes of this section, the term
“rare disease or condition” means any disease or condition which—
(A) affects less than 200,000 persons in the United States, or
(B) affects more than 200,000 persons in the United States but for
which there is no reasonable expectation that the cost of developing and
making available in the United States a drug for such disease or
condition will be recovered from sales in the United States of such drug.
Determinations under the preceding sentence with respect to any drug
shall be made on the basis of the facts and circumstances as of the date such
drug is designated under section 526 of the Federal Food, Drug, and
Cosmetic Act [21 USCS § 360bb].
(2) Special limitations on foreign testing.
(A) In general. No credit shall be allowed under this section with
respect to any clinical testing conducted outside the United States unless
—
(i) such testing is conducted outside the United States because
there is an insufficient testing population in the United States, and
(ii) such testing is conducted by a United States person or by any
other person who is not related to the taxpayer to whom the
designation under section 526 of the Federal Food, Drug, and
Cosmetic Act [21 USCS § 360bb] applies.
( B) Special limitation for corporations to which section 936 [26
USCS § 936] applies. No credit shall be allowed under this section with
respect to any clinical testing conducted by a corporation to which an
election under section 936 [26 USCS § 936] applies.
(3) Certain rules made applicable. Rules similar to the rules of
paragraphs (1) and (2) of section 41(f) [26 USCS § 41(f)] shall apply for
purposes of this section.
(4) Election. This section shall apply to any taxpayer for any taxable
1404
year only if such taxpayer elects (at such time and in such manner as the
Secretary may by regulations prescribe) to have this section apply for such
taxable year.
Leg. H. Added Jan. 4, 1983, P.L. 97-414, § 4(a), 96 Stat. 2053; July 18, 1984, P.L. 98-
369, Div A, Title IV, §§ 471(c), 474(g), Title VI, § 612(e)(1), 98 Stat. 826, 831, 912; Oct.
22, 1986, P.L. 99-514, Title II, §§ 231(d)(3)(A), 232, Title VII, § 701(c)(2), Title XII, §
1275(c)(4), Title XVIII, § 1879(b)(1), (2), 100 Stat. 2178, 2180, 2340, 2599, 2905; Nov.
10, 1988, P.L. 100-647, Title I, § 1018(q)(1), Title IV, § 4008(c)(1), 102 Stat. 3585, 3653;
Dec. 19, 1989, P.L. 101-239, Title VII, § 7110(a)(3), 103 Stat. 2323; Nov. 5, 1990, P.L.
101-508, Title XI, §§ 11402(b)(2), 11411, 104 Stat. 1388-473, 1388-479; Dec. 11, 1991,
P.L. 102-227, Title I, §§ 102(b), 111(a), 105 Stat. 1686, 1688; Aug. 10, 1993, P.L. 103-66,
Title XIII, § 13111(a)(2), (b), 107 Stat. 420; Aug. 20, 1996, P.L. 104-188, Title I, §§
1204(e), 1205(a)(1), (b), (d)(1), (2), 110 Stat. 1775, 1776; Aug. 5, 1997, P.L. 105-34, Title
VI, §§ 601(b)(2), 604(a), 111 Stat. 862, 863; Nov. 21, 1997, P.L. 105-115, Title I, § 125(b)
(2)(O), 111 Stat. 2326; Oct. 21, 1998, P.L. 105-277, Div J, Title I, § 1001(b), 112 Stat.
2681-888; Dec. 17, 1999, P.L. 106-170, Title V, § 502(a)(2), 113 Stat. 1919; Oct. 4, 2004,
P.L. 108-311, Title III, § 301(a)(2), 118 Stat. 1178; Dec. 20, 2006, P.L. 109-432, Div A,
Title I, § 104(a)(2), 120 Stat. 2934; Oct. 3, 2008, P.L. 110-343, Div C, Title III, § 301(a)(2),
122 Stat. 3865; Dec. 17, 2010, P.L. 111-312, Title VII, Subtitle C, § 731(b), 124 Stat. 3317;
Jan. 2, 2013, P.L. 112-240, Title III, § 301(a)(2), 126 Stat. 2326.
Amendments
In 2013, P.L. 112-240 , Sec. 301(a)(2) (applicable to amounts paid or incurred after
12/31/2011, as provided by Sec. 301(d)(1) of P.L. 112-240, which appears as a note to Code
Sec. 41), amended subsec. (b)(1)(D) by substituting “December 31, 2013” for “December
31, 2011”.
In 2010, P.L. 111-312 , Sec. 731(b) (applicable to amounts paid or incurred after
12/31/2009, as provided by Sec. 731(c) of P.L. 111-312 , which appears as a note to Code
Sec. 41), amended subsec. (b)(1)(D) by substituting “December 31, 2011” for “December
31, 2009”.
SUBCHAPTER B
Computation of Taxable Income

PART VI
Itemized Deductions for Individuals and Corporations
1405
(a) Treatment as Expenses.
(1) In General. A taxpayer may treat research or experimental
expenditures which are paid or incurred by him during the taxable year in
connection with his trade or business as expenses which are not chargeable
to capital account. The expenditures so treated shall be allowed as a
deduction.
(2) When Method May be Adopted.
(A) Without Consent. A taxpayer may, without the consent of the
Secretary, adopt the method provided in this subsection for his first
taxable year—
(i) which begins after December 31, 1953, and ends after August
16, 1954, and
(ii) for which expenditures described in paragraph (1) are paid
or incurred.
(B) With Consent. A taxpayer may, with the consent of the
Secretary, adopt at any time the method provided in this subsection.
(3) Scope. The method adopted under this subsection shall apply to all
expenditures described in paragraph (1). The method adopted shall be
adhered to in computing taxable income for the taxable year and for all
subsequent taxable years unless, with the approval of the Secretary, a
change to a different method is authorized with respect to part or all of such
expenditures.
(b) Amortization of Certain Research and Experimental Expenditures.
(1) In General. At the election of the taxpayer, made in accordance
with regulations prescribed by the Secretary, research or experimental
expenditures which are—
(A) paid or incurred by the taxpayer in connection with his trade or
business,
(B) not treated as expenses under subsection (a), and
(C) chargeable to capital account but not chargeable to property of a
character which is subject to the allowance under section 167 (relating
to allowance for depreciation, etc.) or section 611 (relating to
allowance for depletion), may be treated as deferred expenses. In
computing taxable income, such deferred expenses shall be allowed as a
deduction ratably over such period of not less than 60 months as may be
selected by the taxpayer (beginning with the month in which the taxpayer
1406
first realizes benefits from such expenditures). Such deferred expenses
are expenditures properly chargeable to capital account for purposes of
section 1016(a)(1) (relating to adjustments to basis of property).
(2) Time for and Scope of Election. The election provided by
paragraph (1) may be made for any taxable year beginning after December
31, 1953, but only if made not later than the time prescribed by law for
filing the return for such taxable year (including extensions thereof). The
method so elected, and the period selected by the taxpayer, shall be adhered
to in computing taxable income for the taxable year for which the election is
made and for all subsequent taxable years unless, with the approval of the
Secretary, a change to a different method (or to a different period) is
authorized with respect to part or all of such expenditures. The election
shall not apply to any expenditure paid or incurred during any taxable year
before the taxable year for which the taxpayer makes the election.
(c) Land and Other Property. This section shall not apply to any
expenditure for the acquisition or improvement of land, or for the acquisition or
improvement of property to be used in connection with the research or
experimentation and of a character which is subject to the allowance under
section 167 (relating to allowance for depreciation, etc.) or section 611
(relating to allowance for depletion); but for purposes of this section
allowances under section 167, and allowances under section 611, shall be
considered as expenditures.
(d) Exploration Expenditures. This section shall not apply to any
expenditure paid or incurred for the purpose of ascertaining the existence,
location, extent, or quality of any deposit of ore or other mineral (including oil
and gas).
(e) Only Reasonable Research Expenditures Eligible. This section shall
apply to a research or experimental expenditure only to the extent that the
amount thereof is reasonable under the circumstances.
(f) Cross References.
( 1 ) For adjustments to basis of property for amounts allowed as
deductions as deferred expenses under subsection (b), see section 1016(a)
(14).
(2) For election of 10-year amortization of expenditures allowable as a
deduction under subsection (a), see section 59(e).
Leg.H. August 16, 1954, ch. 736, 68A Stat. 66; October 4, 1976, P.L. 94-455 §§
1901(a)(30), 1906(b)(13)(A), 90 Stat. 1769, 1834; September 3, 1982, P.L. 97-248 §
201(d)(9)(B), 96 Stat. 420; January 12, 1983, P.L. 97-448 § 306(a)(1)(A)(i), 96 Stat. 2400;
October 22, 1986, P.L. 99-514 § 701(e)(4)(D), 100 Stat. 2343; November 10, 1988, P.L.
1407
100-647 § 1007(g)(5), 102 Stat. 3435; December 19, 1989, P.L. 101-239 § 7110(d), 103
Stat. 2325.
SUBCHAPTER G
Corporations Used to Avoid Income Tax on

Shareholders
PART II
Personal Holding Companies

(a) General Rule. For purposes of this subtitle [26 USCS §§ 1 et seq.], the
term “personal holding company income” means the portion of the adjusted
ordinary gross income which consists of:
(1) Dividends, etc. Dividends, interest, royalties (other than mineral,
oil, or gas royalties or copyright royalties), and annuities. This paragraph
shall not apply to—
(A) interest constituting rent (as defined in subsection (b)(3)),
(B) interest on amounts set aside in a reserve fund under chapter 533
or 535 of title 46, United States Code [46 USCS §§ 53301 et seq. or
53501 et seq.],
(C) active business computer software royalties (within the meaning
of subsection (d)), and
(D) interest received by a broker or dealer (within the meaning of
section 3(a)(4) or (5) of the Securities and Exchange Act of 1934 [15
USCS § 78c(a)(4) or (5)]) in connection with—
(i) any securities or money market instruments held as property
described in section 1221(a)(1) [26 USCS § 1221(a)],
(ii) margin accounts, or
(iii) any financing for a customer secured by securities or money
market instruments.
(2) Rents. The adjusted income from rents; except that such adjusted
1408
income shall not be included if—
( A ) such adjusted income constitutes 50 percent or more of the
adjusted ordinary gross income, and
(B) the sum of—
(i) the dividends paid during the taxable year (determined under
section 562 [26 USCS § 562]),
(i i ) the dividends considered as paid on the last day of the
taxable year under section 563(d) [26 USCS § 563(d)] (as limited by
the second sentence of section 563(b) [26 USCS § 563(b)]), and
(iii) the consent dividends for the taxable year (determined under
section 565 [26 USCS § 565]),
equals or exceeds the amount, if any, by which the personal holding
company income for the taxable year (computed without regard to this
paragraph and paragraph (6), and computed by including as personal
holding company income copyright royalties and the adjusted income
from mineral, oil, and gas royalties) exceeds 10 percent of the ordinary
gross income.
(3) Mineral, Oil, and Gas Royalties. The adjusted income from
mineral, oil, and gas royalties; except that such adjusted income shall not be
included if—
( A ) such adjusted income constitutes 50 percent or more of the
adjusted ordinary gross income,
( B ) the personal holding company income for the taxable year
(computed without regard to this paragraph, and computed by including
as personal holding company income copyright royalties and the
adjusted income from rents) is not more than 10 percent of the ordinary
gross income, and
(C) the sum of the deductions which are allowable under section 162
[26 USCS § 162] (relating to trade or business expenses) other than—
(i) deductions for compensation for personal services rendered
by the shareholders, and
(ii) deductions which are specifically allowable under sections
other than section 162 [26 USCS § 162], equals or exceeds 15
percent of the adjusted ordinary gross income.
(4) Copyright Royalties. Copyright royalties; except that copyright
royalties shall not be included if—
1409
(A) such royalties (exclusive of royalties received for the use of, or
right to use, copyrights or interests in copyrights on works created in
whole, or in part, by any shareholder) constitute 50 percent or more of
the ordinary gross income,
( B ) the personal holding company income for the taxable year
computed—
( i ) without regard to copyright royalties, other than royalties
received for the use of, or right to use, copyrights or interests in
copyrights in works created in whole, or in part, by any shareholder
owning more than 10 percent of the total outstanding capital stock of
the corporation,
(ii) without regard to dividends from any corporation in which
the taxpayer owns at least 50 percent of all classes of stock entitled
to vote and at least 50 percent of the total value of all classes of
stock and which corporation meets the requirements of this
subparagraph and subparagraphs (A) and (C), and
( i i i ) by including as personal holding company income the
adjusted income from rents and the adjusted income from mineral,
oil, and gas royalties,
is not more than 10 percent of the ordinary gross income, and
(C) the sum of the deductions which are properly allocable to such
royalties and which are allowable under section 162 [26 USCS § 162],
other than—
(i) deductions for compensation for personal services rendered
by the shareholders,
(ii) deductions for royalties paid or accrued, and
(iii) deductions which are specifically allowable under sections
other than section 162 [26 USCS § 162],
equals or exceeds 25 percent of the amount by which the ordinary
gross income exceeds the sum of the royalties paid or accrued and the
amounts allowable as deductions under section 167 [26 USCS § 167]
(relating to depreciation) with respect to copyright royalties.
For purposes of this subsection, the term “copyright royalties” means
compensation, however designated, for the use of, or the right to use,
copyrights in works protected by copyright issued under title 17 of the
United States Code and to which copyright protection is also extended by
the laws of any country other than the United States of America by virtue of
1410
any international treaty, convention, or agreement, or interests in any such
copyrighted works, and includes payments from any person for performing
rights in any such copyrighted work and payments (other than produced film
rents as defined in paragraph (5)(B)) received for the use of, or right to use,
films. For purposes of this paragraph, the term “shareholder” shall include
any person who owns stock within the meaning of section 544 [26 USCS §
544]. This paragraph shall not apply to active business computer software
royalties.
(5) Produced film rents.
(A) Produced film rents; except that such rents shall not be included
if such rents constitute 50 percent or more of the ordinary gross income.
( B) For purposes of this section, the term “produced film rents”
means payments received with respect to an interest in a film for the use
of, or right to use, such film, but only to the extent that such interest was
acquired before substantial completion of production of such film. In the
case of a producer who actively participates in the production of the
film, such term includes an interest in the proceeds or profits from the
film, but only to the extent such interest is attributable to such active
participation.
(6) Use of corporate property by shareholder.
( A) Amounts received as compensation (however designated and
from whomever received) for the use of, or the right to use, tangible
property of the corporation in any case where, at any time during the
taxable year, 25 percent or more in value of the outstanding stock of the
corporation is owned, directly or indirectly, by or for an individual
entitled to the use of the property (whether such right is obtained directly
from the corporation or by means of a sublease or other arrangement).
(B) Subparagraph (A) shall apply only to a corporation which has
personal holding company income in excess of 10 percent of its ordinary
gross income.
( C) For purposes of the limitation in subparagraph (B), personal
holding company income shall be computed—
(i) without regard to subparagraph (A) or paragraph (2),
(ii) by excluding amounts received as compensation for the use of
(or right to use) intangible property (other than mineral, oil, or gas
royalties or copyright royalties) if a substantial part of the tangible
property used in connection with such intangible property is owned
by the corporation and all such tangible and intangible property is
1411
used in the active conduct of a trade or business by an individual or
individuals described in subparagraph (A), and
(iii) by including copyright royalties and adjusted income from
mineral, oil, and gas royalties.
(7) Personal service contracts.
(A) Amounts received under a contract under which the corporation
is to furnish personal services; if some person other than the corporation
has the right to designate (by name or by description) the individual who
is to perform the services, or if the individual who is to perform the
services is designated (by name or by description) in the contract; and
(B) amounts received from the sale or other disposition of such a
contract.
This paragraph shall apply with respect to amounts received for
services under a particular contract only if at some time during the taxable
year 25 percent or more in value of the outstanding stock of the corporation
is owned, directly or indirectly, by or for the individual who has performed,
is to perform, or may be designated (by name or by description) as the one
to perform, such services.
(8) Estates and Trusts. Amounts includible in computing the taxable
income of the corporation under part I of subchapter J (sec. 641 and
following, relating to estates, trusts, and beneficiaries).
(b) Definitions. For purposes of this part [26 USCS §§ 541 et seq.]—
(1) Ordinary Gross Income. The term “ordinary gross income” means
the gross income determined by excluding—
(A) all gains from the sale or other disposition of capital assets, and
(B) all gains (other than those referred to in subparagraph (A)) from
the sale or other disposition of property described in section 1231(b)
[26 USCS § 1231(b)].
(2) Adjusted Ordinary Gross Income. The term “adjusted ordinary
gross income” means the ordinary gross income adjusted as follows:
(A) Rents. From the gross income from rents (as defined in the
second sentence of paragraph (3) of this subsection) subtract the amount
allowable as deductions for—
(i) exhaustion, wear and tear, obsolescence, and amortization of
property other than tangible personal property which is not
customarily retained by any one lessee for more than three years,
1412
(ii) property taxes,
(iii) interest, and
(iv) rent, to the extent allocable, under regulations prescribed by
the Secretary, to such gross income from rents. The amount
subtracted under this subparagraph shall not exceed such gross
income from rents.
(B) Mineral Royalties, etc. From the gross income from mineral,
oil, and gas royalties described in paragraph (4), and from the gross
income from working interests in an oil or gas well, subtract the amount
allowable as deductions for—
( i ) exhaustion, wear and tear, obsolescence, amortization, and
depletion,
(ii) property and severance taxes,
(iii) interest, and
(iv) rent,
to the extent allocable, under regulations prescribed by the
Secretary, to such gross income from royalties or such gross income
from working interests in oil or gas wells. The amount subtracted under
this subparagraph with respect to royalties shall not exceed the gross
income from such royalties, and the amount subtracted under this
subparagraph with respect to working interests shall not exceed the
gross income from such working interests.
(C) Interest. There shall be excluded—
(i) interest received on a direct obligation of the United States
held for sale to customers in the ordinary course of trade or business
by a regular dealer who is making a primary market in such
obligations, and
(ii) interest on a condemnation award, a judgment, and a tax
refund.
(D) Certain Excluded Rents. From the gross income consisting of
compensation described in subparagraph (D) of paragraph (3) subtract
the amount allowable as deductions for the items described in clauses
(i), (ii), (iii), and (iv) of subparagraph (A) to the extent allocable, under
regulations prescribed by the Secretary, to such gross income. The
amount subtracted under this subparagraph shall not exceed such gross
income.
1413
(3) Adjusted Income From Rents. The term “adjusted income from
rents” means the gross income from rents, reduced by the amount subtracted
under paragraph (2)(A) of this subsection. For purposes of the preceding
sentence, the term “rents” means compensation, however designated, for the
use of, or right to use, property, and the interest on debts owed to the
corporation, to the extent such debts represent the price for which real
property held primarily for sale to customers in the ordinary course of its
trade or business was sold or exchanged by the corporation; but such term
does not include—
( A) amounts constituting personal holding company income under
subsection (a)(6),
(B) copyright royalties (as defined in subsection (a)(4)),
(C) produced film rents (as defined in subsection (a)(5)(B)),
(D) compensation, however designated, for the use of, or the right to
use, any tangible personal property manufactured or produced by the
taxpayer, if during the taxable year the taxpayer is engaged in substantial
manufacturing or production of tangible personal property of the same
type, or
( E ) active business computer software royalties (as defined in
subsection (d)).
(4) Adjusted Income From Mineral, Oil, and Gas Royalties. The term
“adjusted income from mineral, oil, and gas royalties” means the gross
income from mineral, oil, and gas royalties (including production payments
and overriding royalties), reduced by the amount subtracted under paragraph
(2)(B) of this subsection in respect of such royalties.
(c) Gross Income of Insurance Companies Other Than Life Insurance
Companies. In the case of an insurance company other than a life insurance
company, the term “gross income” as used in this part [26 USCS §§ 541 et seq.]
means the gross income, as defined in section 832(b)(1) [26 USCS § 832(b)
(1)], increased by the amount of losses incurred, as defined in section 832(b)(5)
[26 USCS § 832(b)(5)], and the amount of expenses incurred, as defined in
section 832(b)(6) [26 USCS § 832(b)(6)], and decreased by the amount
deductible under section 832(c)(7) [26 USCS § 832(c)(7)] (relating to tax-free
interest).
(d) Active business computer software royalties.
(1) In General. For purposes of this section, the term “active business
computer software royalties” means any royalties—
1414
( A ) received by any corporation during the taxable year in
connection with the licensing of computer software, and
(B) with respect to which the requirements of paragraphs (2), (3),
(4), and (5) are met.
( 2 ) Royalties must be received by corporation actively engaged in
computer software business. The requirements of this paragraph are met if
the royalties described in paragraph (1)—
(A) are received by a corporation engaged in the active conduct of
the trade or business of developing, manufacturing, or producing
computer software, and
(B) are attributable to computer software which—
(i) is developed, manufactured, or produced by such corporation
(or its predecessor) in connection with the trade or business
described in subparagraph (A), or
(ii) is directly related to such trade or business.
(3) Royalties Must Constitute at Least 50 Percent of Income. The
requirements of this paragraph are met if the royalties described in
paragraph (1) constitute at least 50 percent of the ordinary gross income of
the corporation for the taxable year.
(4) Deductions under sections 162 and 174 relating to royalties must
equal or exceed 25 percent of ordinary gross income.
(A) In General. The requirements of this paragraph are met if—
(i) the sum of the deductions allowable to the corporation under
sections 162, 174, and 195 [26 USCS §§ 162, 174, and 195] for the
taxable year which are properly allocable to the trade or business
described in paragraph (2) equals or exceeds 25 percent of the
ordinary gross income of such corporation for such taxable year, or
(ii) the average of such deductions for the 5-taxable year period
ending with such taxable year equals or exceeds 25 percent of the
average ordinary gross income of such corporation for such period.
If a corporation has not been in existence during the 5-taxable year
period described in clause (ii), then the period of existence of such
corporation shall be substituted for such 5-taxable year period.
(B) Deductions Allowable Under Section 162. For purposes of
subparagraph (A), a deduction shall not be treated as allowable under
section 162 [26 USCS § 162] if it is specifically allowable under
1415
another section.
(C) Limitation on Allowable Deductions. For purposes of
subparagraph (A), no deduction shall be taken into account with respect
to compensation for personal services rendered by the 5 individual
shareholders holding the largest percentage (by value) of the outstanding
stock of the corporation. For purposes of the preceding sentence—
(i) individuals holding less than 5 percent (by value) of the stock
of such corporation shall not be taken into account, and
( i i ) stock deemed to be owned by a shareholder solely by
attribution from a partner under section 544(a)(2) [26 USCS §
544(a)(2)] shall be disregarded.
(5) Dividends must equal or exceed excess of personal holding company
income over 10 percent of ordinary gross income.
(A) In General. The requirements of this paragraph are met if the
sum of—
(i) the dividends paid during the taxable year (determined under
section 562 [26 USCS § 562]),
(i i ) the dividends considered as paid on the last day of the
taxable year under section 563(d) [26 USCS § 563(d)] (as limited by
the second sentence of section 563(b) [26 USCS § 563(b)]), and
(iii) the consent dividends for the taxable year (determined under
section 565 [26 USCS § 565]),
equals or exceeds the amount, if any, by which the personal holding
company income for the taxable year exceeds 10 percent of the ordinary
gross income of such corporation for such taxable year.
(B) Computation of Personal Holding Company Income. For
purposes of this paragraph, personal holding company income shall be
computed—
(i) without regard to amounts described in subsection (a)(1)(C),
(ii) without regard to interest income during any taxable year—
(I) which is in the 5-taxable year period beginning with the
later of the 1st taxable year of the corporation or the 1st taxable
year in which the corporation conducted the trade or business
described in paragraph (2)(A), and
(II) during which the corporation meets the requirements of
paragraphs (2), (3), and (4), and
1416
( i i i ) by including adjusted income from rents and adjusted
income from mineral, oil, and gas royalties (within the meaning of
paragraphs (2) and (3) of subsection (a)).
(6) Special rules for affiliated group members.
(A) In General. In any case in which—
( i ) the taxpayer receives royalties in connection with the
licensing of computer software, and
(ii) another corporation which is a member of the same affiliated
group as the taxpayer meets the requirements of paragraphs (2), (3),
(4), and (5) with respect to such computer software,
the taxpayer shall be treated as having met such requirements.
(B) Affiliated Group. For purposes of this paragraph, the term
“affiliated group” has the meaning given such term by section 1504(a)
[26 USCS § 1504(a)].
History:
(Aug. 16, 1954, ch 736, 68A Stat. 186; April 22, 1960, P.L. 86-435, § 1(a), (b), 74 Stat.
77; Feb. 2, 1962, P.L. 87-403, § 3(c), 76 Stat. 6; Feb. 26, 1964, P.L. 88-272, Title II, §
225(d), (k)(2), 78 Stat. 81, 93; Aug. 22, 1964, P.L. 88-484, § 3(a), 78 Stat. 598; Nov. 13,
1966, P.L. 89-809, Title I, § 104(h)(2), Title II, § 206(a), (b), 80 Stat. 1559, 1578, 1579;
Oct. 4, 1976, P.L. 94-455, Title II, § 211(a), Title XIX, §§ 1901(b)(32)(D), 1906(b)(13)(A),
Title XXI, § 2106(a), 90 Stat. 1544, 1800, 1834, 1902; Oct. 19, 1976, P.L. 94-553, §
105(d), 90 Stat. 2599; Sept. 3, 1982, P.L. 97-248, Title II, § 222(e)(6), 96 Stat. 480; July 18,
1984, P.L. 98-369, Div A, Title VII, § 712(i)(3), 98 Stat. 948; Oct. 22, 1986, P.L. 99-514,
Title VI, § 645(a)(1), (2), (4), Title XVIII, § 1899A(18), 100 Stat. 2289, 2291, 2959; Nov.
10, 1988, P.L. 100-647, Title I, § 1010(f)(5), Title VI, § 6279(a), 102 Stat. 3454, 3754; Aug.
20, 1996, P.L. 104-188, Title I, § 1704(t)(6), 110 Stat. 1887; July 22, 1998, P.L. 105-206,
Title VI, § 6023(9), 112 Stat. 825; Dec. 17, 1999, P.L. 106-170, Title V, Subtitle C, Part I, §
532(c)(2)(E), 113 Stat. 1930; Oct. 22, 2004, P.L. 108-357, Title IV, § 413(c)(8), 118 Stat.
1507.)
(As amended Oct. 6, 2006, P.L. 109-304, § 17(e)(3), 120 Stat. 1708.)
SUBCHAPTER P
Capital Gains and Losses

PART IV
Special Rules for Determining Capital Gains and

1417
Losses

(a) General. A transfer (other than by gift, inheritance, or devise) of
property consisting of all substantial rights to a patent, or an undivided interest
therein which includes a part of all such rights, by any holder shall be
considered the sale or exchange of a capital asset held for more than 1 year,
regardless of whether or not payments in consideration of such transfer are—
(1) payable periodically over a period generally coterminous with the
transferee’s use of the patent, or
(2) contingent on the productivity, use, or disposition of the property
transferred.
(b) “Holder” Defined. For purposes of this section, the term “holder”
means—
(1) any individual whose efforts created such property, or
(2) any other individual who has acquired his interest in such property
in exchange for consideration in money or money’s worth paid to such
creator prior to actual reduction to practice of the invention covered by the
patent, if such individual is neither—
(A) the employer of such creator, nor
(B) related to such creator (within the meaning of subsection (d)).
(c) Effective Date. This section shall be applicable with regard to any
amounts received, or payments made, pursuant to a transfer described in
subsection (a) in any taxable year to which this subtitle applies, regardless of
the taxable year in which such transfer occurred.
(d) Related Persons. Subsection (a) shall not apply to any transfer, directly
or indirectly, between persons specified within any one of the paragraphs of
section 267(b) or persons described in section 707(b); except that, in applying
section 267(b) and (c) and section 707(b) for purposes of this section—
(1) the phrase “25 percent or more” shall be substituted for the phrase
“more than 50 percent” each place it appears in section 267(b) or 707(b),
and
(2) paragraph (4) of section 267(c) shall be treated as providing that the
family of an individual shall include only his spouse, ancestors, and lineal
descendants.
1418
2012. Act Dec. 18, 2012 (effective 1 year after enactment and applicable as provided by §
203 of such Act, which appears as 35 USCS § 27 note), substituted subsec. (b) for one which
read: “(b) An applicant’s failure to act within prescribed time limits in connection with
requirements pertaining to a pending international application may be excused upon a
showing satisfactory to the Director of unavoidable delay, to the extent not precluded by the
treaty and the Regulations, and provided the conditions imposed by the treaty and the
Regulations regarding the excuse of such failure to act are complied with.”.
§ 365. Right of priority; benefit of the filing date of a

prior application [Caution: See prospective
(a) In accordance with the conditions and requirements of subsections (a)
through (d) of section 119 [35 USCS § 119], a national application shall be
entitled to the right of priority based on a prior filed international application
which designated at least one country other than the United States.
(b) In accordance with the conditions and requirement of section 119(a) [35
USCS § 119(a)] and the treaty and the Regulations, an international application
designating the United States shall be entitled to the right of priority based on a
prior foreign application, or a prior international application designating at least
one country other than the United States. The Director may establish procedures,
including the requirement for payment of the fee specified in section 41(a)(7)
[35 USCS § 41(a)(7)], to accept an unintentionally delayed claim for priority
under the treaty and the Regulations, and to accept a priority claim that pertains
to an application that was not filed within the priority period specified in the
treaty and Regulations, but was filed within the additional 2-month period
specified under section 119(a) [35 USCS § 119(a)] or the treaty and
Regulations.
(c) In accordance with the conditions and requirements of section 120 [35
USCS § 120], an international application designating the United States shall be
entitled to the benefit of the filing date of a prior national application or a prior
international application designating the United States, and a national
application shall be entitled to the benefit of the filing date of a prior
international application designating the United States. If any claim for the
benefit of an earlier filing date is based on a prior international application
which designated but did not originate in the United States, the Director may
require the filing in the Patent and Trademark Office of a certified copy of such
application together with a translation thereof into the English language, if it
was filed in another language.
Leg.H. Added Nov. 14, 1975, P.L. 94-131, § 1, 89 Stat. 686; Nov. 8, 1984, P.L. 98-622,
Title IV, § 403(a) in part, 98 Stat. 3392; Dec. 8, 1994, P.L. 103-465, Title V, Subtitle C, §
532(c)(4), 108 Stat. 4987; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat.
1661
1536.
As amended Nov. 2, 2002, P.L. 107-273, Div C, Title III, Subtitle B, § 13206(b)(1)(B),
116 Stat. 1906; Sept. 16, 2011, P.L. 112-29, § 20(j)(1), 125 Stat. 335; Dec. 18, 2012, P.L.
112-211, Title I, § 102(8), Title II, § 201(c)(2), 126 Stat. 1532, 1535.
Amendment of subsec. (c) on later of Dec. 18, 2013 or entry into force of Geneva Act of
Hague Agreement Concerning the International Registration of Industrial Designs
with respect to the United States. Act Dec. 18, 2012, P.L. 112-211, Title I, § 102(8), 126
Stat. 1532 (effective on later of 1 year after enactment or entry into force of the Geneva Act
of the Hague Agreement Concerning the International Registration of Industrial Designs with
respect to the United States, and applicable as provided by § 103 of such Act, which appears
as 35 USCS § 100 note), provides that title 35, United States Code, is amended in section
365(c)—
“(A) in the first sentence, by striking ‘or a prior international application designating
the United States’ and inserting ‘, a prior international application designating the United
States, or a prior international design application as defined in section 381(a)(6)
designating the United States’; and
“(B) in the second sentence, by inserting ‘or a prior international design application
as defined in section 381(a)(6) which designated but did not originate in the United
States’ after ‘did not originate in the United States’;”.
Amendments
2011. Act Sept. 16, 2011 (effective 1 year after enactment and applicable to
proceedings commenced on or after that effective date, as provided by § 20(l) of such Act,
which appears as 35 USCS § 2 note), deleted “of this title” following “119” in subsec. (a),
following “119(a)” in subsec. (b), and following “120” in subsec. (c).
2012. Act Dec. 18, 2012 (effective 1 year after enactment and applicable as provided by
§ 203 of such Act, which appears as 35 USCS § 27 note), in subsec. (b), added the sentence
beginning “The Director may … ”.
§ 366. Withdrawn international application [Caution:

See prospective amendment note below.]
Subject to section 367 of this part [35 USCS § 367], if an international
application designating the United States is withdrawn or considered
withdrawn, either generally or as to the United States, under the conditions of
the treaty and the Regulations, before the applicant has complied with the
applicable requirements prescribed by section 371(c) of this part [35 USCS §
371(c)], the designation of the United States shall have no effect after the date of
withdrawal, and shall be considered as not having been made, unless a claim
for the benefit of a prior filing date under section 365(c) of this part [35 USCS §
365(c)] was made in a national application, or an international application
1662
designating the United States, filed before the date of such withdrawal.
However, such withdrawn international application may serve as the basis for a
claim of priority under section 365(a) and (b) of this part [35 USCS § 365(a),
(b)], if it designated a country other than the United States.
Leg.H. (Added Nov. 14, 1975, P.L. 94-131, § 1, 89 Stat. 687; Nov. 8, 1984, P.L. 98-
622, Title IV, § 401(b), 98 Stat. 3391.)
(As amended Dec. 18, 2012, P.L. 112-211, Title I, § 102(8), 126 Stat. 1532.)
Amendment of section on later of Dec. 18, 2013 or entry into force of Geneva Act of
Hague Agreement Concerning the International Registration of Industrial Designs
with respect to the United States. Act Dec. 18, 2012, P.L. 112-211, Title I, § 102(1), 126
Stat. 1532 (effective on later of 1 year after enactment or entry into force of the Geneva Act
of the Hague Agreement Concerning the International Registration of Industrial Designs with
respect to the United States, and applicable as provided by § 103 of such Act, which appears
as 35 USCS § 100 note), provides that title 35, United States Code, is amended in section
366—
“(A) in the first sentence, by striking ‘unless a claim’ and all that follows through
‘withdrawal.’ and inserting ‘unless a claim for benefit of a prior filing date under section
365(c) of this section was made in a national application, or an international application
designating the United States, or a claim for benefit under section 386(c) was made in an
international design application designating the United States, filed before the date of
such withdrawal.’; and
“(B) by striking the second sentence and inserting the following: ‘However, such
withdrawn international application may serve as the basis for a claim of priority under
section 365 (a) and (b), or under section 386 (a) or (b), if it designated a country other
than the United States.’.”.
§ 367. Actions of Other Authorities: Review.

(a) Where a Receiving Office other than the Patent and Trademark Office
has refused to accord an international filing date to an international application
designating the United States or where it has held such application to be
withdrawn either generally or as to the United States, the applicant may request
review of the matter by the Director, on compliance with the requirements of
and within the time limits specified by the treaty and the Regulations. Such
review may result in a determination that such application be considered as
pending in the national stage.
(b) The review under subsection (a) of this section, subject to the same
requirements and conditions, may also be requested in those instances where an
international application designating the United States is considered withdrawn
due to a finding by the International Bureau under article 12(3) of the treaty.
1663
Title IV, § 403(a) in part, 98 Stat. 3392; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9),
113 Stat. 1536.
116 Stat. 1906.
§ 368. Secrecy of Certain Inventions; Filing

International Applications in Foreign Countries.
(a) International applications filed in the Patent and Trademark Office shall
be subject to the provisions of chapter 17 [35 USCS §§ 181 et seq.].
( b ) In accordance with article 27(8) of the treaty, the filing of an
international application in a country other than the United States on the
invention made in this country shall be considered to constitute the filing of an
application in a foreign country within the meaning of chapter 17 [35 USCS §§
181 et seq.], whether or not the United States is designated in that international
application.
(c) If a license to file in a foreign country is refused or if an international
application is ordered to be kept secret and a permit refused, the Patent and
Trademark Office when acting as a Receiving Office, International Searching
Authority, or International Preliminary Examining Authority, may not disclose
the contents of such application to anyone not authorized to receive such
disclosure.
622, Title IV, § 403(a) in part, 98 Stat. 3392; Nov. 6, 1986, P.L. 99-616, § 6, 100 Stat.
3486.)
(As amended Sept. 16, 2011, P.L. 112-29, § 20(j)(1), 125 Stat. 335.)
CHAPTER 37
NATIONAL STAGE
§ 371. National Stage.
( a ) Receipt from the International Bureau of copies of international
applications with any amendments to the claims, international search reports,
and international preliminary examination reports including any annexes thereto
may be required in the case of international applications designating or electing
the United States.
( b ) Subject to subsection (f) of this section, the national stage shall
1664
commence with the expiration of the applicable time limit under article 22(1) or
(2), or under article 39(1)(a) of the treaty.
(c) The applicant shall file in the Patent and Trademark Office—
(1) the national fee provided in section 41(a) [35 USCS § 41(a)];
(2) a copy of the international application, unless not required under
subsection (a) of this section or already communicated by the International
Bureau, and a translation into the English language of the international
application, if it was filed in another language;
(3) amendments, if any, to the claims in the international application,
made under article 19 of the treaty, unless such amendments have been
communicated to the Patent and Trademark Office by the International
Bureau, and a translation into the English language if such amendments were
made in another language;
(4) an oath or declaration of the inventor (or other person authorized
under chapter 11 [35 USCS §§ 111 et seq.]) complying with the
requirements of section 115 [35 USCS § 115] and with regulations
prescribed for oaths or declarations of applicants;
( 5 ) a translation into the English language of any annexes to the
international preliminary examination report, if such annexes were made in
another language.
( d ) The requirements with respect to the national fee referred to in
subsection (c)(1), the translation referred to in subsection (c)(2), and the oath or
declaration referred to in subsection (c)(4) of this section shall be complied
with by the date of the commencement of the national stage or by such later time
as may be fixed by the Director. The copy of the international application
referred to in subsection (c)(2) shall be submitted by the date of the
commencement of the national stage. Failure to comply with these requirements
shall be regarded as abandonment of the application by the parties thereof. The
payment of a surcharge may be required as a condition of accepting the national
fee referred to in subsection (c)(1) or the oath or declaration referred to in
subsection (c)(4) of this section if these requirements are not met by the date of
the commencement of the national stage. The requirements of subsection (c)(3)
of this section shall be complied with by the date of the commencement of the
national stage, and failure to do so shall be regarded as a cancellation of the
amendments to the claim in the international application made under article 19
of the treaty. The requirement of subsection (c)(5) shall be complied with at
such time as may be fixed by the Director and failure to do so shall be regarded
as cancellation of the amendments made under article 34(2)(b) of the treaty.
1665
( e ) After an international application has entered the national stage, no
patent may be granted or refused thereon before the expiration of the applicable
time limit under article 28 or article 41 of the treaty, except with the express
consent of the applicant. The applicant may present amendments to the
specification, claims, and drawings of the application after the national stage
has commenced.
(f) At the express request of the applicant, the national stage of processing
may be commenced at any time at which the application is in order for such
purpose and the applicable requirements of subsection (c) of this section have
been complied with.
Title IV, §§ 402(a)-(d), 403(a) in part, 98 Stat. 3391, 3392; Nov. 6, 1986, P.L. 99-616, § 7,
100 Stat. 3486; Dec. 10, 1991, P.L. 102-204, § 5(g)(2), 105 Stat. 1641; Nov. 29, 1999, P.L.
106-113, Div B, § 1000(a)(9), 113 Stat. 1536.
As amended Nov. 2, 2002, P.L. 107-273, Div C, Title III, Subtitle B, § 13206(a)(20), (b)
(1)(B), 116 Stat. 1905, 1906; Sept. 16, 2011, P.L. 112-29, § 20(i)(5), (j)(1), 125 Stat. 335;
Dec. 18, 2012, P.L. 112-211, Title II, § 202(b)(9), 126 Stat. 1536.
Amendments
which appears as 35 USCS § 2 note), in subsec. (b), added the concluding period; and in
subsec. (c), deleted “of this title” following “41(a)” in para. (1) and following “11” and “115”
in para. (4).
2012. Act Dec. 18, 2012 (effective 1 year after enactment and applicable as provided by
§ 203 of such Act, which appears as 35 USCS § 27 note), in subsec. (d), deleted “, unless it
be shown to the satisfaction of the Director that such failure to comply was unavoidable”
following “parties thereof”.
§ 372. National Stage: Requirements and Procedure.

(a) All questions of substance and, within the scope of the requirements of
the treaty and Regulations, procedure in an international application designating
the United States shall be determined as in the case of national applications
regularly filed in the Patent and Trademark Office.
(b) In case of international applications designating but not originating in,
the United States—
(1) the Director may cause to be reexamined questions relating to form
and contents of the application in accordance with the requirements of the
treaty and the Regulations;
( 2) the Director may cause the question of unity of invention to be
1666
reexamined under section 121 [35 USCS § 121], within the scope of the
requirements of the treaty and the Regulations; and
( 3) the Director may require a verification of the translation of the
international application or any other document pertaining to the application
if the application or other document was filed in a language other than
English.
622, Title IV, §§ 402(e), (f), 403(a) in part, 98 Stat. 3392; Nov. 29, 1999, P.L. 106-113, Div
B, § 1000(a)(9), 113 Stat. 1536.)
(As amended Nov. 2, 2002, P.L. 107-273, Div C, Title III, Subtitle B, § 13206(b)(1)(B),
116 Stat. 1906; Sept. 16, 2011, P.L. 112-29, § 20(j)(1), 125 Stat. 335.)
§ 373. Repealed.
This section (Act Nov. 14, 1975, P.L. 94-131, § 1, 89 Stat. 689; Nov. 8,
1984, P.L. 98-622, Title IV, § 403(a) in part, 98 Stat. 3392; Dec. 8, 1994, P.L.
103-465, Title V, Subtitle C, § 532(c)(5), 108 Stat. 4987; Sept. 16, 2011, P.L.
112-29, § 20(j)(1), 125 Stat. 335) was repealed by Act Jan. 14, 2013, P.L. 112-
274, § 1(i), 126 Stat. 2457, effective on enactment and applicable to
proceedings commenced after such date, as provided by § 1(n) of such Act,
which appears as 35 USCS § 5 note. It related to improper applicants.
§ 374. Publication of international application.

The publication under the treaty defined in section 351(a) [35 USCS §
351(a)], of an international application designating the United States shall be
deemed a publication under section 122(b) [35 USCS § 122(b)], except as
provided in section 154(d) [35 USCS § 154(d)].
Leg.H. Added Nov. 14, 1975, P.L. 94-131, § 1, 89 Stat. 689; Nov. 29, 1999, P.L. 106-
113, Div B, § 1000(a)(9), 113 Stat. 1536.
As amended Nov. 2, 2002, P.L. 107-273, Div C, Title III, Subtitle B, § 13205(2)(E), 116
Stat. 1903; Sept. 16, 2011, P.L. 112-29, §§ 3(g)(4), 20(j)(1), 125 Stat. 288, 335.
Amendment
which appears as 35 USCS § 2 note), deleted “of this title” following “351(a)”, “122(b)”, and
“154(d)”.
Such Act further (effective 18 months after enactment and applicable as provided by §
3(n) of such Act, which appears as 35 USCS § 100 note), substituted “section 154(d)” for
“sections 102(e) and 154(d)”.
1667
§ 375. Patent issued on international application:
Effect.
( a ) A patent may be issued by the Director based on an international
application designating the United States, in accordance with the provisions of
this title. Such patent shall have the force and effect of a patent issued on a
national application filed under the provisions of chapter 11 [35 USCS §§ 111
et seq.].
(b) Where due to an incorrect translation the scope of a patent granted on an
international application designating the United States, which was not originally
filed in the English language, exceeds the scope of the international application
in its original language, a court of competent jurisdiction may retroactively limit
the scope of the patent, by declaring it unenforceable to the extent that it exceeds
the scope of the international application in its original language.
Leg.H. Added Nov. 14, 1975, P.L. 94-131, § 1, 89 Stat. 689; Nov. 29, 1999, P.L. 106-
113, Div B, § 1000(a)(9), 113 Stat. 1536.
116 Stat. 1906; Sept. 16, 2011, P.L. 112-29, §§ 3(g)(5), 20(j)(1), 125 Stat. 288, 335.
Amendment
2011. Act Sept. 16, 2011 (effective 1 year after enactment and applicable to proceedings
commenced on or after that effective date, as provided by § 20(l) of such Act, which appears
as 35 USCS § 2 note), in subsec. (a), deleted “of this title” following “102(e)” and “11”.
Such Act further (effective 18 months after enactment and applicable as provided by §
3(n) of such Act, which appears as 35 USCS § 100 note), in subsec. (a), substituted “Such”
for “Subject to section 102(e) of this title, such”.
§ 376. Fees.
(a) The required payment of the international fee and the handling fee, which
amounts are specified in the Regulations, shall be paid in United States
currency. The Patent and Trademark Office shall charge a national fee as
provided in section 41(a), and may also charge the following fees:
(1) A transmittal fee (see section 361(d)).
(2) A search fee (see section 361(d)).
(3) A supplemental search fee (to be paid when required).
(4) A preliminary examination fee and any additional fees (see section
362(b)).
(5) Such other fees as established by the Director.
1668
(b) The amounts of fees specified in subsection (a) of this section, except
the international fee, and the handling fee shall be prescribed by the Director.
He may refund any sum paid by mistake or in excess of the fees so specified, or
if required under the treaty and the Regulations. The Director may also refund
any part of the search fee, the national fee, the preliminary examination fee, and
any additional fees, where he determines such refund to be warranted.
Added Nov. 14, 1975, P.L. 94-131, § 1, 89 Stat. 690; Nov. 8, 1984, P.L. 98-622, Title
IV, §§ 402(g), 403(a) in part, 98 Stat. 3392; Nov. 6, 1986, P.L. 99-616, § 8, 100 Stat. 3486;
Dec. 10, 1991, P.L. 102-204, § 5(g)(1), 105 Stat. 1640; Nov. 29, 1999, P.L. 106-113, Div B,
§ 1000(a)(9), 113 Stat. 1536.
As amended Nov. 2, 2002, P.L. 107-273, Div C, Title III, Subtitle B, § 13206(a)(21), (b)
(1)(B), 116 Stat. 1905, 1906.
PART V
THE HAGUE AGREEMENT CONCERNING

INTERNATIONAL REGISTRATION OF INDUSTRIAL
DESIGNS
CHAPTER 38
INTERNATIONAL DESIGN
APPLICATIONS
§ 381. Definitions. [Caution: This section takes effect
on the later of Dec. 18, 2013, or the date of entry into
force of the Geneva Act of the Hague Agreement
Concerning the International Registration of
Industrial Designs with respect to the United States,
pursuant to § 103 of Act Dec. 18, 2012, P.L. 112-211,
which appears as 35 USCS § 100 note.]
(a) In general.
When used in this part [35 USCS §§ 381 et seq.], unless the context
otherwise indicates—
1669
(1) the term “treaty” means the adopted at Geneva on July 2, 1999;
(2) the term “regulations”—
( A) when capitalized, means the Common Regulations under the
treaty; and
(B) when not capitalized, means the regulations established by the
Director under this title;
(3) the terms “designation”, “designating”, and “designate” refer to a
request that an international registration have effect in a Contracting Party to
the treaty;
( 4 ) the term “International Bureau” means the international
intergovernmental organization that is recognized as the coordinating body
under the treaty and the Regulations;
(5) the term “effective registration date” means the date of international
registration determined by the International Bureau under the treaty;
(6) the term “international design application” means an application for
international registration; and
( 7 ) the term “international registration” means the international
registration of an industrial design filed under the treaty.
(b) Rule of construction. Terms and expressions not defined in this part [35
USCS §§ 381 et seq.] are to be taken in the sense indicated by the treaty and the
Regulations.
Leg.H Added Dec. 18, 2012, P.L. 112-211, Title I, § 101(a), 126 Stat. 1527.
Effective date of section

This section takes effect on the later of Dec. 18, 2013, or the date of entry into force of the
Geneva Act of the Hague Agreement Concerning the International Registration of Industrial
Designs with respect to the United States, pursuant to § 103 of Act Dec. 18, 2012, P.L. 112-
211, which appears as 35 USCS § 100 note.
§ 382. Filing international design applications.

[Caution: This section takes effect on the later of
Dec. 18, 2013, or the date of entry into force of the
International Registration of Industrial Designs with
respect to the United States, pursuant to § 103 of Act
1670
Dec. 18, 2012, P.L. 112-211, which appears as 35
USCS § 100 note.]
(a) In general. Any person who is a national of the United States, or has a
domicile, a habitual residence, or a real and effective industrial or commercial
establishment in the United States, may file an international design application
by submitting to the Patent and Trademark Office an application in such form,
together with such fees, as may be prescribed by the Director.
(b) Required action. The Patent and Trademark Office shall perform all
acts connected with the discharge of its duties under the treaty, including the
collection of international fees and transmittal thereof to the International
Bureau. Subject to chapter 17 [35 USCS §§ 181 et seq.], international design
applications shall be forwarded by the Patent and Trademark Office to the
International Bureau, upon payment of a transmittal fee.
(c) Applicability of chapter 16. Except as otherwise provided in this
chapter, the provisions of chapter 16 [35 USCS §§ 171 et seq.] shall apply.
(d) Application filed in another country. An international design
application on an industrial design made in this country shall be considered to
constitute the filing of an application in a foreign country within the meaning of
chapter 17 [35 USCS §§ 181 et seq.] if the international design application is
filed—
(1) in a country other than the United States;
(2) at the International Bureau; or
(3) with an intergovernmental organization.

§ 383. International design application. [Caution: This

section takes effect on the later of Dec. 18, 2013, or
the date of entry into force of the Geneva Act of the
Hague Agreement Concerning the International
Registration of Industrial Designs with respect to the
1671
United States, pursuant to § 103 of Act Dec. 18, 2012,
In addition to any requirements pursuant to chapter 16 [35 USCS §§ 171 et
seq.], the international design application shall contain—
(1) a request for international registration under the treaty;
(2) an indication of the designated Contracting Parties;
(3) data concerning the applicant as prescribed in the treaty and the
Regulations;
(4) copies of a reproduction or, at the choice of the applicant, of several
different reproductions of the industrial design that is the subject of the
international design application, presented in the number and manner
prescribed in the treaty and the Regulations;
(5) an indication of the product or products that constitute the industrial
design or in relation to which the industrial design is to be used, as
prescribed in the treaty and the Regulations;
(6) the fees prescribed in the treaty and the Regulations; and
(7) any other particulars prescribed in the Regulations.
Leg. H Added Dec. 18, 2012, P.L. 112-211, Title I, § 101(a), 126 Stat. 1528.

§ 384. Filing date. [Caution: This section takes effect on

the later of Dec. 18, 2013, or the date of entry into
(a) In general. Subject to subsection (b), the filing date of an international
design application in the United States shall be the effective registration date.
Notwithstanding the provisions of this part [35 USCS §§ 381 et seq.], any
1672
international design application designating the United States that otherwise
meets the requirements of chapter 16 [35 USCS §§ 171 et seq.] may be treated
as a design application under chapter 16 [35 USCS §§ 171 et seq.].
(b) Review. An applicant may request review by the Director of the filing
date of the international design application in the United States. The Director
may determine that the filing date of the international design application in the
United States is a date other than the effective registration date. The Director
may establish procedures, including the payment of a surcharge, to review the
filing date under this section. Such review may result in a determination that the
application has a filing date in the United States other than the effective
registration date.

§ 385. Effect of international design application.

USCS § 100 note.]
An international design application designating the United States shall have
the effect, for all purposes, from its filing date determined in accordance with
section 384 [35 USCS § 384], of an application for patent filed in the Patent and
Trademark Office pursuant to chapter 16 [35 USCS §§ 171 et seq.].

1673
§ 386. Right of priority. [Caution: This section takes
effect on the later of Dec. 18, 2013, or the date of
entry into force of the Geneva Act of the Hague
Agreement Concerning the International
(a) National application. In accordance with the conditions and
requirements of subsections (a) through (d) of section 119 [35 USCS § 119] and
section 172 [35 USCS § 172], a national application shall be entitled to the right
of priority based on a prior international design application that designated at
least 1 country other than the United States.
(b) Prior foreign application. In accordance with the conditions and
requirements of subsections (a) through (d) of section 119 [35 USCS § 119] and
section 172 [35 USCS § 172] and the treaty and the Regulations, an international
design application designating the United States shall be entitled to the right of
priority based on a prior foreign application, a prior international application as
defined in section 351(c) [35 USCS § 351(c)] designating at least 1 country
other than the United States, or a prior international design application
designating at least 1 country other than the United States.
(c) Prior national application. In accordance with the conditions and
requirements of section 120 [35 USCS § 120], an international design
application designating the United States shall be entitled to the benefit of the
filing date of a prior national application, a prior international application as
defined in section 351(c) [35 USCS § 351(c)] designating the United States, or a
prior international design application designating the United States, and a
national application shall be entitled to the benefit of the filing date of a prior
international design application designating the United States. If any claim for
the benefit of an earlier filing date is based on a prior international application
as defined in section 351(c) [35 USCS § 351(c)] which designated but did not
originate in the United States or a prior international design application which
designated but did not originate in the United States, the Director may require
the filing in the Patent and Trademark Office of a certified copy of such
application together with a translation thereof into the English language, if it
was filed in another language.
Leg. H Added Dec. 18, 2012, P.L. 112-211, Title I, § 101(a), 126 Stat. 1529.
1674
§ 387. Relief from prescribed time limits. [Caution:

This section takes effect on the later of Dec. 18, 2013,
or the date of entry into force of the Geneva Act of
the Hague Agreement Concerning the International
An applicant’s failure to act within prescribed time limits in connection
with requirements pertaining to an international design application may be
excused as to the United States upon a showing satisfactory to the Director of
unintentional delay and under such conditions, including a requirement for
payment of the fee specified in section 41(a)(7) [35 USCS § 41(a)(7)], as may
be prescribed by the Director.
Leg.H. Added Dec. 18, 2012, P.L. 112-211, Title I, § 101(a), 126 Stat. 1530.

§ 388. Withdrawn or abandoned international design

application. [Caution: This section takes effect on
the later of Dec. 18, 2013, or the date of entry into
Subject to sections 384 and 387 [35 USCS §§ 384 and 387], if an
international design application designating the United States is withdrawn,
renounced or canceled or considered withdrawn or abandoned, either generally
1675
or as to the United States, under the conditions of the treaty and the Regulations,
the designation of the United States shall have no effect after the date of
withdrawal, renunciation, cancellation, or abandonment and shall be considered
as not having been made, unless a claim for benefit of a prior filing date under
section 386(c) [35 USCS § 386(c)] was made in a national application, or an
international design application designating the United States, or a claim for
benefit under section 365(c) [35 USCS § 365(c)] was made in an international
application designating the United States, filed before the date of such
withdrawal, renunciation, cancellation, or abandonment. However, such
withdrawn, renounced, canceled, or abandoned international design application
may serve as the basis for a claim of priority under subsections (a) and (b) of
section 386 [35 USCS § 386], or under subsection (a) or (b) of section 365 [35
USCS § 365], if it designated a country other than the United States.
Leg H Added Dec. 18, 2012, P.L. 112-211, Title I, § 101(a), 126 Stat. 1530.

§ 389. Examination of international design application.

USCS § 100 note.]
(a) In general. The Director shall cause an examination to be made
pursuant to this title of an international design application designating the United
States.
(b) Applicability of chapter 16. All questions of substance and, unless
otherwise required by the treaty and Regulations, procedures regarding an
international design application designating the United States shall be
determined as in the case of applications filed under chapter 16 [35 USCS §§
171 et seq.].
(c) Fees. The Director may prescribe fees for filing international design
1676
applications, for designating the United States, and for any other processing,
services, or materials relating to international design applications, and may
provide for later payment of such fees, including surcharges for later submission
of fees.
(d) Issuance of patent. The Director may issue a patent based on an
international design application designating the United States, in accordance
with the provisions of this title. Such patent shall have the force and effect of a
patent issued on an application filed under chapter 16 [35 USCS §§ 171 et seq.].

§ 390. Publication of international design application.

USCS § 100 note.]
The publication under the treaty of an international design application
designating the United States shall be deemed a publication under section
122(b) [35 USCS § 122(b)].

TITLE 42
THE PUBLIC HEALTH AND WELFARE
1677
Contents
CHAPTER 6A THE PUBLIC HEALTH SERVICE

SUBCHAPTER I Administration and Miscellaneous Provisions
PART A Administration
CHAPTER 16 NATIONAL SCIENCE FOUNDATION
§ 1871. Disposition of inventions produced under contracts or other arrangements.
CHAPTER 23 DEVELOPMENT AND CONTROL OF ATOMIC ENERGY
SUBCHAPTER XII Patents and Inventions
§ 2181. Inventions Relating to Atomic Weapons, and Filing of Reports.
§ 2182. Inventions conceived during Commission contracts; ownership; waiver;
hearings.
§ 2185. Prior Art.
CHAPTER 26 NATIONAL SPACE PROGRAM
CHAPTER 73 DEVELOPMENT OF ENERGY SOURCES
SUBCHAPTER I Energy Research and Development Administration
CHAPTER 74 NONNUCLEAR ENERGY RESEARCH AND DEVELOPMENT
CHAPTER 82 SOLID WASTE DISPOSAL
SUBCHAPTER VIII Research, Development, Demonstration, and Information
§ 6981. Research, Demonstrations, Training, and Other Activities.
CHAPTER 85 AIR POLLUTION PREVENTION AND CONTROL
SUBCHAPTER I Programs and Activities
PART A Air Quality and Emission Limitations
CHAPTER 6A
1678
THE PUBLIC HEALTH SERVICE
SUBCHAPTER I
Administration and Miscellaneous Provisions

PART A
Administration

(a) Establishment; Composition; Chairman. There is established in the
Department of Health and Human Services a board for the development of drugs
(including biologics) and devices (including diagnostic products) for rare
diseases or conditions to be known as the Orphan Products Board. The Board
shall be comprised of the Assistant Secretary for Health of the Department of
Health and Human Services and representatives, selected by the Secretary, of
the Food and Drug Administration, the National Institutes of Health, the Centers
for Disease Control and Prevention, and any other Federal department or agency
which the Secretary determines has activities relating to drugs and devices for
rare diseases or conditions. The Assistant Secretary for Health shall chair the
Board.
(b) Function. The function of the Board shall be to promote the
development of drugs and devices for rare diseases or conditions and the
coordination among Federal, other public, and private agencies in carrying out
their respective functions relating to the development of such articles for such
diseases or conditions.
(c) Duties With Respect to Drugs for Rare Diseases or Conditions. In the
case of drugs for rare diseases or conditions the Board shall—
(1) evaluate—
( A ) the effect of subchapter B of the Federal Food, Drug, and
Cosmetic Act on the development of such drugs, and
(B) the implementation of such subchapter;
1679
(2) evaluate the activities of the National Institutes of Health for the
development of drugs for such diseases or conditions,
( 3 ) assure appropriate coordination among the Food and Drug
Administration, the National Institutes of Health and the Centers for Disease
Control and Prevention in the carrying out of their respective functions
relating to the development of drugs for such diseases or conditions to
assure that the activities of each agency are complementary,
( 4 ) assure appropriate coordination among all interested Federal
agencies, manufacturers, and organizations representing patients, in their
activities relating to such drugs,
( 5) with the consent of the sponsor of a drug for a rare disease or
condition exempt under section 505(i) of the Federal Food, Drug, and
Cosmetic Act or regulations issued under such section, inform physicians
and the public respecting the availability of such drug for such disease or
condition and inform physicians and the public respecting the availability of
drugs approved under section 505(c) of such Act or licensed under section
262 of this title for rare diseases or conditions,
(6) seek business entities and others to undertake the sponsorship of
drugs for rare diseases or conditions, seek investigators to facilitate the
development of such drugs, and seek business entities to participate in the
distribution of such drugs, and
(7) recognize the efforts of public and private entities and individuals in
seeking the development of drugs for rare diseases or conditions and in
developing such drugs.
(d) Consultation. The Board shall consult with interested persons
respecting the activities of the Board under this section and as part of such
consultation shall provide the opportunity for the submission of oral views.
(e) Annual Report; Contents. The Board shall submit to the Committee on
Labor and Human Resources of the Senate and the Committee on Energy and
Commerce of the House of Representatives an annual report—
(1) identifying the drugs which have been designated under section 526
of the Federal Food, Drug, and Cosmetic Act for a rare disease or
condition,
(2) describing the activities of the Board, and
(3) containing the results of the evaluations carried out by the Board.
The Director of the National Institutes of Health shall submit to the Board
for inclusion in the annual report a report on the rare disease and condition
1680
research activities of the Institutes of the National Institutes of Health; the
Secretary of the Treasury shall submit to the Board for inclusion in the
annual report a report on the use of the credit against tax provided by
section 44H of Title 26; and the Secretary of Health and Human Services
shall submit to the Board for inclusion in the annual report a report on the
program of assistance under section 360ee of Title 21 for the development
of drugs for rare diseases and conditions. Each annual report shall be
submitted by June 1 of each year for the preceding calendar year.
Leg.H. July 1, 1944, ch. 373 § 227; January 4, 1983, P.L. 97-414 § 3, 96 Stat. 2051;
July 10, 1992, P.L. 102-321 § 163(b)(1), 106 Stat. 375, effective October 1, 1992; October
27, 1992, P.L. 102-531 § 312(d)(1), 106 Stat. 3504; June 10, 1993, P.L. 103-43 § 2010(a)
(4), 107 Stat. 213.
CHAPTER 16
NATIONAL SCIENCE FOUNDATION

§ 1871. Disposition of inventions produced under
contracts or other arrangements.
Each contract or other arrangement executed pursuant to this Act which
relates to scientific or engineering research shall contain provisions governing
the disposition of inventions produced thereunder in a manner calculated to
protect the public interest and the equities of the individual or organization with
which the contract or other arrangement is executed: Provided, however, That
nothing in this Act shall be construed to authorize the Foundation to enter into
any contractual or other arrangement inconsistent with any provision of law
affecting the issuance or use of patents.
Leg.H. (May 10, 1950, ch 171, § 12, 64 Stat. 154; Nov. 22, 1985, P.L. 99-159, Title I,
§§ 109(c), 110(a)(15), 99 Stat. 889, 891.)
CHAPTER 23
DEVELOPMENT AND CONTROL OF

ATOMIC ENERGY
SUBCHAPTER I
1681
General Provisions
The intent of Congress in the definitions as given in this section should be
construed from the words or phrases used in the definitions. As used in this Act
[42 USCS §§ 2011 et seq.]:
(a) The term “agency of the United States” means the executive branch
of the United States, or any Government agency, or the legislative branch of
the United States, or any agency, committee, commission, office, or other
establishment in the legislative branch, or the judicial branch of the United
States, or any office, agency, committee, commission, or other establishment
in the judicial branch.
(b) The term “agreement for cooperation” means any agreement with
another nation or regional defense organization authorized or permitted by
sections 54, 57, 64, 82, 91(c), 103, 104, or 144 [42 USCS §§ 2074, 2077,
2094, 2112, 2121(c), 2133, 2134, 2164], and made pursuant to section 123
[42 USCS § 2153].
(c) The term “atomic energy” means all forms of energy released in the
course of nuclear fission or nuclear transformation.
( d ) The term “atomic weapon” means any device utilizing atomic
energy, exclusive of the means for transporting or propelling the device
(where such means is a separable and divisible part of the device), the
principal purpose of which is for use as, or for development of, a weapon, a
weapon prototype, or a weapon test device.
(e) The term “byproduct material” means—
( 1 ) any radioactive material (except special nuclear material)
yielded in or made radioactive by exposure to the radiation incident to
the process of producing or utilizing special nuclear material;
(2) the tailings or wastes produced by the extraction or concentration
of uranium or thorium from any ore processed primarily for its source
material content;
(3)
( A ) any discrete source of radium-226 that is produced,
extracted, or converted after extraction, before, on, or after the date
of enactment of this paragraph [enacted Aug. 8, 2005] for use for a
1682
commercial, medical, or research activity; or
(B) any material that—
(i) has been made radioactive by use of a particle accelerator;
and
( i i ) is produced, extracted, or converted after extraction,
before, on, or after the date of enactment of this paragraph for use
for a commercial, medical, or research activity; and
(4) any discrete source of naturally occurring radioactive material,
other than source material, that—
(A) the Commission, in consultation with the Administrator of the
Environmental Protection Agency, the Secretary of Energy, the
Secretary of Homeland Security, and the head of any other
appropriate Federal agency, determines would pose a threat similar
to the threat posed by a discrete source of radium-226 to the public
health and safety or the common defense and security; and
(B) before, on, or after the date of enactment of this paragraph
[enacted Aug. 8, 2005] is extracted or converted after extraction for
use in a commercial, medical, or research activity.
(f) The term “Commission” means the Atomic Energy Commission.
(g) The term “common defense and security” means the common defense
and security of the United States.
( h) The term “defense information” means any information in any
category determined by any Government agency authorized to classify
information, as being information respecting, relating to, or affecting the
national defense.
( i ) The term “design” means (1) specifications, plans, drawings,
blueprints, and other items of like nature; (2) the information contained
therein; or (3) the research and development data pertinent to the
information contained therein.
( j ) The term “extraordinary nuclear occurrence” means any event
causing a discharge or dispersal of source, special nuclear, or byproduct
material from its intended place of confinement in amounts offsite, or
causing radiation levels offsite, which the Nuclear Regulatory Commission
or the Secretary of Energy, as appropriate, determines to be substantial, and
which the Nuclear Regulatory Commission or the Secretary of Energy, as
appropriate, determines has resulted or will probably result in substantial
damages to persons offsite or property offsite. Any determination by the
1683
Nuclear Regulatory Commission or the Secretary of Energy, as appropriate,
that such an event has, or has not, occurred shall be final and conclusive,
and no other official or any court shall have power or jurisdiction to review
any such determination. The Nuclear Regulatory Commission or the
Secretary of Energy, as appropriate, shall establish criteria in writing
setting forth the basis upon which such determination shall be made. As used
in this subsection, “offsite” means away from “the location” or “the contract
location” as defined in the applicable Nuclear Regulatory Commission or
the Secretary of Energy, as appropriate, indemnity agreement, entered into
pursuant to section 170 [42 USCS § 2210].
( k) The term “financial protection” means the ability to respond in
damages for public liability and to meet the costs of investigating and
defending claims and settling suits for such damages.
( l ) The term “Government agency” means any executive department,
commission, independent establishment, corporation, wholly or partly
owned by the United States of America which is an instrumentality of the
United States, or any board, bureau, division, service, office, officer,
authority, administration, or other establishment in the executive branch of
the Government.
(m) The term “indemnitor” means (1) any insurer with respect to his
obligations under a policy of insurance furnished as proof of financial
protection; (2) any licensee, contractor or other person who is obligated
under any other form of financial protection, with respect to such
obligations; and (3) the Nuclear Regulatory Commission or the Secretary of
Energy, as appropriate, with respect to any obligation undertaken by it in an
indemnity agreement entered into pursuant to section 170 [42 USCS § 2210].
( n ) The term “international arrangement” means any international
agreement hereafter approved by the Congress or any treaty during the time
such agreement or treaty is in full force and effect, but does not include any
agreement for cooperation.
(o) The term “Energy Committees” means the Committee on Energy and
Natural Resources of the Senate and the Committee on Energy and
Commerce of the House of Representatives.
(p) The term “licensed activity” means an activity licensed pursuant to
this Act [42 USCS §§ 2011 et seq.] and covered by the provisions of section
170(a) [42 USCS § 2210(a)].
( q) The term “nuclear incident” means any occurrence, including an
extraordinary nuclear occurrence, within the United States causing, within
or outside the United States, bodily injury, sickness, disease, or death, or
1684
loss of or damage to property, or loss of use of property, arising out of or
resulting from the radioactive, toxic, explosive, or other hazardous
properties of source, special nuclear, or byproduct material: Provided,
however, That as the term is used in section 170(l) [42 USCS § 2210(l)], it
shall include any such occurrence outside the United States: And provided
further, That as the term is used in section 170(d) [42 USCS § 2210(d)], it
shall include any such occurrence outside the United States if such
occurrence involves source, special nuclear, or byproduct material owned
by, and used by or under contract with, the United States: And provided
further, That as the term is used in section 170 c. [42 USCS § 2210(c)], it
shall include any such occurrence outside both the United States and any
other nation if such occurrence arises out of or results from the radioactive,
toxic, explosive, or other hazardous properties of source, special nuclear, or
byproduct material licensed pursuant to chapters 6, 7, 8, and 10 of this Act
[42 USCS §§ 2071 et seq., 2091 et seq., 2111 et seq., and 2131 et seq.],
which is used in connection with the operation of a licensed stationary
production or utilization facility or which moves outside the territorial
limits of the United States in transit from one person licensed by the Nuclear
Regulatory Commission to another person licensed by the Nuclear
Regulatory Commission.
( r ) The term “operator” means any individual who manipulates the
controls of a utilization or production facility.
( s ) The term “person” means (1) any individual, corporation,
partnership, firm, association, trust, estate, public or private institution,
group, Government agency other than the Commission, any State or any
political subdivision of, or any political entity within a State, any foreign
government or nation or any political subdivision of any such government or
nation, or other entity; and (2) any legal successor, representative, agent, or
agency of the foregoing.
(t) The term “person indemnified” means (1) with respect to a nuclear
incident occurring within the United States or outside the United States as
the term is used in section 170(c) [42 USCS § 2210(c)], and with respect to
any nuclear incident in connection with the design, development,
construction, operation, repair, maintenance, or use of the nuclear ship
Savannah, the person with whom an indemnity agreement is executed or who
is required to maintain financial protection, and any other person who may
be liable for public liability or (2) with respect to any other nuclear incident
occurring outside the United States, the person with whom an indemnity
agreement is executed and any other person who may be liable for public
liability by reason of his activities under any contract with the Secretary of
Energy or any project to which indemnification under the provisions of
1685
section 170(d) [42 USCS § 2210(d)] has been extended or under any
subcontract, purchase order, or other agreement, of any tier, under any such
contract or project.
( u) The term “produce”, when used in relation to special nuclear
material, means (1) to manufacture, make, produce, or refine special nuclear
material; (2) to separate special nuclear material from other substances in
which such material may be contained; or (3) to make or to produce new
special nuclear material.
(v) The term “production facility” means (1) any equipment or device
determined by rule of the Commission to be capable of the production of
special nuclear material in such quantity as to be of significance to the
common defense and security, or in such manner as to affect the health and
safety of the public; or (2) any important component part especially
designed for such equipment or device as determined by the Commission.
Except with respect to the export of a uranium enrichment production
facility, such term as used in chapters 10 and 16 [42 USCS §§ 2131 et seq.
and §§ 2231 et seq.] shall not include any equipment or device (or important
component part especially designed for such equipment or device) capable
of separating the isotopes of uranium or enriching uranium in the isotope
235.
(w) The term “public liability” means any legal liability arising out of
or resulting from a nuclear incident or precautionary evacuation (including
all reasonable additional costs incurred by a State, or a political
subdivision of a State, in the course of responding to a nuclear incident or a
precautionary evacuation), except: (i) claims under State or Federal
workmen’s compensation acts of employees of persons indemnified who are
employed at the site of and in connection with the activity where the nuclear
incident occurs; (ii) claims arising out of an act of war; and (iii) whenever
used in subsections (a), (c), and (k) of section 170 [42 USCS § 2210],
claims for loss of, or damage to, or loss of use of property which is located
at the site of and used in connection with the licensed activity where the
nuclear incident occurs. “Public liability” also includes damage to property
of persons indemnified: Provided, That such property is covered under the
terms of the financial protection required, except property which is located
at the site of and used in connection with the activity where the nuclear
incident occurs.
( x ) The term “research and development” means (1) theoretical
analysis, exploration, or experimentation; or (2) the extension of
investigative findings and theories of a scientific or technical nature into
practical application for experimental and demonstration purposes,
including the experimental production and testing of models, devices,
1686
equipment, materials, and processes.
(y) The term “Restricted Data” means all data concerning (1) design,
manufacture, or utilization of atomic weapons; (2) the production of special
nuclear material; or (3) the use of special nuclear material in the production
of energy, but shall not include data declassified or removed from the
Restricted Data category pursuant to section 142 [42 USCS § 2162].
(z) The term “source material” means (1) uranium, thorium, or any other
material which is determined by the Commission pursuant to the provisions
of section 61 [42 USCS § 2091] to be source material; or (2) ores
containing one or more of the foregoing materials, in such concentration as
the Commission may by regulation determine from time to time.
(aa) The term “special nuclear material” means (1) plutonium, uranium
enriched in the isotope 233 or in the isotope 235, and any other material
which the Commission, pursuant to the provisions of section 51 [42 USCS §
2071], determines to be special nuclear material, but does not include
source material; or (2) any material artificially enriched by any of the
foregoing, but does not include source material.
(bb) The term “United States” when used in a geographical sense
includes all Territories and possessions of the United States, the Canal Zone
and Puerto Rico.
(cc) The term “utilization facility” means (1) any equipment or device,
except an atomic weapon, determined by rule of the Commission to be
capable of making use of special nuclear material in such quantity as to be
of significance to the common defense and security, or in such manner as to
affect the health and safety of the public, or peculiarly adapted for making
use of atomic energy in such quantity as to be of significance to the common
defense and security, or in such manner as to affect the health and safety of
the public; or (2) any important component part especially designed for such
equipment or device as determined by the Commission.
(dd) The terms “high-level radioactive waste” and “spent nuclear fuel”
have the meanings given such terms in section 2 of the Nuclear Waste Policy
Act of 1982 (42 U.S.C. 10101).
(ee) The term “transuranic waste” means material contaminated with
elements that have an atomic number greater than 92, including neptunium,
plutonium, americium, and curium, and that are in concentrations greater
than 10 nanocuries per gram, or in such other concentrations as the Nuclear
Regulatory Commission may prescribe to protect the public health and
safety.
1687
(ff) The term “nuclear waste activities”, as used in section 170 [42
USCS § 2210], means activities subject to an agreement of indemnification
under subsection d. of such section, that the Secretary of Energy is
authorized to undertake, under this Act [42 USCS §§ 2011 et seq.] or any
other law, involving the storage, handling, transportation, treatment, or
disposal of, or research and development on, spent nuclear fuel, high-level
radioactive waste, or transuranic waste, including (but not limited to)
activities authorized to be carried out under the Waste Isolation Pilot
Project under section 213 of Public Law 96-164 (93 Stat. 1265)
[unclassified].
(gg) The term “precautionary evacuation” means an evacuation of the
public within a specified area near a nuclear facility, or the transportation
route in the case of an accident involving transportation of source material,
special nuclear material, byproduct material, high-level radioactive waste,
spent nuclear fuel, or transuranic waste to or from a production or utilization
facility, if the evacuation is—
(1) the result of any event that is not classified as a nuclear incident
but that poses imminent danger of bodily injury or property damage from
the radiological properties of source material, special nuclear material,
byproduct material, high-level radioactive waste, spent nuclear fuel, or
transuranic waste, and causes an evacuation; and
(2) initiated by an official of a State or a political subdivision of a
State, who is authorized by State law to initiate such an evacuation and
who reasonably determined that such an evacuation was necessary to
protect the public health and safety.
(hh) The term “public liability action”, as used in section 170 [42 USCS
§ 2210], means any suit asserting public liability. A public liability action
shall be deemed to be an action arising under section 170 [42 USCS §
2210], and the substantive rules for decision in such action shall be derived
from the law of the State in which the nuclear incident involved occurs,
unless such law is inconsistent with the provisions of such section.
(ii) [Not enacted]
(jj) Legal costs. As used in section 170 [42 USCS § 2210], the term
“legal costs” means the costs incurred by a plaintiff or a defendant in
initiating, prosecuting, investigating, settling, or defending claims or suits
for damage arising under such section.
Leg.H. August 30, 1954, ch. 1073 § 11, 68 Stat. 922; August 6, 1956, ch. 1015 § 1, 70
Stat. 1069; September 2, 1957, P.L. 85-256 § 3, 71 Stat. 576; August 8, 1958, P.L. 85-602 §
1, 72 Stat. 525; September 6, 1961, P.L. 87-206 §§ 2, 3, 75 Stat. 476; August 29, 1962, P.L.
87-615 §§ 4, 5, 76 Stat. 410; October 13, 1966, P.L. 89-645 § 1(a), 80 Stat. 891; December
1688
31, 1975, P.L. 94-197 § 1, 89 Stat. 1111; November 8, 1978, P.L. 95-604 § 201, 92 Stat.
3033; August 20, 1988, P.L. 100-408 §§ 4(b), 5(a), (b), 11(b), (d)(2), 16(a)(1), (b)(1), (2),
(d)(1)–(3), 102 Stat. 1069, 1070, 1076, 1078–1080; November 15, 1990, P.L. 101-575 §
5(a), 104 Stat. 2835; October 24, 1992, P.L. 102-486 §§ 902(a)(8), 1102, 106 Stat. 2944,
2955; November 2, 1994, P.L. 103-437 § 15(f)(1), 108 Stat. 4592; April 26, 1996, P.L.
104-134 § 3116(b)(1), 110 Stat. 1321–349; August 8, 2005, P.L. 109-58 § 651(e)(1), 119
Stat. 806.
SUBCHAPTER XII
Patents and Inventions
§ 2181. Inventions Relating to Atomic Weapons, and

Filing of Reports.
(a) Denial of Patent; Revocation. No patent shall hereafter be granted for
any invention or discovery which is useful solely in the utilization of special
nuclear material or atomic energy in an atomic weapon. Any patent granted for
any such invention or discovery is revoked, and just compensation shall be
made therefor.
(b) Denial of Rights; Revocation. No patent hereafter granted shall confer
any rights with respect to any invention or discovery to the extent that such
invention or discovery is used in the utilization of special nuclear material or
atomic energy in atomic weapons. Any rights conferred by any patent heretofore
granted for any invention or discovery are revoked to the extent that such
invention or discovery is so used, and just compensation shall be made therefor.
(c) Report Describing Investigation or Discovery; Filing. Any person who
has made or hereafter makes any invention or discovery useful in the production
or utilization of special nuclear material or atomic energy, shall file with the
Commission a report containing a complete description thereof unless such
invention or discovery is described in an application for a patent filed with the
Under Secretary of Commerce for Intellectual Property and Director of the
United States Patent and Trademark Office by such person within the time
required for the filing of such report. The report covering any such invention or
discovery shall be filed on or before the one hundred and eightieth day after
such person first discovers or first has reason to believe that such invention or
discovery is useful in such production or utilization.
(d) Notification of Applications for Patents; Access. The Under Secretary
of Commerce for Intellectual Property and Director of the United States Patent
and Trademark Office shall notify the Commission of all applications for
1689
patents heretofore or hereafter filed which, in his opinion, disclose inventions
or discoveries required to be reported under subsection (c) of this section, and
shall provide the Commission access to all such applications.
(e) Confidentiality of Reports and Applications. Reports filed pursuant to
subsection (c) of this section, and applications to which access is provided
under subsection (d) of this section, shall be kept in confidence by the
Commission, and no information concerning the same given without authority of
the inventor or owner unless necessary to carry out the provisions of any Act of
Congress or in such special circumstances as may be determined by the
Commission.
Leg.H. Aug. 1, 1946, ch 724, Title I, Ch. 13, § 151, as added Aug. 30, 1954, ch 1073, §
1, 68 Stat. 943; Sept. 6, 1961, P.L. 87-206, §§ 7-9, 75 Stat. 477; Oct. 24, 1992, P.L. 102-
486, Title IX, § 902(a)(8), 106 Stat. 2944; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)
(9), 113 Stat. 1536.
§ 2182. Inventions conceived during Commission

contracts; ownership; waiver; hearings.
Any invention or discovery, useful in the production or utilization of special
nuclear material or atomic energy, made or conceived in the course of or under
any contract, subcontract, or arrangement entered into with or for the benefit of
the Commission, regardless of whether the contract, subcontract, or arrangement
involved the expenditure of funds by the Commission, shall be vested in, and be
the property of, the Commission, except that the Commission may waive its
claim to any such invention or discovery under such circumstances as the
Commission may deem appropriate, consistent with the policy of this section.
No patent for any invention or discovery, useful in the production or utilization
of special nuclear material or atomic energy, shall be issued unless the
applicant files with the application, or within thirty days after request therefor
by the Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office (unless the Commission advises
the Under Secretary of Commerce for Intellectual Property and Director of the
United States Patent and Trademark Office that its rights have been determined
and that accordingly no statement is necessary) a statement under oath setting
forth the full facts surrounding the making or conception of the invention or
discovery described in the application and whether the invention or discovery
was made or conceived in the course of or under any contract, subcontract, or
arrangement entered into with or for the benefit of the Commission, regardless
of whether the contract, subcontract, or arrangement involved the expenditure of
funds by the Commission. The Under Secretary of Commerce for Intellectual
Property and Director of the United States Patent and Trademark Office shall as
soon as the application is otherwise in condition for allowance forward copies
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of the application and the statement to the Commission.
The Under Secretary of Commerce for Intellectual Property and Director of
the United States Patent and Trademark Office may proceed with the application
and issue the patent to the applicant (if the invention or discovery is otherwise
patentable) unless the Commission, within 90 days after receipt of copies of the
application and statement, directs the Under Secretary of Commerce for
Office to issue the patent to the Commission (if the invention or discovery is
otherwise patentable) to be held by the Commission as the agent of and on
behalf of the United States.
If the Commission files such a direction with the Under Secretary of
Commerce for Intellectual Property and Director of the United States Patent and
Trademark Office, and if the applicant’s statement claims, and the applicant still
believes, that the invention or discovery was not made or conceived in the
course of or under any contract, subcontract or arrangement entered into with or
for the benefit of the Commission entitling the Commission to the title to the
application or the patent the applicant may, within 30 days after notification of
the filing of such a direction, request a hearing before the Patent Trial and
Appeal Board. The Board shall have the power to hear and determine whether
the Commission was entitled to the direction filed with the Under Secretary of
Trademark Office. The Board shall follow the rules and procedures established
for interference and derivation cases and an appeal may be taken by either the
applicant or the Commission from the final order of the Board to the United
States Court of Appeals for the Federal Circuit in accordance with the
procedures governing the appeals from the Patent Trial and Appeal Board.
If the statement filed by the applicant should thereafter be found to contain
false material statements any notification by the Commission that it has no
objections to the issuance of a patent to the applicant shall not be deemed in any
respect to constitute a waiver of the provisions of this section or of any
applicable civil or criminal statute, and the Commission may have the title to the
patent transferred to the Commission on the records of the Under Secretary of
Trademark Office in accordance with the provisions of this section. A
determination of rights by the Commission pursuant to a contractual provision or
other arrangement prior to the request of the Under Secretary of Commerce for
Office for the statement, shall be final in the absence of false material statements
or nondisclosure of material facts by the applicant.
Leg.H. (Aug. 1, 1946, ch 724, Title I, Ch. 13, § 152, as added Aug. 30, 1954, ch 1073, §
1, 68 Stat. 944; Sept. 6, 1961, P.L. 87-206, § 10, 75 Stat. 477; Aug. 29, 1962, P.L. 87-615, §
1691
11, 76 Stat. 411; April 2, 1982, P.L. 97-164, Title I, Part B, § 162(2), 96 Stat. 49; Nov. 8,
1984, P.L. 98-622, Title II, § 205(b), 98 Stat. 3388; Oct. 24, 1992, P.L. 102-486, Title IX, §
902(a)(8), 106 Stat. 2944; Nov. 29, 1999, P.L. 106-113, Div B, § 1000(a)(9), 113 Stat.
1536.)
(As amended Sept. 16, 2011, P.L. 112-29, § 7(d)(1), 125 Stat. 315.)
Amendments 2011. Act Sept. 16, 2011 (effective 1 year after enactment and applicable
as provided by § 7(e) of such Act, which appears as 35 USCS § 6 note), in the third
undesignated paragraph, substituted “Patent Trial and Appeal Board” for “Board of Patent
Appeals and Interferences” in two places, and inserted “and derivation”.

(a) Patent Affected With Public Interest. The Commission may, after giving
the patent owner an opportunity for a hearing, declare any patent to be affected
with the public interest if (1) the invention or discovery covered by the patent is
of primary importance in the production or utilization of special nuclear
material or atomic energy; and (2) the licensing of such invention or discovery
under this section is of primary importance to effectuate the policies and
purposes of this chapter.
(b) Action by Commission. Whenever any patent has been declared
affected with the public interest, pursuant to subsection (a) of this section—
(1) the Commission is hereby licensed to use the invention or discovery
covered by such patent in performing any of its powers under this chapter;
and
(2) any person may apply to the Commission for a nonexclusive patent
license to use the invention or discovery covered by such patent, and the
Commission shall grant such patent license to the extent that it finds that the
use of the invention or discovery is of primary importance to the conduct of
an activity by such person authorized under this chapter.
(c) Application for Patent. Any person—
(1) who has made application to the Commission for a license under
sections 2073, 2092, 2093, 2111, 2133 or 2134 of this title, or a permit or
lease under section 2097 of this title;
( 2 ) to whom such license, permit, or lease has been issued by the
Commission;
(3) who is authorized to conduct such activities as such applicant is
conducting or proposes to conduct under a general license issued by the
Commission under sections 2092 or 2111 of this title; or
(4) whose activities or proposed activities are authorized under section
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2051 of this title, may at any time make application to the Commission for a
patent license for the use of an invention or discovery useful in the
production or utilization of special nuclear material or atomic energy
covered by a patent. Each such application shall set forth the nature and
purpose of the use which the applicant intends to make of the patent license,
the steps taken by the applicant to obtain a patent license from the owner of
the patent, and a statement of the effects, as estimated by the applicant, on
the authorized activities which will result from failure to obtain such patent
license and which will result from the granting of such patent license.
(d) Hearing. Whenever any person has made an application to the
Commission for a patent license pursuant to subsection (c) of this section—
(1) the Commission, within 30 days after the filing of such application,
shall make available to the owner of the patent all of the information
contained in such application, and shall notify the owner of the patent of the
time and place at which a hearing will be held by the Commission;
(2) the Commission shall hold a hearing within 60 days after the filing
of such application at a time and place designated by the Commission; and
(3) in the event an applicant applies for two or more patent licenses, the
Commission may, in its discretion, order the consolidation of such
applications, and if the patents are owned by more than one owner, such
owners may be made parties to one hearing.
(e) Findings; Issuance of License. If, after any hearing conducted pursuant
to subsection (d) of this section, the Commission finds that—
( 1 ) the invention or discovery covered by the patent is of primary
importance in the production or utilization of special nuclear material or
atomic energy;
(2) the licensing of such invention or discovery is of primary importance
to the conduct of the activities of the applicant;
(3) the activities to which the patent license are proposed to be applied
by such applicant are of primary importance to the furtherance of policies
and purposes of this chapter; and
( 4) such applicant cannot otherwise obtain a patent license from the
owner of the patent on terms which the Commission deems to be reasonable
for the intended use of the patent to be made by such applicant, the
Commission shall license the applicant to use the invention or discovery
covered by the patent for the purposes stated in such application on terms
deemed equitable by the Commission and generally not less fair than those
granted by the patentee or by the Commission to similar licensees for
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comparable use.
(f) Restrictions on Issuance of Patent. The Commission shall not grant any
patent license pursuant to subsection (e) of this section for any other purpose
than that stated in the application. Nor shall the Commission grant any patent
license to any other applicant for a patent license on the same patent without an
application being made by such applicant pursuant to subsection (c) of this
section, and without separate notification and hearing as provided in subsection
(d) of this section, and without a separate finding as provided in subsection (e)
of this section.
(g) Royalty Fee. The owner of the patent affected by a declaration or a
finding made by the Commission pursuant to subsection (b) or (e) of this section
shall be entitled to a reasonable royalty fee from the licensee for any use of an
invention or discovery licensed by this section. Such royalty fee may be agreed
upon by such owner and the patent licensee, or in the absence of such agreement
shall be determined for each patent license by the Commission pursuant to
section 2187(c) of this title.
(h) Effective Date. The provisions of this section shall apply to any patent
the application for which shall have been filed before September 1, 1979.
Leg.H. August 30, 1954, ch. 1073 § 153, 68 Stat. 945; June 23, 1959, P.L. 86-50 § 114,
73 Stat. 87; August 1, 1964, P.L. 88-394 § 1, 78 Stat. 376; December 24, 1969, P.L. 91-161
§ 1, 83 Stat. 444; August 17, 1974, P.L. 93-377 § 6, 88 Stat. 475; October 24, 1992, P.L.
102-486 § 902(a)(8), 106 Stat. 2944.
No court shall have jurisdiction or power to stay, restrain, or otherwise
enjoin the use of any invention or discovery by a patent licensee, to the extent
that such use is licensed by section 2183(b) or 2183(e) of this title. If, in any
action against such patent licensee, the court shall determine that the defendant
is exercising such license, the measure of damages shall be the royalty fee
determined pursuant to section 2187(c) of this title, together with such costs,
interest, and reasonable attorney’s fees as may be fixed by the court. If no
royalty fee has been determined, the court shall stay the proceeding until the
royalty fee is determined pursuant to section 2187(c) of this title. If any such
patent licensee shall fail to pay such royalty fee, the patentee may bring an
action in any court of competent jurisdiction for such royalty fee, together with
such costs, interest, and reasonable attorney’s fees as may be fixed by the court.
Leg.H. August 30, 1954, ch. 1073 § 154, 68 Stat. 946; October 24, 1992, P.L. 102-486
§ 902(a)(8), 106 Stat. 2944.
§ 2185. Prior Art.
1694
In connection with applications for patents covered by this subchapter, the
fact that the invention or discovery was known or used before shall be a bar to
the patenting of such invention or discovery even though such prior knowledge
or use was under secrecy within the atomic energy program of the United States.
§ 902(a)(8), 106 Stat. 2944.

The Commission shall establish standard specifications upon which it may
grant a patent license to use any patent declared to be affected with the public
interest pursuant to section 2183(a) of this title. Such a patent license shall not
waive any of the other provisions of this chapter.
Leg.H. August 30, 1954, ch. 1073 § 156, 68 Stat. 947; December 12, 1980, P.L. 96-
517 § 7(a), 94 Stat 3027; October 24, 1992, P.L. 102-486 § 902(a)(8), 106 Stat. 2944.

(a) Patent Compensation Board. The Commission shall designate a Patent
Compensation Board to consider applications under this section. The members
of the Board shall receive a per diem compensation for each day spent in
meetings or conferences, and all members shall receive their necessary
traveling or other expenses while engaged in the work of the Board. The
members of the Board may serve as such without regard to the provisions of
sections 281, 283, or 284 of Title 18 of the United States Code, except insofar
as such sections may prohibit any such member from receiving compensation in
respect of any particular matter which directly involves the Commission or in
which the Commission is directly interested.
(b) Eligibility.
(1) Any owner of a patent licensed under section 2188 or 2183(b) or
2183(e) of this title, or any patent licensee thereunder may make application
to the Commission for the determination of a reasonable royalty fee in
accordance with such procedures as the Commission by regulation may
establish.
( 2) Any person seeking to obtain the just compensation provided in
section 2181 of this title shall make application therefor to the Commission
in accordance with such procedures as the Commission may by regulation
establish.
( 3 ) Any person making any invention or discovery useful in the
production or utilization of special nuclear material or atomic energy, who
is not entitled to compensation or a royalty therefor under this chapter and
1695
who has complied with the provisions of section 2181(c) of this title may
make application to the Commission for, and the Commission may grant, an
award. The Commission may also, after consultation with the General
Advisory Committee, and with the approval of the President, grant an award
for any especially meritorious contribution to the development, use, or
control of atomic energy.
(c) Standards.
(1) In determining a reasonable royalty fee as provided for in section
2183(b) or 2183(c) of this title, the Commission shall take into
consideration (A) the advice of the Patent Compensation Board; (B) any
defense, general or special, that might be pleaded by a defendant in an
action for infringement; (C) the extent to which, if any, such patent was
developed through federally financed research; and (D) the degree of utility,
novelty, and importance of the invention or discovery, and may consider the
cost to the owner of the patent of developing such invention or discovery or
acquiring such patent.
(2) In determining what constitutes just compensation as provided for in
section 2181 of this title, or in determining the amount of any award under
subsection (b)(3) of this section, the Commission shall take into account the
considerations set forth in paragraph (1) of this subsection and the actual use
of such invention or discovery. Such compensation may be paid by the
Commission in periodic payments or in a lump sum.
(d) Period of Limitations. Every application under this section shall be
barred unless filed within six years after the date on which first accrues the right
to such reasonable royalty fee, just compensation, or award for which such
application is filed.
Leg.H. August 30, 1954, ch. 1073 § 157, 68 Stat. 947; September 6, 1961, P.L. 87-206
§ 11, 75 Stat. 478; May 10, 1974, P.L. 93-276 § 201, 88 Stat. 119; October 24, 1992, P.L.
102-486 § 902(a)(8), 106 Stat. 2944.

Whenever the owner of any patent hereafter granted for any invention or
discovery of primary use in the utilization or production of special nuclear
material or atomic energy is found by a court of competent jurisdiction to have
intentionally used such patent in a manner so as to violate any of the antitrust
laws specified in section 2135(a) of this title, there may be included in the
judgment of the court, in its discretion and in addition to any other lawful
sanctions, a requirement that such owner license such patent to any other
licensee of the Commission who demonstrates a need therefor. If the court, at its
discretion, deems that such licensee shall pay a reasonable royalty to the owner
1696
of the patent, the reasonable royalty shall be determined in accordance with
section 2187 of this title.
Leg.H. August 30, 1954, ch. 1073 § 158, 68 Stat. 947; September 6, 1961, P.L. 87-206
§ 12, 75 Stat. 478; October 24, 1992, P.L. 102-486 § 902(a)(8), 106 Stat. 2944.

Nothing in this chapter shall affect the right of the Commission to require
that patents granted on inventions, made or conceived during the course of
federally financed research or operations, be assigned to the United States.
§ 902(a)(8), 106 Stat. 2944.

Any patent application on which a patent was denied by the United States
Patent Office under sections 11(a)(1), 11(a)(2), or 11(b) of the Atomic Energy
Act of 1946, and which is not prohibited by section 2181 or 2185 of this title
may be reinstated upon application to the Commissioner of Patents within one
year after August 30, 1954, and shall then be deemed to have been continuously
pending since its original filing date: Provided, however, That no patent issued
upon any patent application so reinstated shall in any way furnish a basis of
claim against the Government of the United States.
§ 902(a)(8), 106 Stat. 2944.
CHAPTER 26
NATIONAL SPACE PROGRAM

SUBCHAPTER I
General Provisions
1697
This section (Act July 29, 1958, P.L. 85-568, Title III, § 305, 72 Stat. 435;
Dec. 12, 1980, P.L. 96-517, § 7(b), 94 Stat. 3027; Dec. 21, 1981, P.L. 97-96, §
7, 95 Stat. 1210; April 2, 1982, P.L. 97-164, Title I, Part B, § 162(3), 96 Stat.
49; Nov. 8, 1984, P.L. 98-622, Title II, § 205(c), 98 Stat. 3388; Nov. 29, 1999,
P.L. 106-113 , Div B, § 1000(a)(9), 113 Stat. 1536) was repealed by Act Dec.
18, 2010, P.L. 111-314 , § 6, 124 Stat. 3444, except with respect to rights and
duties that matured, penalties that were incurred, or proceedings that were
begun before enactment, as provided by § 6 of such Act, which appears as a
note preceding 51 USCS § 10101. It related to property rights in inventions. For
similar provisions, see 51 USCS § 20135.
CHAPTER 73
DEVELOPMENT OF ENERGY SOURCES

SUBCHAPTER I
Energy Research and Development Administration

(a) Research and Development. The Administrator is authorized to
exercise his powers in such manner as to insure the continued conduct of
research and development and related activities in areas or fields deemed by the
Administrator to be pertinent to the acquisition of an expanded fund of
scientific, technical, and practical knowledge in energy matters. To this end, the
Administrator is authorized to make arrangements (including contracts,
agreements, and loans) for the conduct of research and development activities
with private or public institutions or persons, including participation in joint or
cooperative projects of a research, developmental, or experimental nature; to
make payments (in lump sum or installments, and in advance or by way of
reimbursement, with necessary adjustments on account of overpayments or
underpayments); and generally to take such steps as he may deem necessary or
appropriate to perform functions now or hereafter vested in him. Such functions
of the Administrator under this chapter as are applicable to the nuclear activities
transferred pursuant to this title shall be subject to the provisions of the Atomic
Energy Act of 1954, as amended, and to other authority applicable to such
nuclear activities. The nonnuclear responsibilities and functions of the
Administrator referred to in sections 5813 and 5814 of this title shall be carried
1698
out pursuant to the provisions of this chapter, applicable authority existing
immediately before the effective date of this chapter, or in accordance with the
provisions of chapter 4 of the Atomic Energy Act of 1954, as amended ( 42
U.S.C. 2051–2053).
(b) Facilities and Real Property. Except for public buildings as defined in
the Public Buildings Act of 1959, as amended, and with respect to leased space
subject to the provisions of Reorganization Plan Numbered 18 of 1950, the
Administrator is authorized to acquire (by purchase, lease, condemnation, or
otherwise), construct, improve, repair, operate, and maintain facilities and real
property as the Administrator deems to be necessary in and outside of the
District of Columbia. Such authority shall apply only to facilities required for
the maintenance and operation of laboratories, research and testing sites and
facilities, quarters, and related accommodations for employees and dependents
of employees of the Administration, and such other special-purpose real
property as the Administrator deems to be necessary in and outside the District
of Columbia. Title to any property or interest therein, real, personal, or mixed,
acquired pursuant to this section, shall be in the United States.
(c) Services for Employees at Remote Locations.
(1) The Administrator is authorized to provide, construct, or maintain,
as necessary and when not otherwise available, the following for employees
and their dependents stationed at remote locations:
(A) Emergency medical services and supplies.
(B) Food and other subsistence supplies.
(C) Messing facilities.
(D) Audiovisual equipment, accessories, and supplies for recreation
and training.
(E) Reimbursement for food, clothing, medicine, and other supplies
furnished by such employees in emergencies for the temporary relief of
distressed persons.
(F) Living and working quarters and facilities.
(G) Transportation for school-age dependents of employees to the
nearest appropriate educational facilities.
( 2 ) The furnishing of medical treatment under subparagraph (A) of
paragraph (1) and the furnishing of services and supplies under paragraphs
(B) and (C) of paragraph (1) shall be at prices reflecting reasonable value
as determined by the Administrator.
1699
(3) Proceeds from reimbursements under this section shall be deposited
in the Treasury and may be withdrawn by the Administrator to pay directly
the cost of such work or services, to repay or make advances to
appropriations or funds which do or will bear all or a part of such cost, or
to refund excess sums when necessary; except that such payments may be
credited to a service or working capital fund otherwise established by law,
and used under the law governing such funds, if the fund is available for use
by the Administrator for performing the work or services for which payment
is received.
(d) Acquisition of Copyrights and Patents. The Administrator is authorized
to acquire any of the following described rights if the property acquired thereby
is for use in, or is useful to, the performance of functions vested in him:
(1) Copyrights, patents, and applications for patents, designs, processes,
specifications, and data.
(2) Licenses under copyrights, patents, and applications for patents.
(3) Releases, before suit is brought, for past infringement of patents or
copyrights.
(e) Dissemination of Information. Subject to the provisions of chapter 12
of the Atomic Energy Act of 1954, as amended ( 42 U.S.C. 2161–2166), and
other applicable law, the Administrator shall disseminate scientific, technical,
and practical information acquired pursuant to this title through information
programs and other appropriate means, and shall encourage the dissemination of
scientific, technical, and practical information relating to energy so as to enlarge
the fund of such information and to provide that free interchange of ideas and
criticism which is essential to scientific and industrial progress and public
understanding.
(f) Gifts and Bequests. The Administrator is authorized to accept, hold,
administer, and utilize gifts, and bequests of property, both real and personal,
for the purpose of aiding or facilitating the work of the Administration. Gifts and
bequests of money and proceeds from sales of other property received as gifts
or bequests shall be deposited in the Treasury and shall be disbursed upon the
order of the Administrator. For the purposes of Federal income, estate, and gift
taxes, property accepted under this section shall be considered as a gift or
bequest to the United States.
CHAPTER 74
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NONNUCLEAR ENERGY RESEARCH AND
DEVELOPMENT
(a) Vesting of Title to Invention and Issuance of Patents to United States;
Prerequisites. Whenever any invention is made or conceived in the course of or
under any contract of the Department, other than nuclear energy research,
development, and demonstration pursuant to the Atomic Energy Act of 1954 ( 42
U.S.C. 2011 et seq.) and the Secretary determines that—
(1) the person who made the invention was employed or assigned to
perform research, development, or demonstration work and the invention is
related to the work he was employed or assigned to perform, or that it was
within the scope of his employment duties, whether or not it was made
during working hours, or with a contribution by the Government of the use of
Government facilities, equipment, materials, allocated funds, information
proprietary to the Government, or services of Government employees during
working hours; or
(2) the person who made the invention was not employed or assigned to
perform research, development, or demonstration work, but the invention is
nevertheless related to the contract or to the work or duties he was
employed or assigned to perform, and was made during working hours, or
with a contribution from the Government of the sort referred to in clause (1).
[,] title to such invention shall vest in the United States, and if patents on
such invention are issued they shall be issued to the United States, unless in
particular circumstances the Secretary waives all or any part of the rights of
the United States to such invention in conformity with the provisions of this
section.
(b) Contract as Requiring Report to Secretary of Invention, etc., Made in
Course of Contract. Each contract entered into by the Department with any
person shall contain effective provisions under which such person shall furnish
promptly to the Department a written report containing full and complete
technical information concerning any invention, discovery, improvement, or
innovation which may be made in the course of or under such contract.
(c) Waiver by Secretary of Rights of United States; Regulations
Prescribing Procedures; Record of Waiver Determinations; Objectives. Under
such regulations in conformity with the provisions of this section as the
Secretary shall prescribe, the Secretary may waive all or any part of the rights
of the United States under this section with respect to any invention or class of
1701
inventions made or which may be made by any person or class of persons in the
course of or under any contract of the Department if he determines that the
interests of the United States and the general public will best be served by such
waiver. The Department shall maintain a publicly available, periodically
updated record of waiver determinations. In making such determinations, the
Secretary shall have the following objectives:
( 1 ) Making the benefits of the energy research, development, and
demonstration program widely available to the public in the shortest
practicable time.
(2) Promoting the commercial utilization of such inventions.
( 3 ) Encouraging participation by private persons in the Secretary’s
energy research, development, and demonstration program.
(4) Fostering competition and preventing undue market concentration or
the creation or maintenance of other situations inconsistent with the antitrust
laws.
(d) Considerations Applicable at Time of Contracting for Waiver
Determination by Secretary. In determining whether a waiver to the contractor at
the time of contracting will best serve the interests of the United States and the
general public, the Secretary shall specifically include as considerations—
(1) the extent to which the participation of the contractor will expedite
the attainment of the purposes of the program;
(2) the extent to which a waiver of all or any part of such rights in any or
all fields of technology is needed to secure the participation of the particular
contractor;
( 3 ) the extent to which the contractor’s commercial position may
expedite utilization of the research, development, and demonstration
program results;
(4) the extent to which the Government has contributed to the field of
technology to be funded under the contract;
(5) the purpose and nature of the contract, including the intended use of
the results developed thereunder;
(6) the extent to which the contractor has made or will make substantial
investment of financial resources or technology developed at the
contractor’s private expense which will directly benefit the work to be
performed under the contract;
(7) the extent to which the field of technology to be funded under the
1702
contract has been developed at the contractor’s private expense;
(8) the extent to which the Government intends to further develop to the
point of commercial utilization the results of the contract effort;
(9) the extent to which the contract objectives are concerned with the
public health, public safety, or public welfare;
( 1 0 ) the likely effect of the waiver on competition and market
concentration; and
(11) in the case of a nonprofit educational institution, the extent to which
such institution has a technology transfer capability and program, approved
by the Secretary as being consistent with the applicable policies of this
section.
(e) Considerations Applicable to Identified Invention for Waiver
Determination by Secretary. In determining whether a waiver to the contractor
or inventor of rights to an identified invention will best serve the interests of the
United States and the general public, the Secretary shall specifically include as
considerations paragraphs (4) through (11) of subsection (d) as applied to the
invention and—
( 1 ) the extent to which such waiver is a reasonable and necessary
incentive to call forth private risk capital for the development and
commercialization of the invention; and
(2) the extent to which the plans, intentions, and ability of the contractor
or inventor will obtain expeditious commercialization of such invention.
(f) Rights Subject to Reservation Where Title to Invention Vested in United
States. Whenever title to an invention is vested in the United States, there may
be reserved to the contractor or inventor—
(1) a revocable or irrevocable nonexclusive, paid-up license for the
practice of the invention throughout the world; and
(2) the rights to such invention in any foreign country where the United
States has elected not to secure patent rights and the contractor elects to do
so, subject to the rights set forth in paragraphs (2), (3), (6), and (7) of
subsection (h): Provided, That when specifically requested by the
Department and three years after issuance of such a patent, the contractor
shall submit the report specified in subsection (h)(1) of this section.
(g)–(i) [Repealed]
(j) Small Business Status of Applicant for Waiver or Licenses. The
Secretary shall, in granting waivers or licenses, consider the small business
1703
status of the applicant.
(k) Protection of Invention, etc., Rights by Secretary. The Secretary is
authorized to take all suitable and necessary steps to protect any invention or
discovery to which the United States holds title, and to require that contractors
or persons who acquire rights to inventions under this section protect such
inventions.
(l) Department of Energy as Defense Agency of United States for Purpose
of Maintaining Secrecy of Inventions. The Department shall be considered a
defense agency of the United States for the purpose of chapter 17 of title 35 of
the United States Code [35 USCS §§ 181 et seq.].
(m) Definitions. As used in this section—
(1) the term “person” means any individual, partnership, corporation,
association, institution, or other entity;
( 2 ) the term “contract” means any contract, grant, agreement,
understanding, or other arrangement, which includes research, development,
or demonstration work, and includes any assignment, substitution of parties,
or subcontract executed or entered into thereunder;
(3) the term “made”, when used in relation to any invention, means the
conception or first actual reduction to practice of such invention;
( 4 ) the term “invention” means inventions or discoveries, whether
patented or unpatented; and
(5) the term “contractor” means any person having a contract with or on
behalf of the Department.
(n) Report Concerning Applicability of Existing Patent Policies to Energy
Programs; Time for Submission to President and Appropriate Congressional
Committees. Within twelve months after the date of the enactment of this Act
[Dec. 31, 1974], the Secretary with the participation of the Attorney General,
the Secretary of Commerce, and other officials as the President may designate,
shall submit to the President and the appropriate congressional committees a
report concerning the applicability of existing patent policies affecting the
programs under this Act, along with his recommendations for amendments or
additions to the statutory patent policy, including his recommendations on
mandatory licensing, which he deems advisable for carrying out the purposes of
this Act.
96-517 § 7(c), 94 Stat. 3027; August 8, 2005, P.L. 109-58 § 1009(b)(7), 119 Stat. 935.
CHAPTER 82
1704
SOLID WASTE DISPOSAL
SUBCHAPTER VIII
Research, Development, Demonstration, and

Information
§ 6981. Research, Demonstrations, Training, and Other

Activities.
(a) General Authority. The Administrator, alone or after consultation with
the Secretary of Energy, shall conduct, and encourage, cooperate with, and
render financial and other assistance to appropriate public (whether Federal,
State, interstate, or local) authorities, agencies, and institutions, private agencies
and institutions, and individuals in the conduct of, and promote the coordination
of, research, investigations, experiments, training, demonstrations, surveys,
public education programs, and studies relating to—
( 1 ) any adverse health and welfare effects of the release into the
environment of material present in solid waste, and methods to eliminate
such effects;
(2) the operation and financing of solid waste management programs;
(3) the planning, implementation, and operation of resource recovery
and resource conservation systems and hazardous waste management
systems, including the marketing of recovered resources;
(4) the production of usable forms of recovered resources, including
fuel, from solid waste;
(5) the reduction of the amount of such waste and unsalvageable waste
materials;
(6) the development and application of new and improved methods of
collecting and disposing of solid waste and processing and recovering
materials and energy from solid wastes;
(7) the identification of solid waste components and potential materials
and energy recoverable from such waste components;
(8) small scale and low technology solid waste management systems,
1705
including but not limited to, resource recovery source separation systems;
( 9) methods to improve the performance characteristics of resources
recovered from solid waste and the relationship of such performance
characteristics to available and potentially available markets for such
resources;
(10) improvements in land disposal practices for solid waste (including
sludge) which may reduce the adverse environmental effects of such
disposal and other aspects of solid waste disposal on land, including means
for reducing the harmful environmental effects of earlier and existing
landfills, means for restoring areas damaged by such earlier or existing
landfills, means for rendering landfills safe for purposes of construction and
other uses, and techniques of recovering materials and energy from landfills;
(11) methods for the sound disposal of, or recovery of resources,
including energy, from, sludge (including sludge from pollution control and
treatment facilities, coal slurry pipelines, and other sources);
(12) methods of hazardous waste management, including methods of
rendering such waste environmentally safe; and
(13) any adverse effects on air quality (particularly with regard to the
emission of heavy metals) which result from solid waste which is burned
(either alone or in conjunction with other substances) for purposes of
treatment, disposal or energy recovery.
(b) Management program.
(1)
(A) In carrying out his functions pursuant to this chapter, and any
other Federal legislation respecting solid waste or discarded material
research, development, and demonstrations, the Administrator shall
establish a management program or system to insure the coordination of
all such activities and to facilitate and accelerate the process of
development of sound new technology (or other discoveries) from the
research phase, through development, and into the demonstration phase.
(B) The Administrator shall (i) assist, on the basis of any research
projects which are developed with assistance under this chapter or
without Federal assistance, the construction of pilot plant facilities for
the purpose of investigating or testing the technological feasibility of any
promising new fuel, energy, or resource recovery or resource
conservation method or technology; and (ii) demonstrate each such
method and technology that appears justified by an evaluation at such
pilot plant stage or at a pilot plant stage developed without Federal
1706
assistance. Each such demonstration shall incorporate new or innovative
technical advances or shall apply such advances to different
circumstances and conditions, for the purpose of evaluating design
concepts or to test the performance, efficiency, and economic feasibility
of a particular method or technology under actual operating conditions.
Each such demonstration shall be so planned and designed that, if
successful, it can be expanded or utilized directly as a full-scale
operational fuel, energy, or resource recovery or resource conservation
facility.
(2) Any energy-related research, development, or demonstration project
for the conversion including bioconversion, of solid waste carried out by
the Environmental Protection Agency or by the Secretary of Energy pursuant
to this chapter or any other Act shall be administered in accordance with the
May 7, 1976, Interagency Agreement between the Environmental Protection
Agency and the Secretary of Energy on the Development of Energy from
Solid Wastes and specifically, that in accordance with this agreement, (A)
for those energy-related projects of mutual interest, planning will be
conducted jointly by the Environmental Protection Agency and the Secretary
of Energy, following which project responsibility will be assigned to one
agency; (B) energy-related portions of projects for recovery of synthetic
fuels or other forms of energy from solid waste shall be the responsibility of
the Secretary of Energy; (C) the Environmental Protection Agency shall
retain responsibility for the environmental, economic, and institutional
aspects of solid waste projects and for assurance that such projects are
consistent with any applicable suggested guidelines published pursuant to
section 6907 of this title, and any applicable State or regional solid waste
management plan; and (D) any activities undertaken under provisions of
sections 6982 and 6983 of this title as related to energy; as related to energy
or synthetic fuels recovery from waste; or as related to energy conservation
shall be accomplished through coordination and consultation with the
Secretary of Energy.
(c) Authorities.
(1) In carrying out subsection (a) of this section respecting solid waste
research, studies, development, and demonstration, except as otherwise
specifically provided in section 6984(d) of this title, the Administrator may
make grants to or enter into contracts (including contracts for construction)
with, public agencies and authorities or private persons.
(2) Contracts for research, development, or demonstrations or for both
(including contracts for construction) shall be made in accordance with and
subject to the limitations provided with respect to research contracts of the
military departments in section 2353 of Title 10, except that the
1707
determination, approval, and certification required thereby shall be made by
the Administrator.
(3) Any invention made or conceived in the course of, or under, any
contract under this chapter shall be subject to section 9 of the Federal
Nonnuclear Energy Research and Development Act of 1974 to the same
extent and in the same manner as inventions made or conceived in the course
of contracts under such Act, except that in applying such section, the
Environmental Protection Agency shall be substituted for the Secretary of
Energy and the words “solid waste” shall be substituted for the word
“energy” where appropriate.
(4) For carrying out the purpose of this chapter the Administrator may
detail personnel of the Environmental Protection Agency to agencies
eligible for assistance under this section.
Leg.H. October 20, 1965, P.L. 89-272 § 8001; October 21, 1976, P.L. 94-580 § 2, 90
Stat. 2829; November 8, 1978, P.L. 95-609 § 7(s), 92 Stat. 3083.
CHAPTER 85
AIR POLLUTION PREVENTION AND

CONTROL
SUBCHAPTER I
Programs and Activities

PART A
Air Quality and Emission Limitations

(a) Research Programs; Grants; Contracts; Pilot and Demonstration Plants;
Byproducts Research. The Administrator shall give special emphasis to
research and development into new and improved methods, having industry-
wide application, for the prevention and control of air pollution resulting from
1708
the combustion of fuels. In furtherance of such research and development he
shall—
( 1 ) conduct and accelerate research programs directed toward
development of improved, cost-effective techniques for—
(A) control of combustion byproducts of fuels,
( B ) removal of potential air pollutants from fuels prior to
combustion,
(C) control of emissions from the evaporation of fuels,
(D) improving the efficiency of fuels combustion so as to decrease
atmospheric emissions, and
(E) producing synthetic or new fuels which, when used, result in
decreased atmospheric emissions.
( 2 ) provide for Federal grants to public or nonprofit agencies,
institutions, and organizations and to individuals, and contracts with public
or private agencies, institutions, or persons, for payment of (A) part of the
cost of acquiring, constructing, or otherwise securing for research and
development purposes, new or improved devices or methods having
industrywide application of preventing or controlling discharges into the air
of various types of pollutants; (B) part of the cost of programs to develop
low emission alternatives to the present internal combustion engine; (C) the
cost to purchase vehicles and vehicle engines, or portions thereof, for
research, development, and testing purposes; and (D) carrying out the other
provisions of this section, without regard to section 3324(a) and (b) of Title
31 and section 5 of Title 41: Provided, That research or demonstration
contracts awarded pursuant to this subsection (including contracts for
construction) may be made in accordance with, and subject to the limitations
provided with respect to research contracts of the military departments in,
section 2353 of Title 10, United States Code, except that the determination,
approval, and certification required thereby shall be made by the
Administrator: Provided further, That no grant may be made under this
paragraph in excess of $1,500,000;
(3) determine, by laboratory and pilot plant testing, the results of air
pollution research and studies in order to develop new or improved
processes and plant designs to the point where they can be demonstrated on
a large and practical scale;
(4) construct, operate, and maintain, or assist in meeting the cost of the
construction, operation, and maintenance of new or improved demonstration
plants or processes which have promise of accomplishing the purposes of
1709
this chapter.
(5) study new or improved methods for the recovery and marketing of
commercially valuable byproducts resulting from the removal of pollutants.
(b) Powers of Administrator in Establishing Research and Development
Programs. In carrying out the provisions of this section, the Administrator may
—
(1) conduct and accelerate research and development of cost-effective
instrumentation techniques to facilitate determination of quantity and quality
of air pollutant emissions, including, but not limited to, automotive
emissions;
(2) utilize, on a reimbursable basis, the facilities of existing Federal
scientific laboratories;
(3) establish and operate necessary facilities and test sites at which to
carry on the research, testing, development, and programming necessary to
effectuate the purposes of this section;
( 4 ) acquire secret processes, technical data, inventions, patent
applications, patents, licenses, and an interest in lands, plants, and facilities,
and other property or rights by purchase, license, lease, or donation; and
( 5) cause on-site inspections to be made of promising domestic and
foreign projects, and cooperate and participate in their development in
instances in which the purposes of the chapter will be served thereby.
(c) Clean Alternative Fuels. The Administrator shall conduct a research
program to identify, characterize, and predict air emissions related to the
production, distribution, storage, and use of clean alternative fuels to determine
the risks and benefits to human health and the environment relative to those from
using conventional gasoline and diesel fuels. The Administrator shall consult
with other Federal agencies to ensure coordination and to avoid duplication of
activities authorized under this subsection.
Leg.H. July 14, 1955, ch. 360 § 104; November 21, 1967, P.L. 90-148 § 2, 81 Stat.
487; December 5, 1969, P.L. 91-137, 83 Stat. 283; December 31, 1970, P.L. 91-604 §§
2(b), (c), 13(a), 15(c)(2), 84 Stat. 1676, 1677, 1709, 1713; April 9, 1973, P.L. 93-15 § 1(a),
87 Stat. 11; June 22, 1974, P.L. 93-319 § 13(a), 88 Stat. 265; November 15, 1990, P.L. 101-
549 § 901(d), 104 Stat. 2706.
SUBCHAPTER III
General Provisions
1710
Whenever the Attorney General determines, upon application of the
Administrator—
(1) that—
(A) in the implementation of the requirements of section 7411, 7412,
or 7521 of this title, a right under any United States letters patent, which
is being used or intended for public or commercial use and not
otherwise reasonably available, is necessary to enable any person
required to comply with such limitation to so comply, and
(B) there are no reasonable alternative methods to accomplish such
purpose, and
( 2 ) that the unavailability of such right may result in a substantial
lessening of competition or tendency to create a monopoly in any line of
commerce in any section of the country, the Attorney General may so certify
to a district court of the United States, which may issue an order requiring
the person who owns such patent to license it on such reasonable terms and
conditions as the court, after hearing, may determine. Such certification may
be made to the district court for the district in which the person owning the
patent resides, does business, or is found.
1711
LEAHY-SMITH AMERICA INVENTS ACT
PUBLIC LAW 112-29 [H.R. 1249]
SEPT. 16, 2011
112 P.L. 29; 125 Stat. 284; 2011 Enacted H.R. 1249; 112 Enacted H.R. 1249
BILL TRACKING REPORT: 112 Bill Tracking H.R. 1249
FULL TEXT VERSION(S) OF BILL: 112 H.R. 1249
An Act
To amend title 35, United States Code, to provide for patent reform.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
Sec. 1. Short Title; Table of Contents.

( a ) Short Title.—This Act may be cited as the “Leahy-Smith America
Invents Act”.
(b) Table of Contents.—The table of contents for this Act is as follows:
Sec. 2. Definitions.
In this Act:
( 1 ) Director.—The term “Director” means the Under Secretary of
Trademark Office.
( 2 ) Office.—The term “Office” means the United States Patent and
Trademark Office.
(3) Patent public advisory committee.—The term “Patent Public Advisory
Committee” means the Patent Public Advisory Committee established under
section 5(a) of title 35, United States Code.
(4) Trademark act of 1946.—The term “Trademark Act of 1946” means the
Act entitled “An Act to provide for the registration and protection of trademarks
used in commerce, to carry out the provisions of certain international
conventions, and for other purposes”, approved July 5, 1946 (15 U.S.C. 1051 et
seq.) (commonly referred to as the “Trademark Act of 1946” or the “Lanham
Act”).
1712
(5) Trademark public advisory committee.—The term “Trademark Public
Advisory Committee” means the Trademark Public Advisory Committee
established under section 5(a) of title 35, United States Code.
Sec. 3. First Inventor to File.

(a) Definitions.—Section 100 of title 35, United States Code, is amended—
(1) in subsection (e), by striking “or inter partes reexamination under
section 311”; and
(2) by adding at the end the following:
“(f) The term ‘inventor’ means the individual or, if a joint invention,
the individuals collectively who invented or discovered the subject
matter of the invention.
“(g) The terms ‘joint inventor’ and ‘coinventor’ mean any 1 of the
individuals who invented or discovered the subject matter of a joint
invention.
“(h) The term ‘joint research agreement’ means a written contract,
grant, or cooperative agreement entered into by 2 or more persons or
entities for the performance of experimental, developmental, or research
work in the field of the claimed invention.
“(i)
(1) The term ‘effective filing date’ for a claimed invention in a
patent or application for patent means—
“(A) if subparagraph (B) does not apply, the actual filing date
of the patent or the application for the patent containing a claim to
the invention; or
“(B) the filing date of the earliest application for which the
patent or application is entitled, as to such invention, to a right of
priority under section 119, 365(a), or 365(b) or to the benefit of
an earlier filing date under section 120, 121, or 365(c).
“( 2) The effective filing date for a claimed invention in an
application for reissue or reissued patent shall be determined by
deeming the claim to the invention to have been contained in the
patent for which reissue was sought.
“(j) The term ‘claimed invention’ means the subject matter defined
by a claim in a patent or an application for a patent.”.
(b) Conditions for Patentability.—
1713
(1) In general.—Section 102 of title 35, United States Code, is amended
to read as follows:
“§ 102. Conditions for patentability; novelty
“(a) Novelty; Prior Art.—A person shall be entitled to a patent
unless—
“(1) the claimed invention was patented, described in a printed
publication, or in public use, on sale, or otherwise available to the
public before the effective filing date of the claimed invention; or
“(2) the claimed invention was described in a patent issued under
section 151, or in an application for patent published or deemed
published under section 122(b), in which the patent or application,
as the case may be, names another inventor and was effectively filed
before the effective filing date of the claimed invention.
“(b) Exceptions.—
“(1) Disclosures made 1 year or less before the effective filing
date of the claimed invention.—A disclosure made 1 year or less
before the effective filing date of a claimed invention shall not be
prior art to the claimed invention under subsection (a)(1) if—
“(A) the disclosure was made by the inventor or joint inventor
or by another who obtained the subject matter disclosed directly
or indirectly from the inventor or a joint inventor; or
“(B) the subject matter disclosed had, before such disclosure,
been publicly disclosed by the inventor or a joint inventor or
another who obtained the subject matter disclosed directly or
indirectly from the inventor or a joint inventor.
“ ( 2 ) Disclosures appearing in applications and patents.—A
disclosure shall not be prior art to a claimed invention under
subsection (a)(2) if—
“(A) the subject matter disclosed was obtained directly or
indirectly from the inventor or a joint inventor;
“(B) the subject matter disclosed had, before such subject
matter was effectively filed under subsection (a)(2), been
publicly disclosed by the inventor or a joint inventor or another
who obtained the subject matter disclosed directly or indirectly
from the inventor or a joint inventor; or
“(C) the subject matter disclosed and the claimed invention,
not later than the effective filing date of the claimed invention,
1714
were owned by the same person or subject to an obligation of
assignment to the same person.
“ ( c ) Common Ownership Under Joint Research Agreements.—
Subject matter disclosed and a claimed invention shall be deemed to
have been owned by the same person or subject to an obligation of
assignment to the same person in applying the provisions of subsection
(b)(2)(C) if—
“(1) the subject matter disclosed was developed and the claimed
invention was made by, or on behalf of, 1 or more parties to a joint
research agreement that was in effect on or before the effective filing
date of the claimed invention;
“(2) the claimed invention was made as a result of activities
undertaken within the scope of the joint research agreement; and
“(3) the application for patent for the claimed invention discloses
or is amended to disclose the names of the parties to the joint
research agreement.
“(d) Patents and Published Applications Effective as Prior Art.—
For purposes of determining whether a patent or application for patent is
prior art to a claimed invention under subsection (a)(2), such patent or
application shall be considered to have been effectively filed, with
respect to any subject matter described in the patent or application—
“(1) if paragraph (2) does not apply, as of the actual filing date of
the patent or the application for patent; or
“(2) if the patent or application for patent is entitled to claim a
right of priority under section 119, 365(a), or 365(b), or to claim the
benefit of an earlier filing date under section 120, 121, or 365(c),
based upon 1 or more prior filed applications for patent, as of the
filing date of the earliest such application that describes the subject
matter.”.
(2) Continuity of intent under the create act.—The enactment of section
102(c) of title 35, United States Code, under paragraph (1) of this
subsection is done with the same intent to promote joint research activities
that was expressed, including in the legislative history, through the
enactment of the Cooperative Research and Technology Enhancement Act of
2004 (Public Law 108-453; the “CREATE Act”), the amendments of which
are stricken by subsection (c) of this section. The United States Patent and
Trademark Office shall administer section 102(c) of title 35, United States
Code, in a manner consistent with the legislative history of the CREATE
Act that was relevant to its administration by the United States Patent and
1715
Trademark Office.
(3) Conforming amendment.—The item relating to section 102 in the
table of sections for chapter 10 of title 35, United States Code, is amended
to read as follows:
“102. Conditions for patentability; novelty.”.
(c) Conditions for Patentability; Nonobvious Subject Matter.—Section 103
of title 35, United States Code, is amended to read as follows:
“§ 103. Conditions for patentability; non-obvious subject matter
“A patent for a claimed invention may not be obtained, notwithstanding
that the claimed invention is not identically disclosed as set forth in section
102, if the differences between the claimed invention and the prior art are
such that the claimed invention as a whole would have been obvious before
the effective filing date of the claimed invention to a person having ordinary
skill in the art to which the claimed invention pertains. Patentability shall
not be negated by the manner in which the invention was made.”.
(d) Repeal of Requirements for Inventions Made Abroad.—Section 104 of
title 35, United States Code, and the item relating to that section in the table of
sections for chapter 10 of title 35, United States Code, are repealed.
(e) Repeal of Statutory Invention Registration.—
(1) In general.—Section 157 of title 35, United States Code, and the
item relating to that section in the table of sections for chapter 14 of title 35,
United States Code, are repealed.
(2) Removal of cross references.—Section 111(b)(8) of title 35, United
States Code, is amended by striking “sections 115, 131, 135, and 157” and
inserting “sections 131 and 135”.
(3) Effective date.—The amendments made by this subsection shall take
effect upon the expiration of the 18-month period beginning on the date of
the enactment of this Act, and shall apply to any request for a statutory
invention registration filed on or after that effective date.
(f) Earlier Filing Date for Inventor and Joint Inventor.—Section 120 of title
35, United States Code, is amended by striking “which is filed by an inventor or
inventors named” and inserting “which names an inventor or joint inventor”.
(g) Conforming Amendments.—
(1) Right of priority.—Section 172 of title 35, United States Code, is
amended by striking “and the time specified in section 102(d)”.
1716
( 2 ) Limitation on remedies.—Section 287(c)(4) of title 35, United
States Code, is amended by striking “the earliest effective filing date of
which is prior to” and inserting “which has an effective filing date before”.
( 3 ) International application designating the United States: effect.
—Section 363 of title 35, United States Code, is amended by striking
“except as otherwise provided in section 102(e) of this title”.
(4) Publication of international application: effect.—Section 374 of title
35, United States Code, is amended by striking “sections 102(e) and
154(d)” and inserting “section 154(d)”.
( 5 ) Patent issued on international application: effect.—The second
sentence of section 375(a) of title 35, United States Code, is amended by
striking “Subject to section 102(e) of this title, such” and inserting “Such”.
(6) Limit on right of priority.—Section 119(a) of title 35, United States
Code, is amended by striking “but no patent shall be granted” and all that
follows through “one year prior to such filing”.
(7) Inventions made with federal assistance.—Section 202(c) of title 35,
United States Code, is amended—
(A) in paragraph (2)—
(i) by striking “publication, on sale, or public use,” and all that
follows through “obtained in the United States” and inserting “the 1-
year period referred to in section 102(b) would end before the end
of that 2-year period”; and
(ii) by striking “prior to the end of the statutory” and inserting
“before the end of that 1-year”; and
(B) in paragraph (3), by striking “any statutory bar date that may
occur under this title due to publication, on sale, or public use” and
inserting “the expiration of the 1-year period referred to in section
102(b)”.
(h) Derived Patents.—
to read as follows:
“§ 291. Derived Patents
“(a) In General.—The owner of a patent may have relief by civil
action against the owner of another patent that claims the same
invention and has an earlier effective filing date, if the invention
claimed in such other patent was derived from the inventor of the
1717
invention claimed in the patent owned by the person seeking relief
under this section.
“( b) Filing Limitation.—An action under this section may be
filed only before the end of the 1-year period beginning on the date
of the issuance of the first patent containing a claim to the allegedly
derived invention and naming an individual alleged to have derived
such invention as the inventor or joint inventor.”.
to read as follows:
“291. Derived patents.”.
(i) Derivation Proceedings.—Section 135 of title 35, United States Code, is
amended to read as follows:
“§ 135. Derivation proceedings
“(a) Institution of Proceeding.—An applicant for patent may file a
petition to institute a derivation proceeding in the Office. The petition
shall set forth with particularity the basis for finding that an inventor
named in an earlier application derived the claimed invention from an
inventor named in the petitioner’s application and, without authorization,
the earlier application claiming such invention was filed. Any such
petition may be filed only within the 1-year period beginning on the date
of the first publication of a claim to an invention that is the same or
substantially the same as the earlier application’s claim to the invention,
shall be made under oath, and shall be supported by substantial
evidence. Whenever the Director determines that a petition filed under
this subsection demonstrates that the standards for instituting a
derivation proceeding are met, the Director may institute a derivation
proceeding. The determination by the Director whether to institute a
derivation proceeding shall be final and nonappealable.
“ ( b ) Determination by Patent Trial and Appeal Board.—In a
derivation proceeding instituted under subsection (a), the Patent Trial
and Appeal Board shall determine whether an inventor named in the
earlier application derived the claimed invention from an inventor
named in the petitioner’s application and, without authorization, the
earlier application claiming such invention was filed. In appropriate
circumstances, the Patent Trial and Appeal Board may correct the
naming of the inventor in any application or patent at issue. The Director
shall prescribe regulations setting forth standards for the conduct of
derivation proceedings, including requiring parties to provide sufficient
1718
evidence to prove and rebut a claim of derivation.
“(c) Deferral of Decision.—The Patent Trial and Appeal Board may
defer action on a petition for a derivation proceeding until the expiration
of the 3-month period beginning on the date on which the Director issues
a patent that includes the claimed invention that is the subject of the
petition. The Patent Trial and Appeal Board also may defer action on a
petition for a derivation proceeding, or stay the proceeding after it has
been instituted, until the termination of a proceeding under chapter 30,
31, or 32 involving the patent of the earlier applicant.
“(d) Effect of Final Decision.—The final decision of the Patent Trial
and Appeal Board, if adverse to claims in an application for patent,
shall constitute the final refusal by the Office on those claims. The final
decision of the Patent Trial and Appeal Board, if adverse to claims in a
patent, shall, if no appeal or other review of the decision has been or
can be taken or had, constitute cancellation of those claims, and notice
of such cancellation shall be endorsed on copies of the patent distributed
after such cancellation.
“(e) Settlement.—Parties to a proceeding instituted under subsection
(a) may terminate the proceeding by filing a written statement reflecting
the agreement of the parties as to the correct inventors of the claimed
invention in dispute. Unless the Patent Trial and Appeal Board finds the
agreement to be inconsistent with the evidence of record, if any, it shall
take action consistent with the agreement. Any written settlement or
understanding of the parties shall be filed with the Director. At the
request of a party to the proceeding, the agreement or understanding
shall be treated as business confidential information, shall be kept
separate from the file of the involved patents or applications, and shall
be made available only to Government agencies on written request, or to
any person on a showing of good cause.
“(f) Arbitration.—Parties to a proceeding instituted under subsection
(a) may, within such time as may be specified by the Director by
regulation, determine such contest or any aspect thereof by arbitration.
Such arbitration shall be governed by the provisions of title 9, to the
extent such title is not inconsistent with this section. The parties shall
give notice of any arbitration award to the Director, and such award
shall, as between the parties to the arbitration, be dispositive of the
issues to which it relates. The arbitration award shall be unenforceable
until such notice is given. Nothing in this subsection shall preclude the
Director from determining the patentability of the claimed inventions
involved in the proceeding.”.
1719
(j) Elimination of References to Interferences.—
(1) Sections 134, 145, 146, 154, and 305 of title 35, United States Code,
are each amended by striking “Board of Patent Appeals and Interferences”
each place it appears and inserting “Patent Trial and Appeal Board”.
(2)
(A) Section 146 of title 35, United States Code, is amended—
( i ) by striking “an interference” and inserting “a derivation
proceeding”; and
(ii) by striking “the interference” and inserting “the derivation
proceeding”.
(B) The subparagraph heading for section 154(b)(1)(C) of title 35,
United States Code, is amended to read as follows: “(C) Guarantee of
adjustments for delays due to derivation proceedings, secrecy orders,
and appeals.—”.
(3) The section heading for section 134 of title 35, United States Code,
is amended to read as follows:
“§ 134. Appeal to the Patent Trial and Appeal Board”.
(4) The section heading for section 146 of title 35, United States Code,
is amended to read as follows:
“§ 146. Civil action in case of derivation proceeding”.
(5) The items relating to sections 134 and 135 in the table of sections for
chapter 12 of title 35, United States Code, are amended to read as follows:
“134. Appeal to the Patent Trial and Appeal Board.
“135. Derivation proceedings.”.
(6) The item relating to section 146 in the table of sections for chapter
13 of title 35, United States Code, is amended to read as follows:
“146. Civil action in case of derivation proceeding.”.
(k) Statute of Limitations.—
by inserting between the third and fourth sentences the following: “A
proceeding under this section shall be commenced not later than the earlier
of either the date that is 10 years after the date on which the misconduct
forming the basis for the proceeding occurred, or 1 year after the date on
which the misconduct forming the basis for the proceeding is made known to
1720
an officer or employee of the Office as prescribed in the regulations
established under section 2(b)(2)(D).”.
(2) Report to congress.—The Director shall provide on a biennial basis
to the Judiciary Committees of the Senate and House of Representatives a
report providing a short description of incidents made known to an officer
or employee of the Office as prescribed in the regulations established under
section 2(b)(2)(D) of title 35, United States Code, that reflect substantial
evidence of misconduct before the Office but for which the Office was
barred from commencing a proceeding under section 32 of title 35, United
States Code, by the time limitation established by the fourth sentence of that
section.
(3) Effective date.—The amendment made by paragraph (1) shall apply
in any case in which the time period for instituting a proceeding under
section 32 of title 35, United States Code, had not lapsed before the date of
the enactment of this Act.
(1) Small Business Study.—
(1) Definitions.—In this subsection—
(A) the term “Chief Counsel” means the Chief Counsel for Advocacy
of the Small Business Administration;
(B) the term “General Counsel” means the General Counsel of the
United States Patent and Trademark Office; and
(C) the term “small business concern” has the meaning given that
term under section 3 of the Small Business Act (15 U.S.C. 632).
(2) Study.—
( A ) In general.—The Chief Counsel, in consultation with the
General Counsel, shall conduct a study of the effects of eliminating the
use of dates of invention in determining whether an applicant is entitled
to a patent under title 35, United States Code.
(B) Areas of study.—The study conducted under subparagraph (A)
shall include examination of the effects of eliminating the use of
invention dates, including examining—
( i ) how the change would affect the ability of small business
concerns to obtain patents and their costs of obtaining patents;
(ii) whether the change would create, mitigate, or exacerbate any
disadvantages for applicants for patents that are small business
concerns relative to applicants for patents that are not small business
1721
concerns, and whether the change would create any advantages for
applicants for patents that are small business concerns relative to
applicants for patents that are not small business concerns;
( i i i ) the cost savings and other potential benefits to small
business concerns of the change; and
( i v) the feasibility and costs and benefits to small business
concerns of alternative means of determining whether an applicant is
entitled to a patent under title 35, United States Code.
(3) Report.—Not later than the date that is 1 year after the date of the
enactment of this Act, the Chief Counsel shall submit to the Committee on
Small Business and Entrepreneurship and the Committee on the Judiciary of
the Senate and the Committee on Small Business and the Committee on the
Judiciary of the House of Representatives a report on the results of the study
(m) Report on Prior User Rights.—
(1) In general.—Not later than the end of the 4-month period beginning
on the date of the enactment of this Act, the Director shall report, to the
Committee on the Judiciary of the Senate and the Committee on the Judiciary
of the House of Representatives, the findings and recommendations of the
Director on the operation of prior user rights in selected countries in the
industrialized world. The report shall include the following:
(A) A comparison between patent laws of the United States and the
laws of other industrialized countries, including members of the
European Union and Japan, Canada, and Australia.
(B) An analysis of the effect of prior user rights on innovation rates
in the selected countries.
(C) An analysis of the correlation, if any, between prior user rights
and start-up enterprises and the ability to attract venture capital to start
new companies.
(D) An analysis of the effect of prior user rights, if any, on small
businesses, universities, and individual inventors.
(E) An analysis of legal and constitutional issues, if any, that arise
from placing trade secret law in patent law.
(F) An analysis of whether the change to a first-to-file patent system
creates a particular need for prior user rights.
(2) Consultation with other agencies.—In preparing the report required
1722
under paragraph (1), the Director shall consult with the United States Trade
Representative, the Secretary of State, and the Attorney General.
(n) Effective Date.—
( 1 ) In general.—Except as otherwise provided in this section, the
amendments made by this section shall take effect upon the expiration of the
18-month period beginning on the date of the enactment of this Act, and shall
apply to any application for patent, and to any patent issuing thereon, that
contains or contained at any time—
(A) a claim to a claimed invention that has an effective filing date as
defined in section 100(i) of title 35, United States Code, that is on or
after the effective date described in this paragraph; or
(B) a specific reference under section 120, 121, or 365(c) of title
35, United States Code, to any patent or application that contains or
contained at any time such a claim.
( 2) Interfering patents.—The provisions of sections 102(g), 135, and
291 of title 35, United States Code, as in effect on the day before the
effective date set forth in paragraph (1) of this subsection, shall apply to
each claim of an application for patent, and any patent issued thereon, for
which the amendments made by this section also apply, if such application
or patent contains or contained at any time—
(A) a claim to an invention having an effective filing date as defined
in section 100(i) of title 35, United States Code, that occurs before the
effective date set forth in paragraph (1) of this subsection; or
(B) a specific reference under section 120, 121, or 365(c) of title
35, United States Code, to any patent or application that contains or
contained at any time such a claim.
(o) Sense of Congress.—It is the sense of the Congress that converting the
United States patent system from “first to invent” to a system of “first inventor to
file” will promote the progress of science and the useful arts by securing for
limited times to inventors the exclusive rights to their discoveries and provide
inventors with greater certainty regarding the scope of protection provided by
the grant of exclusive rights to their discoveries.
(p) Sense of Congress.—It is the sense of the Congress that converting the
United States patent system from “first to invent” to a system of “first inventor to
file” will improve the United States patent system and promote harmonization of
the United States patent system with the patent systems commonly used in nearly
all other countries throughout the world with whom the United States conducts
trade and thereby promote greater international uniformity and certainty in the
1723
procedures used for securing the exclusive rights of inventors to their
discoveries.
Sec. 4. Inventor’s Oath or Declaration.

(a) Inventor’s Oath or Declaration.—
to read as follows:
“§ 115. Inventor’s oath or declaration
“ ( a ) Naming the Inventor; Inventor’s Oath or Declaration.—An
application for patent that is filed under section 111(a) or commences
the national stage under section 371 shall include, or be amended to
include, the name of the inventor for any invention claimed in the
application. Except as otherwise provided in this section, each
individual who is the inventor or a joint inventor of a claimed invention
in an application for patent shall execute an oath or declaration in
connection with the application.
“(b) Required Statements.—An oath or declaration under subsection
(a) shall contain statements that—
“(1) the application was made or was authorized to be made by
the affiant or declarant; and
“(2) such individual believes himself or herself to be the original
inventor or an original joint inventor of a claimed invention in the
application.
“ ( c ) Additional Requirements.—The Director may specify
additional information relating to the inventor and the invention that is
required to be included in an oath or declaration under subsection (a).
“(d) Substitute Statement.—
“(1) In general.—In lieu of executing an oath or declaration under
subsection (a), the applicant for patent may provide a substitute
statement under the circumstances described in paragraph (2) and
such additional circumstances that the Director may specify by
regulation.
“ ( 2 ) Permitted circumstances.—A substitute statement under
paragraph (1) is permitted with respect to any individual who—
“(A) is unable to file the oath or declaration under subsection
(a) because the individual—
1724
“(i) is deceased;
“(ii) is under legal incapacity; or
“(iii) cannot be found or reached after diligent effort; or
“(B) is under an obligation to assign the invention but has
refused to make the oath or declaration required under subsection
(a).
“(3) Contents.—A substitute statement under this subsection shall
—
“ ( A ) identify the individual with respect to whom the
statement applies;
“(B) set forth the circumstances representing the permitted
basis for the filing of the substitute statement in lieu of the oath or
declaration under subsection (a); and
“ ( C ) contain any additional information, including any
showing, required by the Director.
“(e) Making Required Statements in Assignment of Record.—An
individual who is under an obligation of assignment of an application
for patent may include the required statements under subsections (b) and
(c) in the assignment executed by the individual, in lieu of filing such
statements separately.
“(f) Time for Filing.—A notice of allowance under section 151 may
be provided to an applicant for patent only if the applicant for patent has
filed each required oath or declaration under subsection (a) or has filed
a substitute statement under subsection (d) or recorded an assignment
meeting the requirements of subsection (e).
“(g) Earlier-Filed Application Containing Required Statements or
Substitute Statement.—
“(1) Exception.—The requirements under this section shall not
apply to an individual with respect to an application for patent in
which the individual is named as the inventor or a joint inventor and
who claims the benefit under section 120, 121, or 365(c) of the filing
of an earlier-filed application, if—
“ ( A) an oath or declaration meeting the requirements of
subsection (a) was executed by the individual and was filed in
connection with the earlier-filed application;
“ ( B ) a substitute statement meeting the requirements of
subsection (d) was filed in connection with the earlier filed
1725
application with respect to the individual; or
“(C) an assignment meeting the requirements of subsection (e)
was executed with respect to the earlier-filed application by the
individual and was recorded in connection with the earlier-filed
application.
“(2) Copies of oaths, declarations, statements, or assignments.—
Notwithstanding paragraph (1), the Director may require that a copy
of the executed oath or declaration, the substitute statement, or the
assignment filed in connection with the earlier-filed application be
included in the later-filed application.
“ ( h) Supplemental and Corrected Statements; Filing Additional
Statements.—
“(1) In general.—Any person making a statement required under
this section may withdraw, replace, or otherwise correct the
statement at any time. If a change is made in the naming of the
inventor requiring the filing of 1 or more additional statements under
this section, the Director shall establish regulations under which
such additional statements may be filed.
“(2) Supplemental statements not required.—If an individual has
executed an oath or declaration meeting the requirements of
subsection (a) or an assignment meeting the requirements of
subsection (e) with respect to an application for patent, the Director
may not thereafter require that individual to make any additional
oath, declaration, or other statement equivalent to those required by
this section in connection with the application for patent or any
patent issuing thereon.
“ ( 3 ) Savings clause.—A patent shall not be invalid or
unenforceable based upon the failure to comply with a requirement
under this section if the failure is remedied as provided under
paragraph (1).
“(i) Acknowledgment of Penalties.—Any declaration or statement
filed pursuant to this section shall contain an acknowledgment that any
willful false statement made in such declaration or statement is
punishable under section 1001 of title 18 by fine or imprisonment of not
more than 5 years, or both.”.
(2) Relationship to divisional applications.—Section 121 of title 35,
United States Code, is amended by striking “If a divisional application” and
all that follows through “inventor.”.
1726
(3) Requirements for nonprovisional applications.—Section 111(a) of
title 35, United States Code, is amended—
(A) in paragraph (2)(C), by striking “by the applicant” and inserting
“or declaration”;
(B) in the heading for paragraph (3), by inserting “or declaration”
after “and oath”; and
( C ) by inserting “or declaration” after “and oath” each place it
appears.
to read as follows:
“115. Inventor’s oath or declaration.”.
(b) Filing by Other Than Inventor.—
to read as follows:
“§ 118. Filing by other than inventor
“A person to whom the inventor has assigned or is under an
obligation to assign the invention may make an application for patent. A
person who otherwise shows sufficient proprietary interest in the matter
may make an application for patent on behalf of and as agent for the
inventor on proof of the pertinent facts and a showing that such action is
appropriate to preserve the rights of the parties. If the Director grants a
patent on an application filed under this section by a person other than
the inventor, the patent shall be granted to the real party in interest and
upon such notice to the inventor as the Director considers to be
sufficient.”.
( 2 ) Conforming amendment.—Section 251 of title 35, United States
Code, is amended in the third undesignated paragraph by inserting “or the
application for the original patent was filed by the assignee of the entire
interest” after “claims of the original patent”.
(c) Specification.—Section 112 of title 35, United States Code, is amended
—
(1) in the first undesignated paragraph—
(A) by striking “The specification” and inserting “(a) In General.—
The specification”; and
1727
(B) by striking “of carrying out his invention” and inserting “or joint
inventor of carrying out the invention”;
(2) in the second undesignated paragraph—
(A) by striking “The specification” and inserting “(b) Conclusion.—
The specification”; and
(B) by striking “applicant regards as his invention” and inserting
“inventor or a joint inventor regards as the invention”;
( 3 ) in the third undesignated paragraph, by striking “A claim” and
inserting “(c) Form.—A claim”;
( 4) in the fourth undesignated paragraph, by striking “Subject to the
following paragraph,” and inserting “(d) Reference in Dependent Forms.—
Subject to subsection (e),”;
( 5 ) in the fifth undesignated paragraph, by striking “A claim” and
inserting “(e) Reference in Multiple Dependent Form.—A claim”; and
(6) in the last undesignated paragraph, by striking “An element” and
inserting “(f) Element in Claim for a Combination.—An element”.
(d) Conforming Amendments.—
(1) Sections 111(b)(1)(A) of title 35, United States Code , is amended
by striking “the first paragraph of section 112 of this title” and inserting
“section 112(a)”.
(2) Section 111(b)(2) of title 35, United States Code , is amended by
striking “the second through fifth paragraphs of section 112,” and inserting
“subsections (b) through (e) of section 112,”.
(e) Effective Date.—The amendments made by this section shall take effect
upon the expiration of the 1-year period beginning on the date of the enactment
of this Act and shall apply to any patent application that is filed on or after that
effective date.
Sec. 5. Defense to Infringement Based on Prior

Commercial Use.
(a) In General.—Section 273 of title 35, United States Code, is amended to
read as follows:
“§ 273. Defense to infringement based on prior commercial use
“(a) In General.—A person shall be entitled to a defense under
section 282(b) with respect to subject matter consisting of a process, or
1728
consisting of a machine, manufacture, or composition of matter used in a
manufacturing or other commercial process, that would otherwise
infringe a claimed invention being asserted against the person if—
“(1) such person, acting in good faith, commercially used the
subject matter in the United States, either in connection with an
internal commercial use or an actual arm’s length sale or other arm’s
length commercial transfer of a useful end result of such commercial
use; and
“(2) such commercial use occurred at least 1 year before the
earlier of either—
“(A) the effective filing date of the claimed invention; or
“(B) the date on which the claimed invention was disclosed to
the public in a manner that qualified for the exception from prior
art under section 102(b).
“( b) Burden of Proof.—A person asserting a defense under this
section shall have the burden of establishing the defense by clear and
convincing evidence.
“(c) Additional Commercial Uses.—
“(1) Premarketing regulatory review.—Subject matter for which
commercial marketing or use is subject to a premarketing regulatory
review period during which the safety or efficacy of the subject
matter is established, including any period specified in section
156(g), shall be deemed to be commercially used for purposes of
subsection (a)(1) during such regulatory review period.
“(2) Nonprofit laboratory use.—A use of subject matter by a
nonprofit research laboratory or other nonprofit entity, such as a
university or hospital, for which the public is the intended
beneficiary, shall be deemed to be a commercial use for purposes of
subsection (a)(1), except that a defense under this section may be
asserted pursuant to this paragraph only for continued and
noncommercial use by and in the laboratory or other nonprofit entity.
“(d) Exhaustion of Rights.—Notwithstanding subsection (e)(1), the
sale or other disposition of a useful end result by a person entitled to
assert a defense under this section in connection with a patent with
respect to that useful end result shall exhaust the patent owner’s rights
under the patent to the extent that such rights would have been exhausted
had such sale or other disposition been made by the patent owner.
“(e) Limitations and Exceptions.—
1729
“(1) Personal defense.—
“ ( A) In general.—A defense under this section may be
asserted only by the person who performed or directed the
performance of the commercial use described in subsection (a),
or by an entity that controls, is controlled by, or is under common
control with such person.
“(B) Transfer of right.—Except for any transfer to the patent
owner, the right to assert a defense under this section shall not be
licensed or assigned or transferred to another person except as an
ancillary and subordinate part of a good-faith assignment or
transfer for other reasons of the entire enterprise or line of
business to which the defense relates.
“ ( C) Restriction on sites.—A defense under this section,
when acquired by a person as part of an assignment or transfer
described in subparagraph (B), may only be asserted for uses at
sites where the subject matter that would otherwise infringe a
claimed invention is in use before the later of the effective filing
date of the claimed invention or the date of the assignment or
transfer of such enterprise or line of business.
“(2) Derivation.—A person may not assert a defense under this
section if the subject matter on which the defense is based was
derived from the patentee or persons in privity with the patentee.
“(3) Not a general license.—The defense asserted by a person
under this section is not a general license under all claims of the
patent at issue, but extends only to the specific subject matter for
which it has been established that a commercial use that qualifies
under this section occurred, except that the defense shall also extend
to variations in the quantity or volume of use of the claimed subject
matter, and to improvements in the claimed subject matter that do not
infringe additional specifically claimed subject matter of the patent.
“ ( 4 ) Abandonment of use.—A person who has abandoned
commercial use (that qualifies under this section) of subject matter
may not rely on activities performed before the date of such
abandonment in establishing a defense under this section with
respect to actions taken on or after the date of such abandonment.
“(5) University exception.—
“(A) In general.—A person commercially using subject matter
to which subsection (a) applies may not assert a defense under
this section if the claimed invention with respect to which the
1730
defense is asserted was, at the time the invention was made,
owned or subject to an obligation of assignment to either an
institution of higher education (as defined in section 101(a) of the
Higher Education Act of 1965 (20 U.S.C. 1001(a)), or a
technology transfer organization whose primary purpose is to
facilitate the commercialization of technologies developed by
one or more such institutions of higher education.
“(B) Exception.—Subparagraph (A) shall not apply if any of
the activities required to reduce to practice the subject matter of
the claimed invention could not have been undertaken using funds
provided by the Federal Government.
“(f) Unreasonable Assertion of Defense.—If the defense under this
section is pleaded by a person who is found to infringe the patent and
who subsequently fails to demonstrate a reasonable basis for asserting
the defense, the court shall find the case exceptional for the purpose of
awarding attorney fees under section 285.
“(g) Invalidity.—A patent shall not be deemed to be invalid under
section 102 or 103 solely because a defense is raised or established
under this section.”.
(b) Conforming Amendment.—The item relating to section 273 in the table
of sections for chapter 28 of title 35, United States Code, is amended to read as
follows:
“273. Defense to infringement based on prior commercial use.”.
(c) Effective Date.—The amendments made by this section shall apply to
any patent issued on or after the date of the enactment of this Act.
Sec. 6. Post-Grant Review Proceedings.

(a) Inter Partes Review.—Chapter 31 of title 35, United States Code, is
amended to read as follows:
CHAPTER 31—INTER PARTES REVIEW
“Sec.
“311 Inter partes review.
“312 Petitions.
“313 Preliminary response to petition.
“314 Institution of inter partes review.
1731
“315 Relation to other proceedings or actions.
“316 Conduct of inter partes review.
“317 Settlement.
“318 Decision of the Board.
“319 Appeal.
“§ 311. Inter partes review
“(a) In General.—Subject to the provisions of this chapter, a
person who is not the owner of a patent may file with the Office a
petition to institute an inter partes review of the patent. The Director
shall establish, by regulation, fees to be paid by the person
requesting the review, in such amounts as the Director determines to
be reasonable, considering the aggregate costs of the review.
“(b) Scope.—A petitioner in an inter partes review may request
to cancel as unpatentable 1 or more claims of a patent only on a
ground that could be raised under section 102 or 103 and only on the
basis of prior art consisting of patents or printed publications.
“(c) Filing Deadline.—A petition for inter partes review shall be
filed after the later of either—
“(1) the date that is 9 months after the grant of a patent or
issuance of a reissue of a patent; or
“(2) if a post-grant review is instituted under chapter 32, the
date of the termination of such post-grant review.
“§ 312. Petitions
“(a) Requirements of Petition.—A petition filed under section
311 may be considered only if—
“ ( 1 ) the petition is accompanied by payment of the fee
established by the Director under section 311;
“(2) the petition identifies all real parties in interest;
“(3) the petition identifies, in writing and with particularity,
each claim challenged, the grounds on which the challenge to
each claim is based, and the evidence that supports the grounds
for the challenge to each claim, including—
“(A) copies of patents and printed publications that the
petitioner relies upon in support of the petition; and
“(B) affidavits or declarations of supporting evidence and
1732
opinions, if the petitioner relies on expert opinions;
“ ( 4 ) the petition provides such other information as the
Director may require by regulation; and
“(5) the petitioner provides copies of any of the documents
required under paragraphs (2), (3), and (4) to the patent owner
or, if applicable, the designated representative of the patent
owner.
“ ( b ) Public Availability.—As soon as practicable after the
receipt of a petition under section 311, the Director shall make the
petition available to the public.
“§ 313. Preliminary response to petition
“If an inter partes review petition is filed under section 311, the
patent owner shall have the right to file a preliminary response to the
petition, within a time period set by the Director, that sets forth reasons
why no inter partes review should be instituted based upon the failure of
the petition to meet any requirement of this chapter.
“§ 314. Institution of inter partes review
“(a) Threshold.—The Director may not authorize an inter partes
review to be instituted unless the Director determines that the
information presented in the petition filed under section 311 and any
response filed under section 313 shows that there is a reasonable
likelihood that the petitioner would prevail with respect to at least 1 of
the claims challenged in the petition.
“(b) Timing.—The Director shall determine whether to institute an
inter partes review under this chapter pursuant to a petition filed under
section 311 within 3 months after—
“ ( 1 ) receiving a preliminary response to the petition under
section 313; or
“(2) if no such preliminary response is filed, the last date on
which such response may be filed.
“(c) Notice.—The Director shall notify the petitioner and patent
owner, in writing, of the Director’s determination under subsection (a),
and shall make such notice available to the public as soon as is
practicable. Such notice shall include the date on which the review shall
commence.
“(d) No Appeal.—The determination by the Director whether to
institute an inter partes review under this section shall be final and
1733
nonappealable.
“§ 315. Relation to other proceedings or actions
“(a) Infringer’s Civil Action.—
“(1) Inter partes review barred by civil action.—An inter
partes review may not be instituted if, before the date on which
the petition for such a review is filed, the petitioner or real party
in interest filed a civil action challenging the validity of a claim
of the patent.
“(2) Stay of civil action.—If the petitioner or real party in
interest files a civil action challenging the validity of a claim of
the patent on or after the date on which the petitioner files a
petition for inter partes review of the patent, that civil action
shall be automatically stayed until either—
“(A) the patent owner moves the court to lift the stay;
“(B) the patent owner files a civil action or counterclaim
alleging that the petitioner or real party in interest has
infringed the patent; or
“(C) the petitioner or real party in interest moves the court
to dismiss the civil action.
“(3) Treatment of counterclaim.—A counterclaim challenging
the validity of a claim of a patent does not constitute a civil
action challenging the validity of a claim of a patent for purposes
of this subsection.
“(b) Patent Owner’s Action.—An inter partes review may not be
instituted if the petition requesting the proceeding is filed more than
1 year after the date on which the petitioner, real party in interest, or
privy of the petitioner is served with a complaint alleging
infringement of the patent. The time limitation set forth in the
preceding sentence shall not apply to a request for joinder under
subsection (c).
“(c) Joinder.—If the Director institutes an inter partes review,
the Director, in his or her discretion, may join as a party to that inter
partes review any person who properly files a petition under section
311 that the Director, after receiving a preliminary response under
section 313 or the expiration of the time for filing such a response,
determines warrants the institution of an inter partes review under
section 314.
“( d) Multiple Proceedings.—Notwithstanding sections 135(a),
1734
251, and 252, and chapter 30, during the pendency of an inter partes
review, if another proceeding or matter involving the patent is before
the Office, the Director may determine the manner in which the inter
partes review or other proceeding or matter may proceed, including
providing for stay, transfer, consolidation, or termination of any such
matter or proceeding.
“(e) Estoppel.—
“(1) Proceedings before the office.—The petitioner in an inter
partes review of a claim in a patent under this chapter that results
in a final written decision under section 318(a), or the real party
in interest or privy of the petitioner, may not request or maintain a
proceeding before the Office with respect to that claim on any
ground that the petitioner raised or reasonably could have raised
during that inter partes review.
“(2) Civil actions and other proceedings.—The petitioner in
an inter partes review of a claim in a patent under this chapter
that results in a final written decision under section 318(a), or the
real party in interest or privy of the petitioner, may not assert
either in a civil action arising in whole or in part under section
1338 of title 28 or in a proceeding before the International Trade
Commission under section 337 of the Tariff Act of 1930 that the
claim is invalid on any ground that the petitioner raised or
reasonably could have raised during that inter partes review.
“§ 316. Conduct of inter partes review
“(a) Regulations.—The Director shall prescribe regulations—
“ ( 1) providing that the file of any proceeding under this
chapter shall be made available to the public, except that any
petition or document filed with the intent that it be sealed shall, if
accompanied by a motion to seal, be treated as sealed pending
the outcome of the ruling on the motion;
“(2) setting forth the standards for the showing of sufficient
grounds to institute a review under section 314(a);
“ ( 3 ) establishing procedures for the submission of
supplemental information after the petition is filed;
“(4) establishing and governing inter partes review under this
chapter and the relationship of such review to other proceedings
under this title;
“(5) setting forth standards and procedures for discovery of
1735
relevant evidence, including that such discovery shall be limited
to—
“(A) the deposition of witnesses submitting affidavits or
declarations; and
“(B) what is otherwise necessary in the interest of justice;
“(6) prescribing sanctions for abuse of discovery, abuse of
process, or any other improper use of the proceeding, such as to
harass or to cause unnecessary delay or an unnecessary increase
in the cost of the proceeding;
“(7) providing for protective orders governing the exchange
and submission of confidential information;
“(8) providing for the filing by the patent owner of a response
to the petition under section 313 after an inter partes review has
been instituted, and requiring that the patent owner file with such
response, through affidavits or declarations, any additional
factual evidence and expert opinions on which the patent owner
relies in support of the response;
“(9) setting forth standards and procedures for allowing the
patent owner to move to amend the patent under subsection (d) to
cancel a challenged claim or propose a reasonable number of
substitute claims, and ensuring that any information submitted by
the patent owner in support of any amendment entered under
subsection (d) is made available to the public as part of the
prosecution history of the patent;
“(10) providing either party with the right to an oral hearing
as part of the proceeding;
“(11) requiring that the final determination in an inter partes
review be issued not later than 1 year after the date on which the
Director notices the institution of a review under this chapter,
except that the Director may, for good cause shown, extend the 1-
year period by not more than 6 months, and may adjust the time
periods in this paragraph in the case of joinder under section
315(c);
“( 12) setting a time period for requesting joinder under
section 315(c); and
“(13) providing the petitioner with at least 1 opportunity to
file written comments within a time period established by the
Director.
1736
“ ( b ) Considerations.—In prescribing regulations under this
section, the Director shall consider the effect of any such regulation
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to timely
complete proceedings instituted under this chapter.
“ ( c ) Patent Trial and Appeal Board.—The Patent Trial and
Appeal Board shall, in accordance with section 6, conduct each inter
partes review instituted under this chapter.
“(d) Amendment of the Patent.—
“ ( 1) In general.—During an inter partes review instituted
under this chapter, the patent owner may file 1 motion to amend
the patent in 1 or more of the following ways:
“(A) Cancel any challenged patent claim.
“( B) For each challenged claim, propose a reasonable
number of substitute claims.
“(2) Additional motions.—Additional motions to amend may
be permitted upon the joint request of the petitioner and the patent
owner to materially advance the settlement of a proceeding under
section 317, or as permitted by regulations prescribed by the
Director.
“(3) Scope of claims.—An amendment under this subsection
may not enlarge the scope of the claims of the patent or introduce
new matter
“(e) Evidentiary Standards.—In an inter partes review instituted
under this chapter, the petitioner shall have the burden of proving a
proposition of unpatentability by a preponderance of the evidence.
“§ 317. Settlement
“(a) In General.—An inter partes review instituted under this
chapter shall be terminated with respect to any petitioner upon the
joint request of the petitioner and the patent owner, unless the Office
has decided the merits of the proceeding before the request for
termination is filed. If the inter partes review is terminated with
respect to a petitioner under this section, no estoppel under section
315(e) shall attach to the petitioner, or to the real party in interest or
privy of the petitioner, on the basis of that petitioner’s institution of
that inter partes review. If no petitioner remains in the inter partes
review, the Office may terminate the review or proceed to a final
written decision under section 318(a).
1737
“(b) Agreements in Writing.—Any agreement or understanding
between the patent owner and a petitioner, including any collateral
agreements referred to in such agreement or understanding, made in
connection with, or in contemplation of, the termination of an inter
partes review under this section shall be in writing and a true copy
of such agreement or understanding shall be filed in the Office before
the termination of the inter partes review as between the parties. At
the request of a party to the proceeding, the agreement or
understanding shall be treated as business confidential information,
shall be kept separate from the file of the involved patents, and shall
be made available only to Federal Government agencies on written
request, or to any person on a showing of good cause.
“§ 318. Decision of the Board
“ ( a ) Final Written Decision.—If an inter partes review is
instituted and not dismissed under this chapter, the Patent Trial and
Appeal Board shall issue a final written decision with respect to the
patentability of any patent claim challenged by the petitioner and any
new claim added under section 316(d).
“(b) Certificate.—If the Patent Trial and Appeal Board issues a
final written decision under subsection (a) and the time for appeal
has expired or any appeal has terminated, the Director shall issue
and publish a certificate canceling any claim of the patent finally
determined to be unpatentable, confirming any claim of the patent
determined to be patentable, and incorporating in the patent by
operation of the certificate any new or amended claim determined to
be patentable.
“(c) Intervening Rights.—Any proposed amended or new claim
determined to be patentable and incorporated into a patent following
an inter partes review under this chapter shall have the same effect
as that specified in section 252 for reissued patents on the right of
any person who made, purchased, or used within the United States,
or imported into the United States, anything patented by such
proposed amended or new claim, or who made substantial
preparation therefor, before the issuance of a certificate under
subsection (b).
“ ( d ) Data on Length of Review.—The Office shall make
available to the public data describing the length of time between the
institution of, and the issuance of a final written decision under
subsection (a) for, each inter partes review.
“§ 319. Appeal
1738
“A party dissatisfied with the final written decision of the Patent
Trial and Appeal Board under section 318(a) may appeal the decision
pursuant to sections 141 through 144. Any party to the inter partes
review shall have the right to be a party to the appeal.”.
(b) Conforming Amendment.—The table of chapters for part III of title 35,
United States Code, is amended by striking the item relating to chapter 31 and
inserting the following:
“31. Inter Partes Review................311”.
(c) Regulations and Effective Date.—
(1) Regulations.—The Director shall, not later than the date that is 1
year after the date of the enactment of this Act, issue regulations to carry out
chapter 31 of title 35, United States Code, as amended by subsection (a) of
this section.
(2) Applicability.—
(A) In general.—The amendments made by subsection (a) shall take
effect upon the expiration of the 1-year period beginning on the date of
the enactment of this Act and shall apply to any patent issued before, on,
or after that effective date.
(B) Graduated implementation.—The Director may impose a limit
on the number of inter partes reviews that may be instituted under
chapter 31 of title 35, United States Code, during each of the first 4 1-
year periods in which the amendments made by subsection (a) are in
effect, if such number in each year equals or exceeds the number of inter
partes reexaminations that are ordered under chapter 31 of title 35,
United States Code, in the last fiscal year ending before the effective
date of the amendments made by subsection (a).
(3) Transition.—
( A ) In general.—Chapter 31 of title 35, United States Code, is
amended—
(i) in section 312—
(I) in subsection (a)—
(aa) in the first sentence, by striking “a substantial new
question of patentability affecting any claim of the patent
concerned is raised by the request,” and inserting “the
information presented in the request shows that there is a
reasonable likelihood that the requester would prevail with
respect to at least 1 of the claims challenged in the request,”;
1739
and
(bb) in the second sentence, by striking “The existence of a
substantial new question of patentability” and inserting “A
showing that there is a reasonable likelihood that the requester
would prevail with respect to at least 1 of the claims
challenged in the request”; and
(II) in subsection (c), in the second sentence, by striking “no
substantial new question of patentability has been raised,” and
inserting “the showing required by subsection (a) has not been
made,”; and
(ii) in section 313, by striking “a substantial new question of
patentability affecting a claim of the patent is raised” and inserting
“it has been shown that there is a reasonable likelihood that the
requester would prevail with respect to at least 1 of the claims
challenged in the request”.
(B) Application.—The amendments made by this paragraph—
(i) shall take effect on the date of the enactment of this Act; and
(ii) shall apply to requests for inter partes reexamination that are
filed on or after such date of enactment, but before the effective date
set forth in paragraph (2)(A) of this subsection.
(C) Continued applicability of prior provisions.—The provisions of
chapter 31 of title 35, United States Code, as amended by this
paragraph, shall continue to apply to requests for inter partes
reexamination that are filed before the effective date set forth in
paragraph (2)(A) as if subsection (a) had not been enacted.
(d) Post-Grant Review.—Part III of title 35, United States Code, is amended
by adding at the end the following:
CHAPTER 32—POST-GRANT REVIEW
“Sec.
“321. Post-grant review.
“322. Petitions.
“323. Preliminary response to petition.
“324. Institution of post-grant review.
“325. Relation to other proceedings or actions.
“326. Conduct of post-grant review.
1740
“327. Settlement.
“328. Decision of the Board.
“329. Appeal.
“§ 321. Post-grant review
“(a) In General.—Subject to the provisions of this chapter, a
person who is not the owner of a patent may file with the Office a
petition to institute a post-grant review of the patent. The Director
shall establish, by regulation, fees to be paid by the person
requesting the review, in such amounts as the Director determines to
be reasonable, considering the aggregate costs of the post-grant
review.
“(b) Scope.—A petitioner in a post-grant review may request to
cancel as unpatentable 1 or more claims of a patent on any ground
that could be raised under paragraph (2) or (3) of section 282(b)
(relating to invalidity of the patent or any claim).
“(c) Filing Deadline.—A petition for a post-grant review may
only be filed not later than the date that is 9 months after the date of
the grant of the patent or of the issuance of a reissue patent (as the
case may be).
“§ 322. Petitions
“(a) Requirements of Petition.—A petition filed under section
321 may be considered only if—
“ ( 1 ) the petition is accompanied by payment of the fee
established by the Director under section 321;
“(2) the petition identifies all real parties in interest;
“(3) the petition identifies, in writing and with particularity,
each claim challenged, the grounds on which the challenge to
each claim is based, and the evidence that supports the grounds
for the challenge to each claim, including—
“(A) copies of patents and printed publications that the
petitioner relies upon in support of the petition; and
“(B) affidavits or declarations of supporting evidence and
opinions, if the petitioner relies on other factual evidence or
on expert opinions;
“ ( 4 ) the petition provides such other information as the
Director may require by regulation; and
1741
“(5) the petitioner provides copies of any of the documents
required under paragraphs (2), (3), and (4) to the patent owner
or, if applicable, the designated representative of the patent
owner.
“ ( b ) Public Availability.—As soon as practicable after the
receipt of a petition under section 321, the Director shall make the
petition available to the public.
“§ 323. Preliminary response to petition
“If a post-grant review petition is filed under section 321, the patent
owner shall have the right to file a preliminary response to the petition,
within a time period set by the Director, that sets forth reasons why no
post-grant review should be instituted based upon the failure of the
petition to meet any requirement of this chapter.
“§ 324. Institution of post-grant review
“(a) Threshold.—The Director may not authorize a post-grant
review to be instituted unless the Director determines that the
information presented in the petition filed under section 321, if such
information is not rebutted, would demonstrate that it is more likely
than not that at least 1 of the claims challenged in the petition is
unpatentable.
“ ( b) Additional Grounds.—The determination required under
subsection (a) may also be satisfied by a showing that the petition
raises a novel or unsettled legal question that is important to other
patents or patent applications.
“(c) Timing.—The Director shall determine whether to institute a
post-grant review under this chapter pursuant to a petition filed
under section 321 within 3 months after—
“(1) receiving a preliminary response to the petition under
section 323; or
“(2) if no such preliminary response is filed, the last date on
which such response may be filed.
“(d) Notice.—The Director shall notify the petitioner and patent
owner, in writing, of the Director’s determination under subsection
(a) or (b), and shall make such notice available to the public as soon
as is practicable. Such notice shall include the date on which the
review shall commence.
“(e) No Appeal.—The determination by the Director whether to
1742
institute a post-grant review under this section shall be final and
nonappealable.
“§ 325. Relation to other proceedings or actions
“(a) Infringer’s Civil Action.—
“(1) Post-grant review barred by civil action.—A post-grant
review may not be instituted under this chapter if, before the date
on which the petition for such a review is filed, the petitioner or
real party in interest filed a civil action challenging the validity
of a claim of the patent.
“(2) Stay of civil action.—If the petitioner or real party in
interest files a civil action challenging the validity of a claim of
the patent on or after the date on which the petitioner files a
petition for post-grant review of the patent, that civil action shall
be automatically stayed until either—
“(A) the patent owner moves the court to lift the stay;
“(B) he patent owner files a civil action or counterclaim
alleging that the petitioner or real party in interest has
infringed the patent; or
“(C) the petitioner or real party in interest moves the court
to dismiss the civil action.
“(3) Treatment of counterclaim.—A counterclaim challenging
the validity of a claim of a patent does not constitute a civil
action challenging the validity of a claim of a patent for purposes
of this subsection.
“ ( b ) Preliminary Injunctions.—If a civil action alleging
infringement of a patent is filed within 3 months after the date on
which the patent is granted, the court may not stay its consideration
of the patent owner’s motion for a preliminary injunction against
infringement of the patent on the basis that a petition for post-grant
review has been filed under this chapter or that such a post-grant
review has been instituted under this chapter.
“(c) Joinder.—If more than 1 petition for a post-grant review
under this chapter is properly filed against the same patent and the
Director determines that more than 1 of these petitions warrants the
institution of a post-grant review under section 324, the Director may
consolidate such reviews into a single post-grant review.
“( d) Multiple Proceedings.—Notwithstanding sections 135(a),
251, and 252, and chapter 30, during the pendency of any post-grant
1743
review under this chapter, if another proceeding or matter involving
the patent is before the Office, the Director may determine the
manner in which the post-grant review or other proceeding or matter
may proceed, including providing for the stay, transfer,
consolidation, or termination of any such matter or proceeding. In
determining whether to institute or order a proceeding under this
chapter, chapter 30, or chapter 31, the Director may take into account
whether, and reject the petition or request because, the same or
substantially the same prior art or arguments previously were
presented to the Office.
“(e) Estoppel.—
“(1) Proceedings before the office.—The petitioner in a post-
grant review of a claim in a patent under this chapter that results
in a final written decision under section 328(a), or the real party
in interest or privy of the petitioner, may not request or maintain a
proceeding before the Office with respect to that claim on any
ground that the petitioner raised or reasonably could have raised
during that post-grant review.
“(2) Civil actions and other proceedings.—The petitioner in a
post-grant review of a claim in a patent under this chapter that
results in a final written decision under section 328(a), or the
real party in interest or privy of the petitioner, may not assert
either in a civil action arising in whole or in part under section
1338 of title 28 or in a proceeding before the International Trade
Commission under section 337 of the Tariff Act of 1930 that the
claim is invalid on any ground that the petitioner raised or
reasonably could have raised during that post-grant review.
“(f) Reissue Patents.—A post-grant review may not be instituted
under this chapter if the petition requests cancellation of a claim in a
reissue patent that is identical to or narrower than a claim in the
original patent from which the reissue patent was issued, and the
time limitations in section 321(c) would bar filing a petition for a
post-grant review for such original patent.
“§ 326. Conduct of post-grant review
“(a) Regulations.—The Director shall prescribe regulations—
“ ( 1) providing that the file of any proceeding under this
chapter shall be made available to the public, except that any
petition or document filed with the intent that it be sealed shall, if
accompanied by a motion to seal, be treated as sealed pending
1744
the outcome of the ruling on the motion;
“(2) setting forth the standards for the showing of sufficient
grounds to institute a review under subsections (a) and (b) of
section 324;
“ ( 3 ) establishing procedures for the submission of
supplemental information after the petition is filed;
“(4) establishing and governing a post-grant review under this
chapter and the relationship of such review to other proceedings
under this title;
“(5) setting forth standards and procedures for discovery of
relevant evidence, including that such discovery shall be limited
to evidence directly related to factual assertions advanced by
either party in the proceeding;
“(6) prescribing sanctions for abuse of discovery, abuse of
process, or any other improper use of the proceeding, such as to
harass or to cause unnecessary delay or an unnecessary increase
in the cost of the proceeding;
“(7) providing for protective orders governing the exchange
and submission of confidential information;
“(8) providing for the filing by the patent owner of a response
to the petition under section 323 after a post-grant review has
been instituted, and requiring that the patent owner file with such
response, through affidavits or declarations, any additional
factual evidence and expert opinions on which the patent owner
relies in support of the response;
“(9) setting forth standards and procedures for allowing the
patent owner to move to amend the patent under subsection (d) to
cancel a challenged claim or propose a reasonable number of
substitute claims, and ensuring that any information submitted by
the patent owner in support of any amendment entered under
subsection (d) is made available to the public as part of the
prosecution history of the patent;
“(10) providing either party with the right to an oral hearing
as part of the proceeding;
“(11) requiring that the final determination in any post-grant
review be issued not later than 1 year after the date on which the
Director notices the institution of a proceeding under this chapter,
except that the Director may, for good cause shown, extend the 1-
1745
year period by not more than 6 months, and may adjust the time
periods in this paragraph in the case of joinder under section
325(c); and
“(12) providing the petitioner with at least 1 opportunity to
file written comments within a time period established by the
Director.
“ ( b ) Considerations.—In prescribing regulations under this
section, the Director shall consider the effect of any such regulation
on the economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office to timely
complete proceedings instituted under this chapter.
“ ( c ) Patent Trial and Appeal Board.—The Patent Trial and
Appeal Board shall, in accordance with section 6, conduct each
post-grant review instituted under this chapter.
“(d) Amendment of the Patent.—
“(1) In general.—During a post-grant review instituted under
this chapter, the patent owner may file 1 motion to amend the
patent in 1 or more of the following ways:
“(A) Cancel any challenged patent claim.
“( B) For each challenged claim, propose a reasonable
number of substitute claims.
“(2) Additional motions.—Additional motions to amend may
be permitted upon the joint request of the petitioner and the patent
owner to materially advance the settlement of a proceeding under
section 327, or upon the request of the patent owner for good
cause shown.
“(3) Scope of claims.—An amendment under this subsection
may not enlarge the scope of the claims of the patent or introduce
new matter.
“(e) Evidentiary Standards.—In a post-grant review instituted
under this chapter, the petitioner shall have the burden of proving a
proposition of unpatentability by a preponderance of the evidence.
“§ 327. Settlement
“ ( a ) In General.—A post-grant review instituted under this
chapter shall be terminated with respect to any petitioner upon the
joint request of the petitioner and the patent owner, unless the Office
has decided the merits of the proceeding before the request for
1746
termination is filed. If the post-grant review is terminated with
respect to a petitioner under this section, no estoppel under section
325(e) shall attach to the petitioner, or to the real party in interest or
privy of the petitioner, on the basis of that petitioner’s institution of
that post-grant review. If no petitioner remains in the post-grant
review, the Office may terminate the post-grant review or proceed to
a final written decision under section 328(a).
“(b) Agreements in Writing.—Any agreement or understanding
between the patent owner and a petitioner, including any collateral
agreements referred to in such agreement or understanding, made in
connection with, or in contemplation of, the termination of a post-
grant review under this section shall be in writing, and a true copy of
such agreement or understanding shall be filed in the Office before
the termination of the post-grant review as between the parties. At
the request of a party to the proceeding, the agreement or
understanding shall be treated as business confidential information,
shall be kept separate from the file of the involved patents, and shall
be made available only to Federal Government agencies on written
request, or to any person on a showing of good cause.
“§ 328. Decision of the Board
“(a) Final Written Decision.—If a post-grant review is instituted
and not dismissed under this chapter, the Patent Trial and Appeal
Board shall issue a final written decision with respect to the
patentability of any patent claim challenged by the petitioner and any
new claim added under section 326(d).
“(b) Certificate.—If the Patent Trial and Appeal Board issues a
final written decision under subsection (a) and the time for appeal
has expired or any appeal has terminated, the Director shall issue
and publish a certificate canceling any claim of the patent finally
determined to be unpatentable, confirming any claim of the patent
determined to be patentable, and incorporating in the patent by
operation of the certificate any new or amended claim determined to
be patentable.
“(c) Intervening Rights.—Any proposed amended or new claim
determined to be patentable and incorporated into a patent following
a post-grant review under this chapter shall have the same effect as
that specified in section 252 of this title for reissued patents on the
right of any person who made, purchased, or used within the United
States, or imported into the United States, anything patented by such
proposed amended or new claim, or who made substantial
1747
preparation therefor, before the issuance of a certificate under
subsection (b).
“ ( d ) Data on Length of Review.—The Office shall make
available to the public data describing the length of time between the
institution of, and the issuance of a final written decision under
subsection (a) for, each post-grant review.
“§ 329. Appeal
“A party dissatisfied with the final written decision of the Patent
Trial and Appeal Board under section 328(a) may appeal the decision
pursuant to sections 141 through 144. Any party to the post-grant review
shall have the right to be a party to the appeal.”.
(e) Conforming Amendment.—The table of chapters for part III of title 35,
United States Code, is amended by adding at the end the following:
“32. Post-Grant Review ................321”.
(f) Regulations and Effective Date.—
(1) Regulations.—The Director shall, not later than the date that is 1
year after the date of the enactment of this Act, issue regulations to carry out
chapter 32 of title 35, United States Code, as added by subsection (d) of this
section.
(2) Applicability.—
(A) In general.—The amendments made by subsection (d) shall take
effect upon the expiration of the 1-year period beginning on the date of
the enactment of this Act and, except as provided in section 18 and in
paragraph (3), shall apply only to patents described in section 3(n)(1).
(B) Limitation.—The Director may impose a limit on the number of
post-grant reviews that may be instituted under chapter 32 of title 35,
United States Code, during each of the first 4 1-year periods in which
the amendments made by subsection (d) are in effect.
(3) Pending interferences.—
( A ) Procedures in general.—The Director shall determine, and
include in the regulations issued under paragraph (1), the procedures
under which an interference commenced before the effective date set
forth in paragraph (2)(A) is to proceed, including whether such
interference—
(i) is to be dismissed without prejudice to the filing of a petition
for a post-grant review under chapter 32 of title 35, United States
1748
Code; or
(ii) is to proceed as if this Act had not been enacted.
(B) Proceedings by patent trial and appeal board.—For purposes of
an interference that is commenced before the effective date set forth in
paragraph (2)(A), the Director may deem the Patent Trial and Appeal
Board to be the Board of Patent Appeals and Interferences, and may
allow the Patent Trial and Appeal Board to conduct any further
proceedings in that interference.
( C) Appeals.—The authorization to appeal or have remedy from
derivation proceedings in sections 141(d) and 146 of title 35, United
States Code, as amended by this Act, and the jurisdiction to entertain
appeals from derivation proceedings in section 1295(a)(4)(A) of title
28, United States Code, as amended by this Act, shall be deemed to
extend to any final decision in an interference that is commenced before
the effective date set forth in paragraph (2)(A) of this subsection and that
is not dismissed pursuant to this paragraph.
(g) Citation of Prior Art and Written Statements.—
to read as follows:
“§ 301. Citation of prior art and written statements
“(a) In General.—Any person at any time may cite to the Office
in writing—
“(1) prior art consisting of patents or printed publications
which that person believes to have a bearing on the patentability
of any claim of a particular patent; or
“( 2) statements of the patent owner filed in a proceeding
before a Federal court or the Office in which the patent owner
took a position on the scope of any claim of a particular patent.
“ ( b) Official File.—If the person citing prior art or written
statements pursuant to subsection (a) explains in writing the
pertinence and manner of applying the prior art or written statements
to at least 1 claim of the patent, the citation of the prior art or written
statements and the explanation thereof shall become a part of the
official file of the patent.
“ ( c ) Additional Information.—A party that submits a written
statement pursuant to subsection (a)(2) shall include any other
documents, pleadings, or evidence from the proceeding in which the
1749
statement was filed that addresses the written statement.
“ ( d) Limitations.—A written statement submitted pursuant to
subsection (a)(2), and additional information submitted pursuant to
subsection (c), shall not be considered by the Office for any purpose
other than to determine the proper meaning of a patent claim in a
proceeding that is ordered or instituted pursuant to section 304, 314,
or 324. If any such written statement or additional information is
subject to an applicable protective order, such statement or
information shall be redacted to exclude information that is subject
to that order.
“( e) Confidentiality.—Upon the written request of the person
citing prior art or written statements pursuant to subsection (a), that
person’s identity shall be excluded from the patent file and kept
confidential.”.
to read as follows:
“301. Citation of prior art and written statements.”.
(3) Effective date.—The amendments made by this subsection shall take
effect upon the expiration of the 1-year period beginning on the date of the
enactment of this Act and shall apply to any patent issued before, on, or after
that effective date.
(h) Reexamination.—
(1) Determination by director.—
(A) In general.—Section 303(a) of title 35, United States Code, is
amended by striking “section 301 of this title” and inserting “section 301
or 302”.
(B) Effective date.—The amendment made by this paragraph shall
take effect upon the expiration of the 1-year period beginning on the date
of the enactment of this Act and shall apply to any patent issued before,
on, or after that effective date.
(2) Appeal.—
( A) In general.—Section 306 of title 35, United States Code, is
amended by striking “145” and inserting “144”.
(B) Effective date.—The amendment made by this paragraph shall
take effect on the date of the enactment of this Act and shall apply to any
1750
appeal of a reexamination before the Board of Patent Appeals and
Interferences or the Patent Trial and Appeal Board that is pending on, or
brought on or after, the date of the enactment of this Act.
Sec. 7. Patent Trial and Appeal Board.

(a) Composition and Duties.—
(1) In general.—Section 6 of title 35, United States Code, is amended to
read as follows:
“§ 6. Patent Trial and Appeal Board
“(a) In General.—There shall be in the Office a Patent Trial and
Appeal Board. The Director, the Deputy Director, the Commissioner
for Patents, the Commissioner for Trademarks, and the
administrative patent judges shall constitute the Patent Trial and
Appeal Board. The administrative patent judges shall be persons of
competent legal knowledge and scientific ability who are appointed
by the Secretary, in consultation with the Director. Any reference in
any Federal law, Executive order, rule, regulation, or delegation of
authority, or any document of or pertaining to the Board of Patent
Appeals and Interferences is deemed to refer to the Patent Trial and
Appeal Board.
“(b) Duties.—The Patent Trial and Appeal Board shall—
“ ( 1 ) on written appeal of an applicant, review adverse
decisions of examiners upon applications for patents pursuant to
section 134(a);
“(2) review appeals of reexaminations pursuant to section
134(b);
“(3) conduct derivation proceedings pursuant to section 135;
and
“ ( 4) conduct inter partes reviews and post-grant reviews
pursuant to chapters 31 and 32.
“(c) 3-Member Panels.—Each appeal, derivation proceeding, post-
grant review, and inter partes review shall be heard by at least 3
members of the Patent Trial and Appeal Board, who shall be designated
by the Director. Only the Patent Trial and Appeal Board may grant
rehearings.
“ ( d ) Treatment of Prior Appointments.—The Secretary of
Commerce may, in the Secretary’s discretion, deem the appointment of
1751
an administrative patent judge who, before the date of the enactment of
this subsection, held office pursuant to an appointment by the Director to
take effect on the date on which the Director initially appointed the
administrative patent judge. It shall be a defense to a challenge to the
appointment of an administrative patent judge on the basis of the judge’s
having been originally appointed by the Director that the administrative
patent judge so appointed was acting as a de facto officer.”.
(2) Conforming amendment.—The item relating to section 6 in the table
of sections for chapter 1 of title 35, United States Code, is amended to read
as follows:
“6. Patent Trial and Appeal Board.”.
(b) Administrative Appeals.—Section 134 of title 35, United States Code,
is amended—
(1) in subsection (b), by striking “any reexamination proceeding” and
inserting “a reexamination”; and
(2) by striking subsection (c).
(c) Circuit Appeals.—
to read as follows:
“§ 141. Appeal to Court of Appeals for the Federal Circuit
“(a) Examinations.—An applicant who is dissatisfied with the
final decision in an appeal to the Patent Trial and Appeal Board
under section 134(a) may appeal the Board’s decision to the United
States Court of Appeals for the Federal Circuit. By filing such an
appeal, the applicant waives his or her right to proceed under
section 145.
“(b) Reexaminations.—A patent owner who is dissatisfied with
the final decision in an appeal of a reexamination to the Patent Trial
and Appeal Board under section 134(b) may appeal the Board’s
decision only to the United States Court of Appeals for the Federal
Circuit.
“(c) Post-Grant and Inter Partes Reviews.—A party to an inter
partes review or a post-grant review who is dissatisfied with the
final written decision of the Patent Trial and Appeal Board under
section 318(a) or 328(a) (as the case may be) may appeal the
Board’s decision only to the United States Court of Appeals for the
Federal Circuit.
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“ ( d ) Derivation Proceedings.—A party to a derivation
proceeding who is dissatisfied with the final decision of the Patent
Trial and Appeal Board in the proceeding may appeal the decision
to the United States Court of Appeals for the Federal Circuit, but
such appeal shall be dismissed if any adverse party to such
derivation proceeding, within 20 days after the appellant has filed
notice of appeal in accordance with section 142, files notice with the
Director that the party elects to have all further proceedings
conducted as provided in section 146. If the appellant does not,
within 30 days after the filing of such notice by the adverse party,
file a civil action under section 146, the Board’s decision shall
govern the further proceedings in the case.”.
( 2 ) Jurisdiction.—Section 1295(a)(4)(A) of title 28, United States
Code, is amended to read as follows:
“(A) the Patent Trial and Appeal Board of the United States Patent
and Trademark Office with respect to a patent application, derivation
proceeding, reexamination, post-grant review, or inter partes review
under title 35, at the instance of a party who exercised that party’s right
to participate in the applicable proceeding before or appeal to the
Board, except that an applicant or a party to a derivation proceeding
may also have remedy by civil action pursuant to section 145 or 146 of
title 35; an appeal under this subparagraph of a decision of the Board
with respect to an application or derivation proceeding shall waive the
right of such applicant or party to proceed under section 145 or 146 of
title 35;”.
( 3 ) Proceedings on appeal.—Section 143 of title 35, United States
Code, is amended—
(A) by striking the third sentence and inserting the following: “In an
ex parte case, the Director shall submit to the court in writing the
grounds for the decision of the Patent and Trademark Office, addressing
all of the issues raised in the appeal. The Director shall have the right to
intervene in an appeal from a decision entered by the Patent Trial and
Appeal Board in a derivation proceeding under section 135 or in an
inter partes or post-grant review under chapter 31 or 32.”; and
(B) by striking the last sentence.
(d) Conforming Amendments.—
(1) Atomic energy act of 1954.—Section 152 of the Atomic Energy Act
of 1954 (42 U.S.C. 2182) is amended in the third undesignated paragraph—
1753
(A) by striking “Board of Patent Appeals and Interferences” each
place it appears and inserting “Patent Trial and Appeal Board”; and
( B ) by inserting “and derivation” after “established for
interference”.
(2) Title 51.—Section 20135 of title 51, United States Code, is amended
—
(A) in subsections (e) and (f), by striking “Board of Patent Appeals
and Interferences” each place it appears and inserting “Patent Trial and
Appeal Board”; and
( B ) in subsection (e), by inserting “and derivation” after
“established for interference”.
(e) Effective Date.—The amendments made by this section shall take effect
of this Act and shall apply to proceedings commenced on or after that effective
date, except that—
(1) the extension of jurisdiction to the United States Court of Appeals
for the Federal Circuit to entertain appeals of decisions of the Patent Trial
and Appeal Board in reexaminations under the amendment made by
subsection (c)(2) shall be deemed to take effect on the date of the enactment
of this Act and shall extend to any decision of the Board of Patent Appeals
and Interferences with respect to a reexamination that is entered before, on,
or after the date of the enactment of this Act;
(2) the provisions of sections 6, 134, and 141 of title 35, United States
Code, as in effect on the day before the effective date of the amendments
made by this section shall continue to apply to inter partes reexaminations
that are requested under section 311 of such title before such effective date;
(3) the Patent Trial and Appeal Board may be deemed to be the Board
of Patent Appeals and Interferences for purposes of appeals of inter partes
reexaminations that are requested under section 311 of title 35, United
States Code, before the effective date of the amendments made by this
section; and
(4) the Director’s right under the fourth sentence of section 143 of title
35, United States Code, as amended by subsection (c)(3) of this section, to
intervene in an appeal from a decision entered by the Patent Trial and
Appeal Board shall be deemed to extend to inter partes reexaminations that
are requested under section 311 of such title before the effective date of the
amendments made by this section.
1754
Sec. 8. Preissuance Submissions by Third Parties.
(a) In General.—Section 122 of title 35, United States Code, is amended by
adding at the end the following:
“(e) Preissuance Submissions by Third Parties.—
“(1) In general.—Any third party may submit for consideration and
inclusion in the record of a patent application, any patent, published
patent application, or other printed publication of potential relevance to
the examination of the application, if such submission is made in writing
before the earlier of—
“(A) the date a notice of allowance under section 151 is given or
mailed in the application for patent; or
“(B) the later of—
“(i) 6 months after the date on which the application for patent
is first published under section 122 by the Office, or
“(ii) the date of the first rejection under section 132 of any
claim by the examiner during the examination of the application
for patent.
“(2) Other requirements.—Any submission under paragraph (1) shall
—
“(A) set forth a concise description of the asserted relevance of
each submitted document;
“(B) be accompanied by such fee as the Director may prescribe;
and
“(C) include a statement by the person making such submission
affirming that the submission was made in compliance with this
section.”.
(b) Effective Date.—The amendments made by this section shall take effect
of this Act and shall apply to any patent application filed before, on, or after that
effective date.
Sec. 9. Venue.
( a ) Technical Amendments Relating to Venue.— Sections 32, 145, 146,
154(b)(4)(A), and 293 of title 35, United States Code, and section 21(b)(4) of
the Trademark Act of 1946 ( 15 U.S.C. 1071(b)(4)), are each amended by
1755
striking “United States District Court for the District of Columbia” each place
that term appears and inserting “United States District Court for the Eastern
District of Virginia”.
on the date of the enactment of this Act and shall apply to any civil action
commenced on or after that date.
Sec. 10. Fee Setting Authority.

(a) Fee Setting.—
( 1 ) In general.—The Director may set or adjust by rule any fee
established, authorized, or charged under title 35, United States Code, or the
Trademark Act of 1946 ( 15 U.S.C. 1051 et seq.), for any services
performed by or materials furnished by, the Office, subject to paragraph (2).
( 2 ) Fees to recover costs.—Fees may be set or adjusted under
paragraph (1) only to recover the aggregate estimated costs to the Office for
processing, activities, services, and materials relating to patents (in the case
of patent fees) and trademarks (in the case of trademark fees), including
administrative costs of the Office with respect to such patent or trademark
fees (as the case may be).
(b) Small and Micro Entities.—The fees set or adjusted under subsection
(a) for filing, searching, examining, issuing, appealing, and maintaining patent
applications and patents shall be reduced by 50 percent with respect to the
application of such fees to any small entity that qualifies for reduced fees under
section 41(h)(1) of title 35, United States Code, and shall be reduced by 75
percent with respect to the application of such fees to any micro entity as
defined in section 123 of that title (as added by subsection (g) of this section).
(c) Reduction of Fees in Certain Fiscal Years.—In each fiscal year, the
Director—
(1) shall consult with the Patent Public Advisory Committee and the
Trademark Public Advisory Committee on the advisability of reducing any
fees described in subsection (a); and
(2). after the consultation required under paragraph (1), may reduce such
fees
(d) Role of the Public Advisory Committee.—The Director shall—
( 1) not less than 45 days before publishing any proposed fee under
subsection (a) in the Federal Register, submit the proposed fee to the Patent
Public Advisory Committee or the Trademark Public Advisory Committee,
1756
or both, as appropriate;
(2)
(A) provide the relevant advisory committee described in paragraph
(1) a 30-day period following the submission of any proposed fee, in
which to deliberate, consider, and comment on such proposal;
(B) require that, during that 30-day period, the relevant advisory
committee hold a public hearing relating to such proposal; and
(C) assist the relevant advisory committee in carrying out that public
hearing, including by offering the use of the resources of the Office to
notify and promote the hearing to the public and interested stakeholders;
(3) require the relevant advisory committee to make available to the
public a written report setting forth in detail the comments, advice, and
recommendations of the committee regarding the proposed fee; and
(4) consider and analyze any comments, advice, or recommendations
received from the relevant advisory committee before setting or adjusting
(as the case may be) the fee.
(e) Publication in the Federal Register.—
(1) Publication and rationale.—The Director shall—
( A ) publish any proposed fee change under this section in the
Federal Register;
(B) include, in such publication, the specific rationale and purpose
for the proposal, including the possible expectations or benefits
resulting from the proposed change; and
(C) notify, through the Chair and Ranking Member of the Committees
on the Judiciary of the Senate and the House of Representatives, the
Congress of the proposed change not later than the date on which the
proposed change is published under subparagraph (A).
( 2 ) Public comment period.—The Director shall, in the publication
under paragraph (1), provide the public a period of not less than 45 days in
which to submit comments on the proposed change in fees.
(3) Publication of final rule.—The final rule setting or adjusting a fee
under this section shall be published in the Federal Register and in the
Official Gazette of the Patent and Trademark Office
( 4 ) Congressional comment period.—A fee set or adjusted under
subsection (a) may not become effective—
1757
(A) before the end of the 45-day period beginning on the day after
the date on which the Director publishes the final rule adjusting or
setting the fee under paragraph (3); or
(B) if a law is enacted disapproving such fee.
(5) Rule of construction.—Rules prescribed under this section shall not
diminish—
( A) the rights of an applicant for a patent under title 35, United
States Code, or for a mark under the Trademark Act of 1946; or
(B) any rights under a ratified treaty.
( f ) Retention of Authority.—The Director retains the authority under
subsection (a) to set or adjust fees only during such period as the Patent and
Trademark Office remains an agency within the Department of Commerce.
(g) Micro Entity Defined.—
(1) In general.—Chapter 11 of title 35, United States Code, is amended
by adding at the end the following new section:
“§ 123. Micro entity defined
“( a) In General.—For purposes of this title, the term ‘micro
entity’ means an applicant who makes a certification that the
applicant—
“( 1) qualifies as a small entity, as defined in regulations
issued by the Director;
“( 2) has not been named as an inventor on more than 4
previously filed patent applications, other than applications filed
in another country, provisional applications under section 111(b),
or international applications filed under the treaty defined in
section 351(a) for which the basic national fee under section
41(a) was not paid;
“(3) did not, in the calendar year preceding the calendar year
in which the applicable fee is being paid, have a gross income, as
defined in section 61(a) of the Internal Revenue Code of 1986,
exceeding 3 times the median household income for that
preceding calendar year, as most recently reported by the Bureau
of the Census; and
“(4) has not assigned, granted, or conveyed, and is not under
an obligation by contract or law to assign, grant, or convey, a
license or other ownership interest in the application concerned
1758
to an entity that, in the calendar year preceding the calendar year
in which the applicable fee is being paid, had a gross income, as
defined in section 61(a) of the Internal Revenue Code of 1986,
exceeding 3 times the median household income for that
preceding calendar year, as most recently reported by the Bureau
of the Census.
“ ( b ) Applications Resulting From Prior Employment.—An
applicant is not considered to be named on a previously filed
application for purposes of subsection (a)(2) if the applicant has
assigned, or is under an obligation by contract or law to assign, all
ownership rights in the application as the result of the applicant’s
previous employment.
“ ( c ) Foreign Currency Exchange Rate.—If an applicant’s or
entity’s gross income in the preceding calendar year is not in United
States dollars, the average currency exchange rate, as reported by the
Internal Revenue Service, during that calendar year shall be used to
determine whether the applicant’s or entity’s gross income exceeds
the threshold specified in paragraphs (3) or (4) of subsection (a).
“ ( d) Institutions of Higher Education.—For purposes of this
section, a micro entity shall include an applicant who certifies that—
“ ( 1 ) the applicant’s employer, from which the applicant
obtains the majority of the applicant’s income, is an institution of
higher education as defined in section 101(a) of the Higher
Education Act of 1965 (20 U.S.C. 1001(a)); or
“(2) the applicant has assigned, granted, conveyed, or is under
an obligation by contract or law, to assign, grant, or convey, a
license or other ownership interest in the particular applications
to such an institution of higher education.
“(e) Director’s Authority.—In addition to the limits imposed by
this section, the Director may, in the Director’s discretion, impose
income limits, annual filing limits, or other limits on who may
qualify as a micro entity pursuant to this section if the Director
determines that such additional limits are reasonably necessary to
avoid an undue impact on other patent applicants or owners or are
otherwise reasonably necessary and appropriate. At least 3 months
before any limits proposed to be imposed pursuant to this subsection
take effect, the Director shall inform the Committee on the Judiciary
of the House of Representatives and the Committee on the Judiciary
of the Senate of any such proposed limits.”.
1759
( 2 ) Conforming amendment.—Chapter 11 of title 35, United States
Code, is amended by adding at the end the following new item:
“123. Micro entity defined.”.
(h) Electronic Filing Incentive.—
(1) In general.—Notwithstanding any other provision of this section,
an additional fee of $400 shall be established for each application for an
original patent, except for a design, plant, or provisional application,
that is not filed by electronic means as prescribed by the Director. The
fee established by this subsection shall be reduced by 50 percent for
small entities that qualify for reduced fees under section 41(h)(1) of title
35, United States Code. All fees paid under this subsection shall be
deposited in the Treasury as an offsetting receipt that shall not be
available for obligation or expenditure.
(2) Effective date.—This subsection shall take effect upon the expiration
of the 60-day period beginning on the date of the enactment of this Act.
(i) Effective Date; Sunset.—
(1) Effective date.—Except as provided in subsection (h), this section
and the amendments made by this section shall take effect on the date of the
enactment of this Act.
(2) Sunset.—The authority of the Director to set or adjust any fee under
subsection (a) shall terminate upon the expiration of the 7-year period
beginning on the date of the enactment of this Act.
(3) Prior regulations not affected.—The termination of authority under
this subsection shall not affect any regulations issued under this section
before the effective date of such termination or any rulemaking proceeding
for the issuance of regulations under this section that is pending on such
date.
Sec. 11. Fees for Patent Services.

(a) General Patent Services.—Subsections (a) and (b) of section 41 of title
35, United States Code, are amended to read as follows:
“(a) General Fees.—The Director shall charge the following fees:
“(1) Filing and basic national fees.—
“(A) On filing each application for an original patent, except for
design, plant, or provisional applications, $330.
“(B) On filing each application for an original design patent,
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$220.
“(C) On filing each application for an original plant patent, $220.
“ ( D) On filing each provisional application for an original
patent, $220.
“(E) On filing each application for the reissue of a patent, $330.
“(F) The basic national fee for each international application
filed under the treaty defined in section 351(a) entering the national
stage under section 371, $330.
“( G) In addition, excluding any sequence listing or computer
program listing filed in an electronic medium as prescribed by the
Director, for any application the specification and drawings of
which exceed 100 sheets of paper (or equivalent as prescribed by
the Director if filed in an electronic medium), $270 for each
additional 50 sheets of paper (or equivalent as prescribed by the
Director if filed in an electronic medium) or fraction thereof.
“(2) Excess claims fees.—
“(A) In general.—In addition to the fee specified in paragraph (1)
—
“(i) on filing or on presentation at any other time, $220 for
each claim in independent form in excess of 3;
“(ii) on filing or on presentation at any other time, $52 for
each claim (whether dependent or independent) in excess of 20;
and
“(iii) for each application containing a multiple dependent
claim, $390.
“(B) Multiple dependent claims.—For the purpose of computing
fees under subparagraph (A), a multiple dependent claim referred to
in section 112 or any claim depending therefrom shall be considered
as separate dependent claims in accordance with the number of
claims to which reference is made.
“ ( C ) Refunds; errors in payment.—The Director may by
regulation provide for a refund of any part of the fee specified in
subparagraph (A) for any claim that is canceled before an
examination on the merits, as prescribed by the Director, has been
made of the application under section 131. Errors in payment of the
additional fees under this paragraph may be rectified in accordance
with regulations prescribed by the Director.
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“(3) Examination fees.—
“(A) In general.—
“ ( i ) For examination of each application for an original
patent, except for design, plant, provisional, or international
applications, $220.
“(ii) For examination of each application for an original
design patent, $140.
“(iii) For examination of each application for an original
plant patent, $170.
“ ( i v ) For examination of the national stage of each
international application, $220.
“(v) For examination of each application for the reissue of a
patent, $650.
“(B) Applicability of other fee provisions.—The provisions of
paragraphs (3) and (4) of section 111(a) relating to the payment of
the fee for filing the application shall apply to the payment of the fee
specified in subparagraph (A) with respect to an application filed
under section 111(a). The provisions of section 371(d) relating to
the payment of the national fee shall apply to the payment of the fee
specified in subparagraph (A) with respect to an international
application.
“(4) Issue fees.—
“(A) For issuing each original patent, except for design or plant
patents, $1,510.
“(B) For issuing each original design patent, $860.
“(C) For issuing each original plant patent, $1,190.
“(D) For issuing each reissue patent, $1,510.
“(5) Disclaimer fee.—On filing each disclaimer, $140.
“(6) Appeal fees.—
“(A) On filing an appeal from the examiner to the Patent Trial
and Appeal Board, $540.
“(B) In addition, on filing a brief in support of the appeal, $540,
and on requesting an oral hearing in the appeal before the Patent
Trial and Appeal Board, $1,080.
“(7) Revival fees.—On filing each petition for the revival of an
1762
unintentionally abandoned application for a patent, for the
unintentionally delayed payment of the fee for issuing each patent, or for
an unintentionally delayed response by the patent owner in any
reexamination proceeding, $1,620, unless the petition is filed under
section 133 or 151, in which case the fee shall be $540.
“(8) Extension fees.—For petitions for 1-month extensions of time to
take actions required by the Director in an application—
“(A) on filing a first petition, $130;
“(B) on filing a second petition, $360; and
“(C) on filing a third or subsequent petition, $620.
“(b) Maintenance Fees.—
“(1) In general.—The Director shall charge the following fees for
maintaining in force all patents based on applications filed on or after
December 12, 1980:
“(A) Three years and 6 months after grant, $980.
“(B) Seven years and 6 months after grant, $2,480.
“(C) Eleven years and 6 months after grant, $4,110.
“(2) Grace period; surcharge.—Unless payment of the applicable
maintenance fee under paragraph (1) is received in the Office on or
before the date the fee is due or within a grace period of 6 months
thereafter, the patent shall expire as of the end of such grace period. The
Director may require the payment of a surcharge as a condition of
accepting within such 6-month grace period the payment of an
applicable maintenance fee.
“(3) No maintenance fee for design or plant patent.—No fee may be
established for maintaining a design or plant patent in force.”.
(b) Delays in Payment.—Subsection (c) of section 41 of title 35, United
States Code, is amended—
(1) by striking “(c)(1) The Director” and inserting:
“(c) Delays in Payment of Maintenance Fees.—
“(1) Acceptance.—The Director”; and
(2) by striking “(2) A patent” and inserting:
“(2) Effect on rights of others.—A patent”.
(c) Patent Search Fees.—Subsection (d) of section 41 of title 35, United
1763
States Code, is amended to read as follows:
“(d) Patent Search and Other Fees.—
“(1) Patent search fees.—
“(A) In general.—The Director shall charge the fees specified
under subparagraph (B) for the search of each application for a
patent, except for provisional applications. The Director shall adjust
the fees charged under this paragraph to ensure that the fees recover
an amount not to exceed the estimated average cost to the Office of
searching applications for patent by Office personnel.
“(B) Specific fees.—The fees referred to in subparagraph (A)
are—
“(i) $540 for each application for an original patent, except
for design, plant, provisional, or international applications;
“(ii) $100 for each application for an original design patent;
“(iii) $330 for each application for an original plant patent;
“ ( i v ) $540 for the national stage of each international
application; and
“(v) $540 for each application for the reissue of a patent.
“ ( C ) Applicability of other provisions.—The provisions of
paragraphs (3) and (4) of section 111(a) relating to the payment of
the fee for filing the application shall apply to the payment of the fee
specified in this paragraph with respect to an application filed under
section 111(a). The provisions of section 371(d) relating to the
payment of the national fee shall apply to the payment of the fee
specified in this paragraph with respect to an international
application.
“(D) Refunds.—The Director may by regulation provide for a
refund of any part of the fee specified in this paragraph for any
applicant who files a written declaration of express abandonment as
prescribed by the Director before an examination has been made of
the application under section 131.
“(2) Other fees.—
“(A) In general.—The Director shall establish fees for all other
processing, services, or materials relating to patents not specified in
this section to recover the estimated average cost to the Office of
such processing, services, or materials, except that the Director shall
charge the following fees for the following services:
1764
“ ( i ) For recording a document affecting title, $40 per
property.
“(ii) For each photocopy, $.25 per page.
“(iii) For each black and white copy of a patent, $3.
“ ( B ) Copies for libraries.—The yearly fee for providing a
library specified in section 12 with uncertified printed copies of the
specifications and drawings for all patents in that year shall be
$50.”.
(d) Fees for Small Entities.—Subsection (h) of section 41 of title 35, United
States Code, is amended to read as follows:
“(h) Fees for Small Entities.—
“(1) Reductions in fees.—Subject to paragraph (3), fees charged
under subsections (a), (b), and (d)(1) shall be reduced by 50 percent
with respect to their application to any small business concern as
defined under section 3 of the Small Business Act, and to any
independent inventor or nonprofit organization as defined in regulations
issued by the Director.
“(2) Surcharges and other fees.—With respect to its application to
any entity described in paragraph (1), any surcharge or fee charged
under subsection (c) or (d) shall not be higher than the surcharge or fee
required of any other entity under the same or substantially similar
circumstances.
“ ( 3 ) Reduction for electronic filing.—The fee charged under
subsection (a)(1)(A) shall be reduced by 75 percent with respect to its
application to any entity to which paragraph (1) applies, if the
application is filed by electronic means as prescribed by the Director.”.
(e) Technical Amendments.—Section 41 of title 35, United States Code, is
amended—
(1) in subsection (e), in the first sentence, by striking “The Director”
and inserting “ Waiver of Fees; Copies Regarding Notice.—The Director”;
(2) in subsection (f), by striking “The fees” and inserting “ Adjustment
of Fees.—The fees”;
(3) by repealing subsection (g); and
(4) in subsection (i)—
(A) by striking “(i)(1) The Director” and inserting the following:
1765
“(i) Electronic Patent and Trademark Data.—
“(1) Maintenance of collections.—The Director”;
( B ) by striking “(2) The Director” and inserting the
following:
“ ( 2 ) Availability of automated search systems.—The
Director”;
( C ) by striking “(3) The Director” and inserting the
following:
“(3) Access fees.—The Director”; and
( D ) by striking “(4) The Director” and inserting the
following:
“(4) Annual report to congress.—The Director”.
(f) Adjustment of Trademark Fees.—Section 802(a) of division B of the
Consolidated Appropriations Act, 2005 (Public Law 108-447) is amended—
(1) in the first sentence, by striking “During fiscal years 2005, 2006, and
2007”, and inserting “Until such time as the Director sets or adjusts the fees
otherwise,”; and
(2) in the second sentence, by striking “During fiscal years 2005, 2006,
and 2007, the” and inserting “The”.
( g ) Effective Date, Applicability, and Transition Provisions.—Section
803(a) of division B of the Consolidated Appropriations Act, 2005 (Public Law
108-447) is amended by striking “and shall apply only with respect to the
remaining portion of fiscal year 2005 and fiscal year 2006”.
(h) Prioritized Examination Fee.—
(1) In general.—
(A) Fee.—
( i ) Prioritized examination fee.—A fee of $4,800 shall be
established for filing a request, pursuant to section 2(b)(2)(G) of title
35, United States Code, for prioritized examination of a
nonprovisional application for an original utility or plant patent.
(B) Regulations; limitations.—
( i ) Regulations.—The Director may by regulation prescribe
conditions for acceptance of a request under subparagraph (A) and a
limit on the number of filings for prioritized examination that may be
1766
accepted.
( i i ) Limitation on claims.—Until regulations are prescribed
under clause (i), no application for which prioritized examination is
requested may contain or be amended to contain more than 4
independent claims or more than 30 total claims.
(iii) Limitation on total number of requests.—The Director may
not accept in any fiscal year more than 10,000 requests for
prioritization until regulations are prescribed under this
subparagraph setting another limit.
(2) Reduction in fees for small entities.—The Director shall reduce fees
for providing prioritized examination of nonprovisional applications for
original utility and plant patents by 50 percent for small entities that qualify
for reduced fees under section 41(h)(1) of title 35, United States Code.
( 3 ) Deposit of fees.—All fees paid under this subsection shall be
credited to the United States Patent and Trademark Office Appropriation
Account, shall remain available until expended, and may be used only for
the purposes specified in section 42(c)(3)(A) of title 35, United States
Code.
(4) Effective date and termination.—
(A) Effective date.—This subsection shall take effect on the date that
is 10 days after the date of the enactment of this Act.
(B) Termination.—The fee imposed under paragraph (1)(A)(i), and
the reduced fee under paragraph (2), shall terminate on the effective date
of the setting or adjustment of the fee under paragraph (1)(A)(i) pursuant
to the exercise of the authority under section 10 for the first time with
respect to that fee.
(i) Appropriation Account Transition Fees.—
(1) Surcharge.—
(A) In general.—There shall be a surcharge of 15 percent, rounded
by standard arithmetic rules, on all fees charged or authorized by
subsections (a), (b), and (d)(1) of section 41, and section 132(b), of title
35, United States Code. Any surcharge imposed under this subsection is,
and shall be construed to be, separate from and in addition to any other
surcharge imposed under this Act or any other provision of law.
( B ) Deposit of amounts.—Amounts collected pursuant to the
surcharge imposed under subparagraph (A) shall be credited to the
United States Patent and Trademark Appropriation Account, shall
1767
remain available until expended, and may be used only for the purposes
specified in section 42(c)(3)(A) of title 35, United States Code.
( 2 ) Effective date and termination of surcharge.—The surcharge
provided for in paragraph (1)—
(A) shall take effect on the date that is 10 days after the date of the
enactment of this Act; and
(B) shall terminate, with respect to a fee to which paragraph (1)(A)
applies, on the effective date of the setting or adjustment of that fee
pursuant to the exercise of the authority under section 10 for the first
time with respect to that fee.
( j ) Effective Date.—Except as otherwise provided in this section, this
section and the amendments made by this section shall take effect on the date of
Sec. 12. Supplemental Examination.

(a) In General.—Chapter 25 of title 35, United States Code, is amended by
“§ 257. Supplemental examinations to consider, reconsider, or correct
information
“(a) Request for Supplemental Examination.—A patent owner may
request supplemental examination of a patent in the Office to consider,
reconsider, or correct information believed to be relevant to the patent,
in accordance with such requirements as the Director may establish.
Within 3 months after the date a request for supplemental examination
meeting the requirements of this section is received, the Director shall
conduct the supplemental examination and shall conclude such
examination by issuing a certificate indicating whether the information
presented in the request raises a substantial new question of
patentability.
“ ( b ) Reexamination Ordered.—If the certificate issued under
subsection (a) indicates that a substantial new question of patentability
is raised by 1 or more items of information in the request, the Director
shall order reexamination of the patent. The reexamination shall be
conducted according to procedures established by chapter 30, except
that the patent owner shall not have the right to file a statement pursuant
to section 304. During the reexamination, the Director shall address
each substantial new question of patentability identified during the
supplemental examination, notwithstanding the limitations in chapter 30
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relating to patents and printed publication or any other provision of such
chapter.
“(c) Effect.—
“(1) In general.—A patent shall not be held unenforceable on the
basis of conduct relating to information that had not been considered,
was inadequately considered, or was incorrect in a prior
examination of the patent if the information was considered,
reconsidered, or corrected during a supplemental examination of the
patent. The making of a request under subsection (a), or the absence
thereof, shall not be relevant to enforceability of the patent under
section 282.
“(2) Exceptions.—
“(A) Prior allegations.—Paragraph (1) shall not apply to an
allegation pled with particularity in a civil action, or set forth
with particularity in a notice received by the patent owner under
section 505(j)(2)(B)(iv)(II) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(2)(B)(iv)(II)), before the date of
a supplemental examination request under subsection (a) to
consider, reconsider, or correct information forming the basis for
the allegation.
“(B) Patent enforcement actions.—In an action brought under
section 337(a) of the Tariff Act of 1930 ( 19 U.S.C. 1337(a)), or
section 281 of this title, paragraph (1) shall not apply to any
defense raised in the action that is based upon information that
was considered, reconsidered, or corrected pursuant to a
supplemental examination request under subsection (a), unless the
supplemental examination, and any reexamination ordered
pursuant to the request, are concluded before the date on which
the action is brought.
“(d) Fees and Regulations.—
“(1) Fees.—The Director shall, by regulation, establish fees for
the submission of a request for supplemental examination of a patent,
and to consider each item of information submitted in the request. If
reexamination is ordered under subsection (b), fees established and
applicable to ex parte reexamination proceedings under chapter 30
shall be paid, in addition to fees applicable to supplemental
examination.
“ ( 2 ) Regulations.—The Director shall issue regulations
governing the form, content, and other requirements of requests for
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supplemental examination, and establishing procedures for
reviewing information submitted in such requests.
“(e) Fraud.—If the Director becomes aware, during the course of a
supplemental examination or reexamination proceeding ordered under
this section, that a material fraud on the Office may have been committed
in connection with the patent that is the subject of the supplemental
examination, then in addition to any other actions the Director is
authorized to take, including the cancellation of any claims found to be
invalid under section 307 as a result of a reexamination ordered under
this section, the Director shall also refer the matter to the Attorney
General for such further action as the Attorney General may deem
appropriate. Any such referral shall be treated as confidential, shall not
be included in the file of the patent, and shall not be disclosed to the
public unless the United States charges a person with a criminal offense
in connection with such referral.
“ ( f ) Rule of Construction.—Nothing in this section shall be
construed—
“(1) to preclude the imposition of sanctions based upon criminal
or antitrust laws (including section 1001(a) of title 18, the first
section of the Clayton Act, and section 5 of the Federal Trade
Commission Act to the extent that section relates to unfair methods of
competition);
“(2) to limit the authority of the Director to investigate issues of
possible misconduct and impose sanctions for misconduct in
connection with matters or proceedings before the Office; or
“(3) to limit the authority of the Director to issue regulations
under chapter 3 relating to sanctions for misconduct by
representatives practicing before the Office.”.
(b) Conforming Amendment.—The table of sections for chapter 25 of title
35, United States Code, is amended by adding at the end the following new
item:
“257. Supplemental examinations to consider, reconsider, or correct
information.”.
(c) Effective Date.—The amendments made by this section shall take effect
of this Act and shall apply to any patent issued before, on, or after that effective
date.
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Sec. 13. Funding Agreements.
(a) In General.—Section 202(c)(7)(E)(i) of title 35, United States Code, is
amended—
(1) by striking “75 percent” and inserting “15 percent”;
(2) by striking “25 percent” and inserting “85 percent”; and
(3) by striking “as described above in this clause (D);” and inserting
“described above in this clause;”.
on the date of the enactment of this Act and shall apply to any patent issued
before, on, or after that date.
Sec. 14. Tax Strategies Deemed within the Prior Art.

(a) In General.—For purposes of evaluating an invention under section 102
or 103 of title 35, United States Code, any strategy for reducing, avoiding, or
deferring tax liability, whether known or unknown at the time of the invention or
application for patent, shall be deemed insufficient to differentiate a claimed
invention from the prior art.
(b) Definition.—For purposes of this section, the term “tax liability” refers
to any liability for a tax under any Federal, State, or local law, or the law of any
foreign jurisdiction, including any statute, rule, regulation, or ordinance that
levies, imposes, or assesses such tax liability.
(c) Exclusions.—This section does not apply to that part of an invention that
—
(1) is a method, apparatus, technology, computer program product, or
system, that is used solely for preparing a tax or information return or other
tax filing, including one that records, transmits, transfers, or organizes data
related to such filing; or
(2) is a method, apparatus, technology, computer program product, or
system used solely for financial management, to the extent that it is
severable from any tax strategy or does not limit the use of any tax strategy
by any taxpayer or tax advisor.
( d) Rule of Construction.—Nothing in this section shall be construed to
imply that other business methods are patentable or that other business method
patents are valid.
(e) Effective Date; Applicability.—This section shall take effect on the date
of the enactment of this Act and shall apply to any patent application that is
1771
pending on, or filed on or after, that date, and to any patent that is issued on or
after that date.
Sec. 15. Best Mode Requirement.

(a) In General.—Section 282 of title 35, United States Code, is amended in
the second undesignated paragraph by striking paragraph (3) and inserting the
following:
“(3) Invalidity of the patent or any claim in suit for failure to comply
with—
“( A) any requirement of section 112, except that the failure to
disclose the best mode shall not be a basis on which any claim of a
patent may be canceled or held invalid or otherwise unenforceable; or
“(B) any requirement of section 251.”.
( b ) Conforming Amendment.—Sections 119(e)(1) and 120 of title 35,
United States Code, are each amended by striking “the first paragraph of section
112 of this title” and inserting “section 112(a) (other than the requirement to
disclose the best mode)”.
(c) Effective Date.—The amendments made by this section shall take effect
upon the date of the enactment of this Act and shall apply to proceedings
commenced on or after that date.
Sec. 16. Marking.

(a) Virtual Marking.—
( 1 ) In general.—Section 287(a) of title 35, United States Code, is
amended by striking “or when,” and inserting “or by fixing thereon the word
‘patent’ or the abbreviation ‘pat.’ together with an address of a posting on
the Internet, accessible to the public without charge for accessing the
address, that associates the patented article with the number of the patent, or
when,”.
(2) Effective date.—The amendment made by this subsection shall apply
to any case that is pending on, or commenced on or after, the date of the
(3) Report.—Not later than the date that is 3 years after the date of the
enactment of this Act, the Director shall submit a report to Congress that
provides—
( A ) an analysis of the effectiveness of “virtual marking”, as
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provided in the amendment made by paragraph (1) of this subsection, as
an alternative to the physical marking of articles;
( B ) an analysis of whether such virtual marking has limited or
improved the ability of the general public to access information about
patents;
(C) an analysis of the legal issues, if any, that arise from such virtual
marking; and
(D) an analysis of the deficiencies, if any, of such virtual marking.
(b) False Marking.—
(1) Civil penalty.—Section 292(a) of title 35, United States, Code, is
amended by adding at the end the following: “Only the United States may
sue for the penalty authorized by this subsection.”.
(2) Civil action for damages.—Subsection (b) of section 292 of title 35,
United States Code, is amended to read as follows:
“(b) A person who has suffered a competitive injury as a result of a
violation of this section may file a civil action in a district court of the
United States for recovery of damages adequate to compensate for the
injury.”.
(3) Expired patents.—Section 292 of title 35, United States Code, is
amended by adding at the end the following:
“(c) The marking of a product, in a manner described in subsection
(a), with matter relating to a patent that covered that product but has
expired is not a violation of this section.”.
( 4 ) Effective date.—The amendments made by this subsection shall
apply to all cases, without exception, that are pending on, or commenced on
or after, the date of the enactment of this Act.
Sec. 17. Advice of Counsel.

(a) In General.—Chapter 29 of title 35, United States Code, is amended by
“§ 298. Advice of counsel.”.
“The failure of an infringer to obtain the advice of counsel with respect
to any allegedly infringed patent, or the failure of the infringer to present
such advice to the court or jury, may not be used to prove that the accused
infringer willfully infringed the patent or that the infringer intended to induce
1773
infringement of the patent.”.
(b) Conforming Amendment.—The table of sections for chapter 29 of title
35, United States Code, is amended by adding at the end the following:
“298. Advice of counsel.”.
Sec. 18. Transitional Program for Covered Business

Method Patents.
(a) Transitional Program.—
(1) Establishment.—Not later than the date that is 1 year after the date of
the enactment of this Act, the Director shall issue regulations establishing
and implementing a transitional post-grant review proceeding for review of
the validity of covered business method patents. The transitional proceeding
implemented pursuant to this subsection shall be regarded as, and shall
employ the standards and procedures of, a post-grant review under chapter
32 of title 35, United States Code, subject to the following:
(A) Section 321(c) of title 35, United States Code, and subsections
(b), (e)(2), and (f) of section 325 of such title shall not apply to a
transitional proceeding.
(B) A person may not file a petition for a transitional proceeding
with respect to a covered business method patent unless the person or
the person’s real party in interest or privy has been sued for
infringement of the patent or has been charged with infringement under
that patent.
( C) A petitioner in a transitional proceeding who challenges the
validity of 1 or more claims in a covered business method patent on a
ground raised under section 102 or 103 of title 35, United States Code,
as in effect on the day before the effective date set forth in section 3(n)
(1), may support such ground only on the basis of—
(i) prior art that is described by section 102(a) of such title of
such title (as in effect on the day before such effective date); or
(ii) prior art that—
(I) discloses the invention more than 1 year before the date of
the application for patent in the United States; and
(II) would be described by section 102(a) of such title (as in
effect on the day before the effective date set forth in section 3(n)
(1)) if the disclosure had been made by another before the
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invention thereof by the applicant for patent.
(D) The petitioner in a transitional proceeding that results in a final
written decision under section 328(a) of title 35, United States Code,
with respect to a claim in a covered business method patent, or the
petitioner’s real party in interest, may not assert, either in a civil action
arising in whole or in part under section 1338 of title 28, United States
Code, or in a proceeding before the International Trade Commission
under section 337 of the Tariff Act of 1930 ( 19 U.S.C. 1337), that the
claim is invalid on any ground that the petitioner raised during that
transitional proceeding.
(E) The Director may institute a transitional proceeding only for a
patent that is a covered business method patent.
(2) Effective date.—The regulations issued under paragraph (1) shall
take effect upon the expiration of the 1-year period beginning on the date of
the enactment of this Act and shall apply to any covered business method
patent issued before, on, or after that effective date, except that the
regulations shall not apply to a patent described in section 6(f)(2)(A) of this
Act during the period in which a petition for post-grant review of that patent
would satisfy the requirements of section 321(c) of title 35, United States
Code.
(3) Sunset.—
(A) In general.—This subsection, and the regulations issued under
this subsection, are repealed effective upon the expiration of the 8-year
period beginning on the date that the regulations issued under to
paragraph (1) take effect.
( B ) Applicability.—Notwithstanding subparagraph (A), this
subsection and the regulations issued under this subsection shall
continue to apply, after the date of the repeal under subparagraph (A), to
any petition for a transitional proceeding that is filed before the date of
such repeal.
(b) Request for Stay.—
( 1 ) In general.—If a party seeks a stay of a civil action alleging
infringement of a patent under section 281 of title 35, United States Code,
relating to a transitional proceeding for that patent, the court shall decide
whether to enter a stay based on—
(A) whether a stay, or the denial thereof, will simplify the issues in
question and streamline the trial;
1775
(B) whether discovery is complete and whether a trial date has been
set;
(C) whether a stay, or the denial thereof, would unduly prejudice the
nonmoving party or present a clear tactical advantage for the moving
party; and
(D) whether a stay, or the denial thereof, will reduce the burden of
litigation on the parties and on the court.
(2) Review.—A party may take an immediate interlocutory appeal from
a district court’s decision under paragraph (1). The United States Court of
Appeals for the Federal Circuit shall review the district court’s decision to
ensure consistent application of established precedent, and such review may
be de novo.
( c ) ATM Exemption for Venue Purposes.—In an action for infringement
under section 281 of title 35, United States Code, of a covered business method
patent, an automated teller machine shall not be deemed to be a regular and
established place of business for purposes of section 1400(b) of title 28, United
States Code.
(d) Definition.—
( 1 ) In general.—For purposes of this section, the term “covered
business method patent” means a patent that claims a method or
corresponding apparatus for performing data processing or other operations
used in the practice, administration, or management of a financial product or
service, except that the term does not include patents for technological
inventions.
(2) Regulations.—To assist in implementing the transitional proceeding
authorized by this subsection, the Director shall issue regulations for
determining whether a patent is for a technological invention.
( e ) Rule of Construction.—Nothing in this section shall be construed as
amending or interpreting categories of patent-eligible subject matter set forth
under section 101 of title 35, United States Code.
Sec. 19. Jurisdiction and Procedural Matters.

( a ) State Court Jurisdiction.—Section 1338(a) of title 28, United States
Code, is amended by striking the second sentence and inserting the following:
“No State court shall have jurisdiction over any claim for relief arising under
any Act of Congress relating to patents, plant variety protection, or copyrights.
For purposes of this subsection, the term ‘State’ includes any State of the United
States, the District of Columbia, the Commonwealth of Puerto Rico, the United
1776
States Virgin Islands, American Samoa, Guam, and the Northern Mariana
Islands.”.
(b) Court of Appeals for the Federal Circuit.—Section 1295(a)(1) of title
28, United States Code, is amended to read as follows:
“(1) of an appeal from a final decision of a district court of the United
States, the District Court of Guam, the District Court of the Virgin Islands,
or the District Court of the Northern Mariana Islands, in any civil action
arising under, or in any civil action in which a party has asserted a
compulsory counterclaim arising under, any Act of Congress relating to
patents or plant variety protection;”.
(c) Removal.—
(1) In general.—Chapter 89 of title 28, United States Code, is amended
by adding at the end the following new section:
“§ 1454. Patent, plant variety protection, and copyright cases
“(a) In General.—A civil action in which any party asserts a
claim for relief arising under any Act of Congress relating to patents,
plant variety protection, or copyrights may be removed to the district
court of the United States for the district and division embracing the
place where the action is pending.
“(b) Special Rules.—The removal of an action under this section
shall be made in accordance with section 1446, except that if the
removal is based solely on this section—
“(1) the action may be removed by any party; and
“(2) the time limitations contained in section 1446(b) may be
extended at any time for cause shown.
“(c) Clarification of Jurisdiction in Certain Cases.—The court to
which a civil action is removed under this section is not precluded
from hearing and determining any claim in the civil action because
the State court from which the civil action is removed did not have
jurisdiction over that claim.
“(d) Remand.—If a civil action is removed solely under this
section, the district court—
“( 1) shall remand all claims that are neither a basis for
removal under subsection (a) nor within the original or
supplemental jurisdiction of the district court under any Act of
Congress; and
1777
“ ( 2 ) may, under the circumstances specified in section
1367(c), remand any claims within the supplemental jurisdiction
of the district court under section 1367.”.
(2) Conforming amendment.—The table of sections for chapter 89 of
title 28, United States Code, is amended by adding at the end the following
new item:
“1454. Patent, plant variety protection, and copyright cases.”.
(d) Procedural Matters in Patent Cases.—
( 1 ) Joinder of parties and stay of actions.—Chapter 29 of title 35,
United States Code, as amended by this Act, is further amended by adding at
the end the following new section:
“§ 299. Joinder of parties
“(a) Joinder of Accused Infringers.—With respect to any civil
action arising under any Act of Congress relating to patents, other
than an action or trial in which an act of infringement under section
271(e)(2) has been pled, parties that are accused infringers may be
joined in one action as defendants or counterclaim defendants, or
have their actions consolidated for trial, or counterclaim defendants
only if—
“(1) any right to relief is asserted against the parties jointly,
severally, or in the alternative with respect to or arising out of the
same transaction, occurrence, or series of transactions or
occurrences relating to the making, using, importing into the
United States, offering for sale, or selling of the same accused
product or process; and
“ ( 2 ) questions of fact common to all defendants or
counterclaim defendants will arise in the action.
“(b) Allegations Insufficient for Joinder.—For purposes of this
subsection, accused infringers may not be joined in one action as
defendants or counterclaim defendants, or have their actions
consolidated for trial, based solely on allegations that they each have
infringed the patent or patents in suit.
“(c) Waiver.—A party that is an accused infringer may waive the
limitations set forth in this section with respect to that party.”.
(2) Conforming amendment.—The table of sections for chapter 29 of
title 35, United States Code, as amended by this Act, is further amended by
adding at the end the following new item:
1778
“299. Joinder of parties.”.
(e) Effective Date.—The amendments made by this section shall apply to
any civil action commenced on or after the date of the enactment of this Act.
Sec. 20. Technical Amendments.

( a ) Joint Inventions.—Section 116 of title 35, United States Code, is
amended—
(1) in the first undesignated paragraph, by striking “When” and inserting
“(a) Joint Inventions.—When”;
( 2 ) in the second undesignated paragraph, by striking “If a joint
inventor” and inserting “(b) Omitted Inventor.—If a joint inventor”; and
(3) in the third undesignated paragraph—(A) by striking “Whenever”
and inserting “(c) Correction of Errors in Application.—Whenever”; and
(B) by striking “and such error arose without any deceptive intention on his
part,”.
(b) Filing of Application in Foreign Country. Section 184 of title 35, United
States Code, is amended—
(A) by striking “Except when” and inserting “(a) Filing in Foreign
Country.—Except when”; and
(B) by striking “and without deceptive intent”;
(2) in the second undesignated paragraph, by striking “The term” and
inserting “(b) Application.—The term”; and
(3) in the third undesignated paragraph, by striking “The scope” and
inserting “(c) Subsequent Modifications, Amendments, and Supplements.—
The scope”.
(c) Filing Without a License.—Section 185 of title 35, United States Code,
is amended by striking “and without deceptive intent”.
(d) Reissue of Defective Patents.—Section 251 of title 35, United States
Code, is amended—
( A ) by striking “Whenever” and inserting “(a) In General.—
Whenever”; and
(B) by striking “without any deceptive intention”;
1779
(2) in the second undesignated paragraph, by striking “The Director”
and inserting “(b) Multiple Reissued Patents.—The Director”;
(3) In the third undesignated paragraph, by striking “The provisions”
and inserting “(c) Applicability of This Title.—The provisions”; and
(4) in the last undesignated paragraph, by striking “No reissued patent”
and inserting “(d) Reissue Patent Enlarging Scope of Claims.—No reissued
patent”.
( e ) Effect of Reissue.—Section 253 of title 35, United States Code, is
amended—
(1) in the first undesignated paragraph, by striking “Whenever, without
any deceptive intention,” and inserting “(a) In General.—Whenever”; and
(2) in the second undesignated paragraph, by striking “In like manner”
and inserting “(b) Additional Disclaimer or Dedication.—In the manner set
forth in subsection (a),”.
(f) Correction of Named Inventor.—Section 256 of title 35, United States
Code, is amended—
( A ) by striking “Whenever” and inserting “(a) Correction.—
Whenever”; and
(B) by striking “and such error arose without any deceptive intention
on his part”; and
(2) in the second undesignated paragraph, by striking “The error” and
inserting “(b) Patent Valid if Error Corrected.—The error”.
(g) Presumption of Validity.—Section 282 of title 35, United States Code, is
amended—
(A) by striking “A patent” and inserting “(a) In General.—A patent”;
and
(B) by striking the third sentence;
(2) in the second undesignated paragraph—
(A) by striking “The following” and inserting “(b) Defenses.—The
following”;
( B) In paragraph (1), by striking “uneforceability,” and inserting
“unenforceability.”; and
1780
( C ) in paragraph (2), by striking “patentability,” and inserting
“patentability.”; and
(3) in the third undesignated paragraph—
(A) by striking “In actions involving the validity or infringement of a
patent” and inserting “(c) Notice of Actions; Actions During Extension
of Patent Term.—In an action involving the validity or infringement of a
patent”; and
( B ) by striking “Claims Court” and inserting “Court of Federal
Claims”.
(h) Action for Infringement.—Section 288 of title 35, United States Code, is
amended by striking “, without deceptive intention,”.
(i) Reviser’s Notes.—
( 1 ) Section 3(e)(2) of title 35, United States Code, is amended by
striking “this Act,” and inserting “that Act,”.
(2) Section 202 of title 35, United States Code, is amended—
( A ) in subsection (b)(3), by striking “the section 203(b)” and
inserting “section 203(b)”; and
(B) In subsection (c)(7)(D), by striking “except where it proves”
and all that follows through “small business firms; and” and inserting:
“except where it is determined to be infeasible following a reasonable
inquiry, a preference in the licensing of subject inventions shall be given
to small business firms; and”.
(3) Section 209(d)(1) of title 35, United States Code, is amended by
striking “nontransferrable” and inserting “nontransferable”.
(4) Section 287(c)(2)(G) of title 35, United States Code, is amended by
striking “any state” and inserting “any State”.
( 5 ) Section 371(b) of title 35, United States Code, is amended by
striking “of the treaty” and inserting “of the treaty.”.
(j) Unnecessary References.—
(1) In general.—Title 35, United States Code, is amended by striking
“of this title” each place that term appears.
(2) Exception.—The amendment made by paragraph (1) shall not apply
to the use of such term in the following sections of title 35, United States
Code:
1781
(A) Section 1(c).
(B) Section 101.
(C) Subsections (a) and (b) of section 105.
(D) The first instance of the use of such term in section 111(b)(8).
(E) Section 161.
(F) Section 164.
(G) Section 171.
(H) Section 251(c), as so designated by this section.
(I) Section 261.
(J) Subsections (g) and (h) of section 271.
(K) Section 287(b)(1).
(L) Section 289.
(M) The first instance of the use of such term in section 375(a).
(k) Additional Technical Amendments.—Sections 155 and 155A of title 35,
United States Code, and the items relating to those sections in the table of
sections for chapter 14 of such title, are repealed.
(l) Effective Date.—The amendments made by this section shall take effect
of this Act and shall apply to proceedings commenced on or after that effective
date.
Sec. 21. Travel Expenses and Payment of

Administrative Judges.
(a) Authority To Cover Certain Travel Related Expenses.—Section 2(b)
(11) of title 35, United States Code, is amended by inserting “, and the Office is
authorized to expend funds to cover the subsistence expenses and travel-related
expenses, including per diem, lodging costs, and transportation costs, of persons
attending such programs who are not Federal employees” after “world”.
( b) Payment of Administrative Judges.—Section 3(b) of title 35, United
States Code, is amended by adding at the end the following:
“(6) Administrative patent judges and administrative trademark judges.
—The Director may fix the rate of basic pay for the administrative patent
judges appointed pursuant to section 6 and the administrative trademark
1782
judges appointed pursuant to section 17 of the Trademark Act of 1946 ( 15
U.S.C. 1067) at not greater than the rate of basic pay payable for level III of
the Executive Schedule under section 5314 of title 5. The payment of a rate
of basic pay under this paragraph shall not be subject to the pay limitation
under section 5306(e) or 5373 of title 5.”.
Sec. 22. Patent and Trademark Office Funding.

(a) In General.—Section 42(c) of title 35, United States Code, is amended
—
(1) by striking “(c)” and inserting “(c)(1)”;
(2) in the first sentence, by striking “shall be available” and inserting
“shall, subject to paragraph (3), be available”;
(3) by striking the second sentence; and
“(2) There is established in the Treasury a Patent and Trademark Fee
Reserve Fund. If fee collections by the Patent and Trademark Office for a
fiscal year exceed the amount appropriated to the Office for that fiscal year,
fees collected in excess of the appropriated amount shall be deposited in the
Patent and Trademark Fee Reserve Fund. To the extent and in the amounts
provided in appropriations Acts, amounts in the Fund shall be made
available until expended only for obligation and expenditure by the Office in
accordance with paragraph (3).
“(3)
(A) Any fees that are collected under sections 41, 42, and 376, and
any surcharges on such fees, may only be used for expenses of the Office
relating to the processing of patent applications and for other activities,
services, and materials relating to patents and to cover a share of the
administrative costs of the Office relating to patents.
“(B) Any fees that are collected under section 31 of the Trademark
Act of 1946, and any surcharges on such fees, may only be used for
expenses of the Office relating to the processing of trademark
registrations and for other activities, services, and materials relating to
trademarks and to cover a share of the administrative costs of the Office
relating to trademarks.”.
on October 1, 2011.
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Sec. 23. Satellite Offices.
(a) Establishment.—Subject to available resources, the Director shall, by
not later than the date that is 3 years after the date of the enactment of this Act,
establish 3 or more satellite offices in the United States to carry out the
responsibilities of the Office.
( b ) Purposes.—The purposes of the satellite offices established under
subsection (a) are to—
( 1 ) increase outreach activities to better connect patent filers and
innovators with the Office;
(2) enhance patent examiner retention;
(3) improve recruitment of patent examiners;
(4) decrease the number of patent applications waiting for examination;
and
(5) improve the quality of patent examination.
(c) Required Considerations.—
(1) In general.—In selecting the location of each satellite office to be
established under subsection (a), the Director—
(A) shall ensure geographic diversity among the offices, including
by ensuring that such offices are established in different States and
regions throughout the Nation;
( B ) may rely upon any previous evaluations by the Office of
potential locales for satellite offices, including any evaluations prepared
as part of the Office’s Nationwide Workforce Program that resulted in
the 2010 selection of Detroit, Michigan, as the first satellite office of the
Office;
(C) shall evaluate and consider the extent to which the purposes of
satellite offices listed under subsection (b) will be achieved;
( D ) shall consider the availability of scientific and technically
knowledgeable personnel in the region from which to draw new patent
examiners at minimal recruitment cost; and
(E) shall consider the economic impact to the region.
(2) Open selection process.—Nothing in paragraph (1) shall constrain
the Office to only consider its evaluations in selecting the Detroit, Michigan,
satellite office.
1784
(d) Report to Congress.—Not later than the end of the third fiscal year that
begins after the date of the enactment of this Act, the Director shall submit a
report to Congress on—
(1) the rationale of the Director in selecting the location of any satellite
office required under subsection (a), including an explanation of how the
selected location will achieve the purposes of satellite offices listed under
subsection (b) and how the required considerations listed under subsection
(c) were met;
(2) the progress of the Director in establishing all such satellite offices;
and
(3) whether the operation of existing satellite offices is achieving the
purposes under subsection (b).
Sec. 24. Designation of Detroit Satellite Office.

( a ) Designation.—The satellite office of the United States Patent and
Trademark Office to be located in Detroit, Michigan, shall be known and
designated as the “Elijah J. McCoy United States Patent and Trademark Office”.
(b) References.—Any reference in a law, map, regulation, document, paper,
or other record of the United States to the satellite office of the United States
Patent and Trademark Office to be located in Detroit, Michigan, referred to in
subsection (a) shall be deemed to be a reference to the “Elijah J. McCoy United
States Patent and Trademark Office”.
Sec. 25. Priority Examination for Important

Technologies.
Section 2(b)(2) of title 35, United States Code, is amended—
(1) in subparagraph (E), by striking “and” after the semicolon;
(2) in subparagraph (F), by inserting “and” after the semicolon; and
“(G) may, subject to any conditions prescribed by the Director and
at the request of the patent applicant, provide for prioritization of
examination of applications for products, processes, or technologies that
are important to the national economy or national competitiveness
without recovering the aggregate extra cost of providing such
prioritization, notwithstanding section 41 or any other provision of
law;”.
1785
Sec. 26. Study on Implementation.
(a) PTO Study.—The Director shall conduct a study on the manner in which
this Act and the amendments made by this Act are being implemented by the
Office, and on such other aspects of the patent policies and practices of the
Federal Government with respect to patent rights, innovation in the United
States, competitiveness of United States markets, access by small businesses to
capital for investment, and such other issues, as the Director considers
appropriate.
(b) Report to Congress.—The Director shall, not later than the date that is 4
years after the date of the enactment of this Act, submit to the Committees on the
Judiciary of the House of Representatives and the Senate a report on the results
of the study conducted under subsection (a), including recommendations for any
changes to laws and regulations that the Director considers appropriate.
Sec. 27. Study on Genetic Testing.

(a) In General.—The Director shall conduct a study on effective ways to
provide independent, confirming genetic diagnostic test activity where gene
patents and exclusive licensing for primary genetic diagnostic tests exist.
(b) Items Included in Study.—The study shall include an examination of at
least the following:
( 1 ) The impact that the current lack of independent second opinion
testing has had on the ability to provide the highest level of medical care to
patients and recipients of genetic diagnostic testing, and on inhibiting
innovation to existing testing and diagnoses.
( 2 ) The effect that providing independent second opinion genetic
diagnostic testing would have on the existing patent and license holders of
an exclusive genetic test.
(3) The impact that current exclusive licensing and patents on genetic
testing activity has on the practice of medicine, including but not limited to:
the interpretation of testing results and performance of testing procedures.
(4) The role that cost and insurance coverage have on access to and
provision of genetic diagnostic tests.
(c) Confirming Genetic Diagnostic Test Activity Defined.—For purposes of
this section, the term “confirming genetic diagnostic test activity” means the
performance of a genetic diagnostic test, by a genetic diagnostic test provider,
on an individual solely for the purpose of providing the individual with an
independent confirmation of results obtained from another test provider’s prior
1786
performance of the test on the individual.
(d) Report.—Not later than 9 months after the date of enactment of this Act,
the Director shall report to the Committee on the Judiciary of the Senate and the
Committee on the Judiciary of the House of Representatives on the findings of
the study and provide recommendations for establishing the availability of such
independent confirming genetic diagnostic test activity.
Sec. 28. Patent Ombudsman Program for Small

Business Concerns.
Using available resources, the Director shall establish and maintain in the
Office a Patent Ombudsman Program. The duties of the Program’s staff shall
include providing support and services relating to patent filings to small
business concerns and independent inventors.
Sec. 29. Establishment of Methods for Studying the

Diversity of Applicants.
The Director shall, not later than the end of the 6-month period beginning on
the date of the enactment of this Act, establish methods for studying the diversity
of patent applicants, including those applicants who are minorities, women, or
veterans. The Director shall not use the results of such study to provide any
preferential treatment to patent applicants.
Sec. 30. Sense of Congress.

It is the sense of Congress that the patent system should promote industries
to continue to develop new technologies that spur growth and create jobs across
the country which includes protecting the rights of small businesses and
inventors from predatory behavior that could result in the cutting off of
innovation.
Sec. 31. USPTO Study on International Patent

Protections for Small Businesses.
(a) Study Required.—The Director, in consultation with the Secretary of
Commerce and the Administrator of the Small Business Administration, shall,
using the existing resources of the Office, carry out a study—
( 1) to determine how the Office, in coordination with other Federal
departments and agencies, can best help small businesses with international
patent protection; and
1787
(2) whether, in order to help small businesses pay for the costs of filing,
maintaining, and enforcing international patent applications, there should be
established either—
(A) a revolving fund loan program to make loans to small businesses
to defray the costs of such applications, maintenance, and enforcement
and related technical assistance; or
( B ) a grant program to defray the costs of such applications,
maintenance, and enforcement and related technical assistance.
(b) Report.—Not later than 120 days after the date of the enactment of this
Act, the Director shall issue a report to the Congress containing—
( 1 ) all findings and determinations made in carrying out the study
required under subsection (a);
(2) a statement of whether the determination was made that—
(A) a revolving fund loan program described under subsection (a)
(2)(A) should be established;
(B) a grant program described under subsection (a)(2)(B) should be
established; or
(C) neither such program should be established; and
(3) any legislative recommendations the Director may have developed
in carrying out such study.
Sec. 32. Pro Bono Program.

( a ) In General.—The Director shall work with and support intellectual
property law associations across the country in the establishment of pro bono
programs designed to assist financially under-resourced independent inventors
and small businesses.
( b ) Effective Date.—This section shall take effect on the date of the
Sec. 33. Limitation on Issuance of Patents.

(a) Limitation.—Notwithstanding any other provision of law, no patent may
issue on a claim directed to or encompassing a human organism.
(b) Effective Date.—
(1) In general.—Subsection (a) shall apply to any application for patent
1788
that is pending on, or filed on or after, the date of the enactment of this Act.
(2) Prior applications.—Subsection (a) shall not affect the validity of
any patent issued on an application to which paragraph (1) does not apply.
Sec. 34. Study of Patent Litigation.

( a ) GAO Study.—The Comptroller General of the United States shall
conduct a study of the consequences of litigation by non-practicing entities, or
by patent assertion entities, related to patent claims made under title 35, United
States Code, and regulations authorized by that title.
(b) Contents of Study.—The study conducted under this section shall include
the following:
(1) The annual volume of litigation described in subsection (a) over the
20-year period ending on the date of the enactment of this Act.
(2) The volume of cases comprising such litigation that are found to be
without merit after judicial review.
(3) The impacts of such litigation on the time required to resolve patent
claims.
( 4 ) The estimated costs, including the estimated cost of defense,
associated with such litigation for patent holders, patent licensors, patent
licensees, and inventors, and for users of alternate or competing
innovations.
(5) The economic impact of such litigation on the economy of the United
States, including the impact on inventors, job creation, employers,
employees, and consumers.
(6) The benefit to commerce, if any, supplied by non-practicing entities
or patent assertion entities that prosecute such litigation.
(c) Report to Congress.—The Comptroller General shall, not later than the
date that is 1 year after the date of the enactment of this Act, submit to the
Committee on the Judiciary of the House of Representatives and the Committee
on the Judiciary of the Senate a report on the results of the study required under
this section, including recommendations for any changes to laws and regulations
that will minimize any negative impact of patent litigation that was the subject of
such study.
Sec. 35. Effective Date.

Except as otherwise provided in this Act, the provisions of this Act shall
1789
take effect upon the expiration of the 1-year period beginning on the date of the
enactment of this Act and shall apply to any patent issued on or after that
effective date.
Sec. 36. Budgetary Effects.

The budgetary effects of this Act, for the purpose of complying with the
Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the
latest statement titled “Budgetary Effects of PAYGO Legislation” for this Act,
submitted for printing in the Congressional Record by the Chairman of the
House Budget Committee, provided that such statement has been submitted prior
to the vote on passage.
Sec. 37. Calculation of 60-Day Period for Application of

Patent Term Extension.
( a ) In General.—Section 156(d)(1) of title 35, United States Code, is
amended by adding at the end the following flush sentence:
“For purposes of determining the date on which a product receives
permission under the second sentence of this paragraph, if such permission is
transmitted after 4:30 P.M., Eastern Time, on a business day, or is transmitted
on a day that is not a business day, the product shall be deemed to receive such
permission on the next business day. For purposes of the preceding sentence, the
term ‘business day’ means any Monday, Tuesday, Wednesday, Thursday, or
Friday, excluding any legal holiday under section 6103 of title 5.”.
(b) Applicability.—The amendment made by subsection (a) shall apply to
any application for extension of a patent term under section 156 of title 35,
United States Code, that is pending on, that is filed after, or as to which a
decision regarding the application is subject to judicial review on, the date of
Speaker of the House of Representatives.

Vice President of the United States and President of the
Senate.
1790
INDEX
References in this index are to code and section numbers for California
statutes, and to title and section of the United States Code for federal
statutes.
The California statutes are placed first in this volume. The California
statutes are arranged alphabetically by code and, within each code, by
section number.
The federal statutes appear following the California statutes. The federal
statutes are arranged numerically by title of the United States Code and,
within each title, by section number.
The code or title, and section range, are indicated at the top of each page in
the text. The indicators in each margin may be used for handy reference in
locating particular codes and titles.
ABBREVIATIONS
B&P ................ Business & Professions Code
CC ................ Civil Code
CCP ................ Code of Civil Procedure
UCC ................ Commercial Code
Corp ................ Corporations Code
Ed ................ Education Code
Ev ................ Evidence Code
Gov ................ Government Code
Intro ................ Introduction
Lab ................ Labor Code
Pen ................ Penal Code
Pro ................ Probate Code
Rev&Tax................ Revenue & Taxation Code
UI ................ Unemployment Insurance Code
U.S.C. ................ United States Code
1791
US Const ................ United States Constitution
1792
INDEX
[References are to sections.]
A B C D E F G H I J K L M N O P Q R S T U V W
A
ABANDONMENT
Fictitious business names (See FICTITIOUS BUSINESS NAMES)
Franchise, termination of . . . . B&P 20021
Patents (See PATENTS)
Trademarks (federal) (See TRADEMARKS (FEDERAL))
ABBREVIATIONS
Platinum group metals . . . . B&P 22129
ACCESS CARDS
Publication of number or code of card . . . . Pen 484j
ACCESSORIES
Grey market goods, disclosures . . . . CC 1797.81
ACCOMMODATIONS
Incentives offered to induce attendance at sales presentations . . . . B&P
17537.2
Travel-accommodation packages
Advertising requirements . . . . B&P 17538.8
ACKNOWLEDGMENTS
Plant variety protection, assignment or conveyance of . . . . 7 USC 2531
ACQUIESCENCE
Trademarks . . . . 15 USC 1069; 15 USC 1115
1793
ACTIONS (See CIVIL ACTIONS)
ADDRESSES
Business address and name
Disclosures by companies using post office box address, private
mailbox receiving service, etc . . . . B&P 17538.5
Foreign corporations, change of address of . . . . Corp 2107
Invention development services contracts, principal business address of
developer . . . . B&P 22379
ADMINISTRATIVE LAW
Attorneys representing clients before agencies . . . . 5 USC 500
Plant Variety Protection Office, practice before ( S e e PLANT VARIETY
PROTECTION)
ADMISSIONS, REQUESTS FOR

Protective orders
Motions for protective order . . . . CCP 2033.080
ADVERTISEMENTS
Accommodations at sales presentations as incentive, rules for . . . . B&P
17537.2
Advertiser, misrepresentations concerning . . . . B&P 17505
Anabolic steroids, sales
Disclosures . . . . B&P 17533.10
Another's name, voice, signature, etc., unauthorized use of . . . . CC 3344
Attorneys, restrictions on advertising by . . . . 5 USC 501; B&P 17500.1
Blemished merchandise, sale of . . . . B&P 17531
Caskets or other burial containers
Retail sale by persons other than funeral directors . . . . B&P 17530.7
Cellular phones
Text message advertisements to appropriately equipped phones or
pagers
Prohibition on transmission . . . . B&P 17538.41
Civil actions
Home solicitations provision, violation of . . . . B&P 17500.3
Incentive offers, actions based on . . . . B&P 17537.4
Injunctions, action to recover penalty for violations of . . . . B&P
17535.5
Civil penalties
1794
Factual evidence, claims of . . . . B&P 17508
False advertising, violations concerning . . . . B&P 17536
Injunction, violation of . . . . B&P 17535.5
Concerts
Truth in music advertising act . . . . B&P 17537.12
Consumer good defined . . . . B&P 17504
Consumer service defined . . . . B&P 17504
Contest solicitations
Definition of contest . . . . B&P 17539.3
Disclosures required . . . . B&P 17539.2
Finding of legislature concerning disclosure of rules and operations of
. . . . B&P 17539
Information-access services (See INFORMATION-ACCESS SERVICES)
Information regarding sweepstakes . . . . B&P 17539.15
Liability provisions . . . . B&P 17539.3
Minimum number of entries, prohibition on advertising contest with
prize conditioned on . . . . B&P 17539.35
“No purchase or payment necessary” message . . . . B&P 17539.15
Orders with entry, requirements for . . . . B&P 17539.15
Representations, restrictions . . . . B&P 17539.15
Statutory construction . . . . B&P 17539.3
Unfair acts prohibited in operation of contest . . . . B&P 17539.1
Continuity plans . . . . B&P 17509
Coupon represented as gift or prize, prior purchase or lease required for use
of . . . . B&P 17537.11
Credit plans, required disclosures for advertisements of . . . . B&P 17538.7
Criminal penalties
False advertisement . . . . B&P 17500
Gifts, unlawful use of in advertising . . . . B&P 17534; B&P 17534.5;
B&P 17537
Used or defective merchandise, violation of provisions for . . . . B&P
17531
Damages
Home solicitations provision, violation of . . . . B&P 17500.3
Quantities for sale, unlawful inducements to buy or limitations on
. . . . B&P 17500.5
Deceased personality, use of name, voice, signature, etc. of . . . . CC 3344.1
Defective merchandise, sale of . . . . B&P 17531
Department of Consumer Affairs, Board within the . . . . B&P 17500.1;
B&P 17506.5
1795
Email
Unsolicited advertisements
Spammers, restrictions on . . . . B&P 17529=B&P 17529.9; B&P
17538.45
Employee's photograph or likeness appearing in . . . . CC 3344
False or misleading statements
Generally . . . . Intro §2[2]; B&P 17500
Advertiser, misrepresentations concerning . . . . B&P 17505
Broadcasters acting in good faith . . . . B&P 17502; B&P 17508
Comparisons with other brands or products . . . . B&P 17508
Factual evidence, claims based on . . . . B&P 17508
Floral or ornamental products or services
Misrepresentation of geographical location by providers . . . . B&P
17537.15
Injunctive relief (See subhead: Injunctions)
Person defined . . . . B&P 17506
Price of goods (See subhead: Price of goods)
Publishers acting in good faith . . . . B&P 17502; B&P 17508
Quantities for sale . . . . B&P 17500.5
Restoration of money or property to person aggrieved . . . . B&P 17535
Fax machines
Unsolicited advertisements sent to fax machines . . . . B&P 17538.43
Federal surplus materials
Misleading business names intended to suggest official or government
status of business . . . . B&P 17533.5
Fines and penalties
Civil (See subhead: Civil penalties)
Criminal (See subhead: Criminal penalties)
17537.15
Franchises (See FRANCHISES)
General merchandise retailer defined . . . . B&P 17537
Gifts, use of
Civil action for violations . . . . B&P 17537.4
Contests (See subhead: Contest solicitations)
Coupon represented as gift, prior purchase or lease required for
. . . . B&P 17537.11
Offers to induce attendance at sales presentation, disclosures required
. . . . B&P 17533.8; B&P 17537.1; B&P 17537.2; B&P 17537.4
Unfair trade practices . . . . B&P 17537.2
1796
Unlawful practices . . . . B&P 17537
Grey market goods . . . . CC 1797.82
Home solicitations . . . . B&P 17500.3
Homestead filing services
Untrue or misleading statements . . . . B&P 17537.6
Incentives
Defined . . . . B&P 17537.1
Offered to induce attendance at sales presentation . . . . B&P 17537.1;
B&P 17537.2; B&P 17537.4
Inducing public to enter into any obligation . . . . B&P 17500
Injunctions
Civil penalty for violating . . . . B&P 17535.5
False advertising provisions, violations of . . . . B&P 17535
Internet (See INTERNET)
Invention development services contracts (S e e INVENTION
DEVELOPMENT SERVICES CONTRACTS)
Lease of other product as condition of sale . . . . B&P 17509
Loans using real property as collateral
Requirements for advertising . . . . B&P 17539.4
Local consumer affairs agency defined . . . . B&P 17506.5
Marketing channel defined . . . . B&P 17537
Minimum number of entries, prohibition on advertising contest with prize
conditioned on . . . . B&P 17539.35
Musical performances
Offers of incentives to induce attendance at sales presentation . . . . B&P
17533.8; B&P 17537.1; B&P 17537.2; B&P 17537.4
Open-end credit, required disclosures for advertisements of . . . . B&P
17538.7
Other products, purchase or lease of as condition to sale . . . . B&P 17509
Pagers
pagers
Performances of services, professional or otherwise . . . . B&P 17500
Plant variety protection, acts not constituting infringement . . . . 7 USC 2545
Prepaid calling cards and services . . . . B&P 17538.9
Price of goods
Former price, advertising of . . . . B&P 17501
1797
Minimum multiple unit, advertising of price of . . . . B&P 17504
Multi-product ads . . . . B&P 17507
Other product, lease or sale of as condition of sale . . . . B&P 17509
Unlawful inducements to buy . . . . B&P 17500.5
Prizes
Contests (See subhead: Contest solicitations)
Coupon represented as prize, prior purchase or lease required for use of
. . . . B&P 17537.11
Professions (See PROFESSIONS)
Proof of notice served on Attorney General or district attorney involving
false advertising actions on appeal . . . . B&P 17536.5
Purchase of other product as condition of sale . . . . B&P 17509
Quantities for sale, limitations on . . . . B&P 17500.5
Real property
False statements concerning realty . . . . B&P 17530
Regulations Z disclosures for open-end credit plans . . . . B&P 17538.7
Rejects of manufacturer, sale of . . . . B&P 17531
Residential solicitations . . . . B&P 17500.3
Retail seller defined . . . . B&P 17504
Sale of realty or personalty . . . . B&P 17500
Sales presentation, offer of incentive to induce attendance at . . . . B&P
17537.1; B&P 17537.2; B&P 17537.4
Seconds, sale of . . . . B&P 17531
Seller assisted marketing plans, notice requirement for . . . . CC 1812.203
Solicitations at residence in person or by telephone . . . . B&P 17500.3
Spammers, restrictions on . . . . B&P 17529=B&P 17529.9; B&P 17538.45
Standing order arrangements . . . . B&P 17509
Statute of limitation for false advertising . . . . CCP 338
Subscription plans . . . . B&P 17509
Supplements and series arrangements . . . . B&P 17509
Surplus materials, sale of federal . . . . B&P 17531.5
Sweepstakes prizes (See subhead: Contest solicitations)
Tear gas devices, weapons, etc . . . . B&P 17533.9
Telemarketing services
Unlawful telephone solicitations to home of prospective buyer offering
sale of goods or services . . . . B&P 17500.3
Tobacco
1798
Smokeless tobacco
Advertising, prohibited acts . . . . B&P 17537.3
Trademark certification marks . . . . 15 USC 1064
Trademarks (state) (See TRADEMARKS (STATE))
Used merchandise, sale of . . . . B&P 17531
Value of thing advertised, definition of . . . . B&P 17501
Vehicle sales or lease . . . . B&P 17537.7
AFFIDAVITS
Patents, rules for taking affidavits . . . . 35 USC 23
Plant variety protection . . . . 7 USC 2353
Property tax exemption, filing claim for . . . . Rev&Tax 217
AGENTS
Acts of agents . . . . B&P 14002
Artist, agent for . . . . CC 1744.9
Copyrights (See COPYRIGHTS)
Franchise registration, liability for violations of . . . . Corp 31302
AGREEMENTS (See CONTRACTS)
AGRICULTURAL COMMODITIES
Container brand violations, exception to . . . . B&P 14438
AGRICULTURAL FAIRS
Copyrighted work performed at . . . . 17 USC 110
AGRICULTURE, UNITED STATES DEPARTMENT OF

Plant patents . . . . 35 USC 164
Plant Variety Protection Office (See PLANT VARIETY PROTECTION)
AIRCRAFT
1799
Patent infringement, exemption from . . . . 35 USC 272
AIR POLLUTION
Compulsory licensing of patent . . . . 42 USC 7608
Environmental Protection Agency, acquisition of patents and licenses
. . . . 42 USC 7404
Public disclosure of information, emission data, and monitoring data
. . . . Gov 6254.7
Statute of limitation . . . . CCP 338
Trade secret information regarding air pollution information, protection of
. . . . Intro §6[5]
ALCOHOLIC BEVERAGES
Labels . . . . B&P 25200=B&P 25246
ALIENATION OF PROPERTY
Conditions restraining . . . . CC 711
ALIENS
Employee defined . . . . Lab 3351
Venue in civil actions against . . . . 28 USC 1391
ALTERATION
Fine art, physical alteration of . . . . CC 987; CC 989
Serial number or identification marks altered with intent to defraud
. . . . CC 1710.1
AMENDMENTS
First Amendment rights . . . . US Const amd I
Franchises, amended registration of (See FRANCHISES)
Trademarks (See TRADEMARKS (FEDERAL))
ANABOLIC STEROIDS
Advertising for sale
ANCESTRY
Fair dealership law (See FAIR DEALERSHIP LAW)
1800
ANIMALS
Definition of . . . . CC 3504
Killing or cruelty to animal in motion picture as nuisance (See MOTION
PICTURES)
Patent for new drugs or veterinary biological product . . . . 35 USC 156; 35
USC 271
ANNUAL PERCENTAGE RATE

17538.7
ANNUITIES
Personal holding company income, taxation of . . . . 26 USC 543
ANONYMOUS WORKS (See COPYRIGHTS)
ANTITRUST LAWS
Atomic energy or nuclear material patents used in violations of . . . . 42
USC 2188
Patent on federally supported inventions . . . . 35 USC 211
APPEALS
Copyrights
Copyright royalty judges
Appeal or judicial review . . . . 17 USC 803
False advertising actions, notice served on Attorney General or district
attorney involving appeal of . . . . B&P 17536.5
Killing or cruelty to animal or human in motion picture, action to enjoin
nuisance . . . . CC 3507
Patents
Board of Patent Appeals
Generally (See PATENTS)
Successor entity (See PATENT TRIAL AND APPEAL BOARD)
Patent trial and appeal board (See PATENT TRIAL AND APPEAL BOARD)
Plant variety protection (See PLANT VARIETY PROTECTION)
Unfair competition actions, notice served on Attorney General or district
attorney involving appeal of . . . . B&P 17536.5
APPLICATIONS
1801
Franchise registration (See FRANCHISES)
Judgment creditor, application for assignment of right to payment due on
judgment . . . . CCP 708.510
APPRAISAL
Franchises, appraisal of . . . . Corp 31151
APPROPRIATION
Lost property, liability for failure to return . . . . Pen 485
ARBITRATION
Franchises, binding arbitration agreement . . . . B&P 20040
ARCHITECTURAL WORK (See COPYRIGHTS)
ARCHIVES
Copyright law applicable to reproductions by . . . . 17 USC 108
AREA FRANCHISE (See FRANCHISES)
ARMS CONTROL AND DISARMAMENT AGENCY

Patents, processes, and developments from research developed by . . . . 22
USC 2572
ARMY DEPARTMENT
Procurement provisions . . . . 10 USC 2386
War materials sold to American Republics, protection of patent rights in
. . . . 22 USC 526
ART AND ARTISTS

Generally . . . . Intro §9 [1]
Actions to recover works of fine art
Statute of limitations . . . . CCP 338
1802
Affidavit for property tax exemption, filing claim for . . . . Rev&Tax 217
Agent for artist . . . . CC 1744.9
Alteration (See subhead: Destruction of art)
Art dealer defined . . . . CC 986; CC 1738; CC 1740
Artist defined . . . . CC 982; CC 986=CC 988; CC 1738; CC 1740
Art Preservation Act . . . . Intro §9 [1]; CC 987
Arts Council
Deposits by . . . . CC 986
Royalty transferred to . . . . CC 986
Assignment of residual rights . . . . CC 986
Attorneys' fees
Multiples, action based on sale of . . . . CC 1745
Physical alteration or destruction of art, artist's action based on
. . . . CC 987
Residual rights, artist suing to collect amount of . . . . CC 986
Building, removal of art work from . . . . CC 987; CC 989
California Art Preservation Act . . . . CC 987
Certificate of authenticity
Defined . . . . CC 1740
Descriptive information contained in . . . . CC 1742; CC 1744
Civil actions
Multiples, action based on sale of . . . . CC 1745.5
Organization acting in public interest bringing action to protect work
. . . . CC 989
. . . . CC 987
Commercial use defined . . . . CC 987
Conserve defined . . . . CC 987
Consignment of fine art
Generally . . . . Intro §10
Compensation . . . . CC 1738.5
Definitions . . . . CC 1738
Delivery constituting . . . . CC 1738.5
Duties of consignee . . . . CC 1738.6
Effective date of statute . . . . CC 1738.9
Multiples, consignment of . . . . CC 1744.9
Payment to consignor . . . . CC 1738.7
Results of . . . . CC 1738.6
Waiver void . . . . CC 1738.8
1803
Contracts for artistic services . . . . Intro §14[8]
Copies
Rights of reproduction (See subhead: Reproduction rights)
Sale of (See subhead: Multiples, sale of)
Cost of removal defined . . . . CC 989
Damages
. . . . CC 987
Death of artist
Multiples, sale of . . . . CC 1744
Protection of art from defacement or alteration . . . . CC 987
Residual rights upon . . . . CC 986
Definition of fine art . . . . CC 982; CC 986; CC 987; CC 989; CC 1738
Delivery of art to art dealer . . . . CC 1738.5
Demolition of building containing art work . . . . CC 987; CC 989
Destruction of art
Master . . . . CC 1744
Protection from . . . . 17 USC 106A; CC 987; CC 989
Disclaimers
Authorship . . . . CC 987
Multiples, sale of . . . . CC 1742; CC 1744.7; CC 1745
Drawing defined . . . . Rev&Tax 217
Enforcement of personal service contracts of special, extraordinary or
intellectual character . . . . Lab 2855
Engravings . . . . Rev&Tax 217
Etchings . . . . Rev&Tax 217
Fair use of fine art . . . . CC 982
Frame, definition of . . . . CC 987
Free fine arts, work of . . . . Rev&Tax 217
Gallery, taxation of property displayed in (See subhead: Taxation)
Gross negligence of person who frames, conserves or restores art . . . . CC
987
Impression defined . . . . CC 1740
Indian arts and crafts (See INDIAN ARTS AND CRAFTS)
Infringement of rights in and to artistic production, complaint in action for
. . . . CCP 429.30
Injunctive relief
Breach of contract for personal services of special, extraordinary or
1804
intellectual character . . . . CC 3390; CC 3423; CCP 526
Multiples, action based on sale of . . . . CC 1745.5
Organization acting in public interest bringing action to protect work
. . . . CC 989
. . . . CC 987
Limitation periods (See subhead: Statutes of limitation)
Limited edition defined . . . . CC 1740
Limited liability companies (See LIMITED LIABILITY COMPANIES)
Lithographs . . . . Rev&Tax 217
Master defined . . . . CC 1740
Mosaic defined . . . . Rev&Tax 217
Multiples, sale of
Applicability of title . . . . CC 1741
Attorneys' fees, recovery of . . . . CC 1745
Basis of bargain, information as part of . . . . CC 1744.7
Catalog, prospectus, or circular, information published in . . . . CC
1742
Certificate of authenticity (See subhead: Certificate of authenticity)
Charitable organizations exempt from disclosure requirements . . . . CC
1742.6
Deceased artist . . . . CC 1744
Destruction of master after current edition . . . . CC 1744
Disclaimers . . . . CC 1742; CC 1744.7; CC 1745
Disclosures required . . . . CC 1742
Injunctive relief for violation of . . . . CC 1745.5
Liability of consignors and agents . . . . CC 1744.9
Liability of offeror or seller . . . . CC 1745
Limitation of actions on . . . . CC 1745
Limited editions . . . . CC 1740; CC 1744
Mistaken, erroneous, or false information, liability for . . . . CC 1745
Penalties for violation of statute . . . . CC 1745.5
Posthumous multiple . . . . CC 1744
Posting sign by dealer . . . . CC 1742
Value of multiple . . . . CC 1741
Warranty, express . . . . CC 1744.7
Negligence of person who frames, conserves or restores art . . . . CC 987
Not-for-profit organization acting to preserve or restore art . . . . CC 989
Original sculpture or statuary . . . . Rev&Tax 217
Painting defined . . . . Rev&Tax 217
1805
Performance of work (See subhead: Reproduction rights)
Person defined . . . . CC 987
Physical alteration of fine art, protection from . . . . CC 987; CC 989
Preservation or restoring integrity of work of art . . . . CC 989
Prints
Defined . . . . CC 1740
Sale of (See subhead: Multiples, sale of)
Taxation of . . . . Rev&Tax 217
Proofs defined . . . . CC 1740
Publicity, right of . . . . Intro §9[2]
Real property, removal of work of art from . . . . CC 987; CC 989
Reproduction rights
Conveyance of right . . . . CC 988
Defined . . . . CC 982
Reservation of . . . . CC 982; CC 988
Transfer of . . . . CC 982
Resale Royalties Act . . . . CC 986
Reservation of ownership rights in reproduced, displayed or performed
work of art . . . . CC 988
Residual rights of artist on sale of work . . . . CC 986
Restore defined . . . . CC 987
Rights of artists . . . . Intro §9[1]
Sales tax exemption . . . . Rev&Tax 6365; Rev&Tax 6366.3
Sculpture defined . . . . Rev&Tax 217
Severability clauses
California Art Preservation Act . . . . CC 987
Not-for-profit organization acting to preserve art . . . . CC 989
Residual rights on sale or transfer of art . . . . CC 986
Sketch defined . . . . Rev&Tax 217
Stained glass artistry . . . . CC 986
Statuary defined . . . . Rev&Tax 217
Statutes of limitation
California Art Preservation Act, action based on . . . . CC 987
Multiples, action based on sale of . . . . CC 1745
Not-for-profit organization, actions to preserve art brought by . . . . CC
989
Residual rights of artist, action based on . . . . CC 986
Theft of art works, statute for . . . . Intro §14[6]
Actions to recover works of fine art . . . . CCP 338
1806
Successor in interest of rights to art . . . . Intro §9[2]
Taxation
Full value of work never sold or exhibited for profit . . . . Rev&Tax
986
Personal property displayed in gallery or museum, claim for exemption
of . . . . Rev&Tax 217
UCC provisions
Personal property leases, generally (S e e PERSONAL PROPERTY
LEASES)
Sale of goods, generally (See SALE OF GOODS)
Visual art defined . . . . 17 USC 106A
Waivers
Consignment, statutory provisions concerning . . . . CC 1738.8
Physical destruction of art . . . . CC 987
Residual rights . . . . CC 986
Woodcuts . . . . Rev&Tax 217
Work of art . . . . CC 988; Rev&Tax 6365
ARTICLES OF INCORPORATION (See CORPORATIONS)
ARTS COUNCIL (See ART AND ARTISTS)
ASSIGNMENTS
Art works, assignment of residual rights . . . . CC 986
Atomic energy federally financed inventions, patents granted on . . . . 42
USC 2189
Employment contract providing for assignment of rights in inventions
. . . . Lab 2870=Lab 2872
Fair dealership law . . . . CC 85
Fictitious business name statement, execution, filing, and publication by
assignee . . . . B&P 17919
Franchisor assigning its interest in marketing premises . . . . B&P 20025
Invention, assignment of interest in . . . . CC 982
Invention development services contracts, equities and defenses of customer
. . . . B&P 22377
Judgment creditor, application for order assigning judgment debtor's right to
payments to . . . . CCP 708.510
Original works of authorship not fixed in any tangible medium . . . . CC 982
1807
Seller assisted marketing plans, assignee of seller . . . . CC 1812.211
Trademarks (state) . . . . B&P 14220
ASSOCIATIONS
Director of association as employee . . . . UI 622
Incorporation of existing unincorporated associations . . . . Corp 200.5
Registration of name of (See TRADE NAMES)
Trade associations (See TRADE ASSOCIATIONS)
ATHLETICS (See SPORTS)
ATOMIC ENERGY
Antitrust violations, compulsory license to remedy . . . . 42 USC 2188
Assignment to US of patents granted on federally financed inventions
. . . . 42 USC 2189
Commission (See ATOMIC ENERGY COMMISSION)
Compulsory license in inventions and patents declared affected with public
interest . . . . 42 USC 2183; 42 USC 2186
Damages in action against patent licensee . . . . 42 USC 2184
Declaration of patent affected with public interest . . . . 42 USC 2183; 42
USC 2186
Definitions . . . . 42 USC 2014
Design defined . . . . 42 USC 2014
Federally financed research, assignment to U.S. of patents granted from
. . . . 42 USC 2189
Government contract, nuclear material or atomic energy inventions made
under . . . . 42 USC 2182
Injunctions against use of invention by patent licensee . . . . 42 USC 2184
Patent Compensation Board to determine reasonable royalty fees . . . . 42
USC 2187
Reinstatement of prior patent application . . . . 42 USC 2190
Reports of inventions to Commissioner of Patents . . . . 42 USC 2181
Research and development defined . . . . 42 USC 2014
Royalty fees, Patent Compensation Board to determine . . . . 42 USC 2187
Secret prior art, effect on granting patent . . . . 42 USC 2185
1808
Standard specifications for compulsory license . . . . 42 USC 2186
Weapons, denial of patent for inventions useful solely in . . . . 42 USC 2181
ATOMIC ENERGY COMMISSION

Inspection of patent by . . . . 35 USC 181
Rules and regulations for secret inventions . . . . 35 USC 188
ATTACHMENT
Deposit in lieu of bond . . . . CC 1812.221
ATTORNEY GENERAL
Advertisements claiming factual evidence, request for proof . . . . B&P
17508
Air pollution patent, compulsory licensing of . . . . 42 USC 7608
Convicted felon's story, action to recover proceeds from sale of . . . . CC
2225
Email
Advertisements, unsolicited
Damages and other remedies against spammers . . . . B&P 17529.8
False advertising, actions prosecuted by . . . . B&P 17535.5; B&P 17536
Fine art multiples, violations in sale of . . . . CC 1745.5
Invention development services contracts, violations concerning . . . . B&P
22387
nuisance . . . . CC 3506=CC 3507.2
Seller assisted marketing plans (S e e SELLER ASSISTED MARKETING
PLANS)
Unfair competition, action for injunctive relief . . . . B&P 17204; B&P
17207
ATTORNEYS
Administrative agencies, representing clients before . . . . 5 USC 500
Advertising, restrictions on . . . . 5 USC 501; B&P 17500.1
City attorneys (See ATTORNEYS)
Congressmen, restrictions on using name of . . . . 5 USC 501
Fees (See ATTORNEYS' FEES)
Petroleum franchises, meetings between dealers and distributors . . . . B&P
1809
20999.2
Plant Variety Protection Office, practice before ( S e e PLANT VARIETY
PROTECTION)
Rules, regulations, or code of ethics restricting advertising, exception for
. . . . B&P 17500.1
ATTORNEYS' FEES
Art and artists (See ART AND ARTISTS)
Computer-related crimes, actions for . . . . Pen 502
Contract, recovery of fees in action on . . . . CC 1717
Convicted felon's story, actions to recover proceeds from sale of . . . . CC
2225
Copyright infringement suit . . . . 17 USC 505
Copyrights
Counterfeit of labels, packaging or documentation . . . . 18 USC 2318
Deceased personality, actions for unauthorized use of name, voice,
signature, etc. of . . . . CC 3344.1
Email
Spammers, remedies against . . . . B&P 17529.8
Spammers, restrictions on unlawful commercial email
advertisements . . . . B&P 17529.5
Fair dealership law, violations of . . . . CC 86
Frivolous litigation
Attorney liability for excessive costs . . . . 28 USC 1927
Invention development services contracts, civil action for . . . . B&P 22386
Killing or cruelty to animal or human in motion pictures, liability for
. . . . CC 3507.4
Patent infringement actions (See PATENTS)
Plant variety protection, infringement suit . . . . 7 USC 2565
Trade names, action by registrant . . . . B&P 14438
Uniform Trade Secrets Act, bad faith claims under . . . . CC 3426.4
Vessels, infringement action regarding protected design of . . . . 17 USC
1323
Vexatious litigation
AUDIOVISUAL WORKS
1810
Disclose origin, failure to
Generally . . . . Pen 653w
Forfeiture and destruction of illicit items . . . . Pen 653v
Evidence in action to enjoin showing of movie, admissibility of movie
depicting killing or cruelty to animal or human as . . . . CC 3507.1
Live performance, unauthorized recording of
Generally . . . . 18 USC 2319A
Attorney General's periodic report concerning prosecutions . . . . 18
USC 2320
Copyright provisions . . . . 17 USC 1101
Motion pictures (See MOTION PICTURES)
Recording devices used in theater to record motion picture . . . . Pen 653z
Unauthorized electronic dissemination of commercial recordings or
audiovisual works
Criminal enforcement . . . . Pen 653aa
AUTHORSHIP (See also TITLE AND OWNERSHIP)

Artists (See ART AND ARTISTS)
Constitutional protection . . . . US Const art I §8 cl. 8
Convicted felon's story, sale of . . . . CC 2225
Designs, generally (See INVENTIONS AND DESIGNS)
Fine arts (See ART AND ARTISTS)
Graphical representation, ownership of . . . . CC 980
Infringement of rights in and to literary, artistic, or intellectual production,
complaint in action for . . . . CCP 429.30
Inventions (See INVENTIONS AND DESIGNS)
Joint authorship . . . . CC 981
Letters and private writings . . . . CC 985
Original work not fixed in any tangible medium of expression
Exclusive ownership rights . . . . CC 980
Transfer of ownership . . . . CC 982
Private writings . . . . CC 985
Sound recording fixed prior to February 15, 1972 . . . . CC 980
U. S. Constitution, clause securing rights to authors . . . . US Const art I §8
cl. 8
AUTOGRAPHED SPORTS MEMORABILIA
1811
Certificates of authenticity . . . . CC 1739.7; Intro §14[9]
B
BAD FAITH
Uniform Trade Secrets Act . . . . CC 3426.4
BANKRUPTCY
Executory contracts, bankruptcy trustee to assume or reject . . . . 11 USC
365
trustee . . . . B&P 17919
Seller assisted marketing plans . . . . CC 1812.206
Trusts
Insolvent person as trustee
Recommending to trustor that insolvent person serve as trustee
. . . . B&P 17530.1
Unexpired leases of debtor, bankruptcy trustee to assume or reject . . . . 11
USC 365
BANKS AND BANKING

Access card, publishing number or code of . . . . Pen 484j
Corporations subject to . . . . Corp 202
Credit card plans as exempt from franchise law (See FRANCHISES)
BED AND BREAKFAST INNS

Unauthorized distribution of handbills in rooms constituting unfair
competition . . . . B&P 17210
BEER
Brand names
Filing . . . . B&P 25203
Labels . . . . B&P 25200
Refilled containers . . . . B&P 25200
BENEFICIAL ASSOCIATIONS
1812
BENEFICIARIES
Definition of beneficiary (crime victim) . . . . CC 2225
Involuntary trust for beneficiary from proceeds of convicted felon's story
. . . . CC 2225
BEQUESTS
BERNE CONVENTION (See COPYRIGHTS)
BEST EDITION
Copyrights . . . . 17 USC 101
BEVERLY-KILLEA LIMITED LIABILITY COMPANY ACT ( See

LIMITED LIABILITY COMPANIES)
BIOTECHNOLOGY
Nonobviousness of biotechnological process, criteria for . . . . 35 USC 103
Patent applications for products manufactured by . . . . 35 USC 156; 35
USC 271
BLACK LUNG DISEASE (See COAL MINING)
BLIND PERSONS
BOARD OF PATENT APPEALS AND INTERFERENCES ( See

PATENTS)
BOATS (See VESSELS)
BONDS (See SURETY BONDS)
BOTTLES
Container brands (See TRADE NAMES)
BREEDERS
BRIBERY
Community colleges
Textbooks and instructional materials
1813
Improper influence by publishers on purchasing decision-makers
. . . . Ed 78900
BROADCAST FREQUENCIES
BROADCASTING TRANSMISSIONS
False advertising provisions, publishers acting in good faith . . . . B&P
17502; B&P 17508
Fraudulent use of to obtain privileged information from public utility
. . . . Pen 538.5
BROKERS
Franchises, persons effecting offer or sale of . . . . Corp 31210
Real estate brokers (See REAL ESTATE BROKERS AND AGENTS)
BUILDINGS
Fine art, removal from building . . . . CC 987; CC 989
Notices to owners of violations of building or housing codes, public records
. . . . Gov 6254.7
BURDEN OF PROOF
Franchises, exemptions or exceptions . . . . B&P 20009; Corp 31153
Killing or cruelty to animal or human in motion pictures, actions to enjoin
. . . . CC 3507.1
Seller assisted marketing plans, exemptions and exceptions . . . . CC
1812.216
BURIAL
BUSINESSES
Address and name
Disclosures by companies using post office box address, private
mailbox receiving service, etc . . . . B&P 17538.5
Definitions
Applicability of . . . . B&P 14000
Person . . . . B&P 14001
1814
Good will (See GOOD WILL)
Related companies, trademarks used by . . . . 15 USC 1055
Small businesses (See PATENTS)
BUSINESS RECORDS
Contest solicitation provisions requiring maintenance of . . . . B&P 17539.2
Franchisor maintaining . . . . Corp 31150
Government records, admissibility of . . . . 28 USC 1733
BUY-BACK ARRANGEMENTS ( See SELLER ASSISTED MARKETING

PLANS)
C
CABLE SYSTEMS (See COPYRIGHTS)
CALLIGRAPHY (See ART AND ARTISTS)
CANCELLATIONS
Plant variety protection, abandonment of procedure for certificate of
cancellation . . . . 7 USC 2501
PLANS)
CANS
CAPACITY
Ownership of property . . . . CC 671
1815
CARRIERS
CASES
CASKETS OR OTHER BURIAL CONTAINERS

CASKS
CATCHES
Platinum group, application of quality marks to . . . . B&P 22125
CATHODE RAY TUBES (CRT)

Picture tubes generally . . . . B&P 17531.6=B&P 17531.9
CEASE AND DESIST ORDERS

Plant variety protection, infringement . . . . 7 USC 2568
CELLULAR PHONES
Advertisements
pagers
Prepaid calling services, information disclosure requirements for
. . . . B&P 17538.9
CENSORING
Motion pictures
Technology making limited portions of content imperceptible
Manufacturer, licensee or licensor liability . . . . 15 USC 1114
Private household use . . . . 17 USC 110
CERTIFICATES
Corporation name, certificate of reservation of . . . . Corp 201
Farm name, certificate of registration of . . . . B&P 14461
1816
Fine art multiples, sale of (See ART AND ARTISTS)
Foreign corporations transacting business in state . . . . Corp 2105; Corp
2106; Corp 2106.5
Insurers (See INSURANCE COMPANIES)
CERTIFICATION MARKS ( S e e PRECIOUS METALS MARKING;

TRADEMARKS (FEDERAL))
CHARITABLE ORGANIZATIONS
Fine art multiples, sale of . . . . CC 1742.6
Performing services for . . . . Lab 3352
CHARITABLE PERFORMANCES
Copyrighted works, exemptions for . . . . 17 USC 110
CHARITABLE TRUSTS
Contest solicitation provisions not applicable to . . . . B&P 17539.3
CHECKS
Postdated checks
Requiring or requesting consumer to issue . . . . B&P 17538.6
CHILD CARE SERVICES

Excluded from employee status . . . . Lab 3352
In-home supportive services . . . . Lab 3351.5
CHILDREN OR MINORS
Computer-related crimes by . . . . Pen 502; Pen 502.01
Copyright definitions . . . . 17 USC 101
Drugs and drug products
Pediatric use
Infectious disease products, exclusivity period extensions . . . . 21
USC 355f
Internal committee for review of pediatric plans, deferrals, waivers,
etc . . . . 21 USC 355d
1817
Plans, assessments, deferrals and waivers . . . . 21 USC 355d
Rare diseases or conditions, priority review to encourage treatments
. . . . 21 USC 360ff
Reports on research for pediatric use of drugs . . . . 21 USC 355c–1
Research into pediatric uses for drugs and biological products
. . . . 21 USC 355c
Studies of drugs for . . . . 21 USC 355a
CHOREOGRAPHIC WORKS (See COPYRIGHTS)
CITY ATTORNEYS
17508
False advertising, prosecution of action for . . . . B&P 17535.5; B&P 17536
Fine art multiples, violations for sale of . . . . CC 1745.5
22387
Unfair competition, prosecution of action for
Generally . . . . B&P 17204; B&P 17206; B&P 17207
San Jose city attorney, prosecution by . . . . B&P 17204.5
CIVIL ACTIONS
Advertisements (See ADVERTISEMENTS)
Computer-related crimes . . . . Pen 502
Container brands registrant, action by . . . . B&P 14438
Copyrights
Deceased personality, unauthorized use of name, voice, signature, etc. of
. . . . CC 3344.1
Petitions and civil actions regarding approval of certain applications
. . . . 21 USC 355
Email
Damages and other remedies against spammers . . . . B&P 17529.8
Spammers, restrictions on unlawful commercial email
advertisements . . . . B&P 17529.5
1818
Invention development services contracts . . . . B&P 22386
Deceptive and improper invention promotion . . . . 35 USC 297
Seller assisted marketing plans, purchaser suing seller in . . . . CC
1812.218
Standing to sue (See STANDING TO SUE)
Statutes of limitation (See STATUTES OF LIMITATION)
Stolen property, action for buying or receiving . . . . Pen 496
Trademarks (state)
Grounds for civil action . . . . B&P 14245
Injunctions
Famous marks, use by others . . . . B&P 14247
Procedure in actions for injunction . . . . B&P 14250
Trade secrets, civil procedure involving . . . . Intro §[4]; Intro §14[3]
Venue (See VENUE)
CIVIL PENALTIES (See FINES AND PENALTIES)
CLAIMS
Patent claims (See PATENTS)
United States, claims against (See UNITED STATES)
CLASS ACTIONS
Jurisdiction
Federal district court diversity jurisdiction . . . . 28 USC 1332
COAL MINING
Alternative technologies, information from research on . . . . 30 USC 1328
Health and safety research, information, patents, etc. on . . . . 30 USC 951
Illnesses of miners, information, patents, etc. from research on . . . . 30 USC
937
Respiratory and pulmonary impairments of miners, information, patents, etc.
from research on . . . . 30 USC 937
Surface mining control and reclamation research, products, patents, etc.
from . . . . 30 USC 1226
COAL SALES
Fraudulent coal sales . . . . B&P 17532
1819
COAT OF ARMS
Trademark consisting of . . . . 15 USC 1052
COLLECTIVE WORKS (See COPYRIGHTS)
COLLEGES
Generally (See UNIVERSITIES AND COLLEGES)
Community college districts, works developed by (S e e COPYRIGHTS,
subhead: Education and schools)
COLOR ADDITIVES
Patents, extension of term . . . . 35 USC 156
COMBINATIONS (See PATENTS)
COMMERCE
Commerce Clause of U. S. Constitution . . . . US Const art I §8 cl. 3
Interstate commerce (See INTERSTATE COMMERCE)
COMMERCE, UNITED STATES DEPARTMENT OF

Classification of information for purposes of national security . . . . 15 USC
1155
Patent and Trademark Office (See PATENT AND TRADEMARK OFFICE)
COMMERCIAL CODE
Personal property leases (See PERSONAL PROPERTY LEASES)
Sale of goods (See SALE OF GOODS)
COMMISSIONERS OF PATENTS AND TRADEMARKS ( Se e PATENT

AND TRADEMARK OFFICE)
COMMISSIONS ON SALES
judgment . . . . CCP 708.510
COMMODITIES
Container brand violations . . . . B&P 14438
COMMON INTERESTS (See TITLE AND OWNERSHIP)
COMMON LAW
1820
Federal copyright law preempting rights under . . . . 17 USC 301
Franchises, liability for offer and sale of . . . . Corp 31306
Trademarks (state)
Rights acquired within common law . . . . B&P 14259
COMMUNICATIONS
Broadcasting transmissions (See BROADCASTING TRANSMISSIONS)
Electronic communications, trademark infringement . . . . 15 USC 1114
COMMUNITY COLLEGE DISTRICTS

Copyrights (See COPYRIGHTS, subhead: Education and schools)
COMMUNITY COLLEGES
. . . . Ed 78900
COMMUNITY PROPERTY
COMPENSATION
Consignment of fine art . . . . CC 1738.5
Indian Arts and Crafts Board, compensation for members of . . . . 25 USC
305
Patents, compensation for secrecy order relating to . . . . 35 USC 183
Plant Variety Protection Board members . . . . 7 USC 2327
COMPETITION
Agreements not to compete
Corporate shareholder's agreement on sale of business . . . . B&P 16601
Franchises, termination of . . . . B&P 20025
Limited liability companies, sale or dissolution . . . . B&P 16602.5
Partner's agreement on dissociating from partnership or selling
partnership interest or on dissolution of partnership . . . . B&P
16602
Sole proprietor's agreement on sale of business . . . . B&P 16601
Void contracts . . . . B&P 16600
Contracts in restraint of trade, prohibition on . . . . Intro §7
1821
Customer lists
Employment agency . . . . B&P 16607
Telephone answering service . . . . B&P 16606
Employment agency, customer list as trade secret . . . . B&P 16607
False advertising (See ADVERTISEMENTS)
Limited liability companies, competition agreements on sale or dissolution
. . . . B&P 16602.5
Telephone answering service, customer list as trade secret . . . . B&P
16606
Unfair competition (See UNFAIR COMPETITION)
COMPILATIONS (See COPYRIGHTS)
COMPLAINTS
Infringement of rights in literary, artistic or intellectual property, action for
. . . . Intro §14[1]; CCP 429.30
COMPUTERS
Crediting of programmers by software producers and licensees as not
required under disclosure-of-origin provision for recordings and
audiovisual works . . . . Pen 653w
Criminal offenses
Generally . . . . Intro §13; Pen 502
Copyrights (S e e COPYRIGHTS, subhead: Criminal offenses and
penalties)
Forfeiture of computer equipment used in committing computer-related
crime . . . . Pen 502.01
Password or access code, publication of . . . . Pen 484j
Prisoners convicted of computer-related crimes, prohibition of access to
prison computer system for . . . . Pen 2702
Trade secret theft . . . . Pen 499c
Evidence, admissibility of computer printouts as . . . . Intro §14[5]
Government-developed software, sale and licensing of . . . . Gov 6254.9
Military procurement provisions . . . . 10 USC 2386
Password or access code, larcenous publication of . . . . Pen 484j
Public records stored in computers . . . . Gov 6254.9
Semiconductor chip products (See COPYRIGHTS)
Trade secret theft . . . . Pen 499c
1822
CONCERTS
Unauthorized recording
Audiovisual works (See AUDIOVISUAL WORKS)
Sound recordings (See SOUND RECORDINGS)
CONCURRENT USE (See TRADEMARKS (FEDERAL))
CONDITIONS OF OWNERSHIP (See PROPERTY)
CONFIDENTIALITY
Invention development services contracts, customer disclosures . . . . B&P
22395
Patent applications . . . . 35 USC 122
Plant variety protection application . . . . 7 USC 2426
Tax return preparation businesses
Disclosures of tax return data . . . . B&P 17530.5
Transmissions by wire, radio or television to obtain information . . . . Pen
538.5
CONFUSING OR DECEPTIVE SIMILARITY

CONSERVATORSHIP
Fictitious business name statement, execution, filing, and publication of
. . . . B&P 17919
CONSIGNMENTS
CONSUMER AFFAIRS, LOCAL AGENCIES ( S e e UNFAIR

COMPETITION)
CONSUMER COOPERATIVE CORPORATIONS

Names of . . . . Corp 12311
CONSUMER GOODS AND SERVICES

Another's name, voice, signature, etc., unauthorized use of in . . . . CC 3344
Definition of . . . . B&P 17504
False advertising of (See ADVERTISEMENTS)
1823
Grey market goods (See GREY MARKET GOODS)
CONSUMER PRODUCT SAFETY COMMISSION

Information, uses, processes, and patents made available to public . . . . 15
USC 2054
Injury information clearinghouse maintained by . . . . 15 USC 2054
CONSUMER PROTECTION
Board within the Dept. of Consumer Affairs (See UNFAIR COMPETITION)
Credit, extension of (See CREDIT)
Local consumer affairs agency (See UNFAIR COMPETITION)
CONTAINER BRANDS (See TRADE NAMES)
CONTAINERS
Alcoholic beverages . . . . B&P 25200=B&P 25246
Mark or identity of country of origin on goods imported into United States
. . . . 19 USC 1304
Refilled . . . . B&P 25200
Trade names (See TRADE NAMES)
CONTEMPT
Franchise registration matters, commissioner's powers in . . . . Corp 31401
CONTESTED CASES
Patents, witnesses in cases involving . . . . 35 USC 24
CONTEST SOLICITATIONS
CONTRACTORS
Licensed contractors, employee defined . . . . UI 621.5
CONTRACTS
Artistic services, contracts for . . . . Intro §14[8]
Attorneys' fees recovered in action on contract . . . . CC 1717
Covenants not to compete (See COMPETITION)
Deceased personality, rights to name, voice, signature, photograph, etc. of
1824
. . . . CC 3344.1
Deposit in court of disputed funds . . . . CC 1717
Employment contracts (See EMPLOYERS AND EMPLOYEES)
Executory contract subject to bankruptcy proceedings of debtor-licensor,
licensee's right to intellectual property under . . . . 11 USC 365(n)
Fictitious business name statement, filing necessary to maintaining action on
contract . . . . B&P 17918
Government contracts (See GOVERNMENT CONTRACTS)
Injunctive relief to prevent breach, denial of . . . . CC 3423; CCP 526
Recording artist contracts
Royalty obligations . . . . CC 2500; CC 2501
Restraints from engaging in business (See COMPETITION)
PLANS)
Specific performance, contracts not subject to . . . . CC 3390
Voidable contracts
Seller assisted marketing plan contracts . . . . CC 1812.215
Void contracts
Restraints from engaging in business or profession . . . . B&P 16600
Warranties against infringement
CONTRIBUTION, RIGHT OF
Joint tortfeasors
Generally . . . . CCP 875
Entry of judgment for contribution . . . . CCP 878
Good faith settlements between plaintiff and one or more joint
tortfeasors, effect of . . . . CCP 877.6
Pro rata share for each tortfeasor, determination of . . . . CCP 876
Release, dismissal of suit, or covenant not to sue, effect of . . . . CCP
877
Sliding scale recovery agreements . . . . CCP 877.5
Other joint judgment debtors
1825
Generally . . . . CCP 882
Applicable law . . . . CCP 881
Motion for order to determine liability for contribution or repayment
. . . . CCP 883
CONVEYANCES
COOPERATIVES
Corporations doing business as . . . . Corp 12311
COPIES
Art works (See ART AND ARTISTS)
Fictitious business name statements, certified copies of . . . . B&P 17926
Fine art multiples (See ART AND ARTISTS)
Foreign countries, copies of records and documents of . . . . 28 USC 1741
Government records, admissibility of copies of . . . . 28 USC 1733
PLANS)
Trademarks (federal), unauthorized use of copies . . . . 15 USC 1114
COPYRIGHT OFFICE (See COPYRIGHTS)
COPYRIGHT ROYALTY TRIBUNAL (See COPYRIGHTS)
COPYRIGHTS
Affiliated entity licensed by copyright owner of sound recording . . . . 17
USC 114
Agents
Copyright owners and performers of sound recordings . . . . 17 USC
114
Internet service provider's agent for infringement liability . . . . 17 USC
512
Agricultural fairs, performances in . . . . 17 USC 110
Anonymous works
1826
Defined . . . . 17 USC 101
Duration of copyright . . . . 17 USC 302
Application for registration (See subhead: Registration)
Arbitration Royalty panels
Copyright royalty judges generally (See subhead: Copyright royalty
judges)
Architectural work
Defined . . . . 17 USC 101
Exclusive rights in, scope of . . . . 17 USC 120
Treaty party or U.S., protection for work incorporated in structure
located in . . . . 17 USC 104
Archives
Definition of archived program . . . . 17 USC 108
Reproductions by . . . . 17 USC 108
Audiovisual works
Automatic gain control copy control technology . . . . 17 USC 1201; 17
USC 1203=17 USC 1205
Counterfeits (See subhead: Counterfeits)
Defined . . . . 17 USC 101
Fixation of live musical performance into recording
Criminal offenses . . . . 18 USC 2319A
Unauthorized fixation and trafficking in sound recordings and music
videos . . . . 17 USC 1101
Motion pictures (See subhead: Motion pictures)
Berne convention
Defined . . . . 17 USC 101
Berne Convention treaty
Definition . . . . 17 USC 301
Effect of . . . . 17 USC 104
Preemption doctrine not affected by . . . . 17 USC 301
Best edition defined . . . . 17 USC 101
Blind persons
Phonorecords distributed to . . . . 17 USC 121
Transmissions to . . . . 17 USC 110
Broadcasting transmissions (See subhead: Transmissions)
Cable systems
Defined . . . . 17 USC 111
Remedies for infringement actions against . . . . 17 USC 510
Secondary transmissions . . . . 17 USC 111
Filing fees . . . . 17 USC 708
Infringement, when considered . . . . 17 USC 501
1827
Certificates
Recordation of transfers . . . . 17 USC 205
Registration certificate, issuance of . . . . 17 USC 410
Registration of protected vessel design . . . . 17 USC 1314; 17 USC
1319
Transfer of ownership, acknowledgment of . . . . 17 USC 204
Charitable performances, exemption for . . . . 17 USC 110
Children defined . . . . 17 USC 101
Choreographic works
Generally . . . . 17 USC 102
Exclusive rights in copyrighted works . . . . 17 USC 106
Circumvention of technological measure controlling access to materials
. . . . 17 USC 1201; 17 USC 1203=17 USC 1205
Coin-operated phonorecord players, public performances by . . . . 17 USC
116
Collective works
Contributions to . . . . 17 USC 201
Defined . . . . 17 USC 101
Notice of copyright . . . . 17 USC 404
Common law, preemption of . . . . 17 USC 301
Community college districts, works developed by (See subhead: Education
and schools)
Compilations
Defined . . . . 17 USC 101
Subject matter of copyright . . . . 17 USC 103
Computer programs
Counterfeiting (See subhead: Counterfeits)
Defined . . . . 17 USC 101
Encryption systems to provide copyright protection . . . . 17 USC 1201;
17 USC 1203=17 USC 1205
Reverse engineering, circumstances allowing . . . . 17 USC 1201
Scope of exclusive rights . . . . 17 USC 117
Continuous program defined . . . . 17 USC 114
Contributions to collective works (See subhead: Collective works)
Copies
Defined . . . . 17 USC 101
Deposit of (See subhead: Deposits of copies or phonorecords)
Ephemeral recordings for later transmissions . . . . 17 USC 112
Libraries and archives, reproduction by . . . . 17 USC 108
Transfer of particular copy, effect of . . . . 17 USC 109
1828
Copyright Office
Application forms and informational material provided by . . . . 17 USC
707
Catalog of copyright registrations . . . . 17 USC 707
Copies of records . . . . 17 USC 706
Delay in deliveries to . . . . 17 USC 709
Deposits, retention and disposition of . . . . 17 USC 704
Effective date for performance of action by . . . . 17 USC 703
Publications of . . . . 17 USC 707
Records of . . . . 17 USC 705
Regulations of . . . . 17 USC 702
Copyright owner defined . . . . 17 USC 101
Copyright royalty judges . . . . 17 USC 801=17 USC 805
Appeal or judicial review . . . . 17 USC 803
Appointments . . . . 17 USC 801
Coin-operated phonorecord players, public performances by
Duties of judges as to . . . . 17 USC 116
Compensation . . . . 17 USC 802
Conflicts from taking on duties inconsistent with office . . . . 17 USC
802
Costs and other administrative matters . . . . 17 USC 803
Defined . . . . 17 USC 101
Determination of judges . . . . 17 USC 803
Duties . . . . 17 USC 801
Ephemeral recordings
Incapacity . . . . 17 USC 802
Independence . . . . 17 USC 802
Institution of proceedings . . . . 17 USC 804
Interpretations from Register of Copyrights . . . . 17 USC 802
Nondramatic musical works
Panels, judges acting as . . . . 17 USC 803
Participation in proceeding . . . . 17 USC 803
Petition to institute proceedings . . . . 17 USC 804
Phonorecords
Procedure before judges . . . . 17 USC 803
Public or noncommercial broadcasting, use of works in
1829
Qualifications . . . . 17 USC 802
Removal . . . . 17 USC 802
Sanctions, grounds . . . . 17 USC 802
Secondary transmissions
Satellite, distant television programming by . . . . 17 USC 119
Sound recordings
Staffing assistance . . . . 17 USC 802
Terms . . . . 17 USC 802
Timing of proceedings . . . . 17 USC 804
Vacancies in office . . . . 17 USC 802
Voluntarily negotiated agreements . . . . 17 USC 805
Costs of infringement suit . . . . 17 USC 505
Counterfeits
Attorney General's periodic report concerning counterfeiting
prosecutions . . . . 18 USC 2320
Documentation . . . . 18 USC 2318
Labels . . . . 18 USC 2318
Packaging . . . . 18 USC 2318
Created work defined . . . . 17 USC 101
Criminal offenses and penalties
Coin-operated phonorecord players, public performances by . . . . 17
USC 116
Illicit labels . . . . 18 USC 2318
Infringement (See subhead: Infringement)
Limitation of actions . . . . 17 USC 507
Date on notice of copyright, defect in . . . . 17 USC 406
Deaf persons, transmissions to . . . . 17 USC 110
Death of author
Duration of copyright . . . . 17 USC 303; 17 USC 304
Posthumous works, copyright of . . . . 17 USC 304
Presumption as to . . . . 17 USC 302
Recordation of statement of . . . . 17 USC 302
Surviving spouse and children, ownership of copyright by . . . . 17 USC
201; 17 USC 203; 17 USC 304
Termination of transfers and licenses upon . . . . 17 USC 203
Definitions, general provisions . . . . 17 USC 101
Deposits of copies or phonorecords
1830
Administrative classifications affecting . . . . 17 USC 408
Records and indexes of . . . . 17 USC 705
Registration, deposit for . . . . 17 USC 408
Retention and disposition of . . . . 17 USC 704
Derivative works
Defined . . . . 17 USC 101
Restored work, derivative work based on . . . . 17 USC 104A
Termination of grant, effect of . . . . 17 USC 203
Destruction of infringing copies, phonorecords, or other articles
Criminal infringement . . . . 17 USC 506
Device, machine, or process defined . . . . 17 USC 101
Digital audio recording devices and media
Arbitration of disputes . . . . 17 USC 1010
Copying controls, requirement for . . . . 17 USC 1002
Determination of disputes . . . . 17 USC 1010
Inaccurate information, encoding of . . . . 17 USC 1002
Infringement actions, prohibition of . . . . 17 USC 1008
Notices, filing of . . . . 17 USC 1003
Remedies for violative acts . . . . 17 USC 1009
Royalty payments
Allocation of . . . . 17 USC 1006
Amount of . . . . 17 USC 1004
Deposit of . . . . 17 USC 1005
Distribution of . . . . 17 USC 1007
Entitlement to . . . . 17 USC 1006
General obligations . . . . 17 USC 1003
Serial copying, requirement for preventing . . . . 17 USC 1002
Statements of account, filing of . . . . 17 USC 1003
Digital technology (See subhead: Digital audio recording devices and
media)
Compulsory license for phonorecord transmission . . . . 17 USC 115
Performance right in sound recordings . . . . 17 USC 114
Phonorecord reproduction for archival, scholarly, or research purposes
. . . . 17 USC 108
Digital transmission
Defined . . . . 17 USC 101
1831
Displays
Defined . . . . 17 USC 101
Exemption of certain displays . . . . 17 USC 110
Distributor defined . . . . 17 USC 119
Domicile
Semiconductor chip products, owners of . . . . 17 USC 902
Dramatic works
Works of authorship . . . . 17 USC 102
Duration of
First term copyrights on January 1, 1978 . . . . 17 USC 304
Preemption of other laws . . . . 17 USC 301
Renewal and extension of copyright term . . . . 17 USC 304
Semiconductor chip products . . . . 17 USC 904
Sonny Bono Copyright Term Extension Act . . . . 17 USC 304
Subsisting copyrights . . . . 17 USC 304
Terminal date . . . . 17 USC 305
Works created but not published or copyrighted before January 1, 1978
. . . . 17 USC 303
Works created on or after January 1, 1978 . . . . 17 USC 302
Education and schools
Ephemeral recordings . . . . 17 USC 112
Exemption from infringement for educational displays or performances
. . . . 17 USC 110
Internet service provider, limitation on liability for infringement for
nonprofit institution acting as . . . . 17 USC 512
Licensing of copyrighted materials by community college districts
. . . . Ed 81459
Royalties or revenue from copyrights . . . . Ed 35170; Ed 60076; Ed
72207
Use of board or district funds to secure copyrights . . . . Ed 32360
Use of employee work time to secure copyrights . . . . Ed 32361
Employer and employee (See subhead: Works made for hire)
Encryption, copyright protection systems employing . . . . 17 USC 1201; 17
USC 1203=17 USC 1205
Energy Research and Development Administration, acquisition of
copyrights by . . . . 42 USC 5817
Establishment
Defined . . . . 17 USC 101
Exemption from infringement for transmission of nondramatic musical
1832
work . . . . 17 USC 110
Exclusive rights in copyrighted works
Computer programs . . . . 17 USC 117
Exemptions for certain displays and performances . . . . 17 USC 110
Fair use . . . . 17 USC 107
Interactive services . . . . 17 USC 114
Nondramatic musical works (See subhead: Musical works)
Particular copy or phonorecord, transfer of . . . . 17 USC 109
Pictorial, graphic, and sculptural works . . . . 17 USC 113
Semiconductor chip products . . . . 17 USC 905=17 USC 907
Sound recordings . . . . 17 USC 114
Transmissions (See subhead: Transmissions)
Extension of copyright (See subhead: Renewal and extension of
copyrights)
Fair use . . . . 17 USC 107
Financial gain
Defined . . . . 17 USC 101
Fixed work defined . . . . 17 USC 101
Food service or drinking establishment
Defined . . . . 17 USC 101
Exemption from infringement for transmission of nondramatic musical
work . . . . 17 USC 101
Foreign corporations, taxation of gain from sale to . . . . 26 USC 1249
Foreign countries
Identification of countries denying adequate protection of copyrights
. . . . 19 USC 2242
Semiconductor chip products of . . . . 17 USC 914
Forfeitures
Criminal infringement . . . . 17 USC 506
Importation prohibitions . . . . 17 USC 603
Form of notice of copyright . . . . 17 USC 401; 17 USC 402
Fraternal organizations, performances for . . . . 17 USC 110
Geneva Phonograms Convention
Defined . . . . 17 USC 101
Effect of . . . . 17 USC 104
Graphic works (See subhead: Pictorial, graphic, and sculptural works)
1833
Gross square feet of space defined . . . . 17 USC 101
Handicapped persons, transmissions to . . . . 17 USC 110
Heirs of deceased author, ownership of copyright by . . . . 17 USC 201; 17
USC 203; 17 USC 304
Horticultural fairs, performances in . . . . 17 USC 110
Illicit labels
Criminal offenses . . . . 18 USC 2318
Importation prohibitions
Regulations, promulgation of . . . . 17 USC 603
Infringement
Actual damages . . . . 17 USC 504
Attorneys' fees . . . . 17 USC 505
Cable systems (See subhead: Cable systems)
Costs . . . . 17 USC 505
Criminal infringement
Generally . . . . 17 USC 506; 18 USC 2319
Attorney General's periodic report concerning infringement
Destruction of illicit articles . . . . 17 USC 506
Forfeiture of illicit articles . . . . 17 USC 506
Notification of Register of Copyrights . . . . 17 USC 508
Penalties . . . . 18 USC 2319
Statute of limitations . . . . 17 USC 507
Damages for . . . . 17 USC 504
Destruction or other disposition of infringing copies . . . . 17 USC 503;
17 USC 506
Exporting infringing items . . . . 17 USC 602
Forfeiture of infringing copies and other articles . . . . 17 USC 506
Importation of articles . . . . 17 USC 602; 19 USC 1337
Impoundment of copies, phonorecords, or other articles . . . . 17 USC
503
Injunctive relief . . . . 17 USC 502; 17 USC 512; 17 USC 1203
Internet service providers . . . . 17 USC 512
Live transmissions, first fixation simultaneous with . . . . 17 USC 411
Notice of action . . . . 17 USC 501; 17 USC 508
Online materials
Liability limitations . . . . 17 USC 512
Penalties for criminal infringement . . . . 18 USC 2319
Profits, infringer's liability for . . . . 17 USC 504
1834
Records documenting manufacture, sale or receipt of things involved in
violation
Impoundment . . . . 17 USC 503
Registration or preregistration as prerequisite to . . . . 17 USC 411; 17
USC 412
Semiconductor chip products . . . . 17 USC 910; 17 USC 911
Special damages for claimed exempted use . . . . 17 USC 504
States, actions against . . . . 17 USC 511
Statute of limitation . . . . 17 USC 507
Statutory damages . . . . 17 USC 504
United States, actions against . . . . 28 USC 1498
Vessel design (See VESSELS)
Willfulness
Presumption of willfulness, facts giving rise to . . . . 17 USC 504
Interactive service's digital audio transmission of sound recording,
exclusive license for . . . . 17 USC 114
International agreement defined . . . . 17 USC 101
Internet service providers, limitation of liability for infringement by
. . . . 17 USC 512
Invention development services contracts . . . . B&P 22374; B&P 22379
Joint works
Death of author . . . . 17 USC 203
Defined . . . . 17 USC 101
judgment . . . . CCP 708.510
Juke boxes
USC 116
Jurisdiction
District courts . . . . 28 USC 1338
Mask works, actions involving rights in . . . . 28 USC 1338
Libraries and archives, reproductions by . . . . 17 USC 108
Library of Congress
Deposits by (See subhead: Deposits of copies or phonorecords)
Secondary transmissions, right to . . . . 17 USC 111
Licenses
Community college districts granting license . . . . Ed 81459
Digital performance right in sound recordings . . . . 17 USC 114
Digital phonorecord delivery . . . . 17 USC 115
Negotiations on license terms for sound recordings . . . . 17 USC 114;
1835
17 USC 115
Network stations . . . . 17 USC 119
Performing rights society . . . . 17 USC 114; 17 USC 513
Phonorecords
Compulsory license for making and distributing . . . . 17 USC 115
Transmission, statutory license for . . . . 17 USC 112
Satellite carriers, secondary transmissions by . . . . 17 USC 119
Literary works
Defined . . . . 17 USC 101
Machine defined . . . . 17 USC 101
Management information systems, integrity of copyright . . . . 17 USC
1202=17 USC 1205
Mask work (See subhead: Semiconductor chip products)
Military departments, appropriations to acquire copyrights . . . . 10 USC
2386
Motion picture exhibition facility
Defined . . . . 17 USC 101
Unauthorized recording of film in facility . . . . 18 USC 2319B
Motion pictures
Defined . . . . 17 USC 101
Musical works
Phonorecords (See subhead: Phonorecords)
Record piracy . . . . Intro §4[2]
Scope of exclusive rights in nondramatic works . . . . 17 USC 115; 17
USC 116
Music videos
videos . . . . 17 USC 1101
Name of person in copyright notice, defect in . . . . 17 USC 406
National Intellectual Property Law Enforcement Coordination Council
. . . . 15 USC 1128
National origin
1836
Semiconductor chip products, owners of . . . . 17 USC 902
Negotiations by copyright owners
Copyright royalty judges
Voluntarily negotiated agreements . . . . 17 USC 805
Nondramatic musical works, compulsory license for phonorecords of
. . . . 17 USC 115
Sound recordings, exclusive rights in . . . . 17 USC 114
Network station defined . . . . 17 USC 111; 17 USC 119
Noncommercial educational station defined . . . . 17 USC 111
Nondramatic musical works (See subhead: Musical works)
Nonprofit performances . . . . 17 USC 110
Notice of copyright
Collective works . . . . 17 USC 404
Date, error in or omission of . . . . 17 USC 406
Destruction of . . . . 17 USC 405
Evidentiary weight of . . . . 17 USC 401; 17 USC 402
Form of . . . . 17 USC 401; 17 USC 402
Fraud . . . . 17 USC 506
Name, error in or omission of . . . . 17 USC 406
Omission of . . . . 17 USC 405
Phonorecords of sound recordings . . . . 17 USC 402
Recordation of document as constructive notice . . . . 17 USC 205
Removal of . . . . 17 USC 405; 17 USC 506
Termination of transfer or license . . . . 17 USC 203
Works of U.S. government . . . . 17 USC 403
Notices
Copyright (See subhead: Notice of copyright)
Digital audio recording devices and media, manufacturers and importers
of . . . . 17 USC 1003
Infringement action
Internet service provider . . . . 17 USC 512
Voluntary negotiation by owners of copyright of sound recording
. . . . 17 USC 114; 17 USC 115
Ownership of copyright
Generally . . . . 17 USC 201; Intro §4[1]
Material object, distinction of . . . . 17 USC 202
1837
Pantomimes . . . . 17 USC 102; 17 USC 106
Performance of work
Coin-operated players, public performances by . . . . 17 USC 116
Defined . . . . 17 USC 101
Exemption of certain performances . . . . 17 USC 110
Performing rights society
Defined . . . . 17 USC 101
Fees for licenses for individual proprietors, determination of . . . . 17
USC 513
Licenses for public performance . . . . 17 USC 114; 17 USC 513
Petition indicating new type of digital audio transmission service . . . . 17
USC 114
Phonorecords
Blind persons, records distributed to . . . . 17 USC 121
Coin-operated players, public performances by . . . . 17 USC 116
Compulsory license for making and distributing . . . . 17 USC 115
Defined . . . . 17 USC 101
Deposit of (See subhead: Deposits of copies or phonorecords)
Infringement . . . . 17 USC 503
Licenses
Nonexempt transmissions . . . . 17 USC 114
1978, distribution prior to . . . . 17 USC 303
Performances to promote retail sale of . . . . 17 USC 110
Statutory license for copy for transmission . . . . 17 USC 112
Transfer of particular record, effect of . . . . 17 USC 109
Pictorial, graphic, and sculptural works
Defined . . . . 17 USC 101
Exclusive rights in copyrighted works . . . . 17 USC 106; 17 USC 113
Scope of exclusive rights in . . . . 17 USC 113
Piracy of records . . . . Intro §4[2]
Postal services, delays by . . . . 17 USC 709
Posthumous works, duration of copyright for . . . . 17 USC 304
Preemption doctrine
1838
Preregistration
Commercial distribution, preregistering works being prepared for
. . . . 17 USC 408
Criminal infringement . . . . 17 USC 506; 18 USC 2319
Infringement action, prerequisite to . . . . 17 USC 411; 17 USC 412
Primary transmission defined . . . . 17 USC 111
Process defined . . . . 17 USC 101
Proprietors
Defined . . . . 17 USC 101
License fees
Individual proprietors . . . . 17 USC 513
Pseudonymous works
Defined . . . . 17 USC 101
Publication defined . . . . 17 USC 101
Public broadcasting entity defined . . . . 17 USC 118
Publicly perform or display defined . . . . 17 USC 101
Published works
National origin of author . . . . 17 USC 104
Registration of previously registered work . . . . 17 USC 408
Radio transmissions (See subhead: Transmissions)
Recordation of transfers
Certificate of . . . . 17 USC 205
Conditions of . . . . 17 USC 205
Death of author, statement of . . . . 17 USC 302
Nonexclusive licenses, priority of . . . . 17 USC 205
Priority between conflicting transfers . . . . 17 USC 205
Register of Copyrights
Deposits (See subhead: Deposits of copies or phonorecords)
Issuance of certificate of registration . . . . 17 USC 410
Notice of infringement action . . . . 17 USC 508
Regulations established by . . . . 17 USC 702
Responsibilities of . . . . 17 USC 701
Registration
1839
Administrative classes affecting . . . . 17 USC 408
Application for
False representation in . . . . 17 USC 506
Vessels, design of . . . . 17 USC 1310=17 USC 1313
Certificate of registration, issuance of . . . . 17 USC 410
USC 116
Defined . . . . 17 USC 101
Deposit for . . . . 17 USC 408
Effective date of . . . . 17 USC 410
Preregistration of works being prepared for commercial distribution
. . . . 17 USC 408
Published edition of unpublished registered work . . . . 17 USC 408
Records and indexes kept by Copyright Office . . . . 17 USC 705
Single registration of works by individual author . . . . 17 USC 408
Supplementary registration
Religious services, displays and performances in . . . . 17 USC 110
Removal of cases
State court, removal of cases . . . . 28 USC 1454
Renewal and extension of copyrights
Application for copyright registration . . . . 17 USC 409
Reporting requirements for satellite carriers making secondary
transmissions . . . . 17 USC 122
Restored works . . . . 17 USC 104A
Retransmissions of sound recordings, exclusive rights and . . . . 17 USC
114
Royalties
Generally . . . . Intro §4[3]
Community college districts receiving . . . . Ed 72207
Digital audio recording devices and media . . . . 17 USC 1003=17 USC
1840
1007
Income tax, allocation of royalties for purposes of . . . . Rev&Tax
25127
Negotiations by copyright owners for sound recordings . . . . 17 USC
112; 17 USC 114; 17 USC 115
Phonorecords, compulsory license for making and distributing . . . . 17
USC 115; 17 USC 116
Public performances of sound recordings, notices of negotiations of
rates and terms for . . . . 17 USC 114
Satellite carriers, secondary transmissions by . . . . 17 USC 119
School districts receiving . . . . Ed 35170
Satellite carriers
Secondary transmission
Distant television programming . . . . 17 USC 119
Local television programming . . . . 17 USC 122
Transmission constituting infringement . . . . 17 USC 501
School districts, works developed by (See subhead: Education and
schools)
Schools (See subhead: Education and schools)
Scrambling, copyright protection systems employing . . . . 17 USC 1201; 17
USC 1203=17 USC 1205
Sculptural works (See subhead: Pictorial, graphic, and sculptural works)
Secondary transmissions
Cable, secondary transmissions by . . . . 17 USC 111
Satellite carriers . . . . 17 USC 119
Seizures
Importation prohibitions . . . . 17 USC 603
Semiconductor chip products
Conduct prior to date of enactment . . . . 17 USC 913
Duration of protection . . . . 17 USC 904
Exclusive rights . . . . 17 USC 905=17 USC 907
Foreign nations, transitional provisions with respect to . . . . 17 USC
914
Importation and subsequent sales . . . . 17 USC 910; 19 USC 1337
1841
Infringement actions
Mask works, action against United States for infringement of
. . . . 28 USC 1498
Innocent purchasers . . . . 17 USC 907
Jurisdiction of district courts . . . . 28 USC 1338
Notice of protection . . . . 17 USC 909
Ownership of mask work . . . . 17 USC 903
Preemption of state laws . . . . 17 USC 912
Recordation of . . . . 17 USC 903
Registration of claim of protection . . . . 17 USC 908
Reproductions not constituting infringement . . . . 17 USC 906
Seizure of . . . . 17 USC 910
Transfer of ownership . . . . 17 USC 903
Venue in civil actions relating to . . . . 28 USC 1400
Son of Sam law, New York . . . . Intro §4[3]
Sound recordings
Agents for copyright owners and performers of . . . . 17 USC 114
Defined . . . . 17 USC 101
Digital audio transmissions and retransmissions . . . . 17 USC 114
Exclusive rights in copyrighted works . . . . 17 USC 106; 17 USC 114
videos . . . . 17 USC 1101
Interactive services, exclusive licensing requirements for . . . . 17 USC
114
Negotiations on royalty rates and license terms by copyright owners
. . . . 17 USC 112; 17 USC 114; 17 USC 115
Noninfringing transmissions of . . . . 17 USC 114
Phonorecords (See subhead: Phonorecords)
Piracy of . . . . Intro §4[2]
Preemptive provisions affecting . . . . 17 USC 301
Public performances, royalties for . . . . 17 USC 114
Scope of exclusive rights in . . . . 17 USC 114
States
Defined . . . . 17 USC 101
Subject matter of copyright
1842
Berne convention, effect of . . . . 17 USC 104
Compilations and derivative works . . . . 17 USC 103
National origin . . . . 17 USC 104
Semiconductor chip product . . . . 17 USC 902
Work of U.S. government . . . . 17 USC 105
Surviving spouse and heirs, ownership of copyright by . . . . 17 USC 201;
17 USC 203; 17 USC 304
Teaching activities, displays or performances in . . . . 17 USC 110
Technological measure controlling access to materials . . . . 17 USC 1201;
17 USC 1203=17 USC 1205
Television transmissions (See subhead: Transmissions)
Transfer of ownership
Certificate of acknowledgment of . . . . 17 USC 204
Death of author . . . . 17 USC 201; 17 USC 203; 17 USC 304
Definition of transfer of copyright ownership . . . . 17 USC 101
Executed before January 1, 1978 . . . . 17 USC 304
Execution of . . . . 17 USC 204
Involuntary transfer . . . . 17 USC 201
Termination of . . . . 17 USC 203
Transmission programs
Defined . . . . 17 USC 101
Deposit of copies or phonorecords of . . . . 17 USC 407
Transmissions
Cable systems, transmissions by . . . . 17 USC 111
C-band services . . . . 17 USC 119
Controlled group or nonpublic, transmissions to . . . . 17 USC 111
Definitions . . . . 17 USC 111; 17 USC 114; 17 USC 119
Exempt secondary transmissions . . . . 17 USC 111; 17 USC 119
Handicapped persons, exempt transmissions to . . . . 17 USC 110
Infringement, secondary transmissions constituting . . . . 17 USC 501
Instructional purposes . . . . 17 USC 110
Live transmissions, first fixation simultaneous with . . . . 17 USC 411
Local markets, secondary transmissions by satellite carriers to . . . . 17
1843
USC 122
Noncommercial broadcasting, use of certain works in . . . . 17 USC 118
Noninfringing transmissions of sound recordings . . . . 17 USC 114
Nonsubscription broadcast transmissions . . . . 17 USC 114
Phonorecords
Licenses
Nonexempt transmissions . . . . 17 USC 114
Programs (See subhead: Transmission programs)
Public broadcasting, use of certain works in . . . . 17 USC 118
Public reception for single receiving apparatus . . . . 17 USC 110
Retransmissions of secondary transmissions
Satellite, distant television programming by . . . . 17 USC 119
Retransmissions of sound recordings, exclusive rights and . . . . 17 USC
114
Satellite carriers
Secondary transmissions by . . . . 17 USC 122
Distant television programming by . . . . 17 USC 119
Sound recordings, digital audio transmission of . . . . 17 USC 114
Unserved households . . . . 17 USC 119
Transmit defined . . . . 17 USC 101
Treaty party defined . . . . 17 USC 101
U. S. Constitution, clause pertaining to authors . . . . US Const art I §8 cl. 8
U. S. Dept. of Education, acquisition of copyrights for use of . . . . 20 USC
3480
United States defined . . . . 17 USC 101
United States work defined . . . . 17 USC 101
Unpublished works
National origin of author . . . . 17 USC 104
Registration of first published edition for previously registered work in
unpublished form . . . . 17 USC 408
Remedies for infringement . . . . 17 USC 412
Useful articles
Defined . . . . 17 USC 101
Pictorial, graphic, and sculptural works, exclusive rights in . . . . 17
USC 113
Venue in civil actions relating to copyrights or mask works . . . . 28 USC
1400
Veterans organizations, performances for . . . . 17 USC 110
1844
Visual art work
Author's right to attribution and integrity . . . . 17 USC 106A
Definition of works of visual art . . . . 17 USC 101
Widow or widower of author
Definition of widow or widower . . . . 17 USC 101
WIPO Copyright Treaty defined . . . . 17 USC 101
WIPO Performance and Phonograms Treaty
Defined . . . . 17 USC 101
Effect of . . . . 17 USC 104
Works made for hire
Defined . . . . 17 USC 101
Ownership of . . . . 17 USC 201
Works of U.S. government
Defined . . . . 17 USC 101
WTO Agreement defined . . . . 17 USC 101
WTO member country defined . . . . 17 USC 101
CORPORATE SHARES AND SHAREHOLDERS

Articles of incorporation, required provisions . . . . Corp 202
Restraints from engaging in similar business on sale of shares . . . . B&P
16601
Tangible property of corporation, taxation of income from shareholder's use
of . . . . 26 USC 543
CORPORATIONS
Articles of incorporation
Execution of . . . . Corp 200
Filing of . . . . Corp 200
Required provisions . . . . Corp 202
Consumer cooperative corporations, names of . . . . Corp 12311
Cooperatives, names of . . . . Corp 12311
Director of corporation as employee . . . . UI 622
Existence of . . . . Corp 200
1845
Foreign corporations (See FOREIGN CORPORATIONS)
Formation of . . . . Corp 200
Unincorporated associations
Incorporation of existing unincorporated associations . . . . Corp
200.5
Names
Articles of incorporating including . . . . Corp 202
Insurance companies . . . . Corp 201.5
Foreign corporations (See FOREIGN CORPORATIONS)
Prohibited names . . . . Corp 201
Reservation of . . . . Corp 201
Nonprofit (See NONPROFIT CORPORATIONS)
Personal service contracts, taxation of amounts received under . . . . 26
USC 543
Professional corporations, name of . . . . Corp 13409
Purpose of . . . . Corp 202
Shares and shareholders (S e e CORPORATE SHARES AND
SHAREHOLDERS)
Subsidiaries
Defined . . . . B&P 16601
Restraints from engaging in similar business on sale of business
. . . . B&P 16601
Trademarks used by related companies . . . . 15 USC 1055
Unincorporated associations
CORPORATIONS COMMISSIONER (See FRANCHISES)
CORRECTIONS (See ERRORS)
CORRESPONDENCE
Ownership of . . . . CC 985
1846
COSTS
Convicted felon's story, actions to recover proceeds from sale of . . . . CC
2225
Copyright infringement suit . . . . 17 USC 505
Copyrights
Email
Fair dealership law, violations of . . . . CC 86
Frivolous or vexatious litigation
. . . . CC 3507.4
Uniform Trade Secrets Act, bad faith claims under . . . . CC 3426.4
COUNTERFEITS
Copyrighted works (See COPYRIGHTS)
Security of drug supply chain . . . . 21 USC 355e
Securities or tax stamps, transportation of counterfeited . . . . 18 USC 2314
Trafficking in counterfeit labels, illicit labels or counterfeit documentation
or packaging . . . . 18 USC 2318
Wines
Labels
Counterfeit labels . . . . B&P 25239
COUNTY ATTORNEYS
22387
Unfair competition, action for injunctive relief against . . . . B&P 17204;
B&P 17207
COUNTY CLERKS
Fictitious business name statements, clerk maintaining indices of . . . . B&P
1847
17925
COUNTY RECORDER
Public records
Official records not disclosed if public record available . . . . Gov
6254.27
COURTS
Contract disputes, deposits in court . . . . CC 1717
U. S. Claims Court (See UNITED STATES CLAIMS COURT)
U. S. Courts of Appeals (See UNITED STATES COURTS OF APPEALS)
U. S. District Court for the District of Columbia (Se e UNITED STATES
DISTRICT COURT FOR THE DISTRICT OF COLUMBIA)
U. S. District Courts (See UNITED STATES DISTRICT COURTS)
COVENANTS NOT TO COMPETE (See COMPETITION)
COVENANTS NOT TO SUE

Joint tortfeasors, effect on right of contribution among . . . . CCP 877
COVERS
CREDIT
17538.7
Regulation Z disclosures for open-end credit plans . . . . B&P 17538.7
CREDIT CARDS
Franchise regulation, exemption from (See FRANCHISES)
Scanning to obtain information from magnetic strip . . . . Pen 502.6
CREDIT UNIONS
Name of . . . . Corp 12311
CRIMINAL CONVICTION
Computer systems, convicted persons denied access to departmental
. . . . Pen 2702
1848
Definition of convicted felon . . . . CC 2225
. . . . CC 2225
Representative of felon . . . . CC 2225
Seller assisted marketing plans . . . . CC 1812.203; CC 1812.206
CRIMINAL MISCONDUCT
CRIMINAL OFFENSES AND PENALTIES

Audiovisual works or commercial recordings
Unauthorized electronic dissemination . . . . Pen 653aa
Brand of goods sold, misrepresentations concerning . . . . Pen 351a
Computer-related crimes (See COMPUTERS)
Conviction of crime (See CRIMINAL CONVICTION)
Copyright infringement, penalties for . . . . 18 USC 2319
Counterfeiting (See COUNTERFEITS)
Email
Failure to disclose origin of recording or audiovisual work . . . . Pen 653w
Felony defined . . . . CC 2225
Fictitious business name statements, filing of false . . . . B&P 17924; B&P
17930
Forgery of trade union's trademark or labels . . . . Lab 1015
Indian arts and crafts, sales involving (See INDIAN ARTS AND CRAFTS)
Mark or identify country of origin on goods imported into United States,
failure to . . . . 19 USC 1304
Marks, alteration or removal of . . . . Pen 537e
Motion pictures
Recording device operated in theater to record film . . . . Pen 653z
Name of maker of goods sold, misrepresentations concerning . . . . Pen
351a
Numbers, alteration or removal of . . . . Pen 537e
1849
Piracy
Precious metals marking (See PRECIOUS METALS MARKING)
Radio or television, fraudulent use of to obtain information from public
utility . . . . Pen 538.5
Serial number, alteration or removal of . . . . Pen 537e
Solicitation to commit felony . . . . Pen 653f
Stolen property (See STOLEN PROPERTY)
Theft (See THEFT)
Trademarks (state)
Enforcement by criminal prosecution . . . . B&P 14252
Trade unions, forgery or unauthorized use of mark or labels of . . . . Lab
1015; Lab 1016
Victims (See VICTIMS)
Wire, fraudulent use of to obtain information from public utility . . . . Pen
538.5
CROPS
Plant variety protection, saving seed for purposes of crops . . . . 7 USC
2543
CRUELTY TO ANIMALS (See MOTION PICTURES)
CUSTOMER LISTS
Competition (See COMPETITION)
Trade secret information (See TRADE SECRETS)
CUSTOMS (See UNITED STATES CUSTOMS)
CYBERPIRACY PREVENTION
Bad faith intent . . . . B&P 17526
California provisions . . . . B&P 17525=B&P 17528.5
Conduct constituting cyberpiracy . . . . B&P 17525
Definitions . . . . B&P 17527
Individuals, protections for . . . . 15 USC 1129
Jurisdiction . . . . B&P 17528
Trademarks (federal) . . . . 15 USC 1125; 15 USC 8131
1850
Transfer of domain name as remedy . . . . B&P 17528.5
D
DAMAGES
Atomic energy or nuclear material patents, actions against patent licensee
. . . . 42 USC 2184
Copyrights
Infringement, actual and statutory damages for . . . . 17 USC 504
. . . . CC 3344.1
Email
Spammers, remedies against . . . . B&P 17529.5; B&P 17529.8
Exemplary damages . . . . CC 3294
Stolen property, recovery of exemplary damages for receipt or
concealment of . . . . Pen 496
Uniform trade secrets act . . . . CC 3426.3
Facsimiles
Advertisements
Unsolicited advertisements sent to fax machines . . . . B&P
17538.43
Fraud, exemplary damages for . . . . CC 3294
. . . . CC 3507.4
Malicious acts, exemplary damages for . . . . CC 3294
Oppression, exemplary damages for . . . . CC 3294
Patent infringement (See PATENTS)
Phonorecords, breach of personal service contracts to produce . . . . Lab
2855
Punitive damages . . . . CC 3294
Stolen property, recovery of exemplary damages for receipt or
1851
concealment of . . . . Pen 496
Seller assisted marketing plans, purchaser suing seller in . . . . CC
1812.218
Stolen property, recovery of exemplary damages for receipt or concealment
of . . . . Pen 496
Trade secrets . . . . CC 3426.3
Uniform trade secrets act
Exemplary damages . . . . CC 3426.3
DATA
Military departments, appropriations to acquire designs, processes, etc.
. . . . 10 USC 2386
DEAF PERSONS
Copyrighted works transmitted to . . . . 17 USC 110
DEALERS
Art dealers (See ART AND ARTISTS)
Fair Dealership Law (See FAIR DEALERSHIP LAW)
Misrepresenting name of manufacturer or dealer, penalties for . . . . Pen
351a
Secondhand goods (See DEALERS IN SECONDHAND GOODS)
DEALERS IN SECONDHAND GOODS

Stolen property, rebuttable presumption concerning buying or receiving
. . . . Pen 496
DEATH
Artists, death of (See ART AND ARTISTS)
. . . . B&P 17919
Franchisee's death, effect of . . . . B&P 20027
1852
Likeness of deceased personality, use of . . . . CC 3344.1
Name of deceased personality, use of . . . . CC 3344.1
Patents, death of inventor . . . . 35 USC 117
Photograph of deceased personality, use of . . . . CC 3344.1
Plant variety protection, death of breeder . . . . 7 USC 2424
Signature of deceased personality, use of . . . . CC 3344.1
Voice of deceased personality, use of . . . . CC 3344.1
DEBIT CARDS
DECEIT (See FRAUD)
DECEPTIVE SIMILARITY
DECLARATIONS
Patents, declarations in lieu of oath . . . . 35 USC 25
DEDICATION
Invention or design intentionally made public . . . . CC 983
DEEDS
Grant deed copy services
Disclosure requirements . . . . B&P 17537.10
DEEDS OF TRUST
Advertising loans using realty as collateral . . . . B&P 17539.4
DEFACEMENT
Fine art, protection of . . . . CC 987; CC 989
Trade names . . . . B&P 14404
DEFENSE, UNITED STATES DEPARTMENT OF

Funds to acquire copyrights, patents, designs, etc. . . . . 10 USC 2386
DEFENSES
1853
. . . . CC 3507.4
Trademarks (federal), incontestable right to use mark . . . . 15 USC 1115
1854
DEFINITIONS
Abandoned
Trademarks, state . . . . B&P 14202
Abandoned mark . . . . 15 USC 1127
Access (computers) . . . . Pen 499c; Pen 502
Actual discovery
Statute of limitations for recovery of works of fine art . . . . CCP 338
Adverse drug experience
Drugs and drug products, risk evaluation and mitigation . . . . 21 USC
355–1
Advertised value of thing . . . . B&P 17501
Advertisement (offer or sale of franchise) . . . . Corp 31003
Advertiser
Email spammers, restrictions on . . . . B&P 17529.1
Affiliate . . . . Corp 31005.5
Affiliated entity . . . . 17 USC 114
Ancillary charges
Animal . . . . CC 3504
Anonymous work . . . . 17 USC 101
Applicant
Architectural work . . . . 17 USC 101
Archived program . . . . 17 USC 108
Area franchise . . . . B&P 20004; B&P 20006; Corp 31008
Art dealer . . . . CC 986; CC 1738; CC 1740
Article
Counterfeit trademarks . . . . Pen 350
Trade secret, evidentiary privilege . . . . Ev 1061
Artist . . . . CC 982; CC 986=CC 988; CC 1738
Assessment appeal applications
Assessment reduction filing service . . . . B&P 17537.9(d)
Assessment reduction filing service . . . . B&P 17537.9(d)
Auctioneers
Audiovisual works . . . . 17 USC 101; Pen 653w
Unauthorized electronic dissemination of audiovisual works or
commercial recordings . . . . Pen 653aa
1855
Autographed
Autographed sports memorabilia sales, certificates of authenticity
. . . . CC 1739.7
Basic application
Trademarks (federal), Madrid protocol . . . . 15 USC 1141
Basic registration
Basic seed . . . . 7 USC 2401
Beneficiary (crime victim) . . . . CC 2225
Benefit . . . . Pen 499c
Berne convention . . . . 17 USC 101
Best edition . . . . 17 USC 101
Board within the Department of Consumer Affairs . . . . B&P 17201.5; B&P
17506.5
Brand . . . . B&P 14425
Breeder . . . . 7 USC 2401
Broadcast transmission . . . . 17 USC 114
Business days . . . . Corp 31003.5
Business entity . . . . B&P 16601
Buy-back . . . . CC 1812.201
Cable system . . . . 17 USC 111
California electronic mail address
California email address
California franchise
Franchise, registration of material modification . . . . Corp 31125
Cards
Prepaid calling cards . . . . B&P 17538.9
C-band service . . . . 17 USC 119
Cellular telephone services
Certificate of authenticity . . . . CC 1740
Certification mark . . . . 15 USC 1127
Children . . . . 17 USC 101
Claimed inventions
Patents . . . . 35 USC 100
1856
Class
Class action
Class certification order
Class members
Coin-operated phonorecord player . . . . 17 USC 116
Coinventors
Patents . . . . 35 USC 100
Collectible
. . . . CC 1739.7
Collective mark . . . . 15 USC 1127
Collective work . . . . 17 USC 101
Commerce . . . . 15 USC 1127
Commercial email advertisement
Commercial establishment
Copyright, satellite transmission of distant television programming
. . . . 17 USC 119
Commercial name . . . . 15 USC 1127
Commercial recording or audiovisual work
Commercial use (fine art) . . . . CC 987
Commissioner of Business Oversight . . . . Corp 31004
Common interest . . . . CC 685
Community of interest . . . . CC 81
Community property . . . . CC 687
Company
Comparative commercial advertising
Compilation . . . . 17 USC 101
Computer program . . . . 17 USC 101
Computer system, network or program . . . . Pen 499c; Pen 502
1857
Conserve (fine art) . . . . CC 987
Consignment (fine art) . . . . CC 1738
Conspicuous
Solicitations by nongovernment entities with insignia, seal, etc.,
implying governmental connection . . . . B&P 17533.6
Conspicuously
Solicitations by nongovernment entities with insignia, seal, etc.,
implying governmental connection . . . . B&P 17533.6
Consumer goods . . . . B&P 17504
Consumers
. . . . CC 1739.7
Consumer service . . . . B&P 17504
Containers . . . . B&P 14425
Contest . . . . B&P 17539.3
Continuous program defined . . . . 17 USC 114
Contract (invention development services) . . . . B&P 22371
Contract for invention promotion services
Invention promotion, deceptive and improper . . . . 35 USC 297
Contracting party
Contractor . . . . 35 USC 201
Convicted felon . . . . CC 2225
Copies . . . . 17 USC 101; Pen 499c
Copyright management information . . . . 17 USC 1202
Copyright owner . . . . 17 USC 101
Copyright royalty judge . . . . 17 USC 101
Counterfeit
Counterfeit marks . . . . 15 USC 1116; Pen 350
Trafficking in counterfeit goods or services . . . . 18 USC 2320
Counterfeit military good or service
Country of origin . . . . 15 USC 1126
Course of trade, business, profession or occupation . . . . Lab 3355
Covered application
355–1
1858
Created works . . . . 17 USC 101
Cruelty . . . . CC 3505
Customer . . . . B&P 22371
Cyberpiracy . . . . B&P 17527
Date of recordal
Dealer . . . . CC 81
. . . . CC 1739.7
Dealer invoice (vehicle) . . . . B&P 17537.7
Dealership . . . . CC 81
Deceased personality
Use of name, voice, signature, etc. of . . . . CC 3344.1
Deceit . . . . Corp 31012
Deck
Vessel design protection . . . . 17 USC 1301
Declaration of bona fide intention to use the mark in commerce
Derivative work . . . . 17 USC 101
Description
. . . . CC 1739.7
Design (atomic energy) . . . . 42 USC 2014
Device, machine, or process . . . . 17 USC 101
Digital audio transmission . . . . 17 USC 114
Digital transmission . . . . 17 USC 101
Dilution
Dilution by blurring
Direct consent
Disabled person . . . . B&P 17206.1
Disclosing
1859
Display . . . . 17 USC 101
Distant signal equivalent . . . . 17 USC 111
Distinctness (plant variety) . . . . 7 USC 2401
Distributor . . . . 17 USC 119
Copyright, satellite carrier transmission of local television programming
. . . . 17 USC 122
Domain name
Infringement, willfulness . . . . 17 USC 504
Down payment . . . . CC 1812.201
Drawing . . . . Rev&Tax 217
Duress
Effective filing date
Patents . . . . 35 USC 100
Effectively available to workers in this country . . . . 7 USC 2401
Electronic dissemination
Electronic mail
Electronic mail address
Electronic mail advertisement
Electronic mail service provider
Email spammers, restrictions on . . . . B&P 17529.1; B&P 17538.45
Eligible nonsubscription transmission defined . . . . 17 USC 114
Email
Spammers, restrictions on . . . . B&P 17529.1
Email address
Employees . . . . Lab 3350=Lab 3352
Unemployment insurance . . . . UI 621; UI 621.5; UI 623
1860
Encryption technology . . . . 17 USC 1201
Engravings . . . . Rev&Tax 217
Equipment . . . . CC 1812.201
Establishment . . . . 17 USC 101
Etchings . . . . Rev&Tax 217
Exploit or exploitation (motion picture) . . . . Rev&Tax 6010.6
Extension of protection
False advertising . . . . Intro §2[2]
Farm . . . . B&P 14460
Federal agency . . . . 35 USC 201
Federally supported inventions, definitions relating to . . . . 35 USC 201
Felony . . . . CC 2225
Fictitious business names . . . . B&P 17900
Fictitious business name statement . . . . B&P 17926
Financial gain . . . . 17 USC 101
Fine art . . . . CC 982; CC 986; CC 987; CC 989; CC 1738
Fine art multiple . . . . CC 1740
Fine print . . . . CC 1740
Fixed work . . . . 17 USC 101
Food service or drinking establishment . . . . 17 USC 101
Frame (fine art) . . . . CC 987
Franchise . . . . B&P 20001; B&P 20006; Corp 31005; Corp 31010
Franchisee . . . . B&P 20002; Corp 31005.5; Corp 31006
Franchise fee . . . . B&P 20007; Corp 31011
Franchisor . . . . B&P 20003; Corp 31005.5; Corp 31007
Fraud . . . . Corp 31012
Free fine arts, work of . . . . Rev&Tax 217
Fuel . . . . Corp 31005.5
Funding agreement . . . . 35 USC 201
Future interest . . . . CC 688; CC 690
General merchandise retailer . . . . B&P 17537
General partner . . . . B&P 17901
Geneva Phonograms Convention . . . . 17 USC 101
1861
Good will . . . . B&P 14100
Grant . . . . CC 81
Grantor . . . . CC 81
Graphic works . . . . 17 USC 101
Gross square feet of space . . . . 17 USC 101
Holder of an international registration
Homeowners' exemption filing service . . . . B&P 17537.8(d)
Hull (vessel) . . . . 17 USC 1301
Impression . . . . CC 1740
Improper means (trade secret) . . . . CC 3426.1
Incentive . . . . B&P 17537.1
Incident
Independent contractors . . . . Lab 3353
Independent station . . . . 17 USC 111
Initial payment . . . . CC 1812.201
Initiate
Initiation
Intellectual property . . . . Intro §1
Interactive service . . . . 17 USC 114
International agreement . . . . 17 USC 101
International application
International bureau
International register
International registration
International registration date
Internet
1862
In this state . . . . Corp 31013
Invention . . . . 35 USC 100; 35 USC 201; B&P 22371
Invention developer . . . . B&P 22371
Invention development services . . . . B&P 22371
Invention promoters
Invention promotion services
Inventors
Patents . . . . 35 USC 100
Invoice (vehicle) . . . . B&P 17537.7
Joint interests . . . . CC 683
Joint inventors
Patents . . . . 35 USC 100
Joint research agreements
Patents . . . . 35 USC 100
Joint work . . . . 17 USC 101
Killing . . . . CC 3505
Kind . . . . 7 USC 2401
Knowingly possess
Lanham Act
Leahy-Smith America Invents Act . . . . 35 USC 1 note
Leased marketing premises . . . . B&P 20999.25; Corp 31005.5
Lender's address . . . . CC 1899.1
Limited edition . . . . CC 1740
Limited interest . . . . CC 688; CC 692
Liquidating assets
Principal and income act . . . . Pro 16362
Literary works . . . . 17 USC 101
Lithographs . . . . Rev&Tax 217
Live performance . . . . Pen 653s
Loan (to museum) . . . . CC 1899.1
Local consumer affairs agency . . . . B&P 17201.5; B&P 17506.5
Local markets
. . . . 17 USC 122
1863
Local services area of primary transmitter . . . . 17 USC 111
Low power television stations
. . . . 17 USC 122
Made . . . . 35 USC 201
Madrid protocol
Major life activities . . . . B&P 17206.1
Mark
Model state trademark law . . . . B&P 14202
Marketing channel . . . . B&P 17537
Marketing premises . . . . B&P 20999.25; Corp 31005.5
Mask work . . . . 17 USC 901
Mass action
Master . . . . CC 1740
Master recording . . . . Pen 653h
Materials (convicted felons) . . . . CC 2225
Mental impairment . . . . B&P 17206.1
Micro entities
Patent applications . . . . 35 USC 123
Mint condition
. . . . CC 1739.7
Misappropriation (trade secret) . . . . CC 3426.1
Mold (vessel hull) . . . . 17 USC 1301
Monetary relief
Copyright infringement, limitation of liability for online material
. . . . 17 USC 512
Mosaic . . . . Rev&Tax 217
Motion picture exhibition facility . . . . 17 USC 101
Motion pictures . . . . 17 USC 101; CC 3504; Rev&Tax 988; Rev&Tax
6010.6
Motion picture theater
Recording device, use in theater to record motion picture . . . . Pen 653z
Multicast stream
. . . . 17 USC 119
Copyright, secondary transmissions by cable . . . . 17 USC 111
1864
Multiple . . . . CC 1740
Museum . . . . CC 1899.1; Rev&Tax 6365; Rev&Tax 6366.3
Museum or gallery
Network station . . . . 17 USC 111; 17 USC 119
. . . . 17 USC 122
New safety information
355–1
New subscription service defined . . . . 17 USC 114
Noncommercial educational station . . . . 17 USC 111
. . . . 17 USC 122
Non-network station
. . . . 17 USC 122
. . . . 17 USC 119
Nonprofit organization . . . . 35 USC 201
Nonsubscription transmission defined . . . . 17 USC 114
No purchase or payment necessary messages
Contest solicitations or information regarding sweepstakes . . . . B&P
17539.15
Notification of refusal
Novel variety (plant) . . . . 7 USC 2401
Offer, offer to sell (franchise) . . . . Corp 31018
Office of contracting party
Office of origin
Official rules
17539.15
Ongoing business . . . . CC 1812.201
Opposition period
Original (sculpture or statuary) . . . . Rev&Tax 217
1865
Owner of business entity . . . . B&P 16601
Ownership . . . . CC 654
Ownership interest . . . . B&P 16601
Painting . . . . Rev&Tax 217
Partnership interest . . . . CC 684
Patent Cooperation Treaty . . . . 35 USC 351
Patentee . . . . 35 USC 100
Payment cards
Pediatric studies
Drugs and drug products . . . . 21 USC 355a
Performance of work . . . . 17 USC 101
Performing rights society . . . . 17 USC 101
Perpetual interest . . . . CC 688; CC 691
Person
. . . . CC 1739.7
Picture tubes . . . . B&P 17531.6
Petroleum corporation . . . . Corp 31005.5
Petroleum distributor . . . . Corp 31005.5
Petroleum franchise definitions . . . . B&P 20999
Petroleum retailer . . . . Corp 31005.5
Phonorecords . . . . 17 USC 101
Photographs . . . . CC 3344
Deceased personality, use of name, voice, signature, etc. of . . . . CC
3344.1
Physical impairment . . . . B&P 17206.1
Pictorial works . . . . 17 USC 101
Plug (vessel hull) . . . . 17 USC 1301
Practical application . . . . 35 USC 201
Precious metals marking definitions . . . . B&P 22101=B&P 22104
Preexisting or current business relationship
Preexisting satellite digital audio radio service defined . . . . 17 USC 114
Preexisting subscription service defined . . . . 17 USC 114
1866
Prepaid calling cards . . . . B&P 17538.9
Prepaid calling services . . . . B&P 17538.9
Present interest . . . . CC 688; CC 689
Primary network station
. . . . 17 USC 119
Primary stream
. . . . 17 USC 119
Primary transmission . . . . 17 USC 111; 17 USC 119
Primary transmitters
Principal register . . . . 15 USC 1127
Prints . . . . CC 1740; Rev&Tax 217
Private home viewing . . . . 17 USC 119
Proceeds (convicted felon's story) . . . . CC 2225
Process . . . . 35 USC 100
Product . . . . CC 1812.201
Profiteer of the felony . . . . CC 2225
Promoters
. . . . CC 1739.7
Proofs (from master) . . . . CC 1740
Property (under museum's care) . . . . CC 1899.1
Proprietor . . . . 17 USC 101
Providers
Email service termination, notice . . . . B&P 17538.35
Pseudonymous work . . . . 17 USC 101
Publication . . . . 17 USC 101
Public broadcasting entity . . . . 17 USC 118
Publicly displaying or performing work . . . . 17 USC 101
Public safety official
Public records inspection . . . . Gov 6254.24
Public variety . . . . 7 USC 2401
Publish . . . . Corp 31016
Purchaser . . . . CC 1812.201
Qualified infectious disease products
1867
Drugs, exclusivity extension for infectious disease products . . . . 21
USC 355f
Qualified testing
Rare diseases, drugs for . . . . 21 USC 355ee
Qualifying date
. . . . 17 USC 119
Qualifying pathogens
Drugs, exclusivity extension for infectious disease products . . . . 21
USC 355f
Quality marks . . . . B&P 22121; B&P 22176
Rare disease or condition
Drugs for rare diseases or conditions . . . . 21 USC 355ee
Reactivate
Recipient
Recording device
Use in theater to record motion picture . . . . Pen 653z
Recordings . . . . Pen 653w
Reencoders
Payment cards, scanning to obtain information from magnetic strip
. . . . Pen 502.6
Refiner . . . . Corp 31005.5
Registered user
Registrant
Registration of copyright claim . . . . 17 USC 101
Rejects
Rejuvenate
Related company . . . . 15 USC 1127
Representative of felon . . . . CC 2225
1868
Reproduction, right of . . . . CC 982
Research and development (atomic energy) . . . . 42 USC 2014
Responsible person
355–1
Restore
Restore (fine art) . . . . CC 987
Restored work, copyright . . . . 17 USC 104A
Retail seller . . . . B&P 17504
Retail vendors
Routine transmission
Royalty recipient
Sound recordings, royalty obligations from recording artist contracts
Royalty reporting party
Sound recordings, royalty obligations from recording artist contracts
Sale, sell (franchise) . . . . Corp 31018
Satellite carrier . . . . 17 USC 119
. . . . 17 USC 122
Scanning devices
Payment cards, scanning to obtain information from magnetic strip
. . . . Pen 502.6
Sculptural works . . . . 17 USC 101; Rev&Tax 217
Secondary transmission . . . . 17 USC 111; 17 USC 119
. . . . 17 USC 122
Seconds
Secretary
Secured investment . . . . CC 1812.201
Seller . . . . CC 1812.201
1869
Semiconductor chip product . . . . 17 USC 901
Senior citizens . . . . B&P 17206.1
Serious adverse drug experience
355–1
Serious risk
355–1
Service mark . . . . 15 USC 1127
Service provider . . . . 17 USC 512
Services . . . . CC 1812.201
Prepaid calling services . . . . B&P 17538.9
Sexually reproduced . . . . 7 USC 2401
Signal of serious risk
355–1
Simulcast
Sketch . . . . Rev&Tax 217
Sliding scale recovery agreements . . . . CCP 877.5
Small business firm . . . . 35 USC 201
Sound recordings . . . . 17 USC 101
Specially selected
17539.15
Stability (plant variety) . . . . 7 USC 2401
State . . . . 17 USC 101; Corp 31018
Statuary . . . . Rev&Tax 217
Story (convicted felons) . . . . CC 2225
Studies
Drugs and drug products, pediatric drugs . . . . 21 USC 355a
Subfranchise . . . . Corp 31008.5
Subfranchisor . . . . B&P 20005; Corp 31009
Subject invention . . . . 35 USC 201
Subscribe
. . . . 17 USC 119
1870
Subscribers
. . . . 17 USC 122
. . . . 17 USC 119
Subsidiaries . . . . B&P 16601
Supplemental register . . . . 15 USC 1127
Supplies . . . . CC 1812.201
Sweepstakes sponsors
17539.15
Telephone facsimile machines
Unsolicited advertisements . . . . B&P 17538.43
Television broadcast stations
. . . . 17 USC 122
Testing of plant variety . . . . 7 USC 2401
Text message advertisements . . . . B&P 17538.41
Third-party requester . . . . 35 USC 100
Trade, business, profession or occupation . . . . Lab 3356
Trademark . . . . 15 USC 1127
Trade name . . . . 15 USC 1127
Trade secret . . . . CC 3426.1; Pen 499c
Evidentiary privilege . . . . Ev 1061
Trade union . . . . B&P 14003
Traffic
Traffic in
Trafficking . . . . 18 USC 2318
Transfer of copyright ownership . . . . 17 USC 101
Transmission program . . . . 17 USC 101
Transmit . . . . 17 USC 101
Treaty party . . . . 17 USC 101
Unexpected serious risk
1871
355–1
Unfair competition . . . . Intro §2[1]; B&P 17200
Uniformity (plant variety) . . . . 7 USC 2401
United States . . . . 17 USC 101; 35 USC 100
United States work . . . . 17 USC 101
Unserved household . . . . 17 USC 119
Unsolicited advertisements . . . . B&P 17538.43
Unsolicited commercial email advertisement
Unsolicited electronic mail advertisement
Untrue or misleading statements
Grant deed copy services, disclosure requirements . . . . B&P 17537.10
Use
Useful article . . . . 17 USC 101
Use in commerce . . . . 15 USC 1127
Value
Vessel . . . . 17 USC 1301
Visual art . . . . 17 USC 101
Wholesale price (vehicle) . . . . B&P 17537.7
Widow or widower
Copyright, author's widow or widower . . . . 17 USC 101
WIPO Copyright Treaty defined . . . . 17 USC 101
WIPO Performances and Phonograms Treaty . . . . 17 USC 101
Woodcuts . . . . Rev&Tax 217
Work made for hire . . . . 17 USC 101
Work of art . . . . CC 988; Rev&Tax 6365
Work of U.S. government . . . . 17 USC 101
Work of visual art . . . . 17 USC 101
WTO Agreement defined . . . . 17 USC 101
WTO member country . . . . 17 USC 101
DELEGATION OF POWER
Secret inventions, rules and regulations for . . . . 35 USC 188
DELIVERY
1872
DEPARTMENT OF AGRICULTURE
DEPARTMENT OF COMMERCE
1155
DEPARTMENT OF CONSUMER AFFAIRS

Advertisements claiming factual evidence, Director requesting proof
. . . . B&P 17508
Definition of Board within the Dept. of Consumer Affairs . . . . B&P
17201.5; B&P 17506.5
False advertising, actions prosecuted by board within . . . . B&P 17535.5;
B&P 17536
Rules, regulations, or code of ethics restricting advertising . . . . B&P
17500.1
DEPARTMENT OF DEFENSE
DEPARTMENT OF EDUCATION
Acquisition of copyrights, patents, designs, processes, etc. . . . . 20 USC
3480
DEPARTMENT OF ENERGY
Non-nuclear energy invention, issuance of patents . . . . 42 USC 5908
DEPARTMENT OF HEALTH AND HUMAN SERVICES

Drugs and drug products, approval procedure for (See DRUGS AND DRUG
PRODUCTS)
Examinations and investigations by Secretary of . . . . 21 USC 372
Under Secretary of Commerce for Intellectual Property/Director of Patent
and Trademark Office, information request from . . . . 21 USC 372
DEPARTMENT OF NAVY
1873
. . . . 22 USC 526
DEPARTMENT OF REHABILITATION
Employment training provided by . . . . Lab 3351.5
DEPOSITIONS
Patents . . . . 35 USC 23
Plant Variety Protection Office . . . . 7 USC 2353
Protective orders
Motion of protective orders . . . . CCP 2025.420
DEPOSITS
Arts Council, deposits by . . . . CC 986
Copyrighted copies, deposit of (See COPYRIGHTS)
Court, deposit involving contract disputes . . . . CC 1717
17537.2
In lieu of bonds (See DEPOSITS IN LIEU OF BONDS)
Plant variety protection, deposit of seed . . . . 7 USC 2422; 7 USC 2481
DEPOSITS IN LIEU OF BONDS

Invention development services, deposits established by providers of
. . . . B&P 22391; B&P 22391.1
Seller assisted marketing plans, claims against deposits established by
sellers of . . . . CC 1812.221
DEPUTY CLERKS
Appointment without compensation . . . . Lab 3352
DEPUTY SHERIFFS
Appointment without compensation . . . . Lab 3352
DERIVATIVE WORKS (See COPYRIGHTS)
DESCRIPTION
Plant patents, description of . . . . 35 USC 162
Plant variety . . . . 7 USC 2422
1874
Trademarks consisting of descriptive terms or words . . . . 15 USC 1052
DESIGNS
Generally (See INVENTIONS AND DESIGNS)
. . . . 10 USC 2386
Patents of (See PATENTS)
U. S. Dept. of Education, acquisition of designs for use of . . . . 20 USC
3480
Vessel hulls (See VESSELS)
DESIST AND REFRAIN ORDERS (See CEASE AND DESIST ORDERS)
DESTRUCTION
Art (See ART AND ARTISTS)
Copyright infringement, remedies for (See COPYRIGHTS)
Franchise records, destruction by Corporations Commissioner . . . . Corp
31506
Serial number or identification marks destroyed with intent to defraud
. . . . CC 1710.1
Sound recordings, forfeiture of infringing articles . . . . Pen 653v
Trademarks (federal), destruction of infringing mark or articles . . . . 15
USC 1118
DEVICES
Medical devices . . . . 35 USC 156
Trademarks . . . . 15 USC 1091
DIGITAL SOUND REPRODUCTION (See COPYRIGHTS)
DILUTION OF TRADEMARKS
Federal law
Definition of dilution . . . . 15 USC 1127
Injunction against dilution . . . . 15 USC 1125
DIRECTOR OF THE UNITED STATES PATENT AND TRADEMARK

OFFICE
1875
DISABLED PERSONS
Blind persons (See COPYRIGHTS)
Deaf persons, copyrighted works transmitted to . . . . 17 USC 110
Defined . . . . B&P 17206.1
Major life activities defined . . . . B&P 17206.1
Physical or mental impairment defined . . . . B&P 17206.1
Unfair competition against, civil penalties for . . . . B&P 17206.1
DISASTER SERVICE WORKERS

Employee status of . . . . Lab 3352.94
DISCLAIMERS
DISCLOSURES
Advertising disclosures (See ART AND ARTISTS)
Audiovisual works, criminal penalties for failure to disclose origin of (See
AUDIOVISUAL WORKS)
Coal mining (See COAL MINING)
Computer software, disclosure of contributing authors or programmers
. . . . Pen 653w
Confidentiality (See CONFIDENTIALITY)
Contest solicitations . . . . B&P 17539.2
Drug safety and effectiveness data and information . . . . 21 USC 355
Invention development services contracts, right to cancel . . . . B&P 22374
Pesticide information . . . . 7 USC 136h; Gov 6254.2
Prepaid telecommunications calling services/cards . . . . B&P 17538.9
Privileged information (See PRIVILEGED INFORMATION)
Public records (See PUBLIC RECORDS)
Recordings, criminal penalties for failure to disclose origin of . . . . Pen
653w
Sales presentation, offer of incentive to induce attendance at . . . . B&P
1876
17537.1; B&P 17537.2; B&P 17537.4
Trade secrets (See TRADE SECRETS)
DISCOVERY
Depositions (See DEPOSITIONS)
Electronically stored information (ESI)
Protective orders . . . . CCP 2025.420
Inspection demands . . . . CCP 2031.060
Protective orders
Admissions, requests for . . . . CCP 2033.080
Electronically stored information (ESI) . . . . CCP 2025.420
Inspection, copying, sampling, etc demands . . . . CCP 2031.060
Interrogatories . . . . CCP 2030.090
Oral depositions . . . . CCP 2025.420
Trade secret protection . . . . Intro §6[6]
Sanctions
Protective orders, unsuccessful motion for or opposition to
Admissions, request for . . . . CCP 2033.080
Inspection, copying, sampling, etc demands . . . . CCP 2031.060
Oral depositions . . . . CCP 2025.420
Trade secret, misappropriation of (See UNIFORM TRADE SECRETS ACT)
Uniform Trade Secrets Act (See UNIFORM TRADE SECRETS ACT)
DISCRIMINATION
DISGORGEMENT
Franchises
Ancillary administrative relief
Commissioner's inclusion in administrative actions . . . . Corp
31408
DISMISSAL OF SUITS
Right of contribution, effect of dismissal of suit against one or more
tortfeasors on . . . . CCP 877
DISPARAGING MATTER
DISPLAYS (See COPYRIGHTS)
1877
DISTINCTIVE MARKS
DISTRICT ATTORNEYS
17508
False advertising, actions prosecuted by . . . . B&P 17535.5; B&P 17536
Fine art multiples, violations in sale of . . . . CC 1745.5
Franchise violations referred by Corporations Commissioner . . . . Corp
31404
22387
nuisance . . . . CC 3506=CC 3507.2
Unfair competition, action for injunctive relief . . . . B&P 17204; B&P
17207
DIVERSITY OF CITIZENSHIP
Jurisdiction . . . . 28 USC 1332
DIVIDENDS
DNA TECHNOLOGY (See BIOTECHNOLOGY)
DOMAIN NAMES (See INTERNET)
DOMESTIC PARTNERSHIPS
Fictitious business names
Abandonment, filing statement of . . . . B&P 17922
Signatures . . . . B&P 17914
DOMICILE
Franchise law, jurisdiction of . . . . B&P 20015
DRAMA
DRAWINGS
Fine art defined . . . . CC 982
1878
Trademarks (federal) . . . . 15 USC 1051
DRUGS AND DRUG PRODUCTS

Abbreviated new drug applications . . . . 21 USC 355; 21 USC 355–1
Action package for approval of application for new drug . . . . 21 USC 355
Active postmarket risk identification . . . . 21 USC 355
Adulterated drugs
Adverse events
Reporting . . . . 21 USC 355b
Antibiotic drugs
Submission for approval prior to November 21, 1997
Exclusivity periods, eligibility . . . . 21 USC 355
Application procedure for approval of new drugs . . . . 21 USC 355
Civil actions
Petitions and civil actions regarding approval of certain applications
. . . . 21 USC 355
Clinical investigations
Rare diseases or conditions, drugs for . . . . 21 USC 360dd
Counterfeit drugs
Drug safety oversight board . . . . 21 USC 355–1
Expired drugs
Generic drugs
Database for authorized generic drugs . . . . 21 USC 355
Infectious disease products
Exclusivity period
Extension for new qualified infectious disease products . . . . 21
USC 355f
Labeling . . . . 21 USC 355
Misbranded drugs
New drug applications . . . . 21 USC 355
Orphan drug testing (See subhead: Rare diseases or conditions, drugs for)
Patients
1879
Postmarket drug safety information for patients and providers . . . . 21
USC 355
Pediatric use
Adverse event reporting . . . . 21 USC 355b
Infectious disease products, exclusivity period extensions . . . . 21 USC
355f
Plans, assessments, deferrals and waivers
Internal review committee . . . . 21 USC 355d
Rare diseases or conditions, drugs for
Priority review to encourage treatments . . . . 21 USC 360ff
Research into pediatric uses for drugs and biological products . . . . 21
USC 355c
etc . . . . 21 USC 355d
Studies of drugs for . . . . 21 USC 355a
etc . . . . 21 USC 355d
Pharmaceutical security . . . . 21 USC 355e
Post approval studies and clinical trials . . . . 21 USC 355
Postmarket risk identification
Active postmarket risk identification . . . . 21 USC 355
Providers
Postmarket drug safety information for patients and providers . . . . 21
USC 355
Rare diseases or conditions, drugs for
Clinical testing expenses
Federal grants and contracts for defraying . . . . 21 USC 360ee
Income tax credits . . . . 26 USC 45C
Designation of drug, request for . . . . 21 USC 360bb
Expiration date for exclusive holder . . . . 21 USC 360cc
Orphan Products Board, membership composition and duties of . . . . 42
USC 236
Pediatric diseases
Priority review to encourage treatments . . . . 21 USC 360ff
Protocols for clinical investigations . . . . 21 USC 360dd
Recommendation for investigation, request for . . . . 21 USC 360aa
Research into safety and effectiveness
Exemptions . . . . 21 USC 355
Risk evaluation and mitigation . . . . 21 USC 355–1
1880
Single enantiomers, drugs containing
Applications involving . . . . 21 USC 355
Suspension upon finding imminent hazard to public health . . . . 21 USC 355
Waiver in public health emergencies . . . . 21 USC 355–1
DURATION
E
EARNINGS
Generally (See COMPENSATION)
EDITING DEVICES OR TECHNOLOGY

Motion pictures
EDUCATION
Federally supported inventions, rights in educational awards . . . . 35 USC
212
Sound recordings, transmissions exempt from criminal penalties . . . . Pen
653h; Pen 653s
EDUCATION, UNITED STATES DEPARTMENT OF

3480
EFFECTIVELY AVAILABLE TO WORKERS IN THIS COUNTRY ( See

PLANT VARIETY PROTECTION)
ELDERLY (See SENIOR CITIZENS)
ELECTRICAL CURRENTS
1881
ELECTRONICALLY STORED INFORMATION (ESI)
Discovery
ELECTRONIC COMMUNICATIONS
Disclosure of electronically collected personal information compiled by
state agency . . . . Gov 6254.20
Email (See EMAIL)
Fax transmissions
Advertisements
17538.43
Franchises
Disclosure document
Copy to prospective franchisee . . . . Corp 31119
Inspection, copying, sampling, etc of electronically stored information
. . . . CCP 2031.060
Internet (See INTERNET)
Mail order businesses
Failure to ship goods or provide refund in 30 days . . . . B&P 17538;
B&P 17538.3
Solicitations by nongovernment entities
Insignia, seal, etc., implying governmental connection
Prohibited conduct . . . . B&P 17533.6
Trademark infringement . . . . 15 USC 1114
EMAIL
Restrictions on . . . . B&P 17538.45
Spammers, restrictions on . . . . B&P 17529=B&P 17529.9; B&P
17538.45
Collection and use of email addresses . . . . B&P 17529.4
Damages and other remedies . . . . B&P 17529.8
Definitions . . . . B&P 17529.1
Internet service providers' policies, effect on . . . . B&P 17529.3
Legislative findings . . . . B&P 17529
Prohibition of unsolicited commercial email advertisements
. . . . B&P 17529.2
Severability of provisions . . . . B&P 17529.2; B&P 17529.9
Unlawful commercial email advertisements . . . . B&P 17529.5
Inspection, copying, sampling, etc of electronically stored information
1882
. . . . CCP 2031.060
Internet generally (See INTERNET)
Termination of email service
Notice . . . . B&P 17538.35
EMBLEMS
Nongovernmental entity solicitations
Use of insignia, seal, etc., implying governmental connection
EMPLOYERS AND EMPLOYEES

Assignment of rights in employee inventions, contract provisions for
. . . . Lab 2870=Lab 2872
Contest solicitation provisions, applicability of . . . . B&P 17539.3
Contract of employment
Assignment of rights in invention, provision for . . . . Lab 2870=Lab
2872
Definition of . . . . Lab 2750
Personal service contract, limitation on enforcement of . . . . Lab 2855
Phonorecords, personal service contracts to produce . . . . Lab 2855
Specially ordered or commissioned work of authorship, employer
defined to include person contracting for . . . . UI 686
Copyright law, works for hire under (See COPYRIGHTS)
Definitions under unemployment compensation law
Collective bargaining agreements in motion picture and broadcast
industries, employee defined under . . . . UI 601.5
Directors of corporations or associations as excluded from definition of
employee . . . . UI 622
Employee defined, generally . . . . UI 621; UI 621.5; UI 623
Employer defined to include person contracting for work for hire
. . . . UI 686
Licensed contractors, employees of . . . . UI 621.5
Definitions under workers' compensation law
Course of trade, business, profession, or occupation defined . . . . Lab
3355; Lab 3356
Employee defined, generally . . . . Lab 3350=Lab 3351.5
Employment contract defined . . . . Lab 2750
Exclusions from definition of employee . . . . Lab 3352; Lab 3352.94
Independent contractor defined . . . . Lab 3353
Disaster service worker as excluded from definition of employee under
workers' compensation law . . . . Lab 3352.94
1883
Fine art, transfer to employer of reproduction rights in work of . . . . CC
982
Independent contractor
Defined . . . . Lab 3353
Proof of status as independent contractor . . . . Lab 2750.5
Ownership of things acquired by virtue of employment . . . . Lab 2860
Personal services contract, limitation on enforcement of . . . . Lab 2855
Phonorecords, personal service contracts to produce . . . . Lab 2855
Photograph of employee appearing in advertisement . . . . CC 3344
Presumption of employee status . . . . Lab 2750.5; Lab 3357
Trade secrets
Disclosure by employees of improper private business activities not
actionable as trade secret violation . . . . CC 3426.11
Inducing employee to steal . . . . Pen 499c
EMPLOYMENT AGENCY
Customer list as trade secret . . . . B&P 16607
ENCRYPTION OR SCRAMBLING
Copyright protection systems employing . . . . 17 USC 1201; 17 USC
1203=17 USC 1205
ENERGY
Atomic energy (See ATOMIC ENERGY)
Non-nuclear energy research and inventions . . . . 42 USC 5817; 42 USC
5908
ENERGY, UNITED STATES DEPARTMENT OF

ENERGY CONSERVATION PRODUCTS

False statements or misrepresentations . . . . B&P 17537.5
ENERGY RESEARCH AND DEVELOPMENT ADMINISTRATION

Acquisition of copyrights and patents related to non-nuclear energy . . . . 42
USC 5817
Dissemination of information by . . . . 42 USC 5817
ENGINEERS
Franchises, reports concerning . . . . Corp 31151
1884
ENGLISH LANGUAGE
ENTERTAINMENT
Copyrighted works (See COPYRIGHTS)
17537.2
Radio and television (See RADIO AND TELEVISION)
ENVIRONMENTAL PROTECTION AGENCY

Air pollution inventions, patents and licenses to . . . . 42 USC 7404
Solid waste inventions, ownership and issuance of patents for . . . . 42 USC
6981
EPA (See ENVIRONMENTAL PROTECTION AGENCY)
EQUIPMENT
Defined . . . . CC 1812.201
Franchise fee not including rental or purchase of . . . . B&P 20007
ERRORS
Fine art multiples, sale of . . . . CC 1745
ESCROW
Franchise fees . . . . Corp 31113
ESTATES
Franchise ownership by . . . . B&P 20027
ESTOPPEL
1885
EVIDENCE
Advertisement claims based on factual evidence . . . . B&P 17508
Assay certification issued by assay office . . . . B&P 22130
Burden of proof (See BURDEN OF PROOF)
Computer information (See COMPUTERS)
Government records and papers, admissibility of copies of . . . . 28 USC
1733
Independent contractor status . . . . Lab 2750.5
Motion picture depicting killing or cruelty to animal or human, admissibility
of motion picture in action to enjoin . . . . CC 3507.1
Oral evidence as proof of content of writing . . . . Ev 1523
Original writing as proof of content of writing . . . . Ev 1520
Plant Variety Protection Office, regulations for taking evidence . . . . 7 USC
2353
Privileged information (S e e PRIVILEGED INFORMATION; TRADE
SECRETS)
Secondary evidence as proof of content of writing . . . . Ev 1521; Ev 1522
Writing, proof of content of . . . . Ev 1520=Ev 1523
EXAMINATIONS
EXECUTION OF DOCUMENTS
Articles of incorporation . . . . Corp 200
Fictitious business name statement . . . . B&P 17914
1886
EXECUTION ON JUDGMENTS
Assignment of judgment debtor's right to payments to judgment creditor,
application for order for . . . . CCP 708.510
Contribution, right of (See CONTRIBUTION, RIGHT OF)
Fine art, royalties held by seller or agent on sale of . . . . CC 986
EXECUTORS AND ADMINISTRATORS

. . . . B&P 17919
EXECUTORY CONTRACTS
Bankruptcy proceedings of debtor-licensor, licensee's rights to intellectual
property under executory contract subject to . . . . 11 USC 365(n)
EXEMPLARY DAMAGES . . . . CC 3294

of . . . . Pen 496
EXEMPTIONS
Franchise (See FRANCHISES)
Motion pictures showing killing or cruelty to animal or human . . . . CC
3508; CC 3508.1
EXPENSES
EXPERT TESTIMONY
Franchises, opinions concerning . . . . Corp 31151
Patent infringement suit . . . . 35 USC 284
EXPORTS
Copyrights
Infringing items . . . . 17 USC 602
Platinum group metals, defense of exportation to violations concerning
1887
. . . . B&P 22132
Trafficking in counterfeit goods and services
Transshipment through of export from United States . . . . 18 USC 2320
EXTENSIONS
F
FACSIMILES
Advertisements
Trademarks (federal), facsimile of . . . . 15 USC 1051
FAIR DEALERSHIP LAW

Ancestry (See subhead: Discrimination prohibited)
Assignment of dealership . . . . CC 85
Attorneys' fees in action based on violation of . . . . CC 86
Bequest of dealership . . . . CC 85
Cancellation of dealership . . . . CC 84
Citation to . . . . CC 80
Community of interest defined . . . . CC 81
Costs in action based on violation of . . . . CC 86
Dealer defined . . . . CC 81
Dealership defined . . . . CC 81
Definitions to . . . . CC 81
Discrimination prohibited
Assignments or transfers . . . . CC 85
Granting dealership . . . . CC 83
Purpose of law . . . . CC 82
Termination or nonrenewal of dealership . . . . CC 84
Grant defined . . . . CC 81
Granting of dealership . . . . CC 83
Grantor defined . . . . CC 81
Intestate succession of dealership . . . . CC 85
1888
National origin (See subhead: Discrimination prohibited)
Nonrenewal of dealership . . . . CC 84
Person defined . . . . CC 81
Purposes and policies of . . . . CC 82
Race (See subhead: Discrimination prohibited)
Religion (See subhead: Discrimination prohibited)
Sale or transfer of dealership . . . . CC 85
Sex discrimination (See subhead: Discrimination prohibited)
Termination of dealership . . . . CC 84
FAIR USE
Copyrighted works, fair use of . . . . 17 USC 107
Counterfeit marks
Exemption from enforcement for fair use . . . . Pen 350
Fine art . . . . CC 982
FALSE OR MISLEADING REPRESENTATIONS (See also FRAUD)

Energy conservation products or services . . . . B&P 17537.5
Fictitious business name statements, filing of . . . . B&P 17924; B&P 17930
17537.15
Indian-made products or goods, misrepresentation of . . . . 18 USC 1159
Invention promotion services
Newspaper or periodical circulation
Misrepresentation of circulation volume . . . . B&P 17533
Real property
1889
Wines
Labels
California Central Coast Counties Dry Wine . . . . B&P 25237
FARM NAMES
Registration of (See TRADE NAMES)
FARMS AND FARMING

Plant variety protection, sale of seeds . . . . 7 USC 2543
FAX TRANSMISSIONS
Advertisements
FDA
Drugs and drug products (See DRUGS AND DRUG PRODUCTS)
FEDERAL SURPLUS MATERIALS

Misleading business names intended to suggest official or government status
of business . . . . B&P 17533.5
FEES
Copyrights, fees for recordation of transfers and registration of . . . . 17
USC 708
Deceased personality, registration of rights of . . . . CC 3344.1
Franchise fee (See FRANCHISES)
Licenses
Veterans' exempt from city licensing fees . . . . B&P 16001.7
PLANS)
1890
FELONY
Defined . . . . CC 2225
Profits or proceeds from sale of felon's story, treatment of . . . . Intro §4[3];
CC 2225
Stop order revoking franchise registration, felony conviction as grounds for
. . . . Corp 31115
FICTITIOUS BUSINESS NAMES

Abandonment, statement of
Expiration of statement on filing of . . . . B&P 17920
File number and date of filing . . . . B&P 17927
Requirements . . . . B&P 17922
Additional owners, names suggestive of . . . . B&P 17900
Assignment of business, effect of . . . . B&P 17919
Associations
Generally . . . . B&P 17900
General partner defined . . . . B&P 17901
Bankruptcy trustee, execution, filing, and publication by . . . . B&P 17919
Certified copies of statements, fees and presumptions concerning . . . . B&P
17926
Changes in facts set forth in statement . . . . B&P 17920
Compilations of filings, clerk furnishing . . . . B&P 17928
Conservatorship, effect of . . . . B&P 17919
Contract, filing of statement prerequisite to action on . . . . B&P 17918
Corporations
Noncorporation's use of corporation designation . . . . B&P 17910.5
Prohibited names . . . . B&P 17910.5
Criminal penalty for filing false statements . . . . B&P 17924; B&P 17930
Date of filing . . . . B&P 17927
Death of individual or partner, effect of . . . . B&P 17919
Defined . . . . B&P 17900
Domestic partnerships
1891
Execution of statement . . . . B&P 17914
Executor or administrator filing statement . . . . B&P 17919
Expiration of statement
Date of expiration, notice of . . . . B&P 17921
Form of fictitious business name statement with expiration notice
. . . . B&P 17913
False statements, penalties for . . . . B&P 17913; B&P 17924; B&P 17930
Fees
Certified copy of statement . . . . B&P 17926
Filing of statements . . . . B&P 17929
Summaries and compilations of filings, clerk furnishing . . . . B&P
17928
Tender of . . . . B&P 17916
File numbers . . . . B&P 17927
Filing statement
Abandonment statement . . . . B&P 17922
Fees for filing statements . . . . B&P 17929
Location of filing . . . . B&P 17915
Method of . . . . B&P 17916
Withdrawal of partner, statement of . . . . B&P 17923
Form of statement
Furnished without charge . . . . B&P 17924
Incorporated or Inc., use of prohibited . . . . B&P 17910.5
Indices maintained by county clerk . . . . B&P 17925
Individuals
Signature . . . . B&P 17914
Limited liability partnerships
Limited partnerships
Generally . . . . Intro §5[6]; B&P 17900
Foreign . . . . B&P 17900
Married couples
1892
Nonprofit corporations, applicability of provisions to . . . . B&P 17911
Notices
Date of expiration of statement . . . . B&P 17921
Expiration of statement . . . . B&P 17913
Required notices . . . . B&P 17924
Partnerships
General partner defined . . . . B&P 17901
Signature . . . . B&P 17914
Withdrawal of partner, statement of . . . . B&P 17923; B&P 17927
Persons required to file statement . . . . B&P 17910
Presumptions concerning certified copies of statements . . . . B&P 17926
Publication of statement
Abandonment statement . . . . B&P 17922
Affidavit of . . . . B&P 17917
Withdrawal of partner, statement of . . . . B&P 17923
Real estate investment trusts . . . . B&P 17912
Registrant defined . . . . B&P 17903
Sale of business, effect of . . . . B&P 17919
Statement defined . . . . B&P 17926
Summaries of filings, clerk furnishing . . . . B&P 17928
Time for filing statement . . . . B&P 17910
Trusts
FILINGS
Articles of incorporation . . . . Corp 200
Public records
1893
6254.28
PLANS)
FILING SERVICES
Assessment appeal applications, required disclosure and unlawful
statements in offers to file . . . . B&P 17537.8
Homeowners' exemptions, required disclosure and unlawful statements in
offers to file . . . . B&P 17537.8
FILMS (See MOTION PICTURES)
FINANCE CHARGES
17538.7
FINANCIAL STATEMENTS
FINE ARTS (See ART AND ARTISTS)
FINES AND PENALTIES

Advertisements, false or misleading (See ADVERTISEMENTS)
Criminal penalties (See CRIMINAL OFFENSES AND PENALTIES)
Franchises
Citations and sanctions . . . . Corp 31406
Civil penalties . . . . Corp 31405
Criminal penalties
Fraud or deceit in offer or sale . . . . Corp 31411
Other statutes, punishment under . . . . Corp 31412
Willful violations of law or rule . . . . Corp 31410
Indian arts and crafts, sale of (See INDIAN ARTS AND CRAFTS)
Killing or cruelty to animal or human in motion pictures, injunctive relief
. . . . CC 3507.3
Pesticides, prohibited disclosure by government employees of trade secret
information for . . . . 7 USC 136h; Gov 6254.2
Plant variety protection, late payment penalty . . . . 7 USC 2371
1894
FIRST AMENDMENT RIGHTS

Generally . . . . US Const amd I
FIRST REFUSAL RIGHTS (See FRANCHISES)
FIXTURES
Franchise fee not including rental or purchase of . . . . B&P 20007
FLAGS
FOOD ADDITIVES
FOOD AND DRUG ADMINISTRATION

FORECLOSURES
FOREIGN CORPORATIONS
Agent for service of process . . . . Corp 2105
Amended statement and designation . . . . Corp 2107
Assumed name, use of . . . . Corp 2106
Certificate of qualification . . . . Corp 2105; Corp 2106
Change of name or address of . . . . Corp 2107
Conflicting names . . . . Corp 2106
Filing form to obtain certificate . . . . Corp 2105
Qualification, certificate of . . . . Corp 2105
Registration and renewal of corporate name . . . . Corp 2101
Search warrants served on . . . . Corp 2105
Service of process . . . . Corp 2105
Taxation of gain from sale of patents, etc. to . . . . 26 USC 1249
Trade name, right to use corporate name as . . . . B&P 14415
1895
FOREIGN COUNTRIES
Intellectual property rights, denial of adequate protection for . . . . 19 USC
2242
Mark or identity of country of origin on goods imported into United States
. . . . 19 USC 1304
Pesticide information to foreign pesticide producers, prohibition against
disclosure of . . . . 7 USC 136h; Gov 6254.2
Sale of foreign goods represented as “made in U.S.A.” . . . . B&P 17533.7
Semiconductor chip products, federal copyright laws applicable to . . . . 17
USC 914
Trade representative to identify countries denying protection of intellectual
property rights . . . . 19 USC 2242
FOREIGN LANGUAGES
FOREIGN PATENTS (See PATENTS)
FOREIGN RELATIONS
. . . . 22 USC 526
FORFEITURES
Computer system and related property . . . . Pen 502.01
Copyright infringement (See COPYRIGHTS)
Counterfeit marks, labels, etc, property containing . . . . 18 USC 2318; 18
USC 2320
Sound recordings, forfeiture of infringing articles . . . . Pen 653v
Telecommunications equipment . . . . Pen 502.01
FORGERY
Trade unions, trademark or label of . . . . Lab 1015
FORMS
Copyright, notice of . . . . 17 USC 401; 17 USC 402
1896
Museums, notice of intent to preserve interest in property loaned to
. . . . CC 1899.5
Plant variety protection, papers to be filed . . . . 7 USC 2352
FRANCHISES
Abandonment by failure to operate business . . . . B&P 20021
Advertisements
Defined . . . . Corp 31003
False or misleading advertising . . . . Corp 31157
Filing of . . . . Corp 31156
Publication of . . . . Corp 31157
Affiliate defined . . . . Corp 31005.5
Amended application for registration (See subhead: Registration)
Ancillary administrative relief . . . . Corp 31408
Applicant, identification of . . . . Corp 31210
Application for registration (See subhead: Registration)
Appraisers, use of . . . . Corp 31151
Arbitration agreement binding . . . . B&P 20040
Area franchise
Generally . . . . B&P 20004; B&P 20006
Defined . . . . Corp 31008; Corp 31010
Assignment by franchisor of its interest in marketing premises . . . . B&P
20025
Attorney General
Acts done in good faith in conformity with opinions of . . . . Corp 31511
Injunctive relief, actions for . . . . Corp 31400
Attorneys' fees in action for violation of right of free association . . . . Corp
31302.5
Bankruptcy, effect of . . . . B&P 20021
Banks as issuers of credit cards (See subhead: Credit cards)
Books and records maintained by franchisor . . . . Corp 31150
Burden of proof, exemptions or exceptions . . . . Corp 31153
Business days defined . . . . Corp 31003.5
Business Oversight Commissioner
Citations
Commissioner's citation and sanction . . . . Corp 31406
1897
Citation to Franchise Investment Law . . . . Corp 31000
Civil actions
Damages, actions for (See subhead: Damages)
Injunctive relief, actions for (See subhead: Injunctions)
Petroleum franchises, violation of provisions concerning . . . . B&P
20999.3
Commissioner of corporations (See subhead: Corporations commissioner)
Common law, liability under . . . . Corp 31306
Conduct unfavorable to . . . . B&P 20021
Contracts
Copy of all proposed agreements to prospective franchisee . . . . Corp
31119
Defined . . . . Corp 31005.5
Copies
Certification of . . . . Corp 31505
Documents, request for copies of . . . . Corp 31505
Microfilm, copies on . . . . Corp 31506
Corporate directors and officers, liability for violations . . . . Corp 31302
Corporations Commissioner
Acts done in good faith in conformity with rules, order, or opinions of
. . . . Corp 31511
Citations . . . . Corp 31406
Civil actions brought by . . . . Corp 31400
Copies, request for . . . . Corp 31505
Desist and refrain orders by (See subhead: Desist and refrain orders)
Destruction of documents by . . . . Corp 31506
Determination of whether agreement constitutes franchise . . . . B&P
20009
Disclosure of records by . . . . Corp 31504
Examination of registrant's financial records . . . . Corp 31111
False advertising, notice concerning . . . . Corp 31157
Hearings (See subhead: Hearings)
Interpretive opinions of . . . . Corp 31510; Corp 31511
Investigations by . . . . Corp 31151; Corp 31401
Judicial powers of . . . . Corp 31401
Judicial review of orders and decisions of . . . . Corp 31501
Microfilming of documents by . . . . Corp 31506
Order directing discontinuance of violation . . . . Corp 31407
Order of, defined . . . . Corp 31014
1898
Personal benefit of commissioner or staff, use of information for
. . . . Corp 31504
Powers of commissioner . . . . Corp 31400=Corp 31408
Procedure for adopting rules of . . . . Corp 31503
Reference of violations to district attorney . . . . Corp 31404
Regulations, releases, guidelines, and opinions of . . . . B&P 20009
Rulemaking authority of . . . . Corp 31502; Corp 31503
Rule of commissioner defined . . . . Corp 31017
Service of process on . . . . Corp 31155; Corp 31420
Stop order issued by (See subhead: Stop orders)
Violation of order or conditions imposed by . . . . Corp 31203
Costs
Injunctive relief action for violation of right of free association
. . . . Corp 31302.5
20999.3
Covenants not to compete, enforcement of . . . . B&P 20025
Credit cards
Service charges as not constituting franchise fees . . . . B&P 20007
Criminal misconduct by franchisee . . . . B&P 20021
Criminal penalties
Fraud or deceit in offer or sale . . . . Corp 31411
Other statutes, punishment under . . . . Corp 31412
Willful violations of law or rule . . . . Corp 31410
Criminal proceedings brought by district attorney . . . . Corp 31404
Cure (See subhead: Notice of noncompliance and cure)
Damages
31408
Corporations Commissioner including in action claim for ancillary
relief . . . . Corp 31400
Failure to register, action for . . . . Corp 31220
Free association, violation of franchisee's right of . . . . Corp 31302.5
Misrepresentations in offers and sales, action for . . . . Corp 31301;
Corp 31304
20999.3
Date of enactment . . . . B&P 20041
Death of franchisee . . . . B&P 20027
1899
Deceit (See subhead: Fraud or deceit)
Definition of . . . . B&P 20001; B&P 20006; Corp 31002=Corp 31019
Desist and refrain orders
Generally . . . . Corp 31211
Issued by commissioner . . . . Corp 31211
Large franchisors subject to exemption, noncompliance by . . . . Corp
31403
Misrepresentations . . . . Corp 31403
Unregistered offers . . . . Corp 31402
Directors
Ineligibility to serve as director or officer of franchisor . . . . Corp
31400.1
Disclosure document
Disgorgement
31408
District attorney, reference of violations to . . . . Corp 31404
Documentary evidence, production of . . . . Corp 31401
Domicile, requirements of . . . . B&P 20015
Employer and employee, joint and several liability of . . . . Corp 31302
Engineers, opinions, appraisements, and reports of . . . . Corp 31151
Equipment, rental or purchase of . . . . B&P 20007
Escrow fund, commissioner requiring . . . . Corp 31113
Estate of franchisee . . . . B&P 20027
Evidence
Agreement constitutes franchise . . . . B&P 20009
Documentary evidence, production of . . . . Corp 31401
Exclusions from act . . . . B&P 20001
Execution, levy of . . . . B&P 20021
Exemptions
Amended application . . . . Corp 31109.1
Burden of proving . . . . B&P 20009; Corp 31153
Credit card plans (See subhead: Credit cards)
Filing of application for registration . . . . Corp 31109.1
Large franchisor exemption (See subhead: Large franchisor exemption)
Material modification of existing franchise, exemption for . . . . Corp
31125
1900
Renewal of registration generally . . . . Corp 31109.1
Experts, opinions, appraisements and reports of . . . . Corp 31151
Failure to register
Damages or rescission as remedy for . . . . Corp 31300
Filing fees for application for approval of written notice of violation
. . . . Corp 31500
Statute of limitations . . . . Corp 31303
False statements
Tampering to impede, obstruct, etc, administration or enforcement of
provisions . . . . Corp 31204
Fees
Filing fees, generally . . . . Corp 31500
Franchise fees (See subhead: Franchise fees)
Financial records of franchisor . . . . Corp 31111
Findings of legislature . . . . Corp 31001
Fines and penalties
Citations and sanctions . . . . Corp 31406
Criminal (See subhead: Criminal penalties)
Fixtures, rental or purchase of . . . . B&P 20007
Foreclosure of business premises . . . . B&P 20021
Foreign corporations
Franchisor consent to commissioner as agent for service of process
. . . . Corp 31155
Franchisee defined . . . . B&P 20002; Corp 31005.5; Corp 31006
Franchise fees
Definition of . . . . B&P 20007; Corp 31011
Exclusions from definition of . . . . B&P 20007
Failure to pay . . . . B&P 20021
Impound of fees, commissioner requiring . . . . Corp 31113
Franchise Investment Law . . . . Intro §8[2]
Franchisor defined . . . . B&P 20003; Corp 31005.5; Corp 31007
Fraud or deceit
Criminal penalties for . . . . Corp 31411
Fraudulent registration (See subhead: Registration)
Free association, right of . . . . Corp 31220; Corp 31302.5
Fuel (See subhead: Petroleum franchises)
1901
Gasoline franchises (See subhead: Petroleum franchises)
Good cause
Petroleum franchises, termination or nonrenewal of . . . . B&P 20999.1
Termination of franchise for . . . . B&P 20020
Goods, purchase of . . . . B&P 20007
Hearings
Advertisement containing false or misleading information . . . . Corp
31157
Department of Corporations, hearing before . . . . Corp 31513
Desist and refrain orders . . . . Corp 31211; Corp 31402; Corp 31403
Stop orders . . . . Corp 31117
Heirs of franchisee . . . . B&P 20027
Implication, no liability by . . . . Corp 31306
Improvements on leased marketing premises, offer to sell . . . . B&P
20999.25
Income tax treatment of transfer of franchise . . . . 26 USC 1253
Injunctions
Corporations Commissioner, actions brought or requested by . . . . Corp
31400
Free association, violation of franchisee's right of . . . . Corp 31302.5
20999.3
Insolvency, effect of . . . . B&P 20021
In this state, definition of . . . . Corp 31013
Inventory, offers to repurchase
Franchisee's right to sue . . . . B&P 20037
Offsets against repurchase offer sums owed to franchisor . . . . B&P
20036
Price . . . . B&P 20035
When required . . . . B&P 20035
Joint and several liability of principals and agents . . . . Corp 31302
Judicial review of orders and decisions of commissioner . . . . Corp 31501
Large franchisor exemption
Damages or rescission in actions against noncomplying franchisors
. . . . Corp 31300
Desist and refrain orders against noncomplying franchisors . . . . Corp
31403
Filing fees . . . . Corp 31500
Notice of exemption
1902
Notice of violation, fees for filing . . . . Corp 31500
Prohibition of misrepresentations by franchisors . . . . Corp 31202
Time limit for actions against noncomplying franchisors . . . . Corp
31303; Corp 31304
Leased marketing premises
Defined . . . . B&P 20999.25; Corp 31005.5
Franchisee's first refusal rights . . . . B&P 20999.25
Levy of execution . . . . B&P 20021
Limitation of actions (See subhead: Statutes of limitation)
Marketing premises defined . . . . B&P 20999.25; Corp 31005.5
Material modification of existing franchises (See subhead: Registration)
Misrepresentations and omissions
Advertisement containing . . . . Corp 31157
Applications, notices, or reports filed with commissioner . . . . Corp
31200; Corp 31300; Corp 31303
By franchisee . . . . B&P 20021
Desist and refrain order for . . . . Corp 31403
Exempt offerings by large franchisor . . . . Corp 31202; Corp 31300;
Corp 31303
Offers and sales, generally . . . . Corp 31201; Corp 31301; Corp 31304
Registration application (See subhead: Registration)
Stop order, misrepresentation as grounds for . . . . Corp 31115
Modification of existing franchises (See subhead: Registration)
Motor vehicle franchises . . . . B&P 20042
Noncompliance (See subhead: Notice of noncompliance and cure)
Nonprofit organizations excluded from definition of . . . . Corp 31005
Nonrenewal of
Condition of . . . . B&P 20025
Contents and delivery notice . . . . B&P 20030
Extension of term to satisfy time of notice . . . . B&P 20026
Notice of . . . . B&P 20025
Petroleum franchises . . . . B&P 20999.1
Repurchase of inventory, requirements for (See subhead: Inventory,
offers to repurchase)
Notice of noncompliance and cure
After cure franchisee engages in same noncompliance . . . . B&P 20021
Termination, good cause for . . . . B&P 20020
Notices
Advertisement containing false or misleading information . . . . Corp
1903
31157
Large franchisor exemption (See subhead: Large franchisor exemption)
Noncompliance and cure (See subhead: Notice of noncompliance and
cure)
Nonrenewal (See subhead: Nonrenewal of)
Petroleum franchisee withdrawing from marketing in area, notification
of . . . . B&P 20999.4
Termination notice . . . . B&P 20030
Offer defined . . . . Corp 31018
Offering circular
Officers
Ineligibility to serve as director or officer of franchisor . . . . Corp
31400.1
Oil and gas franchises (See subhead: Petroleum franchises)
Omissions (See subhead: Misrepresentations and omissions)
Operative date of act . . . . B&P 20041
Orders
Desist and refrain orders (See subhead: Desist and refrain orders)
Discontinuance of violation, order directing . . . . Corp 31407
Stop orders (See subhead: Stop orders)
Other law, liability under . . . . Corp 31306
Other states (See subhead: Foreign corporations)
Partner's liability for violations . . . . Corp 31302
Person defined . . . . B&P 20008; Corp 31015
Persons authorized to sell . . . . Corp 31210
Petroleum franchises
Civil actions to enforce provisions . . . . B&P 20999.3
Dealers meetings with distributor, accompaniment by attorneys or
representatives . . . . B&P 20999.2
Definitions . . . . B&P 20999; Corp 31005; Corp 31005.5
Franchise Relations Act, applicability of . . . . B&P 20001
Termination, cancellation, or refusal to renew . . . . B&P 20999.1
Withdrawal from marketing in area, notification to Governor of
. . . . B&P 20999.4
Principals and agents, joint and several liability of . . . . Corp 31302
Prior law
Effectiveness of actions under . . . . Corp 31515
Liability imposed under . . . . Corp 31306
1904
Real estate law, applicability of . . . . Corp 31516
Public inspection of applications, reports filed with commissioner
. . . . Corp 31504
Publish defined . . . . Corp 31016
Punishment (See subhead: Criminal penalties)
Purpose of Franchise Investment Law . . . . Corp 31001
Real estate broker or salesman . . . . Corp 31210
Real estate law, applicability of . . . . Corp 31516
Refiner of oil (See subhead: Petroleum franchises)
Registration
Amended application
Effective date . . . . Corp 31124
Exemptions generally . . . . Corp 31109.1
Desist and refrain order for unregistered offers . . . . Corp 31402
Disclosure document . . . . Corp 31114
Effective date of . . . . Corp 31116
Evidence . . . . Corp 31401
Execution and verification of application . . . . Corp 31112
Exemptions (See subhead: Exemptions)
Failure to register (See subhead: Failure to register)
Fees for filing application . . . . Corp 31500
Filing of application for . . . . Corp 31111
Exemptions . . . . Corp 31109.1
Findings by commissioner concerning truthfulness of application
. . . . Corp 31154
Fraudulent application
Damages or rescission as remedy for . . . . Corp 31301
Filing fees for application for approval of written notice of violation
. . . . Corp 31500
Statute of limitation . . . . Corp 31304
Incorporation by reference of earlier filed documents . . . . Corp 31152
Material modification of existing franchises
Registration fees . . . . Corp 31500
Period of . . . . Corp 31120
Public inspection of applications . . . . Corp 31504
Renewal
1905
Application form . . . . Corp 31122
Exemptions generally . . . . Corp 31109.1
Fees for . . . . Corp 31500
Representations concerning . . . . Corp 31154
Requirement of . . . . Corp 31110
Revocation of (See subhead: Revocation of registration)
Risk-based review of applications . . . . Corp 31001.1
Stop order suspending or revoking . . . . Corp 31115
Relations between franchisor and franchisee, laws concerning . . . . Intro
§8[3]
Renewal
Nonrenewal of franchises (See subhead: Nonrenewal of)
Registration, renewal of (See subhead: Registration)
Rescission
31408
Willful failure to register . . . . Corp 31220
Restitution
31408
Claim for . . . . Corp 31400
Revocation of registration
Stop orders (See subhead: Stop orders)
Right of first refusal
Franchisor's exercise of . . . . B&P 20027
Leased marketing premises, sale or transfer of . . . . B&P 20999.25
Nonrenewal of franchise . . . . B&P 20025
Risk-based review process . . . . Corp 31001.1
Rule defined . . . . Corp 31017
Sale defined . . . . Corp 31018
Securities broker-dealer or agent . . . . Corp 31210
Seizure of business premises . . . . B&P 20021
Seller assisted marketing plans distinguished . . . . CC 1812.201
Service of process
Consent for service on commissioner . . . . Corp 31155
Corporations Commissioner, conduct of person authorizing service on
. . . . Corp 31420
1906
Severability of invalid provisions . . . . B&P 20043; Corp 31514
State defined . . . . Corp 31019
Civil penalties, action to enforce . . . . Corp 31405
Failure to register, action for . . . . Corp 31303
Free association, action for violation of franchisee's right of . . . . Corp
31302.5
Misrepresentation, action for . . . . Corp 31304
20999.3
Stop orders
Grounds for . . . . Corp 31115
Hearing on . . . . Corp 31117
Removal or modification of . . . . Corp 31118
Subfranchise defined . . . . Corp 31008.5; Corp 31010
Subfranchisor defined . . . . B&P 20005; Corp 31009
Subpoena of witnesses by commissioner . . . . Corp 31401
Survival of actions . . . . Corp 31305
Surviving spouse of franchisee . . . . B&P 20027
Suspension of revocation . . . . Corp 31115
Termination of franchise
Agreement to terminate . . . . B&P 20021
Good cause for . . . . B&P 20020
Notice of noncompliance and cure . . . . B&P 20020
Notice of termination without opportunity to cure . . . . B&P 20021
Petroleum franchises . . . . B&P 20999.1
Repurchase of inventory, requirements for (See subhead: Inventory,
offers to repurchase)
Revocation (See subhead: Revocation of registration)
Title of act . . . . B&P 20000
Trade association, franchisee's right to join . . . . Corp 31220; Corp
31302.5
Trademark defined . . . . Corp 31005.5
Trademark or trade name of franchisor . . . . B&P 20001
Trading stamp company, payments to . . . . B&P 20007
Venue restrictions in franchise agreement . . . . B&P 20040.5
Violation of orders or conditions imposed by commissioner . . . . Corp
31203
1907
Waiver of compliance with law . . . . B&P 20010; Corp 31512
Witnesses, subpoena issued by commissioner . . . . Corp 31401
FRATERNAL ORGANIZATIONS
Copyrighted work performed for . . . . 17 USC 110
FRAUD (See also FALSE OR MISLEADING REPRESENTATIONS)

Acts constituting deceit in action for fraud . . . . CC 1710
Coal sales
Fraudulent coal sales . . . . B&P 17532
Container of another, use of . . . . B&P 14403
Exemplary damages for . . . . CC 3294
Invention development and promotion
Service contracts . . . . B&P 22384
Patents
Supplemental examinations . . . . 35 USC 257
Serial number or identification marks altered or destroyed with intent to
defraud . . . . CC 1710.1
Trademarks (state)
Fraudulent registration . . . . B&P 14240
Transmissions by wire, radio or television to obtain confidential
information . . . . Pen 538.5
FREE ASSOCIATION
Franchisee's right of . . . . Corp 31220; Corp 31302.5
Freedom of public assembly, right of . . . . US Const amd I
FRIVOLOUS LITIGATION
FUEL
Petroleum franchises (See FRANCHISES)
1908
FUNDING
Department of Defense, department's acquisition of patents, copyrights, etc.
. . . . 10 USC 2386
FUNERAL DIRECTORS
FUTURE INTEREST
Generally . . . . CC 688; CC 690
G
GALLERIES
Taxation of property displayed in (See ART AND ARTISTS)
GARNISHMENT
GASOLINE FRANCHISES (See FRANCHISES)
GENERIC DRUGS
Database for authorized generic drugs . . . . 21 USC 355
GEOGRAPHY
Trademarks consisting of descriptive terms or words . . . . 15 USC 1052;
15 USC 1091
GIFTS
Community colleges
. . . . Ed 78900
GOLD (See PRECIOUS METALS MARKING)
GOOD CAUSE
1909
GOOD FAITH
Patent infringement action . . . . 35 USC 287
Settlement in good faith between plaintiff and one or more joint tortfeasors
. . . . CCP 877.6
Uniform Trade Secrets Act, bad faith . . . . CC 3426.4
GOOD WILL
Defined . . . . B&P 14100
Previous owner, right to use name of . . . . B&P 14101
Property, good will as . . . . B&P 14102
Restraints from engaging in business on sale of . . . . B&P 16601
Trademarks (state)
Assignment with good will . . . . B&P 14220
Trade name transferred with . . . . B&P 14401
Transfer including business name . . . . B&P 14103
GOVERNMENT CONTRACTS
Civil actions against U.S. for infringement of patent, copyright, etc. . . . . 28
USC 1498
Environmental Protection Agency, ownership of inventions made under
contract with . . . . 42 USC 6981
National Science Foundation, inventions produced under contracts with
. . . . 42 USC 1871
Nuclear material or atomic energy inventions made under . . . . 42 USC
2182
Patents on federally owned or supported inventions (See PATENTS)
Pesticide information, prohibition against disclosure of . . . . 7 USC 136h;
Gov 6254.2
U. S. Arms Control and Disarmament Agency, research contracted by
. . . . 22 USC 2572
U. S. Dept. of Energy, inventions produced under contract with . . . . 42
USC 5908
GOVERNOR
Petroleum franchisee withdrawing from marketing in area, notification of
. . . . B&P 20999.4
GRANTS
1910
Deeds
Grant deed copy services
Disclosure requirements . . . . B&P 17537.10
GRAPHIC ART
GRAPHIC WORKS
GREY MARKET GOODS

Advertising disclosures . . . . CC 1797.82
Credit, liability of seller . . . . CC 1797.85
Defined . . . . CC 1797.8
Disclosures by retail seller . . . . CC 1797.81
Label affixed to product or package . . . . CC 1797.81
Language of disclosure . . . . CC 1797.83
Lease defined as sale . . . . CC 1797.8
Manufacturer's warranty not covering . . . . CC 1797.81
Other laws applicable to . . . . CC 1797.84
Posting of conspicuous sign on display . . . . CC 1797.81
Presale availability of written warranties . . . . CC 1797.81
Refunds, liability of seller for . . . . CC 1797.85
Rescission of sale . . . . CC 1797.86
Song-Beverly Consumer Warranty Act requirements . . . . CC 1797.81
Tag affixed to product or package . . . . CC 1797.81
Unfair competition, violations constituting . . . . CC 1797.86
H
HALLMARKS
Trademarks (state), generally (See PRECIOUS METALS MARKING)
HANDBILLS
Unauthorized distribution in hotel rooms constituting unfair competition
1911
. . . . B&P 17210
HANDICAPPED PERSONS (See DISABLED PERSONS)
HEALTH AND HUMAN SERVICES, UNITED STATES DEPARTMENT

OF
PRODUCTS)
HEALTH AND SAFETY

Coal mining . . . . 30 USC 937; 30 USC 951
HEARINGS
Uniform Trade Secrets Act, in-camera hearings . . . . CC 3426.5
HEIRS (See also INTESTATE SUCCESSION)

Copyright ownership upon death of author . . . . 17 USC 201; 17 USC 203;
17 USC 304
HISTORICAL ORGANIZATIONS
HOMESTEAD FILING SERVICES

Untrue or misleading statements . . . . B&P 17537.6
HORTICULTURAL FAIRS
Copyrighted work performed at . . . . 17 USC 110
HOTELS
HOUSING
Self-help housing program
1912
Owner-builders, employment relationships . . . . Lab 3352
HOUSING COOPERATIVES
Name of . . . . Corp 12311
HULLS, SHIP (See VESSELS)
HYBRIDS
Plant variety protection for . . . . 7 USC 2541
I
IDENTITY THEFT
Public records
Social security numbers
Redaction prior to disclosure of records . . . . Gov 6254.29
IMMORAL MATTER
IMMUNITY
Patents on federally supported inventions . . . . 35 USC 211
Waiver of sovereign immunity under trademark law . . . . 15 USC 1122
IMPORTS
Patent infringement activities . . . . 35 USC 271
Unfair competition in . . . . 19 USC 1337
Vessels, design protection rules for . . . . 17 USC 1328
IMPOUNDMENT
Copyright infringement remedies . . . . 17 USC 503
Franchise fees . . . . Corp 31113
IMPROVEMENTS
Franchise premises, offer to sell improvements on . . . . B&P 20999.25
1913
INCOME TAX
Credits
Drugs for rare diseases or conditions
Clinical testing expenses . . . . 26 USC 45C
Foreign corporations, sale or exchange of patents, copyrights, etc. to
. . . . 26 USC 1249
Franchise, transfer of . . . . 26 USC 1253
Infringement, taxation of award of damages for . . . . Rev&Tax 24675
Patents, gain from sale or transfer of (See PATENTS)
Personal holding company income . . . . 26 USC 543
Research and experimental expenditures, treatment of . . . . 26 USC 174
Royalties allocable to state . . . . Rev&Tax 25127
Tax return preparation businesses
Trademarks, transfer of . . . . 26 USC 1253
Trade names, transfer of . . . . 26 USC 1253
INCONTESTABLE RIGHT TO USE MARK (S e e TRADEMARKS

(FEDERAL))
INCORPORATION BY REFERENCE
Franchise registration . . . . Corp 31152
INDEMNIFICATION
Personal property leases, lessee's right to indemnity for breach of
. . . . UCC 10516
Sale of goods, buyer's right to indemnity for breach of warranty for
. . . . UCC 2607
INDEPENDENT CONTRACTORS (S e e EMPLOYERS AND

EMPLOYEES)
INDIAN ARTS AND CRAFTS

Board of commissioners, appointment of . . . . 25 USC 305
Counterfeit of Indian Arts and Crafts trademark . . . . 18 USC 1158
False misrepresentation of Indian produced goods and products for sale
. . . . 18 USC 1159
Trademark registration, exemption from payment of fees . . . . 15 USC 1113
1914
INDICES
Fictitious business name statements, clerk maintaining indices of . . . . B&P
17925
INFORMANTS
Identity of informant, claim of privilege . . . . Ev 915
INFORMATION-ACCESS SERVICES
General provisions on unlawful advertisements and solicitations for
. . . . B&P 17539.5
Same language required in broadcast or print advertisement as used in “900
number” telephone call messages . . . . B&P 17539.6
Sweepstakes contests
General provisions . . . . B&P 17539.5
Registration requirements for operating sweepstakes using “900
number” telephone calls . . . . B&P 17539.55
INFRINGEMENT
Literary, artistic, or intellectual production, complaint in action for
infringement of . . . . Intro §14[1]; CCP 429.30
Warranties against infringement
INJUNCTIONS
Advertisements, false or misleading (See ADVERTISEMENTS)
Atomic energy or nuclear material patents, injunctions against use of
. . . . 42 USC 2184
Convicted felon's story, actions to preserve proceeds from sale of . . . . CC
2225
Copyrights
Infringement remedies . . . . 17 USC 502
Protection and management system violations . . . . 17 USC 1203
1915
Denial of . . . . CC 3423; CCP 526
Facsimiles
Advertisements
17538.43
Grounds for issuance of . . . . CCP 526
Internet service provider, copyright infringement by . . . . 17 USC 512
Invention development services contracts, willful violation of provisions
concerning . . . . B&P 22387
nuisance . . . . CC 3506=CC 3507.2
Patent infringement actions . . . . 35 USC 283
Picture tubes
Labeling requirements, enforcement . . . . B&P 17531.9
Proceedings which may not be enjoined . . . . CC 3423; CCP 526
Trade secrets . . . . CC 3426.2
Vessels, infringement of design protection for . . . . 17 USC 1322
INSIGNIAS
Nongovernmental entities solicitations
INSOLVENCY (See BANKRUPTCY)
INSPECTION DEMANDS
INSURANCE COMPANIES
Articles of incorporation
Domestic mutual insurer, mutual holding company, or stock holding
1916
company, authorization for filing of articles for . . . . Corp 201.7
Name approval by insurance commissioner . . . . Corp 201.5
Required provisions, generally . . . . Corp 202
Foreign corporations
Qualification to transact intrastate business, certificate of . . . . Corp
2106; Corp 2106.5
Redomestication, certificate of . . . . Corp 201.6
INSURANCE POLICIES
Creditor, order for assignment of insurance policy loan value to . . . . CCP
708.510
INTERACTIVE SERVICES
Copyright for digital performance of sound recordings . . . . 17 USC 114
INTEREST ON MONEY
Trademark infringement suits, prejudgment interest awards in . . . . 15 USC
1117
INTERFERENCES
INTERNATIONAL APPLICATION (See PATENTS)
INTERNET
Advertising
Email advertisements, restrictions on unsolicited . . . . B&P
17529=B&P 17529.9; B&P 17538.45
Purchase or lease of product . . . . B&P 17509
Sales presentation, offer of gift as inducement for . . . . B&P 17533.8
Used or defective merchandise or seconds . . . . B&P 17531
Copyright infringement, limitation on liability of Internet service providers
for . . . . 17 USC 512
Domain names . . . . Intro §5[8]
Cyberpiracy prevention . . . . 15 USC 1125; 15 USC 8131
1917
Misuse of . . . . Pen 502
Study of abusive registrations involving personal names . . . . 15 USC
1125
Willfulness . . . . 17 USC 504
False or misleading statements disseminated over . . . . B&P 17500
Information-access services, solicitations for . . . . B&P 17539.5
B&P 17538.3
Public officers and employees, posting of home address or phone number of
. . . . Gov 6254.21
Sweepstakes, requirements for . . . . B&P 17539.5; B&P 17539.55
INTER PARTES PROCEEDING (See TRADEMARKS (FEDERAL))
INTERROGATORIES
INTERSTATE COMMERCE
Commerce Clause of U. S. Constitution . . . . US Const art I §8 cl. 3
Counterfeited securities or tax stamps, transportation of . . . . 18 USC 2314
Drugs approved by Secretary of Health and Human Services . . . . 21 USC
355
Gold, falsely or spuriously stamped articles of merchandise made of
. . . . B&P 22179
Scheme or artifice to defraud, transportation for purposes of . . . . 18 USC
2314
Veterans' memorial object, transportation of stolen . . . . 18 USC 2314
INTERVENTION
Lessor as intervening party in third party action against lessee for
1918
infringement . . . . UCC 10516
Seller of goods as intervening party in third party action against lessee for
infringement . . . . UCC 2607
INTESTATE SUCCESSION (See also HEIRS)

. . . . CC 3344.1
INVASION OF PRIVACY
Uniform Single Publication Act (See UNIFORM SINGLE PUBLICATION
ACT)
INVENTION DEVELOPMENT SERVICES CONTRACTS

Address of developer . . . . B&P 22379
Advertisements
Compliance with act references prohibited . . . . B&P 22393
Fee disclosed in . . . . B&P 22380
Assignee of developer's rights . . . . B&P 22377
Attorneys' fees . . . . B&P 22386
Bona fide errors . . . . B&P 22383
Bonds (See subhead: Surety bonds)
Business form of developer . . . . B&P 22379
Cancellation of
Cover sheet disclosing right of cancellation . . . . B&P 22374
Chapter not exclusive . . . . B&P 22382
Civil action for damages caused to customer . . . . B&P 22386
Claim against deposit made in lieu of bond . . . . B&P 22391
Confidentiality of customer disclosures . . . . B&P 22395
Contents of . . . . B&P 22379
Contract defined . . . . B&P 22371
Copy of contract to customer . . . . B&P 22372
Copyright law disclosure . . . . B&P 22374; B&P 22379
Correspondence (See subhead: Records and correspondence)
Cover sheet of . . . . B&P 22374
Customer defined . . . . B&P 22371
1919
Damages . . . . B&P 22386
Date of completion of services . . . . B&P 22379
Deposit made in lieu of bond . . . . B&P 22391; B&P 22391.1
Devices, construction of sale of . . . . B&P 22379
Disclosure of right to cancel . . . . B&P 22374
Errors, bona fide . . . . B&P 22383
Estimated earnings . . . . B&P 22379
Expenses of development . . . . B&P 22379; B&P 22381
False, fraudulent or misleading representations inducing reliance . . . . B&P
22384
Fees
Advertisements . . . . B&P 22380; B&P 22388
Failure to make disclosure of . . . . B&P 22388
Filing fee for service provider's bond or deposit in lieu of bond
. . . . B&P 22391.1
Potential customers, disclosures made to . . . . B&P 22381
Statement of . . . . B&P 22379
Subsequent contracts, disclosure of fees . . . . B&P 22372
Filing fee for service provider's bond or deposit in lieu of bond . . . . B&P
22391.1
Fraudulent representations . . . . B&P 22384
Injunctive relief . . . . B&P 22387
Invention defined . . . . B&P 22371
Invention developer defined . . . . B&P 22371
Invention development services defined . . . . B&P 22371
Legislative findings concerning . . . . B&P 22370
Manufacture of invention by developer . . . . B&P 22375
Models, construction and sale of . . . . B&P 22379
Name of developer . . . . B&P 22379
Notice of cancellation of contract . . . . B&P 22373
Number of customers . . . . B&P 22379; B&P 22381
Other laws applicable . . . . B&P 22382
Patent law disclosure . . . . B&P 22374; B&P 22379
Potential customers, disclosure to . . . . B&P 22381
Prototypes, construction and sale of . . . . B&P 22379
Purpose of law governing . . . . B&P 22370
1920
Quarterly statement of services . . . . B&P 22378
Records and correspondence
Duties of developer . . . . B&P 22379
Maintenance of . . . . B&P 22392
Return of money upon cancellation of contract . . . . B&P 22373
Severability of invalid provisions . . . . B&P 22394
Statement of right of cancellation . . . . B&P 22373
Subsequent contracts . . . . B&P 22372
Surety bonds
Amount of . . . . B&P 22389
Beneficiary of . . . . B&P 22390
Deposit in lieu of bond . . . . B&P 22391; B&P 22391.1
Filing fee for bond or deposit in lieu of bond . . . . B&P 22391.1
Requirement of . . . . B&P 22389
Terms of . . . . B&P 22379
Third party rights and defenses . . . . B&P 22376
Title, interest of developer in . . . . B&P 22375
Trademark laws disclosure . . . . B&P 22374; B&P 22379
Type size . . . . B&P 22379
Voidable contracts . . . . B&P 22388
Void contracts
False, fraudulent or misleading representations inducing reliance
. . . . B&P 22384
Noncomplying contracts . . . . B&P 22383
Waivers
Confidentiality of customer disclosures . . . . B&P 22395
Contrary to public policy . . . . B&P 22385
Willful violations . . . . B&P 22387
Writing requirement . . . . B&P 22372
INVENTION PROMOTION SERVICES

Invention development services contracts generally (S e e INVENTION
INVENTIONS AND DESIGNS

Assignment of interest in . . . . CC 982
Atomic energy related inventions (See ATOMIC ENERGY)
Dedication to public . . . . CC 983
Employee's inventions (See EMPLOYERS AND EMPLOYEES)
1921
Employment contract providing for assignment of rights in . . . . Intro §3[1];
Lab 2870=Lab 2872
Joint production of . . . . CC 981
National security, classification for purposes of . . . . 15 USC 1155
Non-nuclear energy research and inventions . . . . 42 USC 5817; 42 USC
5908
Ownership of . . . . Intro §3[1]; CC 980
Prior invention, effect of . . . . CC 984
Publication of public dedication . . . . CC 983
U. S. Constitution, clause securing rights to inventors . . . . US Const art I §8
cl. 8
U.S. Dept. of Energy, inventions produced under contract with . . . . 42 USC
5908
INVENTORY (See FRANCHISES)
INVOLUNTARY TRUSTS (See TRUSTS)
IRIDIUM (See PRECIOUS METALS MARKING)
J
JOINDER OF PARTIES
Patents
Infringement
Joinder of accused infringers . . . . 35 USC 299
Plaintiff, joinder of person as not possible
Making party defendant . . . . CCP 382
JOINT AND SEVERAL LIABILITY

Release, dismissal of suit, or covenant not to sue by joint tortfeasor, effect
of . . . . CCP 877
JOINT INTERESTS
1922
Community property
Survivorship right . . . . CC 682.1
Safe deposit boxes . . . . CC 683.1
Severance of joint tenant's interest
Nonconsensual severance . . . . CC 683.2
JOINTS
JOINT WORKS (See COPYRIGHTS)
JUDGMENTS
Assignment to judgment creditor of right to payment, application for order
. . . . CCP 708.510
Convicted felons, judgments against . . . . CC 2225
Enforcement of judgments . . . . Intro §14[2]
Execution (See EXECUTION ON JUDGMENTS)
Joint and several liability (See JOINT AND SEVERAL LIABILITY)
Seller assisted marketing plans, judgment entered against seller of . . . . CC
1812.203; CC 1812.206
JUDICIAL REVIEW
Franchises, review of orders and decisions of commissioner concerning
. . . . Corp 31501
Settlements in good faith between plaintiff and one or more joint tortfeasors,
review of . . . . CCP 877.6
JUNK DEALERS (See TRADE NAMES)
JUNK EMAIL
Spammers, restrictions on . . . . B&P 17529=B&P 17529.9; B&P 17538.45
JUNK FAXES
Advertisements
JURISDICTION
1923
Amount in controversy . . . . 28 USC 1332
Class actions
Diversity of citizenship . . . . 28 USC 1332
Federal question, district court jurisdiction . . . . 28 USC 1295; 28 USC
1331
Franchise law, coverage of . . . . B&P 20015
Interlocutory decisions, appeals from . . . . 28 USC 1292
Multiforum jurisdiction . . . . 28 USC 1369
Service in multiparty, multiforum cases . . . . 28 USC 1697
Subpoenas . . . . 28 USC 1785
Venue . . . . 28 USC 1391
Multiparty jurisdiction . . . . 28 USC 1369
Venue . . . . 28 USC 1391
U.S. Court of Appeals for the Federal Circuit, exclusive jurisdiction of
. . . . 28 USC 1295
U.S. District Courts, federal question jurisdiction of . . . . 28 USC 1295; 28
USC 1331
K
KEGS
KILLING OF ANIMALS
KINESCOPES
1924
LABELS
Alcoholic beverages . . . . B&P 25200=B&P 25246
Counterfeit labels
Trafficking in counterfeit labels, patches, stickers, etc . . . . 18 USC
2318; 18 USC 2320
Adverse event reporting
Toll-free number in labeling . . . . 21 USC 355b
Picture tubes
Alteration or removal of label . . . . B&P 17531.8
Injunctions to enforce requirements . . . . B&P 17531.9
Requirements for labeling picture tubes . . . . B&P 17531.7
Toys
Unassembled toys . . . . B&P 17531.1
Trade unions, mark or label of (See TRADE UNIONS)
Wine labels (See WINES)
LABOR ORGANIZATIONS
Generally (See TRADE UNIONS)
Trade associations (See TRADE ASSOCIATIONS)
LACHES
LANHAM ACT (See TRADEMARKS (FEDERAL))
LAUNDRY SUPPLY DESIGNATIONS (See TRADE NAMES)

Definitions . . . . 35 USC 1 note
Text of act
Full text . . . . PL 112–29
LEASES
Franchise, leased marketing premises of (See FRANCHISES)
1925
Other product, lease of as condition of sale . . . . B&P 17509
PLANS)
LEGISLATORS
Advertising, restrictions on using names in . . . . 5 USC 501
LEGISLATURE
Computer-related crimes, findings concerning . . . . Pen 502
Franchises, findings concerning . . . . Corp 31001
Invention development services contracts, finding concerning . . . . B&P
22370
Museums, finding concerning property on loan to . . . . CC 1899
Seller assisted marketing plans, findings concerning . . . . CC 1812.200
LETTERS
Ownership of . . . . CC 985
LIBEL AND SLANDER (See UNIFORM SINGLE PUBLICATION ACT)
LIBRARIES
Copyrighted works, reproductions of . . . . 17 USC 108
Patent and Trademark Office library . . . . 35 USC 7
Patents, deposit of copies of . . . . 35 USC 12
LIBRARY OF CONGRESS (See COPYRIGHTS)
LICENSES
Contractors, employee defined . . . . UI 621.5
Executory contracts, bankruptcy trustee to assume or reject . . . . 11 USC
365(n)
Independent contractors required to have . . . . Lab 2750.5
Veterans' exempt from city licensing fees . . . . B&P 16001.7
LIENS
Museums, property on loan to . . . . CC 1899.6
1926
LIKENESS
Another's likeness, unauthorized use of in advertising . . . . CC 3344
Deceased personality, use of likeness of . . . . CC 3344.1
LIMITATION OF ACTIONS (See STATUTES OF LIMITATION)
LIMITED-EQUITY HOUSING COOPERATIVE

Name of . . . . Corp 12311
LIMITED INTEREST
LIMITED LIABILITY COMPANIES

Animals, involvement in motions pictures using . . . . CC 3504
Art
California Art Preservation Act, applicability of . . . . CC 987
Definitions of limited liability companies with respect to . . . . CC
1738; CC 1740
California Art Preservation Act, applicability of . . . . CC 987
Competition agreements on sale or dissolution . . . . B&P 16602.5
Employee status of members and managers . . . . Lab 3351
Signature on statement . . . . B&P 17914
Statement of fictitious business name, form of . . . . B&P 17913
Managers
Defined . . . . B&P 17901.5
Fictitious business name statement, signature on . . . . B&P 17914
Names
Fictitious business names (See subhead: Fictitious business names)
Reservation
Certificate of reservation of name . . . . Corp 17053
Recordation of articles of organization or certificate of registration
. . . . Corp 17052
Seller assisted marketing plans, involvement in . . . . CC 1812.201
Signatures on fictitious business name statement . . . . B&P 17914
Trade secrets act, definition for purposes of . . . . CC 3426.1
1927
LIMITED LIABILITY COMPANIES (2014)
Name
Requirements, restrictions . . . . Corp 17701.08
Reservation of exclusive use of name . . . . Corp 17701.09
LIMITED LIABILITY PARTNERSHIPS

LIMITED PARTNERSHIPS
LITERARY WORKS
LIVE PERFORMANCES
LOANS
Museums, property on loan to (See MUSEUMS, PROPERTY ON LOAN TO)
Real property as collateral
1928
LOCAL AGENCIES
Computer software developed by . . . . Gov 6254.9
LODGES
LOGO
LOST PROPERTY
Liability for failure to return property to rightful owner . . . . Pen 485
M
MACHINES
MADRID PROTOCOL . . . . 15 USC 1141=15 USC 1141n
MAGAZINES
Circulation
MAIL
Copyright Office, delays in deliveries to . . . . 17 USC 709
MAIL ORDER BUSINESSES

Failure to ship goods or provide refund in 30 days . . . . B&P 17538; B&P
17538.3
MANUFACTURERS
Manufacturer's nameplate removed or altered with intent to defraud
. . . . CC 1710.1
351a
1929
Plug molding law . . . . Intro §2[3]
MANUFACTURING
Federally supported inventions . . . . 35 USC 204
Invention development services contracts, developer to manufacture
invention . . . . B&P 22375
MARKET
Seller assisted marketing plans, representations . . . . CC 1812.201
MARKETING PLANS
PLANS)
MARKS AND MARKING

Counterfeited and forged articles, criminal penalty for interstate
transportation of . . . . 18 USC 2314
Gold (See PRECIOUS METALS MARKING)
Platinum (See PRECIOUS METALS MARKING)
Public offense, alteration or removal of marks from property . . . . Pen 537e
MARRIAGE
Restraint on marriage . . . . CC 710
MASK WORK (See COPYRIGHTS)
MASS ACTIONS
MASTER TAPES AND RECORDINGS (See SOUND RECORDINGS)
MECHANISMS
MEDICAL DEVICES
1930
MEDICINES
MEMORABILIA
Autographed sports memorabilia
MENTAL ILLNESS
Patents, incapacity of inventor . . . . 35 USC 117
Plant variety protection, incapacity of breeder . . . . 7 USC 2424
MERCHANDISE
MERCHANT IN GOODS
Sale of goods, merchant's liability in contracts for . . . . UCC 2312
METALS
MICROFILM
Franchise records, microfilming of . . . . Corp 31506
MILITARY ORGANIZATIONS
Army, Department of (See UNITED STATES DEPARTMENT OF ARMY)
Counterfeit military goods
Navy, Department of (See UNITED STATES DEPARTMENT OF NAVY)
MINES AND MINING

Surface mining control and reclamation research, products, patents, etc.
from . . . . 30 USC 1226
MINORS (See CHILDREN OR MINORS)
MISAPPROPRIATION OF TRADE SECRETS ( Se e UNIFORM TRADE

SECRETS ACT)
MISREPRESENTATIONS ( S e e FALSE OR MISLEADING
1931
REPRESENTATIONS)
MISTAKES
Involuntary trusts, mistake as grounds for . . . . CC 2224
MITIGATING FACTORS
Patent infringement action . . . . 35 USC 287
MOBILE TELEPHONY
Advertisements
pagers
. . . . B&P 17538.9
MODELS
Patents, model as exhibit . . . . 35 USC 114
MODEL STATE TRADEMARK LAW . . . . B&P 14200=B&P 14272 ( See

TRADEMARKS (STATE))
MODIFICATION
Franchises, registration statement for material modification of (See
FRANCHISES)
MOLDS
MORTGAGES
MOSAIC (See ART AND ARTISTS)
1932
MOTELS
MOTION PICTURES
Animals (See subhead: Killing or cruelty to animal or human as nuisance)
Censoring
Cruelty (See subhead: Killing or cruelty to animal or human as nuisance)
Definition of . . . . CC 3504; Rev&Tax 988; Rev&Tax 6010.6
Exploit or exploitation defined . . . . Rev&Tax 6010.6
Killing or cruelty to animal or human as nuisance
Actions by district attorney or attorney general to enjoin . . . . CC
3506=CC 3507.2
Appeals . . . . CC 3507
Burden of proof . . . . CC 3507.1
Definitions . . . . CC 3504; CC 3505
Distributor's liability to exhibitor . . . . CC 3507.4
Evidence, motion picture admissible . . . . CC 3507.1
Exempt motion pictures . . . . CC 3508; CC 3508.1
Exhibition showing intentional acts . . . . CC 3505
Exhibitor's liability . . . . CC 3507.4
Fine for violations of injunction or orders . . . . CC 3507.3
Injunctive relief, actions for . . . . CC 3506=CC 3507.2
Patently offensive conduct . . . . CC 3505
Precedence of actions . . . . CC 3507.2
Producer's liability to exhibitor . . . . CC 3507.4
Severability of invalid provisions . . . . CC 3508.2
Speedy adjudication . . . . CC 3507.2
Trial on merits . . . . CC 3507
Willful misstatement of exempt status . . . . CC 3508.1
Motion picture exhibition facility
Defined . . . . 17 USC 101
Unauthorized recording of film in facility . . . . 18 USC 2319B
1933
Negatives and prints defined . . . . Rev&Tax 988
Partnership, formation of . . . . Rev&Tax 6010.4
Produced film rents, taxation of income from . . . . 26 USC 543
Unauthorized recording . . . . 18 USC 2319B
Sales and use tax
Partnership, formation of . . . . Rev&Tax 6010.4
Production, furnishing equipment and facilities for . . . . Rev&Tax
6010.4
Qualified motion picture, transfer of . . . . Rev&Tax 6010.6
Qualified production services excluded . . . . Rev&Tax 6010.6
Taxation
Full value for purposes of property tax . . . . Rev&Tax 988
Intangible rights, exclusion of . . . . Rev&Tax 988
Sales and use tax (See subhead: Sales and use tax)
Theaters
Definition of motion picture exhibition facility . . . . 17 USC 101
Unauthorized recording of film in motion picture exhibition facility
. . . . 18 USC 2319B
Transfer of . . . . Rev&Tax 6010.6
Unemployment compensation, employees for purposes of . . . . UI 601.5
MOTOR VEHICLES (See VEHICLES)
MOVEMENTS
MULTIFORUM JURISDICTION . . . . 28 USC 1369

Venue . . . . 28 USC 1391
MULTIPARTY JURISDICTION . . . . 28 USC 1369

Venue . . . . 28 USC 1391
1934
MULTIPLES, SALE OF (See ART AND ARTISTS)
MUNICIPAL CORPORATIONS
Injunctive relief to prevent legislative act by . . . . CC 3423; CCP 526
MUSEUMS, PROPERTY ON LOAN TO

Change of address of lender, notice of . . . . CC 1899.4
Changes in ownership, notice of . . . . CC 1899.4
Conservation work or measures . . . . CC 1899; CC 1899.6
Definitions . . . . CC 1899.1; Rev&Tax 6365; Rev&Tax 6366.3
Disposition of property by museum . . . . CC 1899.6
Expiration of specified term loan . . . . CC 1899.9
Findings of legislature . . . . CC 1899
Indefinite loan, notice of intent to terminate . . . . CC 1899.9
Informing lender of statutory provisions . . . . CC 1899.3
Injury or loss of property
Liability of museum . . . . CC 1899.6
Limitation of action against museum . . . . CC 1899.7; CC 1899.8
Notice of . . . . CC 1899.3
Published notice . . . . CC 1899.7
Lender's address defined . . . . CC 1899.1
Liability for injury or loss of property . . . . CC 1899.6
Lien on property . . . . CC 1899.6
Loan defined . . . . CC 1899.1
Location of museum . . . . CC 1899.2
Notice by museum
Generally . . . . CC 1899.2
Proof of receipt . . . . CC 1899.2
Termination of indefinite loan, notice by museum of . . . . CC 1899.9
Unclaimed property law, notice under . . . . CC 1899.11
Notice of intent to preserve interest in property
Effect of filing . . . . CC 1899.4
Form of . . . . CC 1899.5
Proof of receipt of . . . . CC 1899.3
Retained by museum . . . . CC 1899.3; CC 1899.5
Property defined . . . . CC 1899.1
Property tax exemption, filing of . . . . Rev&Tax 217
1935
Publication of notice
Injury or loss of property, notice of . . . . CC 1899.7
Lender, notice to . . . . CC 1899.2
Purpose of statute governing . . . . CC 1899
Recovery of property, action for . . . . CC 1899.10
Regularly open to the public . . . . Rev&Tax 217
Injury or loss of property, action based on . . . . CC 1899.7; CC 1899.8
Recovery of personal property, action for . . . . CC 1899.10
Taxation of property, exemption from . . . . Rev&Tax 217
Title to property purchased from museum . . . . CC 1899.10
Unclaimed property law, applicability of . . . . CC 1899; CC 1899.11
MUSICAL PERFORMANCES
MUSICAL WORKS (See COPYRIGHTS)
MUTUAL BENEFIT CORPORATIONS

Names, reservation of . . . . Corp 7122
N
NAFTA COUNTRIES
Inventions in . . . . 35 USC 104 (Repeal of section in 2013)
NAMES
Another's name, unauthorized use of in advertising . . . . CC 3344
Congressmen, restrictions on using names of . . . . 5 USC 501
Consumer cooperative corporations, names of . . . . Corp 12311
Copyright notice, defect in . . . . 17 USC 406
Corporations (See CORPORATIONS)
Deceased personality, use of name of . . . . CC 3344.1
1936
Good will, name of previous owner not part of . . . . B&P 14101
Invention development services contracts, developer's name . . . . B&P
22379
Limited liability companies (2014)
Requirements, restrictions . . . . Corp 17701.08
Reservation of exclusive use of name . . . . Corp 17701.09
Limited partnerships (See LIMITED PARTNERSHIPS)
Nonprofit corporations (See NONPROFIT CORPORATIONS)
Organization names, registration of (See TRADE NAMES)
Partnerships (See PARTNERSHIPS)
Patent, error in name of inventor . . . . 35 USC 116; 35 USC 256
Professional corporations . . . . Corp 13409
NATIONAL DEFENSE OR SECURITY

Classification of information for purposes of . . . . 15 USC 1155
NATIONAL INTELLECTUAL PROPERTY LAW ENFORCEMENT

COORDINATION COUNCIL
Establishment of . . . . 15 USC 1128
NATIONAL ORIGIN
NATIONAL SCIENCE FOUNDATION

Inventions produced under scientific or engineering research contract
. . . . 42 USC 1871
NATIONAL SECURITY (See PATENTS)
NAVY DEPARTMENT
1937
. . . . 22 USC 526
NEGLIGENCE
Fine art, framing, conserving, or preserving . . . . CC 987
NEWSPAPERS
Circulation
Freedom of press, right of . . . . US Const amd I
Seller assisted marketing plans, newspaper distribution system
distinguished . . . . CC 1812.201
“900 NUMBER” TELEPHONE CALLS (S e e INFORMATION-ACCESS

SERVICES)
NONPROFIT CORPORATIONS
Contest solicitation provisions, applicability of . . . . B&P 17539.3
Fictitious business name provisions applicable to . . . . B&P 17911
Mutual benefit corporations, reservation of names . . . . Corp 7122
Names, reservation of
Mutual benefit corporations . . . . Corp 7122
Public benefit corporations . . . . Corp 5122
Religious corporations . . . . Corp 9122
Public benefit corporations, reservation of names by . . . . Corp 5122
Religious corporations, reservation of names . . . . Corp 9122
NONPROFIT ORGANIZATIONS
Employment status of volunteers . . . . Lab 3352
Fine art, preservation of . . . . CC 989
Franchise not including cooperatives for independent retailers . . . . Corp
31005
Internet service provider, limitation on liability for copyright infringement
for educational institution acting as . . . . 17 USC 512
Museum, operation of . . . . Rev&Tax 6365; Rev&Tax 6366.3
NONPROFIT PERFORMANCES
1938
Copyrighted works, exemptions for . . . . 17 USC 110
NOTARY PUBLIC
Statute of limitation on bonds . . . . CCP 338
NOTICES
Building owners, notices of housing or building code violations . . . . Gov
6254.7
Email
Termination of service . . . . B&P 17538.35
Employee's invention, assignment of rights in . . . . Lab 2872
Invention development services contracts, notice of cancellation of
. . . . B&P 22373
Failure to ship goods or provide refund in 30 days
Back order notice . . . . B&P 17538.3
PLANS)
Service of process or papers (See SERVICE OF PROCESS OR PAPERS)
NUCLEAR ENERGY (See ATOMIC ENERGY)
NUISANCE
NUMBERS OR NUMERALS
Serial numbers, alteration or removal of . . . . Pen 537e
1939
O
OATHS
OFFERING CIRCULARS
OFFSETS
Franchisor's offer to repurchase inventory of franchisee . . . . B&P 20036
OIL AND GAS

OPPOSITION
ORDERS
Cease and desist orders (See CEASE AND DESIST ORDERS)
Injunctions (See INJUNCTIONS)
Judgment creditor, application for order assigning judgment debtor's right to
payments to . . . . CCP 708.510
Protective orders (See DISCOVERY)
Stop orders (See STOP ORDERS)
ORDINANCES
Home solicitations, restrictions on . . . . B&P 17500.3
ORGANIZATIONS
Names, registration of (See TRADE NAMES)
Nonprofit (See NONPROFIT ORGANIZATIONS)
ORIGINAL WORK NOT FIXED IN TANGIBLE MEDIUM ( See

AUTHORSHIP)
ORPHAN DRUG TESTING (See DRUGS AND DRUG PRODUCTS)
OSMIUM (See PRECIOUS METALS MARKING)
1940
OUTER SPACE
Patents on inventions made, used, or sold in outer space . . . . 35 USC 105
OWNERSHIP (See TITLE AND OWNERSHIP)
P
PACKAGES
PAGERS
Advertisements
pagers
PAINTINGS (See ART AND ARTISTS)
PALLADIUM (See PRECIOUS METALS MARKING)
PANTOMIMES
Copyrights . . . . 17 USC 102; 17 USC 106
PARENT AND CHILD

Child care services (See CHILD CARE SERVICES)
Definition of children . . . . 17 USC 101
Employment relationship . . . . Lab 3352
PARTIES TO ACTIONS
Joinder of party as plaintiff not possible
Making party defendant . . . . CCP 382
Patents
Infringement
PARTNERSHIPS
Dissolution of partnership or disassociation of partner, noncompetition
agreement in connection with . . . . B&P 16602
1941
Franchise registration, liability for violations of . . . . Corp 31302
Limited partnerships (See LIMITED PARTNERSHIPS)
Noncompetition agreement in connection with dissolution of partnership,
disassociation of partner, or sale of partnership interest . . . . B&P
16602
Ownership of property . . . . CC 682; CC 684
Sale of partnership interest, noncompetition agreement in connection with
. . . . B&P 16602
PATENT AND TRADEMARK OFFICE

Abandoned applications
Revival and reinstatement of reexamination proceedings . . . . 35 USC
27
Fees for petition . . . . 35 USC 41
Actions and proceedings in (See PATENTS)
Advisory committees . . . . 35 USC 5
Annual reports . . . . 35 USC 13; 35 USC 42
Board of Patent Appeals and Interferences (See PATENTS)
Bureau under Secretary of Commerce . . . . 15 USC 1511
Certified copies furnished by . . . . 35 USC 9
Classification of patents by subject matter . . . . 35 USC 8
Commissioners of Patents and of Trademarks, duties and compensation of
. . . . 35 USC 3
Copies of records of . . . . 15 USC 1057
Derivation proceedings . . . . 35 USC 135
Director
Duties . . . . 35 USC 3
Fees . . . . 35 USC 41
Foreign countries, exchanges with . . . . 35 USC 11
Funding of . . . . 35 USC 42
Library of . . . . 35 USC 7
Mistakes by . . . . 15 USC 1057; 35 USC 254
NAFTA and WTO member countries, inventions in . . . . 35 USC 104
(Repeal of section in 2013)
National security positions . . . . 35 USC 3
Officers and employees of
1942
Interest in patents, prohibition against . . . . 35 USC 4
Powers and duties . . . . 35 USC 2
Public libraries, copies to . . . . 35 USC 12
Register of interests in patents and applications . . . . 35 USC 261
Rules and regulations for conduct of proceedings in . . . . 15 USC 1123
Satellite offices . . . . 35 USC 1 note
Seal . . . . 35 USC 2
Secretary of Commerce appointing officers and employees . . . . 35 USC 3
Trial and appeal board (See PATENT TRIAL AND APPEAL BOARD)
and Trademark Office, duties of . . . . 35 USC 3
WTO and NAFTA member countries, inventions in . . . . 35 USC 104
(Repeal of section in 2013)
PATENT COOPERATION TREATY (See PATENTS)
PATENTS
Abandonment
Filing fees
Failure to submit fees for application within prescribed period,
abandonment resulting from . . . . 35 USC 111
International application . . . . 35 USC 371
Issue fee not timely paid . . . . 35 USC 151
Loss of entitlement to patent . . . . 35 USC 102
Oath for application not submitted within prescribed period . . . . 35
USC 111
Provisional application . . . . 35 USC 111
Secret invention, unauthorized disclosure of . . . . 35 USC 182
Time for prosecuting applications . . . . 35 USC 133
Actions and proceedings
Affidavits . . . . 35 USC 23
Day for taking action . . . . 35 USC 21
Declaration in lieu of oath . . . . 35 USC 25
Defective execution of documents . . . . 35 USC 26
Depositions . . . . 35 USC 23
Derivation proceedings
Civil action in case of . . . . 35 USC 146
1943
Derived patents . . . . 35 USC 291
False marking
Competitive injury resulting from false marking . . . . 35 USC 292
Interference, civil action in case of . . . . 35 USC 146
Inter partes review (September 2012)
Relationship of review to other actions, proceedings, etc . . . . 35
USC 315
Patent, civil action to obtain . . . . 35 USC 145
Post-grant review
Relation of review to other actions, proceedings, etc . . . . 35 USC
325
Printing of papers . . . . 35 USC 22
Witnesses . . . . 35 USC 24
Adjustment of fees . . . . 35 USC 41
Affidavits, rules for taking . . . . 35 USC 23
Agents
Application for patent filed by . . . . 35 USC 118
Suspension or exclusion from practice . . . . 35 USC 32
Unauthorized practice . . . . 35 USC 33
Aircraft temporarily in U.S. . . . . 35 USC 272
Amendments
Defective patents, amendment of application . . . . 35 USC 251
Earlier filed application, reference to . . . . 35 USC 120
Error in naming inventor on application . . . . 35 USC 116; 35 USC 256
Inter partes review (September 2012) . . . . 35 USC 316
New matter, introduction of . . . . 35 USC 132
Post-grant review . . . . 35 USC 326
American Republics, protection of patent rights of U.S. citizens . . . . 22
USC 526
Animal drug . . . . 35 USC 156; 35 USC 271
Antitrust laws, federally supported inventions . . . . 35 USC 211
Appeals
Board of Patent Appeals (See PATENT TRIAL AND APPEAL BOARD)
Civil actions (See subhead: Actions and proceedings)
Court of Appeals (See subhead: U. S. Court of Appeals for the Federal
Circuit)
Federally supported inventions, determinations on . . . . 35 USC 203
Fees . . . . 35 USC 41
1944
Appeal of board decision . . . . 35 USC 319
Post-grant review
Reexamination proceedings, ex parte . . . . 35 USC 306
Applications
Abandonment of (See subhead: Abandonment)
Agents filing . . . . 35 USC 118
Assignees filing . . . . 35 USC 118
Confidentiality of . . . . 35 USC 122
Divisional . . . . 35 USC 121
Drawings (See subhead: Drawings)
Error in naming inventor . . . . 35 USC 116; 35 USC 256
Examination of (See subhead: Examination of application)
Filing date . . . . 35 USC 111
Foreign countries, filing application in . . . . 35 USC 184=35 USC 186
Government applications
Time for taking action . . . . 35 USC 267
Ingredients . . . . 35 USC 114
International (See subhead: Patent Cooperation Treaty)
Joint application . . . . 35 USC 116
Legal representatives filing . . . . 35 USC 117
Micro entities . . . . 35 USC 123
Model as exhibit . . . . 35 USC 114
Notice of allowance of . . . . 35 USC 151
Number of inventions . . . . 35 USC 121
Oaths . . . . 35 USC 111; 35 USC 115
Omission of inventor . . . . 35 USC 116; 35 USC 256
Prior filed applications
References to prior filed applications . . . . 35 USC 111
Provisional application . . . . 35 USC 111; 35 USC 119
Publication of . . . . 35 USC 122
Reference to earlier filed application . . . . 35 USC 120
Specifications (See subhead: Specifications)
Specimens . . . . 35 USC 114
Third party submissions . . . . 35 USC 122
Time for prosecuting . . . . 35 USC 133
Two or more inventions in one application . . . . 35 USC 121
Arbitration
Infringement suit . . . . 35 USC 294
1945
Validity of patent, dispute involving . . . . 35 USC 294
Assignments
Application filed by assignee . . . . 35 USC 118
Atomic energy research federally finances, assignment of patents to U.S.
. . . . 42 USC 2189
Certificate of acknowledgment of . . . . 35 USC 261
Federally supported inventions, disposition of rights . . . . 35 USC 202
Issue of patent to assignee . . . . 35 USC 152
Atomic energy related patents (See ATOMIC ENERGY)
Attorneys
Infringement
Failure of infringer to obtain or present to factfinder advice of
counsel
Evidentiary effect . . . . 35 USC 298
Suspension or exclusion from practice . . . . 35 USC 32
Attorneys' fees in infringement action
United States as defendant . . . . 28 USC 1498
Biotechnological process
DNA technology, manufacturing using . . . . 35 USC 271
Nonobviousness, criteria for . . . . 35 USC 103
Board of Patent Appeals and Interferences (S e e PATENT TRIAL AND
APPEAL BOARD)
Certificates
Assignment or conveyance, acknowledgment of . . . . 35 USC 261
Correction of mistake, certificate of . . . . 35 USC 254; 35 USC 255
Reexamination proceedings, certificate canceling or confirming claim
. . . . 35 USC 307
Certified copies . . . . 35 USC 9
Civil actions (See subhead: Actions and proceedings)
Claims regarding invention
Disclaimer of . . . . 35 USC 253; 35 USC 288
Fees . . . . 35 USC 111
Incorporation of amended or new claim . . . . 35 USC 307
Invalidity of claim affecting infringement action . . . . 35 USC 288
Nonobviousness of process . . . . 35 USC 282
Presumption of validity of . . . . 35 USC 282
1946
Reexamination proceedings, certificate canceling or confirming claim
. . . . 35 USC 307
Reissuance of patent to correct . . . . 35 USC 251; 35 USC 252
Rejection of (See subhead: Rejection of claims)
Classification of . . . . 35 USC 8
Coal mining research and developments (See COAL MINING)
Color additive products . . . . 35 USC 156
Combinations
Claims regarding invention . . . . 35 USC 112
Infringement, acts constituting . . . . 35 USC 271
Commissioner of Patents and Trademarks (S e e PATENT AND
TRADEMARK OFFICE)
Compensation for damage caused by secrecy order . . . . 35 USC 183
Confidentiality
Prior art citation, person requesting . . . . 35 USC 301
Constitutional protection of inventors . . . . US Const art I §8 cl. 8
Consumer product safety information, research, and patents available to
public . . . . 15 USC 2054
Contents of . . . . 35 USC 154
Contributing infringement . . . . 35 USC 271
Conveyance of
Joint owners . . . . 35 USC 262
Copies
Admissibility of copies of patents and patent-related records . . . . 28
USC 1744
Certified copies . . . . 35 USC 9
Foreign patent documents . . . . 28 USC 1745
Public libraries . . . . 35 USC 12
Correction of patents
Certificate of correction . . . . 35 USC 254; 35 USC 255
Reissuance . . . . 35 USC 251; 35 USC 252
Costs
Disclaimer, failure to file . . . . 28 USC 1928
Infringement suits . . . . 28 USC 1928; 35 USC 284
Damages for infringement (See subhead: Infringement)
Day for taking action . . . . 35 USC 21
1947
Death of inventor . . . . 35 USC 117
Defense agencies
Defenses
Infringement
Prior commercial use . . . . 35 USC 273
Infringement action . . . . 35 USC 282
Validity of patent, action involving . . . . 35 USC 282
Delay in payment of maintenance
Fees . . . . 35 USC 41
Depositions, rules for taking . . . . 35 USC 23
Derivation proceedings
Civil action in cases of . . . . 35 USC 146
Civil action in cases of derived patents . . . . 35 USC 291
Description of plant patents . . . . 35 USC 162
Designated person for service of process . . . . 35 USC 293
Design patents
Industrial designs, Hague Agreement concerning international
registration of (See subhead: Industrial designs, Hague Agreement
concerning international registration of)
Infringement remedies . . . . 35 USC 289
Priority rights . . . . 35 USC 172
Term of . . . . 35 USC 173
Disclaimers
Claims . . . . 35 USC 253
Costs in infringement suits, recovery of . . . . 28 USC 1928
Fees . . . . 35 USC 41
Invalid claim affecting infringement suit . . . . 35 USC 288
Term of patent . . . . 35 USC 253
Disclosure as evidence of good faith . . . . 35 USC 287
DNA technology, manufacturing using . . . . 35 USC 271
Drawings
Certified copies of . . . . 35 USC 9
Adverse event reporting . . . . 21 USC 355b
1948
Applications filed with Secretary of Health and Human Services
. . . . 21 USC 355
Approved products . . . . 35 USC 156
Definition of . . . . 35 USC 156
Extension of term of patent . . . . 35 USC 155A (Repealed September
2012); 35 USC 155 (Repealed September 2012); 35 USC 156
Pediatric use
Term extension for studies of drugs for . . . . 21 USC 355a
Request for information from Secretary of Health and Human Services
. . . . 21 USC 372
Educational awards relating to federally supported inventions . . . . 35 USC
212
Electronic patent and trademark data
Fees . . . . 35 USC 41
Energy Research and Development Administration, acquisition of patents by
. . . . 42 USC 5817
English language
International applications . . . . 35 USC 371; 35 USC 375
Requirements . . . . 35 USC 361
Environmental effects test . . . . 35 USC 156
Environmental Protection Agency (S e e UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY)
Errors (See subhead: Correction of patents)
Evidence
Admissibility of patents and patent-related records . . . . 28 USC 1744
Foreign patents and related documents, copies of . . . . 28 USC 1745
Examination of application
Appeals (See PATENT TRIAL AND APPEAL BOARD)
Fees . . . . 35 USC 41
International Preliminary Examining Authority . . . . 35 USC 362
Objections or imposition of requirements . . . . 35 USC 132
Prior art (See subhead: Prior art and written statement citations)
Reexamination, ex parte . . . . 35 USC 132
Rejection of claims . . . . 35 USC 132
Time for prosecuting application . . . . 35 USC 133
Excess claims
Fees . . . . 35 USC 41
Execution of documents
1949
Defective execution . . . . 35 USC 26
Patent, execution of . . . . 35 USC 153
Expert testimony on damages or royalty in infringement suit . . . . 35 USC
284
Extension of patent term
Appellate review, delay of patent due to . . . . 35 USC 154
Approved products, method of using or manufacturing product, patent
for . . . . 35 USC 156
Derivation proceedings, delay of patent due to . . . . 35 USC 154
Fees . . . . 35 USC 41
Invalidity of extension as defense . . . . 35 USC 282
Nonapproved new drug products subsequently approved by FDA
. . . . 35 USC 155A (Repealed September 2012)
Secrecy order, application placed under . . . . 35 USC 154
Stay of approval, FDA-regulated products or processes subject to
. . . . 35 USC 155 (Repealed September 2012)
Federally assisted inventions (See subhead: Federally supported
inventions)
Federally owned inventions
Domestic and foreign protection . . . . 35 USC 207
Licensing of . . . . 35 USC 209
Precedence of chapter . . . . 35 USC 210
Regulations governing licensing of . . . . 35 USC 208
Small business firms, preference to . . . . 35 USC 209
Federally supported inventions
Antitrust laws . . . . 35 USC 211
Appeals procedure . . . . 35 USC 203
Assignment of rights to . . . . 35 USC 202
Confidentiality . . . . 35 USC 205
Consumer product safety . . . . 15 USC 2054
Education awards, rights in . . . . 35 USC 212
Fire prevention . . . . 15 USC 2218(d)
Funding agreements
Standard clauses . . . . 35 USC 206
Immunity clause . . . . 35 USC 211
License, grant of . . . . 35 USC 203
Manufacturing requirement . . . . 35 USC 204
March-in rights . . . . 35 USC 203
1950
Objective of . . . . 35 USC 200
Precedence of chapter . . . . 35 USC 210
Regulations . . . . 35 USC 206
Retention of title . . . . 35 USC 202
Fees . . . . 35 USC 41
Application for patent . . . . 35 USC 111
Date to be paid . . . . 35 USC 21
International applications (See subhead: Patent Cooperation Treaty)
Issuance of patent . . . . 35 USC 151
Patent Cooperation Treaty (See subhead: Patent Cooperation Treaty)
Reexamination request . . . . 35 USC 302; 35 USC 303
Refunds . . . . 35 USC 42
Revenues from . . . . 35 USC 42
Filings
Application for patent . . . . 35 USC 111
Date for . . . . 35 USC 21
Fees . . . . 35 USC 41
Printed papers . . . . 35 USC 22
Priority (See subhead: Priority)
Retroactive effect of divisional application . . . . 35 USC 121
Fines and penalties
False marking . . . . 35 USC 292
Secrecy order, violation of . . . . 35 USC 186
Fire prevention inventions and discoveries under federal contract . . . . 15
USC 2218(d)
Food additive products . . . . 35 USC 156
Food and Drug Administration
Approved products, extension of term for . . . . 35 USC 156
Composition of matter under regulatory review by . . . . 35 USC 155
(Repealed September 2012)
New drug products, regulatory review of . . . . 35 USC 155A (Repealed
September 2012)
Stay of regulation by . . . . 35 USC 155 (Repealed September 2012)
Foreign countries
Benefit of earlier filing date in . . . . 35 USC 119
Combination of components outside U.S., infringement . . . . 35 USC
271
Copies of patents exchanged with . . . . 35 USC 11
Denying adequate protection of patents . . . . 19 USC 2242
1951
Filing of application in . . . . 35 USC 184=35 USC 186
International applications filed in . . . . 35 USC 368
Invention made in . . . . 35 USC 104 (Repeal of section in 2013)
Foreign patents
Evidentiary use of copies . . . . 28 USC 1745
Prior patents . . . . 35 USC 102
Fraud
Funding agreements (See subhead: Federally supported inventions)
Grants
Health and environmental effects test . . . . 35 USC 156
Immunity related to federally supported inventions . . . . 35 USC 211
Imports, infringement activities . . . . 35 USC 271
Income taxation (See subhead: Sale or exchange of patents, tax treatment
for)
Industrial designs, Hague Agreement concerning international registration of
Application, content of . . . . 35 USC 383
Effect of application . . . . 35 USC 385
Examination of application . . . . 35 USC 389
Filing applications . . . . 35 USC 382
Filing date . . . . 35 USC 384
Publication of application . . . . 35 USC 390
Relief from prescribed time limits . . . . 35 USC 387
Right of priority . . . . 35 USC 386
Withdrawn or abandoned application . . . . 35 USC 388
Infringement
Actions
USC 315
Post-grant review
Relation of review to other actions, proceedings, etc . . . . 35
USC 325
Acts constituting . . . . 35 USC 271
Arbitration, voluntary . . . . 35 USC 294
Attorneys
Failure of infringer to obtain or present to factfinder advice of
1952
counsel
Evidentiary effect . . . . 35 USC 298
Attorneys' fees (See subhead: Attorneys' fees in infringement action)
Civil action for . . . . 35 USC 281
Contributory infringement . . . . 35 USC 271
Costs . . . . 28 USC 1928; 35 USC 284
Damages
Design patent profits . . . . 35 USC 289
Defenses
Pleading of . . . . 35 USC 282
Prior commercial use . . . . 35 USC 273
Derived patents . . . . 35 USC 291
Disclosure, request for . . . . 35 USC 287
Exemption for vessels, aircraft or vehicles temporarily in U.S. . . . . 35
USC 272
Expert testimony to determine damages . . . . 35 USC 284
Good faith, evidence of . . . . 35 USC 287
Importation of articles . . . . 19 USC 1337
Income tax on award of damages for . . . . Rev&Tax 24675
Injunctive relief . . . . 35 USC 283
Invalid claim, effect of . . . . 35 USC 288
Marking . . . . 35 USC 287
Mitigating circumstances . . . . 35 USC 287
Notice
Infringement, notice of . . . . 35 USC 287
Patent or publication relied upon . . . . 35 USC 282
Suit, notice to Director of . . . . 35 USC 290
Parties
Persons liable . . . . 35 USC 271
Plant variety protection
States, infringement by . . . . 7 USC 2570
Presumption of validity of . . . . 35 USC 282
Process patent . . . . 35 USC 295
Remedies . . . . 35 USC 281; 35 USC 287
Service of process on nonresident . . . . 28 USC 1694
States, infringement by
No 11th amendment immunity . . . . 35 USC 296
Time limitation on recovery . . . . 35 USC 286
1953
Ingredients . . . . 35 USC 114
Injunctions in infringement action . . . . 35 USC 283
Post-grant review
325
Interferences
Appeal of decisions (See subhead: U. S. Court of Appeals for the
Federal Circuit)
Board determining priority of inventions (S e e PATENT TRIAL AND
APPEAL BOARD)
Statutory invention registration . . . . 35 USC 157 (Repealed September
2013)
International application (See subhead: Patent Cooperation Treaty)
International Searching Authority (See subhead: Patent Cooperation
Treaty)
Inter partes reexamination
Appeals . . . . 35 USC 315
Certificate of patentability or unpatentability . . . . 35 USC 316
Circumstances precluding reexamination . . . . 35 USC 317
Claim cancellation . . . . 35 USC 316
Conduct of proceedings . . . . 35 USC 314
Determination by Director . . . . 35 USC 312
Estoppel effect of . . . . 35 USC 311
Order for . . . . 35 USC 313
Request for . . . . 35 USC 311
Stay of pending litigation . . . . 35 USC 318
Third party requester, appeals by . . . . 35 USC 315
Inter partes review (September 2012) . . . . 35 USC 311=35 USC 319
Conduct of review
Patent trial and appeal board to conduct . . . . 35 USC 316
Rulemaking . . . . 35 USC 316
Decisions . . . . 35 USC 318
Estoppel
USC 315
Findings required to institute review . . . . 35 USC 314
Institution of review . . . . 35 USC 314
Patent trial and appeal board
Conduct of review . . . . 35 USC 316
1954
Petition for review
Contents . . . . 35 USC 312
Permitted . . . . 35 USC 311
Public availability . . . . 35 USC 312
Response . . . . 35 USC 313
Relationship of review to other actions, proceedings, etc . . . . 35 USC
315
Response to petition for review . . . . 35 USC 313
Settlement . . . . 35 USC 317
Time to file for review . . . . 35 USC 311
Time to institute review . . . . 35 USC 314
Inventions
Federally owned inventions (See subhead: Federally owned
inventions)
Federally supported inventions (See subhead: Federally supported
inventions)
Foreign country, invention made in . . . . 35 USC 104 (Repeal of section
in 2013)
Issuance of patent (See subhead: Issuance of)
Obviousness, determination of . . . . 35 USC 103
Patentability of
Conditions for . . . . 35 USC 102
2013)
Inventor
Correction of named inventor . . . . 35 USC 256
Death of . . . . 35 USC 117
Error in naming . . . . 35 USC 116; 35 USC 256
Incapacity of . . . . 35 USC 117
Omission of inventor on application . . . . 35 USC 116; 35 USC 256
Two or more persons . . . . 35 USC 116
Issuance of
Assignee, issue to . . . . 35 USC 152
Contents of patent . . . . 35 USC 154
Execution of patent . . . . 35 USC 153
1955
Fee, payment as prerequisite to . . . . 35 USC 151
Fees . . . . 35 USC 41
International application, patent issued on . . . . 35 USC 375
Recordation of patent . . . . 35 USC 153
Term of patent . . . . 35 USC 154
Withholding patents on certain inventions (See subhead: Secrecy of
inventions)
Joint owners . . . . 35 USC 262
Joint research agreements
Common ownership . . . . 35 USC 102
judgment . . . . CCP 708.510
Jurisdiction
Nonresident patentee, jurisdiction over . . . . 35 USC 293
Knowledge of invention . . . . 35 USC 102
Licenses
Air pollution patents, compulsory licensing of . . . . 42 USC 7608
Federally owned inventions . . . . 35 USC 208; 35 USC 209
Federally supported inventions, grant of license . . . . 35 USC 203
Foreign countries, filing application in . . . . 35 USC 184=35 USC 186
Maintenance
Fees . . . . 35 USC 41
Manufacturing federally supported inventions . . . . 35 USC 204
Marking
Prerequisite to recovery in action for infringement . . . . 35 USC 287
Medical devices . . . . 35 USC 156
Micro entities
Defined . . . . 35 USC 123
Military departments, appropriations to acquire patents, applications, etc.
. . . . 10 USC 2386
Mistakes
Applicant's mistake . . . . 35 USC 255
Patent and Trademark Office mistake . . . . 35 USC 254
Model as exhibit . . . . 35 USC 114
Name of inventor, error in . . . . 35 USC 116; 35 USC 256
National Intellectual Property Law Enforcement Coordination Council
. . . . 15 USC 1128
1956
National Science Foundation, inventions produced under contracts with
. . . . 42 USC 1871
National security
Causing withholding of patent . . . . 35 USC 181
Classification of information for purposes of . . . . 15 USC 1155
Nonpublication of application . . . . 35 USC 122
Nonprofit organizations
inventions)
Nonresident patentee, service of process . . . . 35 USC 293
Notices
Allowance of application . . . . 35 USC 151
Appeal, notice to Director of . . . . 35 USC 142
Arbitration award . . . . 35 USC 135; 35 USC 294
Post-grant review
Instituting review . . . . 35 USC 324
Rejection of claim . . . . 35 USC 132
2013)
Oaths
Application for patent . . . . 35 USC 111; 35 USC 115
International application . . . . 35 USC 371
Ownership of
Generally . . . . 35 USC 261; Intro §3[1]
Federally supported inventions, disposition of rights . . . . 35 USC 202
Joint ownership . . . . 35 USC 262
Patentability of inventions (See subhead: Inventions)
Patent Cooperation Treaty
Fees
Currency . . . . 35 USC 376
National stage . . . . 35 USC 371
Refunds . . . . 35 USC 376
Abandonment of . . . . 35 USC 371
Defined . . . . 35 USC 351
1957
Designating the United States, effect . . . . 35 USC 363
English language . . . . 35 USC 361; 35 USC 371; 35 USC 375
Improper applicant at national stage . . . . 35 USC 373 (repealed
January 2013)
Prior application, benefit of filing date of . . . . 35 USC 365
Priority, right of . . . . 35 USC 365
Publication at national stage . . . . 35 USC 374
Secrecy of inventions . . . . 35 USC 368
Withdrawn . . . . 35 USC 366
International Bureau . . . . 35 USC 351
International Preliminary Examining Authority . . . . 35 USC 362
International Searching Authority
Defined . . . . 35 USC 351
International stage
Fees . . . . 35 USC 361
Procedure . . . . 35 USC 364
Review of determinations . . . . 35 USC 367
Time limitations . . . . 35 USC 364
National stage
Commencement of . . . . 35 USC 371
Fees . . . . 35 USC 371
Improper applicant . . . . 35 USC 373 (repealed January 2013)
Issuance of patent . . . . 35 USC 375
Procedures . . . . 35 USC 372
Publication, effect of . . . . 35 USC 374
Substance, questions of . . . . 35 USC 372
Receiving Office
Defined . . . . 35 USC 351
Patentee defined . . . . 35 USC 100
Personal property attributes of . . . . 35 USC 261
Plant patents
Assistance of Department of Agriculture . . . . 35 USC 164
Description and claim . . . . 35 USC 162
Grant of . . . . 35 USC 163
Invention defined . . . . 35 USC 201
Subject invention defined . . . . 35 USC 201
Post-grant review . . . . 35 USC 321=35 USC 329
Appeals . . . . 35 USC 329
Conduct of review
1958
Patent trial and appeal board . . . . 35 USC 326
Rulemaking . . . . 35 USC 326
Estoppel
325
Findings required to institute review . . . . 35 USC 324
Patent trial and appeal board
Petition for review
Contents . . . . 35 USC 322
Permitted . . . . 35 USC 321
Public availability . . . . 35 USC 322
Response . . . . 35 USC 323
Time to file . . . . 35 USC 321
Relation of review to other actions, proceedings, etc . . . . 35 USC 325
Response to petition for review . . . . 35 USC 323
Settlement . . . . 35 USC 327
Presumption of validity of patent and claims . . . . 35 USC 282
Printed or typewritten papers . . . . 35 USC 22
Prior art . . . . 35 USC 102; 35 USC 103
Prior art and written statement citations
Appeal of decision . . . . 35 USC 306
Certificate canceling or confirming claim . . . . 35 USC 307
Conduct of reexamination proceedings . . . . 35 USC 305
Confidentiality of person requesting . . . . 35 USC 301
Determination by director of issue . . . . 35 USC 303
Fees . . . . 35 USC 302; 35 USC 303
Order for reexamination . . . . 35 USC 304
Request for reexamination . . . . 35 USC 302
Prior commercial use
Infringement
Defense based on prior commercial use . . . . 35 USC 273
Prior filed applications
References to prior filed applications . . . . 35 USC 111
1959
Priority
Benefit of earlier filing in U.S. . . . . 35 USC 120
Design patents . . . . 35 USC 172
Determination of . . . . 35 USC 102
Foreign country, benefit of earlier filing in . . . . 35 USC 119
International applications . . . . 35 USC 365
Provisional applications . . . . 35 USC 111
Process
Content of patent . . . . 35 USC 154
Contributory infringement . . . . 35 USC 271
Defined . . . . 35 USC 100
Infringement of process patent . . . . 35 USC 295
Patentability . . . . 35 USC 101
Provisional application . . . . 35 USC 111; 35 USC 119
Publication of international application . . . . 35 USC 374
Public libraries, copies to . . . . 35 USC 12
Public use, invention in . . . . 35 USC 102
Receiving Office (See subhead: Patent Cooperation Treaty)
Recombinant DNA technology, manufacturing using . . . . 35 USC 271
Records
Admissibility of patents and patent-related records . . . . 28 USC 1744
Appellate review based on . . . . 35 USC 144
Certified list of documents comprising . . . . 35 USC 143
Decision of appeals court entered of record . . . . 35 USC 144
Patent, recordation of . . . . 35 USC 153
Reexamination
Appeals . . . . 35 USC 141; 35 USC 306
Optional inter partes reexamination procedures . . . . 35 USC 315
Barring of reexamination
Determination of issue . . . . 35 USC 303
Dispositions upon reexamination . . . . 35 USC 307
Ex parte reexamination . . . . 35 USC 132
Inter partes review (September 2012) generally . . . . 35 USC 311=35
USC 319 (See subhead: Inter partes review (September 2012))
Optional inter partes reexamination procedures . . . . 35 USC 311=35
USC 318
1960
Order . . . . 35 USC 304
Optional inter partes reexamination procedures . . . . 35 USC 313;
35 USC 317
Reexamination after issuance of certificate . . . . 7 USC 2501
Prior art, citation of . . . . 35 USC 301
Request for reexamination . . . . 35 USC 302
Stay of litigation
Supplemental examinations resulting in reexamination . . . . 35 USC 257
Register of interests in patents and applications
Patent and trademark offices, duties . . . . 35 USC 261
Reissuance
Defective patents . . . . 35 USC 251; 35 USC 252
Effect of . . . . 35 USC 252
Incorporation of amended or new claim following reexamination
proceedings . . . . 35 USC 307
Surrender of original patent . . . . 35 USC 252
Time for application . . . . 35 USC 251
Rejection of claims
Appeals . . . . 35 USC 134
Notice of . . . . 35 USC 132
Report of statutory invention registration . . . . 35 USC 157 (Repealed
September 2013)
Review
Inter partes review (September 2012) . . . . 35 USC 311=35 USC 319
(See subhead: Inter partes review (September 2012))
Post-grant review . . . . 35 USC 321=35 USC 329 (See subhead: Post-
grant review)
Revival
Fees . . . . 35 USC 41
Royalties
Damages of reasonable royalty in infringement suit . . . . 35 USC 284
Income tax, allocation of royalties for purposes of . . . . Rev&Tax
25127
Sale or exchange of patents, tax treatment for
Foreign corporations, gain from sale or exchange to . . . . 26 USC 1249
Saturday, Sunday, and holiday, day for taking action falling on . . . . 35 USC
1961
21
Search
Fees . . . . 35 USC 41
Secrecy of inventions
Abandonment by unauthorized disclosure . . . . 35 USC 182
Compensation for damage caused by order of secrecy . . . . 35 USC 183
Delegation of power . . . . 35 USC 188
Government having property interest in invention . . . . 35 USC 181
National security, disclosure detrimental to . . . . 35 USC 181
Officers or agents of U.S., nonapplicability to . . . . 35 USC 187
Penalty for violation of order . . . . 35 USC 186
Secretary of Health and Human Services, request for information from
. . . . 21 USC 372
Service of process
Nonresident defendant in infringement suit . . . . 28 USC 1694
Nonresident patentee . . . . 35 USC 293
Settlement
Secrecy, agreement regarding order . . . . 35 USC 183
Small businesses
Federally owned inventions, preference in licensing of . . . . 35 USC
209
Federally supported inventions, generally (See subhead: Federally
supported inventions)
Fees . . . . 35 USC 41
Specifications
Certified copies of . . . . 35 USC 9
Claims regarding invention . . . . 35 USC 112
Insufficiency in . . . . 35 USC 113
Specimens as exhibit . . . . 35 USC 114
Infringement suit, recovery in . . . . 35 USC 286
Interference, civil action in case of . . . . 35 USC 146
Patent, civil action to obtain . . . . 35 USC 145
1962
2013)
Subpoenas in contested cases . . . . 35 USC 24
Subsequent purchaser or mortgagee without notice . . . . 35 USC 261
Supplemental examinations
Considering, reconsidering or correcting information . . . . 35 USC 257
Tax treatment for sale or exchange of patents (See subhead: Sale or
exchange of patents, tax treatment for)
Term of
Dedication to public . . . . 35 USC 253
Design patents . . . . 35 USC 173
Disclaimer of . . . . 35 USC 253
Extension of (See subhead: Extension of patent term)
Third-party requesters
Defined . . . . 35 USC 100
Time
Government applications
Time for taking action . . . . 35 USC 267
Post-grant review
Prosecuting applications . . . . 35 USC 133
Title (See subhead: Ownership of)
Typewritten papers . . . . 35 USC 22
U. S. Arms Control and Disarmament Agency, research developed by
. . . . 22 USC 2572
U. S. Claims Court
Federally supported inventions, appeals process . . . . 35 USC 203
Secret inventions, just compensation for . . . . 35 USC 183
U. S. Constitution, clause pertaining to inventors . . . . US Const art I §8 cl.
8
U. S. Court of Appeals for the Federal Circuit
Appeals to, generally . . . . 35 USC 141
Decision of . . . . 35 USC 144
Ex parte appeal . . . . 35 USC 143
1963
Notice of appeal . . . . 35 USC 142
Proceedings on appeal . . . . 35 USC 143
Scope of review . . . . 35 USC 144
U. S. Department of Agriculture, assistance of . . . . 35 USC 162
U. S. Department of Defense
U. S. Department of Education, acquisition of patents for use of . . . . 20
USC 3480
U. S. Department of Energy, inventions produced under contract with
. . . . 42 USC 5908
U. S. District Court for Eastern District of Virginia
Civil action to obtain patent . . . . 35 USC 145
Scope of review of . . . . 35 USC 146
U. S. District Courts
Eastern District of Virginia (See subhead: U. S. District Court for
Eastern District of Virginia)
Secret inventions, just compensation for . . . . 35 USC 183
U. S. Food and Drug Administration (See subhead: Food and Drug
Administration)
United States
inventions)
Infringement suit brought against . . . . 35 USC 286
International application designating . . . . 35 USC 363
Inventions owned by (See subhead: Federally owned inventions)
Secrecy of invention for reasons of national security (See subhead:
Secrecy of inventions)
Temporary presence of vessel, aircraft or vehicle in . . . . 35 USC 272
Validity of patent
Arbitration, voluntary . . . . 35 USC 294
Defenses to action involving . . . . 35 USC 282
Presumption of . . . . 35 USC 282
Vehicles temporarily in U.S. . . . . 35 USC 272
Venue in civil actions for infringement . . . . 28 USC 1400
Vessels temporarily in U. S. . . . . 35 USC 272
Veterinary biological product . . . . 35 USC 156; 35 USC 271
Virus-Serum-Toxin Act, drug product subject to . . . . 35 USC 156
1964
Waivers
Appeal to U.S. Court of Appeals for the Federal Circuit, effect of
. . . . 35 USC 141
Fee waivers . . . . 35 USC 41
Manufacturing of federally supported inventions . . . . 35 USC 204
Statutory invention registrant waiving right to patent . . . . 35 USC 157
. . . . 22 USC 526
Withholding grant of patent for national security reasons (See subhead:
Secrecy of inventions)
Witnesses in contested cases . . . . 35 USC 24
PATENT TRIAL AND APPEAL BOARD

Appeals from board . . . . 35 USC 141
Appeal to board
Primary examiner's decision, appeal from . . . . 35 USC 134
Appeals . . . . 35 USC 141
Duties . . . . 35 USC 6
Established . . . . 35 USC 6
Examination
Appeals . . . . 35 USC 141
Fees
Appeal fees . . . . 35 USC 41
Final judgment of . . . . 35 USC 135
Panels . . . . 35 USC 6
Post-grant review
Decisions of board . . . . 35 USC 328
Reexamination
Appeals . . . . 35 USC 141
PAYMENT CARDS
1965
PAYMENTS
PLANS)
PEACE OFFICERS
Deputies, appointment without compensation . . . . Lab 3352
Other states, officers employed by . . . . Lab 3352
PENALTIES ( S e e CRIMINAL OFFENSES AND PENALTIES; FINES

AND PENALTIES)
PERFORMANCE ENHANCING DRUGS

Advertisement of anabolic steroids for sale
PERFORMANCE OF WORK (See COPYRIGHTS)
PERIODICALS
PERPETUAL INTEREST
PERSONALITIES
Deceased personality's name, voice, likeness, etc., use of . . . . CC 3344.1
Living persons, trademarks consisting of name, portrait, or signature of
. . . . 15 USC 1052
PERSONAL PROPERTY
Generally . . . . CC 663
Deceased personality, name, voice, signature, photograph, etc. of . . . . CC
3344.1
False advertising in sale of . . . . B&P 17500
Good will as . . . . B&P 14102
Kinds of property . . . . CC 657
1966
Plant variety protection, attributes of . . . . 7 USC 2531
PERSONAL PROPERTY LEASES

Acceptance of goods by lessee . . . . UCC 10516
Defective goods, lessee's notice to lessor or supplier of . . . . UCC 10516
Exclusion or modification of implied warranties . . . . UCC 10214
Indemnification of loss, lessee's right to . . . . UCC 10516
Intervening party for buyer in action for infringement, lessor's rights and
obligations as . . . . UCC 10516
Nonconforming goods, lessee's notice to lessor or supplier of . . . . UCC
10516
Rejection by lessee . . . . UCC 10516
Rental payments, lessee's obligation for . . . . UCC 10516
Special order goods, infringement claims involving . . . . UCC 10211
Warranty against infringement
Generally . . . . UCC 10211
Exclusion or modification of . . . . UCC 10214
Lessor as intervening party in action for infringement against lessee,
rights and obligations of . . . . UCC 10516
Notice to lessor of breach of . . . . UCC 10516
Warranty of fitness, exclusion or modification of . . . . UCC 10214
Warranty of merchantability, exclusion or modification of . . . . UCC 10214
PERSONAL SERVICE CONTRACTS

Injunctive relief to prevent breach . . . . CC 3423
PESTICIDES
Trade secret information regarding pesticides, protection of . . . . 7 USC
136h; Intro §6[5]; Gov 6254.2
PETITIONS
PETROLEUM FRANCHISES (See FRANCHISES)
PHARMACEUTICALS (See DRUGS AND DRUG PRODUCTS)
PHONORECORDS (See SOUND RECORDINGS)
PHOTOGRAPHS
1967
Another's photograph, unauthorized use of in advertising . . . . CC 3344
Deceased personality, photograph of . . . . CC 3344.1
Defined . . . . CC 3344
Multiples, sale of (See ART AND ARTISTS)
PHRASES (See DEFINITIONS)
PICTORIAL WORKS
Photographs (See PHOTOGRAPHS)
Portraits (See PORTRAITS)
PICTURE TUBES . . . . B&P 17531.6=B&P 17531.9

Labels
Alteration or removal of label . . . . B&P 17531.8
Injunctions to enforce requirements . . . . B&P 17531.9
Requirements for labeling picture tubes . . . . B&P 17531.7
PIN TONGUES
PIRACY
Cyberpiracy prevention
Trademarks (federal) . . . . 15 USC 1125; 15 USC 8131
Motion picture piracy . . . . Pen 653z
PLANTS
1968
Protection of varieties (See PLANT VARIETY PROTECTION)
PLANT VARIETY PROTECTION

Administrative appeals . . . . 7 USC 2443
Advertising exemption . . . . 7 USC 2545
Affidavits, regulations for taking . . . . 7 USC 2353
Appeals
Administrative . . . . 7 USC 2443
Jurisdiction of . . . . 7 USC 2461
Time for . . . . 7 USC 2461
Application for certificate
Allowance, notice of . . . . 7 USC 2481
Confidentiality of . . . . 7 USC 2426
Contents of . . . . 7 USC 2422
Extension of time for filing . . . . 7 USC 2402
Legal representative making . . . . 7 USC 2424
Publication of information regarding . . . . 7 USC 2427
Refusal, objection, or requirement by examiner, notice of . . . . 7 USC
2442
Two or more breeders . . . . 7 USC 2423
Writing required . . . . 7 USC 2421
Assignment, grant, or conveyance of
Acknowledgment, certificate of . . . . 7 USC 2531
Attorney's practice before Office (See subhead: Practice before Office)
Bars to . . . . 7 USC 2402
Board (See subhead: Plant Variety Protection Board)
Breeder
Correction of error in naming of . . . . 7 USC 2486
Death or incapacity of . . . . 7 USC 2424
Defined . . . . 7 USC 2401
Entitlement to protection . . . . 7 USC 2402
Error in naming of . . . . 7 USC 2421
Two or more breeders . . . . 7 USC 2423
Cancellation of certificate, abandonment of procedure for . . . . 7 USC 2501
Cease and desist orders . . . . 7 USC 2568
Certificate of protection
Application for (See subhead: Application for certificate)
Cancellation of certificate . . . . 7 USC 2501
1969
Errors in (See subhead: Correction of errors)
Issuance of . . . . 7 USC 2482
Rights on issuance of . . . . 7 USC 2483
Terms of . . . . 7 USC 2483
Two owners of certificate of same variety . . . . 7 USC 2504
Civil actions
Alternative to appeal . . . . 7 USC 2462
Interference, remedy for . . . . 7 USC 2504
Nonpayment of fees . . . . 7 USC 2371
Testing, notice of release for . . . . 7 USC 2532
Time for . . . . 7 USC 2462
Compensation for declaration of protected variety open to use . . . . 7 USC
2404
Contested cases
Subpoenas in . . . . 7 USC 2354
Witnesses in . . . . 7 USC 2354
Conveyance (See subhead: Assignment, grant, or conveyance of)
Correction of errors
Name of breeder . . . . 7 USC 2421; 7 USC 2486
Plant Variety Protection Office mistake . . . . 7 USC 2484
Crop exemption . . . . 7 USC 2543
Damages
Infringement suit . . . . 7 USC 2564; 7 USC 2566; 7 USC 2567
Notice or knowledge that propagation prohibited as prerequisite to
recovery . . . . 7 USC 2567
Time limitation on recovery of . . . . 7 USC 2566
Date of determination defined . . . . 7 USC 2401
Declaration
Deposit of seed . . . . 7 USC 2422
Public need for variety . . . . 7 USC 2404
Defective executions, effect of . . . . 7 USC 2355
Definitions, generally . . . . 7 USC 2401
Depositions, regulations for taking . . . . 7 USC 2353
Deposit of seed . . . . 7 USC 2422; 7 USC 2481
Description of variety . . . . 7 USC 2422
Disclosure
Declaration of protected variety open to use . . . . 7 USC 2404
1970
Public dissemination of records and materials . . . . 7 USC 2330
Distinctness defined . . . . 7 USC 2401
Drawings . . . . 7 USC 2422
Effectively available to workers in this country
Bar to protection . . . . 7 USC 2402
Employees' interest in . . . . 7 USC 2324
Entitlement to . . . . 7 USC 2402
Errors (See subhead: Correction of errors)
Evidence, regulations for taking . . . . 7 USC 2353
Examination of application . . . . 7 USC 2441
Exclusive rights to use of variety
Assignment (See subhead: Assignment, grant, or conveyance of)
Issuance of certificate, effect of . . . . 7 USC 2483
Assignments, grants, or conveyances . . . . 7 USC 2531
Defective executions . . . . 7 USC 2355
Exemptions
Crop exemption . . . . 7 USC 2543
Research exemption . . . . 7 USC 2544
Transportation or delivery by carrier . . . . 7 USC 2545
Extension of time
Filing of application . . . . 7 USC 2402
Refusal, objection, or requirement by examiner, action following . . . . 7
USC 2442
Farming exemption . . . . 7 USC 2543
Fees
Allowance, notice of . . . . 7 USC 2481
Late fee, acceptance of . . . . 7 USC 2481
Payment of . . . . 7 USC 2372
Refund of . . . . 7 USC 2372
Foreign countries
Exchange of information with . . . . 7 USC 2330
Prior application filed in . . . . 7 USC 2402; 7 USC 2425
Reciprocity . . . . 7 USC 2403; 7 USC 2425
Form of papers to be filed . . . . 7 USC 2352
Grandfather clause . . . . 7 USC 2542
1971
Grants (See subhead: Assignment, grant, or conveyance of)
Hybrids, production of . . . . 7 USC 2541
Importation as infringement . . . . 7 USC 2541
Infringement
Cease and desist orders . . . . 7 USC 2568
Damages in suit for . . . . 7 USC 2564; 7 USC 2566; 7 USC 2567
Defenses to suit . . . . 7 USC 2562
Exemption, acts not infringement (See subhead: Exemptions)
Grandfather clause . . . . 7 USC 2542
Importation as . . . . 7 USC 2541
Injunctive relief . . . . 7 USC 2563
Innocent infringement . . . . 7 USC 2564
Notice or knowledge that propagation prohibited . . . . 7 USC 2567
Remedy for . . . . 7 USC 2561
Sale or offer to sell as infringement . . . . 7 USC 2541
States, infringement by . . . . 7 USC 2570
Injunctions
Infringement suits . . . . 7 USC 2563
Intent of Congress in enacting statute . . . . 7 USC 2581
Interference, remedy for . . . . 7 USC 2504
Jurisdiction
Appeals to court . . . . 7 USC 2461
Kind defined . . . . 7 USC 2401
Late payment penalty . . . . 7 USC 2371
Libraries
Copies of descriptions to . . . . 7 USC 2331
Maintenance of . . . . 7 USC 2328
Mistakes (See subhead: Correction of errors)
Nonresidents, service of process on . . . . 7 USC 2569
Notice
Allowance of certificate . . . . 7 USC 2481
Cancellation of certificate . . . . 7 USC 2501
Marking of containers . . . . 7 USC 2567
Refusal, objection, or requirement by examiner . . . . 7 USC 2442
1972
Testing, release for . . . . 7 USC 2532
Novel variety . . . . 7 USC 2401; 7 USC 2541
Ownership
Personal property attributes . . . . 7 USC 2531
Testing, release for . . . . 7 USC 2532
Penalties for late payment . . . . 7 USC 2371
Personal property attributes . . . . 7 USC 2531
Photographs . . . . 7 USC 2422
Plant Variety Protection Board
Advice on appeals . . . . 7 USC 2443
Appointment of . . . . 7 USC 2327
Compensation of . . . . 7 USC 2327
Functions of . . . . 7 USC 2327
Plant Variety Protection Office
Conduct of proceedings, regulations for . . . . 7 USC 2326
Employees ineligible under act . . . . 7 USC 2324
Fees of (See subhead: Fees)
Library, maintenance of . . . . 7 USC 2328
Mistake of . . . . 7 USC 2484
Organization of . . . . 7 USC 2323
Practice before (See subhead: Practice before Office)
Register maintained by . . . . 7 USC 2329
Saturday, Sunday, or holiday as day for taking action . . . . 7 USC 2351
Seal of . . . . 7 USC 2322
Practice before Office
Regulations governing . . . . 7 USC 2356
Unauthorized . . . . 7 USC 2357
Presumptions
Same variety . . . . 7 USC 2561
Validity of certificate . . . . 7 USC 2562
Priority
Previously filed application . . . . 7 USC 2425
WTO country or foreign UPOV, applications for plant breeder's rights
filed in . . . . 35 USC 119
Publications
Application for certificate, information of pending . . . . 7 USC 2427
Public needs, declaration that protected variety is open to use based on
. . . . 7 USC 2404
1973
Public variety
Bar to protection . . . . 7 USC 2402
Defined . . . . 7 USC 2401
Reconsideration, request for . . . . 7 USC 2442
Recordation of assignments, grants, or conveyances . . . . 7 USC 2531
Reexamination after issuance of certificate . . . . 7 USC 2501
Register of protected plant varieties . . . . 7 USC 2329
Regulations
Evidence, taking of . . . . 7 USC 2353
Form of papers filed . . . . 7 USC 2352
Practice before office . . . . 7 USC 2356
Removal of cases from state court . . . . 28 USC 1454
Research exemption . . . . 7 USC 2544
Royalties
Declaration of protected variety open to use, remuneration for . . . . 7
USC 2404
Infringement suit, damages in . . . . 7 USC 2564
Sale of seed by farmers . . . . 7 USC 2543
Sale or offer to sell as infringement . . . . 7 USC 2541
Seal, official . . . . 7 USC 2322
Seed
Basic seed defined . . . . 7 USC 2401
Saving seed for crop production . . . . 7 USC 2543
Service of process designation by nonresident . . . . 7 USC 2569
Severability provision of act . . . . 7 USC 2582
Sexually multiply . . . . 7 USC 2541
Sexually reproduced defined . . . . 7 USC 2401
Specimens . . . . 7 USC 2422
Stability defined . . . . 7 USC 2401
Subpoenas, issuance of . . . . 7 USC 2354
Subsequent purchaser or mortgagee for valuable consideration . . . . 7 USC
2531
Term of protection . . . . 7 USC 2483
Testing
Defined . . . . 7 USC 2401
Release for . . . . 7 USC 2532
Time
Appeals to court . . . . 7 USC 2461
1974
Refusal, objection, or requirement by examiner, action following . . . . 7
USC 2442
U. S. Courts of Appeals . . . . 7 USC 2461
U. S. District Court for the District of Columbia
Civil action as alternative to appeal . . . . 7 USC 2462
Nonresidents, service of process on . . . . 7 USC 2569
U. S. government, claims against . . . . 7 USC 2566
U. S. Protected Variety notice . . . . 7 USC 2567; 7 USC 2568
Unauthorized Propagation Prohibited notice . . . . 7 USC 2541; 7 USC
2567; 7 USC 2568
Unauthorized Seed Multiplication Prohibited notice . . . . 7 USC 2541; 7
USC 2567; 7 USC 2568
Uniformity defined . . . . 7 USC 2401
Validity of certificate, presumption of . . . . 7 USC 2562
Waivers of rights under certificate . . . . 7 USC 2483
Witnesses in contested cases . . . . 7 USC 2354
PLANT VARIETY PROTECTION BOARD ( S e e PLANT VARIETY

PROTECTION)
PLANT VARIETY PROTECTION OFFICE ( S e e PLANT VARIETY

PROTECTION)
PLATINUM (See PRECIOUS METALS MARKING)
PLEADINGS
Infringement of rights in literary, artistic or intellectual property, action for
. . . . CCP 429.30
PLUG MOLDING LAW

POLLUTION
Air pollution (See AIR POLLUTION)
EPA (See UNITED STATES ENVIRONMENTAL PROTECTION AGENCY)
Water quality control, limitation of action . . . . CCP 338
PORTRAITS
Trademarks (federal), portraits of living persons or presidents as . . . . 15
1975
USC 1052
POSTAL SERVICES (See MAIL)
POSTDATED CHECKS
Requiring or requesting consumer to issue . . . . B&P 17538.6
PRECIOUS METALS
Marking (See PRECIOUS METALS MARKING)
PRECIOUS METALS MARKING

Apply, definition of . . . . B&P 22103
Article of merchandise defined . . . . B&P 22101
Criminal penalties
Gold articles, penalty for nonconforming marks . . . . B&P 22181
Platinum group, violations pertaining to . . . . B&P 22132
Gold
Application of law to . . . . B&P 22175
Compliance of quality marks to provisions of law . . . . B&P 22177
Content of gold, marks to indicate . . . . B&P 22178
Definition of quality mark . . . . B&P 22176
Interstate commerce, federal law pertaining to gold moved in . . . . B&P
22179
Nonconforming marks, penalty for . . . . B&P 22181
Tolerance for indicated fineness . . . . B&P 22179
Trademark, application of . . . . B&P 22180
Iridium (See subhead: Platinum group)
Mark defined . . . . B&P 22102
Osmium (See subhead: Platinum group)
Palladium (See subhead: Platinum group)
Platinum group
Abbreviations of metal names . . . . B&P 22129
Application of mark, standards for . . . . B&P 22128
Assay certificate as proof concerning assay . . . . B&P 22130
Exportation, defense of . . . . B&P 22132
Legibility of marks . . . . B&P 22122
Mechanisms, works or movements, application of mark to . . . . B&P
22123
Metals subject to article . . . . B&P 22120
1976
Numerals to identify article or design . . . . B&P 22126
Parts or percentages defined by weight . . . . B&P 22127
Penalties for violations . . . . B&P 22132
Pin tongues, joints, catches, etc., application of mark to . . . . B&P
22125
Quality marks . . . . B&P 22121; B&P 22122
Springs, winding bars, etc., application of marks to . . . . B&P 22124
Standards for application of mark . . . . B&P 22128
Time of manufacture after effective date of law, proof of . . . . B&P
22131
Trademarks, application of . . . . B&P 22126
Weight, parts or percentages defined by . . . . B&P 22127
Rhodium (See subhead: Platinum group)
Ruthenium (See subhead: Platinum group)
Statutory construction . . . . B&P 22100
PREEMPTION DOCTRINE
Federal copyright law (See COPYRIGHTS)
PREREGISTRATION FOR COPYRIGHT

Commercial distribution, preregistering works being prepared for . . . . 17
USC 408
PRESENT INTEREST
PRESUMPTIONS
Copyright infringement
Willfulness
Facts giving rise to presumption of willfulness . . . . 17 USC 504
Death of author under federal copyright laws . . . . 17 USC 302
Employee status, presumption of . . . . Lab 2750.5; Lab 3357
Fictitious business name statements, certified copies of . . . . B&P 17926
Patent, validity of . . . . 35 USC 282
PREVENTIVE RELIEF (See INJUNCTIONS)
1977
PRICE OF GOODS (See ADVERTISEMENTS)
PRINCIPAL AND AGENT (See AGENTS)
PRINCIPAL REGISTER (See TRADEMARKS (FEDERAL))
PRINTERS
PRINTS
PRIOR ART CITATIONS (See PATENTS)
PRIORITY
Plant variety protection application, priority for previously filed . . . . 7
USC 2425
PRISONERS
PRIVILEGED INFORMATION
Informant, identity of . . . . Ev 915
Official information, claim of privilege . . . . Ev 915
Trade secrets (See TRADE SECRETS)
538.5
PRIZE CONTESTS (See ADVERTISEMENTS)
PROCEEDS
PROCESS, SERVICE (See SERVICE OF PROCESS OR PAPERS)
PROCESSES
Coal mining research and development (See COAL MINING)
1978
. . . . 10 USC 2386
U. S. Dept. of Education, acquisition of processes for use of . . . . 20 USC
3480
PRODUCTS
Defined . . . . CC 1812.201
PRODUCTS OF THE MIND

Authorship (See AUTHORSHIP)
PROFESSIONAL CORPORATIONS
Name of . . . . Corp 13409
PROFESSIONS
False advertisement . . . . B&P 17500
17500.1
PROFITS
Convicted felon's story, proceeds from sale of . . . . CC 2225
Copyright infringement, infringer's liability for profits . . . . 17 USC 504
. . . . CC 3344.1
Felon's story, treatment of profits or proceed from sale of . . . . Intro §4[3];
CC 2225
Invention development services contracts, estimated earnings
representations . . . . B&P 22379
PROPERTY
Alienation, conditions restraining . . . . CC 711
Art works (See ART AND ARTISTS)
Conditions precedent and subsequent . . . . CC 708
1979
Illegal conditions . . . . CC 709
Kinds of . . . . CC 657
Marriage, conditions imposing restraints on . . . . CC 710
Ownership of (See TITLE AND OWNERSHIP)
Personal (See PERSONAL PROPERTY)
Precedent, conditions . . . . CC 708
Real property (See REAL PROPERTY)
Statute of limitation for action for damages to private property . . . . CCP
338
Subsequent, conditions . . . . CC 708
Things subject to ownership . . . . CC 655
Time of enjoyment of . . . . CC 707
Void conditions . . . . CC 709
PROPERTY TAX
Assessment reduction filing services, required disclosure and unlawful
statements in offers to file . . . . B&P 17537.9
Homeowners exemption, required disclosure and unlawful statements in
offers to file . . . . B&P 17537.8
PROTECTIVE ORDERS
Impoundment of records documenting . . . . 17 USC 503
Discovery (See DISCOVERY)
PROTOTYPES
PSEUDONYMOUS WORKS
PUBLICATION
Freedom of press, right of . . . . US Const amd I
International patent application, publication of . . . . 35 USC 374
Inventions, public dedication of . . . . CC 983
Letters and private writings . . . . CC 985
1980
PUBLIC BENEFIT CORPORATIONS

PUBLIC HEALTH (See HEALTH AND SAFETY)
PUBLICITY
Artists, right to publicity of . . . . Intro §9[2]
PUBLIC OFFENSES (See CRIMINAL OFFENSES AND PENALTIES)
PUBLIC OFFICERS AND EMPLOYEES

Injunctive relief to prevent exercise of office . . . . CC 3423; CCP 526
Internet, posting of home address or phone number on . . . . Gov 6254.21
Statute of limitation for action on official bonds . . . . CCP 338
Trade secret information, public employees reporting improper government
activities not actionable as unlawful disclosure of . . . . CC 3426.11
PUBLIC RECORDS
Air pollution information and data, disclosure of . . . . Gov 6254.7
Building owners, notices of violations of housing or building codes
. . . . Gov 6254.7
Computers, records stored in . . . . Gov 6254.9
Computer software developed by state or local agency . . . . Gov 6254.9
Disclosure of electronically collected personal information compiled by
state agency . . . . Gov 6254.20
Investment of public funds
Nondisclosure of certain records in relation to investments . . . . Gov
6254.26
6254.27; Gov 6254.28
Pesticide safety and efficacy information, disclosure of . . . . 7 USC 136h;
Gov 6254.2
Public safety officials
1981
Defined . . . . Gov 6254.24
Social security numbers
Redaction prior to disclosure of records . . . . Gov 6254.29
Trade secrets, disclosure as misappropriation of . . . . CC 3426.7
Uniform Trade Secrets Act, effect on disclosure of records . . . . CC 3426.7
PUBLIC UTILITIES
Fraudulent use of transmission to obtain privileged information from
. . . . Pen 538.5
PUBLIC VARIETY (See PLANT VARIETY PROTECTION)
PUBLISHED WORKS (See COPYRIGHTS)
PUBLISHERS
Announcement cards . . . . B&P 17509
Contest solicitations, liability for . . . . B&P 17539.3
17502; B&P 17508
Standing orders . . . . B&P 17509
Subscription plans, advertising of . . . . B&P 17509
Supplements and series arrangements, advertising of . . . . B&P 17509
PUNITIVE DAMAGES . . . . CC 3294

of . . . . Pen 496
PURCHASERS
purchaser . . . . B&P 17919
PLANS)
Subsequent purchaser or mortgagee (See SUBSEQUENT PURCHASER OR
MORTGAGEE)
1982
QUALITY MARKS (S e e PRECIOUS METALS MARKING;
TRADEMARKS (FEDERAL))
R
RACE DISCRIMINATION (See FAIR DEALERSHIP LAW)
RACKS
RADIO AND TELEVISION

Contest solicitations, liability for . . . . B&P 17539.3
17502; B&P 17508
Fraudulent use of transmission to obtain privileged information . . . . Pen
538.5
Information-access services, advertising and solicitations for (See
INFORMATION-ACCESS SERVICES)
Sound recordings, transmissions exempt from criminal penalties . . . . Pen
653h; Pen 653s
Unemployment compensation, employees for purposes of . . . . UI 601.5
RARE DISEASES, DRUGS FOR (See DRUGS AND DRUG PRODUCTS)
REAL ESTATE BROKERS AND AGENTS

Franchises, regulation of . . . . Corp 31210
REAL ESTATE INVESTMENT TRUSTS

Fictitious business name provisions applicable to . . . . B&P 17912
REAL PROPERTY
Agents and brokers (See REAL ESTATE BROKERS AND AGENTS)
Convicted felon's story, real property as consideration received for sale of
. . . . CC 2225
False advertising in sale of . . . . B&P 17500
1983
Fine art, removal from real property . . . . CC 987; CC 989
Franchises, laws applicable to . . . . Corp 31516
Kinds of property . . . . CC 657
Loans using realty as collateral
Slander of title, limitation of action for . . . . CCP 338
Title and ownership (See TITLE AND OWNERSHIP)
Trespass, limitation of action . . . . CCP 338
REBATES
RECEIVING OFFICE (See PATENTS)
RECOMBINANT DNA TECHNOLOGY (See BIOTECHNOLOGY)
RECORDATION
Limited liability company articles of organization or certificate of
registration . . . . Corp 17052
Plant variety protection, assignments, grants, and conveyances . . . . 7 USC
2531
Trademarks (state)
Assignments . . . . B&P 14220
RECORDINGS
RECORDS
Business records (See BUSINESS RECORDS)
Impoundment of records documenting . . . . 17 USC 503
Government records, admissibility of . . . . 28 USC 1733
1984
Public records (See PUBLIC RECORDS)
Trademarks (state)
Secretary to maintain . . . . B&P 14225
Wine labels
California Central Coast Counties Dry Wine
Growers' or bottlers' records . . . . B&P 25238
RECREATION
17537.2
RECREATIONAL VEHICLES
Secondary transmissions to . . . . 17 USC 119
RECREATION THERAPIST
Requirements for representation as . . . . B&P 17505.2
REENCODERS
Payment cards
REEXAMINATION
REFINER
REFUNDS
Contest solicitation disclosures . . . . B&P 17539.2
B&P 17538.3
REGISTER OF COPYRIGHTS (See COPYRIGHTS)
REGISTERS AND REGISTRATION

1985
REJECTIONS
RELEASE
Joint tortfeasor, effect of release of . . . . CCP 877
RELIEF ORGANIZATIONS
RELIGION AND RELIGIOUS ORGANIZATIONS

Copyright law applicable to displays and performances . . . . 17 USC 110
REMOVAL OF CASES
Copyrights
RENEWALS
Franchise (See FRANCHISES)
Trademarks (federal), renewal of registration . . . . 15 USC 1059
RENTALS
judgment . . . . CCP 708.510
Produced film rents, taxation of income from . . . . 26 USC 543
REPLACEMENT PARTS
1986
REPORTS
Atomic energy
Reports of inventions to Commissioner of Patents . . . . 42 USC 2181
Copyrights
Reporting requirements for satellite carriers making secondary
transmissions . . . . 17 USC 122
Drugs
Pediatric use, study and research efforts . . . . 21 USC 355c–1
Engineers
Franchises, reports concerning . . . . Corp 31151
Franchises
Engineers, opinions, appraisements, and reports of . . . . Corp 31151
Patent and trademark office
Annual reports . . . . 35 USC 13; 35 USC 42
Patents, reports of statutory invention registration . . . . 35 USC 157
Public officers and employees
Trade secret information, public employees reporting improper
government activities not actionable as unlawful disclosure of
. . . . CC 3426.11
REPRODUCTIONS
Fine art multiples (See ART AND ARTISTS)
Trademarks (federal), reproduction of registered mark . . . . 15 USC 1114
REQUESTS FOR ADMISSIONS

Protective orders
Motions for protective order . . . . CCP 2033.080
RESCISSION
Franchises
31408
Willful failure to register . . . . Corp 31220
Grey market goods, sale of . . . . CC 1797.86
RESIDENCE
Solicitations in person or by telephone . . . . B&P 17500.3
1987
RESTITUTION
Counterfeits
Labels, documentation or packaging . . . . 18 USC 2318
Marks . . . . Pen 350
Franchises
31408
Claim for restitution . . . . Corp 31400
RESTRAINT OF TRADE (See COMPETITION)
RETAILERS
Franchise not including cooperatives for independent retailers . . . . Corp
31005
Seller assisted marketing plans, general merchandise retailer's license
distinguished . . . . CC 1812.201
RETAIL SALES (See SALE OF GOODS)
REVOCATION
RHODIUM (See PRECIOUS METALS MARKING)
RIGHT OF FIRST REFUSAL

ROYALTIES
Artist's residual rights on sale of work . . . . CC 986
judgment . . . . CCP 708.510
Sound recordings
1988
Recording artist contracts, royalty obligations
Audits . . . . CC 2501
Trade secrets (See UNIFORM TRADE SECRETS ACT)
RUTHENIUM (See PRECIOUS METALS MARKING)
S
SAFE DEPOSIT BOXES
Joint interests . . . . CC 683.1
SALARIES AND WAGES

Order assigning judgment debtor's right to payments to judgment creditor,
application for . . . . CCP 708.510
SALE OF BUSINESS
Limited liability companies, competition agreements on sale or dissolution
. . . . B&P 16602.5
SALE OF GOODS
Acceptance of goods by buyer . . . . UCC 2607
Blemished merchandise, sale of . . . . B&P 17531
Consequential damages from seller's breach of warranty . . . . UCC 2715
Damages for breach of warranty
Consequential damages . . . . UCC 2715
Incidental damages . . . . UCC 2715
Defective merchandise, sale of . . . . B&P 17531
Definition of retail seller . . . . B&P 17504
False advertisements (See ADVERTISEMENTS)
Foreign goods represented as “Made in U.S.A.” . . . . B&P 17533.7
Franchise fee not including . . . . B&P 20007
1989
Home solicitations, restrictions on . . . . B&P 17500.3
Incidental damages from seller's breach of warranty . . . . UCC 2715
Indemnification, buyer's right to . . . . UCC 2607
Intervening party for buyer in action for infringement, seller's rights and
Merchant in goods . . . . UCC 2312
351a
Nonconforming goods
Damages for seller's breach . . . . UCC 2714
Notice to seller . . . . UCC 2607
Notice to seller of breach of warranty . . . . UCC 2607
Other products, purchase or lease of as condition to sale . . . . B&P 17509
Payment terms . . . . UCC 2607
Price of goods (See ADVERTISEMENTS)
Rejection of goods by buyer . . . . UCC 2607
Rejects of manufacturer, sale of . . . . B&P 17531
Seconds, sale of . . . . B&P 17531
PLANS)
Special order goods . . . . UCC 2312
Surplus material, sale of federal . . . . B&P 17531.5
Trademarks (federal), sales constituting infringement . . . . 15 USC 1114
UCC provisions
Acceptance of goods by buyer . . . . UCC 2607
Damages (See subhead: Damages for breach of warranty)
Indemnification, buyer's right to . . . . UCC 2607
Payment terms . . . . UCC 2607
Warranty against infringement ( See subhead: Warranty against
infringement)
Warranty of title . . . . UCC 2312
Used merchandise, sale of . . . . B&P 17531
Warranty against infringement
Damages for breach (See subhead: Damages for breach of warranty)
Intervening party for buyer in action for infringement, seller's rights and
Notice to seller of breach . . . . UCC 2607
1990
Warranty of title . . . . UCC 2312
SALE OF REALTY
False advertising . . . . B&P 17500
SALES AND USE TAX

Master tapes and recordings embodying sound exempt . . . . Rev&Tax
6362.5
SAN JOSE, CITY OF

Unfair competition, city attorney prosecuting action for injunctive relief for
. . . . B&P 17204.5
SATELLITE CARRIERS
Copyright . . . . 17 USC 119
Defined . . . . 17 USC 119
Federal Communications Commission rules applicable to . . . . 17 USC 119
Licenses . . . . 17 USC 119
Preexisting satellite digital audio radio service defined . . . . 17 USC 114
Royalties . . . . 17 USC 119
Secondary transmissions by
Distant television programming . . . . 17 USC 119
Local television programming . . . . 17 USC 122
SATELLITE HOME VIEWER ACT OF 1994

SATURDAYS, SUNDAYS, OR HOLIDAYS

Patents, day for taking action . . . . 35 USC 21
Plant Variety Protection Office, day for taking action . . . . 7 USC 2351
SCANDALOUS MATTER
SCANNERS
Payment cards
1991
SCHOOLS
SCIENTIFIC AND TECHNICAL INFORMATION

Atomic energy (See ATOMIC ENERGY)
Federally owned or -supported inventions (See PATENTS)
National security, classification for purposes of . . . . 15 USC 1155
SCULPTURAL WORKS
Protection of fine arts (See ART AND ARTISTS)
SEALS
Patent and Trademark Office . . . . 35 USC 2
SEARCH AND SEIZURE

Computer system and related property . . . . Pen 502.01
Copyright infringement (See COPYRIGHTS)
Telecommunications equipment used in crimes by . . . . Pen 502.01
Trademarks (federal), seizure of counterfeit goods . . . . 15 USC 1116
SEARCH WARRANTS
Foreign corporation, service to agent of . . . . Corp 2105
SECRECY OF INVENTIONS (See PATENTS)
SECRETARY OF STATE
Trademarks (state)
Fees . . . . Gov 12193
SECRETS (See TRADE SECRETS)
1992
SECURED INVESTMENT (S e e SELLER ASSISTED MARKETING
PLANS)
SECURITIES
SEED (See PLANT VARIETY PROTECTION)
SEIZURE (See SEARCH AND SEIZURE)
SELF-INCRIMINATION, PRIVILEGE AGAINST

Franchise registration, commissioner's powers to enforce . . . . Corp 31401
SELLER ASSISTED MARKETING PLANS

Acceptance of offer to sell or lease . . . . CC 1812.202
Advertisements to prospective purchasers, notice requirement for . . . . CC
1812.203
Assignee of seller, rights of . . . . CC 1812.211
Attorney General
Deposit in lieu of bond, claims against . . . . CC 1812.221
Desist and refrain order issued by . . . . CC 1812.203
Filing with (See subhead: Filing of disclosure statement)
Stop order issued by . . . . CC 1812.203
Trust account information on file with . . . . CC 1812.206
Bankruptcy of seller . . . . CC 1812.206
Books and records kept by seller . . . . CC 1812.213
Business name of seller . . . . CC 1812.204; CC 1812.205
Buy-back arrangements
Definition of buy back . . . . CC 1812.201
First contact disclosures . . . . CC 1812.205
Representations concerning . . . . CC 1812.201; CC 1812.204
Cancellation
Procedure for . . . . CC 1812.209
Right of purchaser to cancel . . . . CC 1812.208
Civil action for damages brought by purchaser . . . . CC 1812.218
Civil judgment entered against seller . . . . CC 1812.203; CC 1812.206
Compliance with statute, reference to prohibited . . . . CC 1812.212
Contents of contract . . . . CC 1812.209
1993
Contract defined . . . . CC 1812.201
Copies
Complete contract . . . . CC 1812.207
Unexecuted contract . . . . CC 1812.206
Court proceedings . . . . CC 1812.203
Criminal conviction . . . . CC 1812.203
Criminal penalties . . . . CC 1812.217
Damages, purchaser's action for . . . . CC 1812.218
Deceit, effect of finding of . . . . CC 1812.203
Definitions . . . . CC 1812.201
Delivery date . . . . CC 1812.209; CC 1812.215
Deposit in lieu of bond, claims against . . . . CC 1812.221
Desist and refrain orders . . . . CC 1812.203
Down payments . . . . CC 1812.201; CC 1812.210
Earnings, representations concerning . . . . CC 1812.201; CC 1812.204; CC
1812.205
Equipment defined . . . . CC 1812.201
Escrow account . . . . CC 1812.210; CC 1812.214
Exceptions, burden of proof . . . . CC 1812.216
Existing businesses excluded from . . . . CC 1812.201
Experience of seller . . . . CC 1812.204; CC 1812.206
False statements, effect of . . . . CC 1812.215
Fees
Annual fees . . . . CC 1812.203
Renewal fees . . . . CC 1812.203
Filing of disclosure statement
Renewal filing . . . . CC 1812.203
Time of . . . . CC 1812.203
Financial statement of seller . . . . CC 1812.206
Findings of legislature concerning . . . . CC 1812.200
First contact or communication with purchaser, disclosures on . . . . CC
1812.205
Forty-eight hours before sale or lease, information to purchaser . . . . CC
1812.206
Franchise distinguished from . . . . CC 1812.201
Fraud, effect of finding of . . . . CC 1812.203
General merchandise retailer's license distinguished . . . . CC 1812.201
Information sheet given to purchaser 48 hours before sale or lease . . . . CC
1994
1812.206
Initial contact with purchaser, disclosures on . . . . CC 1812.205
Initial payment
Cash payment defined . . . . CC 1812.201
Defined . . . . CC 1812.201
Secured, representation of . . . . CC 1812.204
Statement of . . . . CC 1812.205
Insolvency of seller . . . . CC 1812.206
Limited liability companies involved in . . . . CC 1812.201
Logotype, use of . . . . CC 1812.204
Market for product or services, representations concerning . . . . CC
1812.201
Misrepresentation, effect of finding of . . . . CC 1812.203
Name of seller . . . . CC 1812.204; CC 1812.205
Newspaper distribution system distinguished . . . . CC 1812.201
Noncompliance, effect of . . . . CC 1812.203; CC 1812.215
Notices
Cancel contract, right to . . . . CC 1812.208
Suspension or revocation . . . . CC 1812.203
Voidability of contract by purchaser . . . . CC 1812.215
Number of purchasers, representations concerning . . . . CC 1812.204
Offer to sell or lease, time of . . . . CC 1812.202
Ongoing business, sale of . . . . CC 1812.201
Payments
Contract terms . . . . CC 1812.201; CC 1812.210
Down payments . . . . CC 1812.201; CC 1812.210
Initial payments (See subhead: Initial payment)
Person defined . . . . CC 1812.201
Products defined . . . . CC 1812.201
Purchasers
Defined . . . . CC 1812.201
Excluded . . . . CC 1812.201
Purpose of statute . . . . CC 1812.200
Real estate brokers or agents excluded . . . . CC 1812.201
Record of sales kept by seller . . . . CC 1812.213
Remedies not exclusive . . . . CC 1812.219
Renewal or extension of existing plan . . . . CC 1812.201
Residence . . . . CC 1812.202
1995
Revocation of filing . . . . CC 1812.203
Secured investment
Defined . . . . CC 1812.201
Representations . . . . CC 1812.204
Security arrangements . . . . CC 1812.205
Security distinguished from . . . . CC 1812.201
Seller defined . . . . CC 1812.201
Service mark, use of . . . . CC 1812.204
Service of process, designated agent for . . . . CC 1812.214
Services defined . . . . CC 1812.201
Services to be performed by seller . . . . CC 1812.205
Severability of unconstitutional provisions . . . . CC 1812.220
Stop order issued by Attorney General . . . . CC 1812.203
Supplier's name and address . . . . CC 1812.209
Supplies defined . . . . CC 1812.201
Surety bond required of seller . . . . CC 1812.206; CC 1812.214
Suspension of filing . . . . CC 1812.203
Third parties rights and defenses . . . . CC 1812.210
Trademark, use of . . . . CC 1812.204
Trade name, use of . . . . CC 1812.204
Training promised by seller . . . . CC 1812.205
Trust account established by seller . . . . CC 1812.206; CC 1812.214
Voidability of contract . . . . CC 1812.215
Waiver of statutory provisions void . . . . CC 1812.216
Written contracts . . . . CC 1812.207
SEMICONDUCTOR CHIP PRODUCTS (See COPYRIGHTS)
SENIOR CITIZENS
Defined . . . . B&P 17206.1
Major life activities defined . . . . B&P 17206.1
Unfair competition against seniors, civil penalties for . . . . B&P 17206.1
SERVANTS (See EMPLOYERS AND EMPLOYEES)
SERVICE MARKS
1996
SERVICE OF PROCESS OR PAPERS
Articles of incorporation identifying agent for . . . . Corp 202
False advertising actions on appeal, proof of notice served on Attorney
General or district attorney involving . . . . B&P 17536.5
Foreign corporations, agent for . . . . Corp 2105
Mulitparty, multiforum jurisdiction . . . . 28 USC 1697
Plant variety protection office, designation for service by nonresident
. . . . 7 USC 2569
Private mailbox receiving service, companies using
Designation of service as agent for process . . . . B&P 17538.5
Seller assisted marketing plans, designated agent for seller . . . . CC
1812.214
Unfair competition actions on appeal, proof of notice served on Attorney
General or district attorney involving . . . . B&P 17209
SETTLEMENT
Attorneys' fees, contract providing for . . . . CC 1717
Good faith settlement between plaintiff and one or more joint tortfeasors,
effect of . . . . CCP 877.6
Patents
Withheld from secret invention . . . . 35 USC 183
SEVERABILITY
Franchise investment law provisions . . . . Corp 31514
Franchise Relations Act . . . . B&P 20043
Invention development services contracts, provisions governing . . . . B&P
22394
Motion pictures showing killing or cruelty to animal or human, act for
. . . . CC 3508.2
Plant variety protection act . . . . 7 USC 2582
1997
SEX
SHIPS (See VESSELS)
SIGNATURES
Another's signature, unauthorized use of in advertising . . . . CC 3344
Deceased personality, use of signature of . . . . CC 3344.1
Execution of documents (See EXECUTION OF DOCUMENTS)
Trademarks (federal), signatures of living persons or presidents as . . . . 15
USC 1052
SIGNS
SILK PRODUCTS
Country of origin marking on imports . . . . 19 USC 1304
SINGLE PUBLICATION (See UNIFORM SINGLE PUBLICATION ACT)
SIPHONS
SLANDER OF TITLE
SLOGANS
SMALL BUSINESS (See PATENTS)
SMOKELESS TOBACCO
SOCIAL SECURITY NUMBERS

Public records
Redaction of numbers prior to disclosure of records . . . . Gov 6254.29
SOCIETIES
1998
SOLICITATIONS
Deceased personality, use of name, voice, signature, etc. of . . . . CC 3344.1
Felony, solicitation to commit . . . . Pen 653f
17537.1; B&P 17537.2; B&P 17537.4
Information-access services, unlawful solicitations by (See
INFORMATION-ACCESS SERVICES)
Nongovernmental entities
Residential solicitations in person or by telephone . . . . B&P 17500.3
SOLID WASTE
Environmental Protection Agency, ownership of inventions made under
contract with . . . . 42 USC 6981
SONG-BEVERLY CONSUMER WARRANTY ACT

SOUND RECORDINGS
Criminal penalties
Copyright (S e e COPYRIGHTS, subhead: Criminal offenses and
penalties)
Failure to disclose origin of recording . . . . Pen 653w
Forfeiture and destruction of illicit articles . . . . Pen 653v
Live performances, unauthorized recording of (See subhead: Live
performance, unauthorized recording of)
Unauthorized copying and sales, generally . . . . Pen 653h
audiovisual works . . . . Pen 653aa
Employment contract to render personal service in production of
phonorecords, enforcement of . . . . Lab 2855
Forfeiture and destruction of unauthorized articles . . . . Pen 653v
Live performance, unauthorized recording of
Generally . . . . 18 USC 2319A; Pen 653s; Pen 653u
Attorney General's periodic report concerning prosecutions . . . . 18
USC 2320
Copyright provisions . . . . 17 USC 1101
1999
Forfeiture and destruction of illicit articles . . . . Pen 653v
Master tapes and recordings
Defined . . . . Pen 653h
Sales and use tax exemption . . . . Rev&Tax 6362.5
Ownership of recording fixed prior February 15, 1972 . . . . CC 980
Royalty obligations from recording artist contracts
Audits . . . . CC 2501
Sales and use tax exemption for master tapes and recordings . . . . Rev&Tax
6362.5
audiovisual works
Criminal enforcement . . . . Pen 653aa
SOVEREIGN IMMUNITY
Waiver under federal trademark law . . . . 15 USC 1122
2000
SPAM (UNSOLICITED EMAIL ADVERTISEMENTS)
Restrictions on spammers . . . . B&P 17529=B&P 17529.9; B&P 17538.45
Collection and use of email addresses . . . . B&P 17529.4
Damages and other remedies . . . . B&P 17529.8
Internet service providers' policies, effect on . . . . B&P 17529.3
Legislative findings . . . . B&P 17529
Prohibition of unsolicited commercial email advertisements . . . . B&P
17529.2
Severability of provisions . . . . B&P 17529.2; B&P 17529.9
Unlawful commercial email advertisements . . . . B&P 17529.5
SPECIFICATIONS (See PATENTS)
SPECIFIC RELIEF
Contracts not subject to specific performance . . . . CC 3390
Unfair competition . . . . B&P 17202
SPECIMENS
Patents, specimens as exhibits . . . . 35 USC 114
Trademarks (federal) . . . . 15 USC 1051
SPEECH, FREEDOM OF
Constitutional right . . . . US Const amd I
SPORTS
Employment status of volunteers . . . . Lab 3352
Memorabilia
Autographed sports memorabilia
SPRINGS
STAINED GLASS
Sale of work, residual rights on . . . . CC 986
STAMPS
2001
STANDING TO SUE
Fine art multiples, action based on sale of . . . . CC 1745.5
Unfair competition, action for injunctive relief . . . . B&P 17204
STATE OF CALIFORNIA
Computer software developed by . . . . Gov 6254.9
STATES
Infringement by states
No 11th amendment immunity . . . . 35 USC 296
STATUTES OF LIMITATION
Advertising, action for false . . . . CCP 338
Air pollution, action based on . . . . CCP 338
Convicted felon's story, action to recover proceeds from sale of . . . . CC
2225
Copyright infringement actions . . . . 17 USC 507
Employment contracts, enforcement of . . . . Lab 2855
Fraud or mistake, action based on . . . . CCP 338
Notary public, action against . . . . CCP 338
Official bond, action upon . . . . CCP 338
Petroleum franchises, suit for injunctive relief . . . . B&P 20999.3
Private property, action for physical damage to . . . . CCP 338
Slander of title to real property, action for . . . . CCP 338
Statutory suits . . . . CCP 338
Trade secrets, action for misappropriation of . . . . CC 3426.6
Trespass, action for . . . . CCP 338
Trover, action for . . . . CCP 338
Unfair competition, actions based on . . . . B&P 17208
Uniform Trade Secrets Act, action brought under . . . . CC 3426.6
Vessels, infringements action regarding protected designs of . . . . 17 USC
1323
Violence
2002
Freedom from violence motivated by political affiliation or by
membership in protected class . . . . CCP 338
Water quality control, action based on . . . . CCP 338
STAY OF PROCEEDINGS
Denial of injunction . . . . CC 3423; CCP 526
Patents
Reexamination
STEROIDS
Advertising for sale
STOCK COOPERATIVES
Name of . . . . Corp 12311
STOLEN PROPERTY
Buying or receiving . . . . Pen 496
Serial number or other identification mark, alteration or removal of
. . . . Pen 537e
Transportation in interstate or foreign commerce . . . . 18 USC 2314
STOP ORDERS
Franchises, stop orders issued by Corporations Commissioner (See
FRANCHISES)
STUDENTS
Excluded from employee status . . . . Lab 3352
SUBJECT MATTER OF COPYRIGHT (See COPYRIGHTS)
SUBPOENAS
Franchise registration, Corporations Commissioner issuing subpoenas
. . . . Corp 31401
Internet service provider, copyright owner's subpoena to . . . . 17 USC 512
Mulitparty, multiforum jurisdiction . . . . 28 USC 1785
Patents, contested cases . . . . 35 USC 24
2003
SUBSEQUENT PURCHASER OR MORTGAGEE
Patents . . . . 35 USC 261
SUBSIDIARIES (See CORPORATIONS)
SUGGESTIVE MATTER
SUPPLEMENTAL REGISTER (See TRADEMARKS (FEDERAL))
SUPPLIES
Defined . . . . CC 1812.201
Seller assisted marketing plans, name and address of supplier . . . . CC
1812.209
SURETY BONDS
Deposits in lieu of (See DEPOSITS IN LIEU OF BONDS)
Statute of limitation for action on official bonds . . . . CCP 338
SURNAMES
SURPLUS MATERIALS
Federal surplus
SURVIVAL OF ACTIONS
Franchise registration, actions for violations of . . . . Corp 31305
SURVIVING SPOUSES
Copyrighted works, ownership of . . . . 17 USC 203; 17 USC 304
SUSPENSION
2004
SWAP MEET VENDORS
Stolen property, rebuttable presumption concerning buying or receiving
. . . . Pen 496
SWEEPSTAKES PRIZES
False advertisements (See ADVERTISEMENTS)
SYMBOLS
T
TAGS
TAXATION
Art work (See ART AND ARTISTS)
Equalization hearings open and public . . . . Rev&Tax 1605.4
Income tax (See INCOME TAX)
Property tax
Assessment reduction filing services, requirements for services offering
to file . . . . B&P 17537.9
Homeowners exemption, requirements for services offering to file
. . . . B&P 17537.8
Return preparation businesses
Sales and use tax (See SALES AND USE TAX)
Trade secrets, closed hearings for . . . . Rev&Tax 1605.4
TEAR GAS
Advertising
TELECOMMUNICATIONS DEVICES
Forfeiture of telecommunications equipment used in committing computer-
related crime . . . . Pen 502.01
Prepaid calling services/cards, information disclosure requirements for
2005
. . . . B&P 17538.9
TELEMARKETING SERVICES
Residential solicitations by telephone, unlawful conduct in . . . . B&P
17500.3
TELEPHONE ANSWERING SERVICE

Customer list as trade secret . . . . B&P 16606
TELEPHONES (See TELECOMMUNICATIONS DEVICES)
TELEVISION (See RADIO AND TELEVISION)

TERMINATION
TESTING
TEXTBOOKS AND INSTRUCTIONAL MATERIALS

Community colleges
. . . . Ed 78900
TEXT MESSAGING
Advertisements transmitted to cellular phones or pagers equipped to
receive text messages
THEFT
Access card, publishing access to number or code of . . . . Pen 484j
Art works, statute of limitations for theft of . . . . Intro §14[6]
Buying or receiving stolen property . . . . Pen 496
Lost property, failure to return . . . . Pen 485
Trade secrets, acts constituting theft of . . . . Intro §6[4]; Pen 499c
2006
THERAPIST, RECREATION
Requirements for representation as . . . . B&P 17505.2
THIRD PARTIES
Appeals of rejected patent claims
Patent trial and appeal board, appeal to . . . . 35 USC 134
Invention development services contracts, third party rights and defenses
. . . . B&P 22376
TICKETS
TIME
Fictitious business name statement, filing of . . . . B&P 17910
Property, enjoyment of . . . . CC 707
Statutes of limitation (See STATUTES OF LIMITATION)
TITLE AND OWNERSHIP (See also AUTHORSHIP)

Absolute . . . . CC 678; CC 679
Base . . . . CC 680
Capacity to own . . . . CC 671
Common interest
Generally . . . . CC 683
Acquisition, mode of . . . . CC 686
Community property
Survivorship right . . . . CC 682.1
Definition of ownership . . . . CC 654
Employee acquisitions by virtue of employment . . . . Lab 2860
Future interest defined . . . . CC 688; CC 690
Invention development services contracts, interest of developer in title
. . . . B&P 22375
2007
Joint interests . . . . CC 682; CC 683
Live performance, right to record . . . . Pen 653s
Lost property, liability for failure to locate true owner of . . . . Pen 485
Museums, purchase of property on loan to . . . . CC 1899.10
Partnership interests . . . . CC 682; CC 684
Perpetual interest . . . . CC 688; CC 691
Present interest defined . . . . CC 688; CC 689
Private ownership . . . . CC 669
Public . . . . CC 669
Qualified . . . . CC 678; CC 680
Several owners . . . . CC 681
Slander of title, limitation of action . . . . CCP 338
Sole ownership . . . . CC 681
Things subject to . . . . CC 655
Trademark registration as constructive notice of claim of . . . . 15 USC
1072
Work made for hire, rights comprised in . . . . Lab 3351.5
TOBACCO
Food, drug and cosmetics act
Inspections, examinations, etc, under act
Contracting with states . . . . 21 USC 372
Smokeless tobacco
TOOLS
Plug molding law affecting . . . . Intro §2[3]
TOURNAMENTS
TOYS
Unassembled toys
Label requirements . . . . B&P 17531.1
TRADE ASSOCIATIONS
2008
Franchisee's right to join . . . . Corp 31220; Corp 31302.5
17500.1
Unions (See TRADE UNIONS)
TRADEMARKS
Farm names, registration of (See TRADE NAMES)
Federal laws governing (See TRADEMARKS (FEDERAL))
State laws governing (See TRADEMARKS (STATE))
TRADEMARKS (FEDERAL)
Abandonment
Cancellation of registration, grounds for . . . . 15 USC 1064
Defined . . . . 15 USC 1127
Incontestable right to use mark, defense to . . . . 15 USC 1115
Refusal of registration . . . . 15 USC 1062
Verified statement, failure to timely file . . . . 15 USC 1051
Acceptance notice (See subhead: Notice of acceptance or refusal)
Acknowledgments
Assignments . . . . 15 USC 1060
Acquiescence . . . . 15 USC 1069; 15 USC 1115
Actions (See subhead: Civil actions)
Advertisements
Certification mark in . . . . 15 USC 1064
Constituting infringement . . . . 15 USC 1114
Injunction against innocent infringers . . . . 15 USC 1114
Misrepresentations, civil liability for . . . . 15 USC 1125
Affidavits
Continuing use or excusable nonuse, affidavit of . . . . 15 USC 1058
Incontestable right to use mark . . . . 15 USC 1065; 15 USC 1115
Amendments
Marks already used in commerce, application to reflect . . . . 15 USC
1051
Registration, amendment of . . . . 15 USC 1057
Antitrust laws, mark violating . . . . 15 USC 1115
Appeals
Courts, appeals to . . . . 15 USC 1071
Pending appeals on effective date of Lanham Act . . . . Lanham Act
2009
47(b)
Trademark Trial and Appeal Board, appeals to . . . . 15 USC 1070
Applicant defined . . . . 15 USC 1127
Applications
Amendment of . . . . 15 USC 1051
Classes of goods and services, application falling within plurality of
. . . . 15 USC 1112
Foreign applications . . . . 15 USC 1126
Marks used in commerce . . . . 15 USC 1051
Pending applications on effective date of Lanham Act . . . . Lanham Act
47(a)
Principal register, application to register trademark on . . . . 15 USC
1051
Service marks, registration of . . . . 15 USC 1053
Supplemental register, registration on . . . . 15 USC 1091
Assignments
Certificate of registration issued to assignee . . . . 15 USC 1057
Execution of . . . . 15 USC 1060
Record of . . . . 15 USC 1060
Attorneys' fees in infringement suit . . . . 15 USC 1117
Blurring
Dilution by blurring . . . . 15 USC 1125
Cancellations
Court order canceling or restoring registration . . . . 15 USC 1119
Director's actions in proceedings involving . . . . 15 USC 1068
Expiration of term . . . . 15 USC 1058
Grounds for . . . . 15 USC 1064
Notice to parties of . . . . 15 USC 1067
Petition to cancel registration
Filing of . . . . 15 USC 1064
Surrender of registration for cancellation . . . . 15 USC 1057
Certificates of registration
Assignee, issuance to . . . . 15 USC 1057
Term based upon applications pending on date of 1988 Act
. . . . Lanham Act 51
Certification marks
2010
Defined . . . . 15 USC 1127
Civil actions
Costs of . . . . 15 USC 1071
Evidence before court . . . . 15 USC 1071
False or fraudulent statement in procuring registration, liability for
. . . . 15 USC 1120
Filing of . . . . 15 USC 1071
Infringement suits (See subhead: Infringement)
Injunctions (See subhead: Injunctions)
Inter partes proceeding . . . . 15 USC 1071
Jurisdiction and service of process . . . . 15 USC 1071
Classification of goods and services . . . . 15 USC 1112
Coat of arms . . . . 15 USC 1052
Collective marks
Defined . . . . 15 USC 1127
Colorable imitations . . . . 15 USC 1114
Commerce defined . . . . 15 USC 1127
Commercial name defined . . . . 15 USC 1127
Companies, use of mark by related . . . . 15 USC 1055
Concurrent use
Application, filing of . . . . 15 USC 1051
Publication subject to determination of rights of parties . . . . 15 USC
1062
Conduct of proceedings, rules and regulations for . . . . 15 USC 1123
Configuration of goods . . . . 15 USC 1091
Confusing or deceptive similarity
Importation prohibited . . . . 15 USC 1124
Interference based on showing of . . . . 15 USC 1066
Registrability of marks . . . . 15 USC 1052
Constructive use, application as . . . . 15 USC 1057; 15 USC 1068; 15 USC
1071
Continuous prior use . . . . 15 USC 1115
Copies, unauthorized . . . . 15 USC 1114
Correction of mistakes
Patent and Trademark Office mistake . . . . 15 USC 1057
2011
Costs of infringement suit . . . . 15 USC 1117
Counterfeit marks
Attorney General's periodic report concerning counterfeiting
Attorneys' fees in civil suit . . . . 15 USC 1117
Damages in civil suit . . . . 15 USC 1117
Defined . . . . 15 USC 1116; 18 USC 2320
Destruction of . . . . 15 USC 1118
Imports bearing counterfeit marks, seizure and forfeiture of . . . . 19
USC 1526
Liability for . . . . 15 USC 1114
Seizure of . . . . 15 USC 1116; 19 USC 1526
Trafficking in goods or service using . . . . 18 USC 2320
Country of origin, registration in . . . . 15 USC 1126
Courts
Appellate jurisdiction of federal courts . . . . 15 USC 1121
Decrees and orders, certification of . . . . 15 USC 1119
Federal Circuit Court of Appeal (See subhead: US Court of Appeals for
the Federal Circuit)
Jurisdiction (See subhead: Jurisdiction)
State courts requiring alteration of registered mark . . . . 15 USC 1121
Cyberpiracy prevention . . . . 15 USC 1125; 15 USC 8131
Damages
Counterfeit marks . . . . 15 USC 1117
False or fraudulent statement in procuring registration . . . . 15 USC
1120
Treble damages . . . . 15 USC 1117
Deceptive similarity (See subhead: Confusing or deceptive similarity)
Defenses to incontestable right to use mark . . . . 15 USC 1115
Descriptive marks . . . . 15 USC 1052
Descriptive term or device used in good faith . . . . 15 USC 1115
Destruction of materials bearing infringing mark . . . . 15 USC 1118
Devices . . . . 15 USC 1091
Dilution
Injunction against dilution . . . . 15 USC 1125
Disclaimers
Registration . . . . 15 USC 1057
2012
Unregistrable component of mark . . . . 15 USC 1056
Disparaging or suggestive matter . . . . 15 USC 1052
Distinctive marks
Dilution of famous marks (See subhead: Dilution)
Registration of . . . . 15 USC 1052
Supplemental register, effect of registration of mark on . . . . 15 USC
1095
Unregistrable component of mark, disclaimer of . . . . 15 USC 1056
Drawings, application under principal register . . . . 15 USC 1051
Duration of
Extensions (See subhead: Extensions)
Electronic communications, infringement contained in . . . . 15 USC 1114
Electronic patent and trademark data
Fees . . . . 35 USC 41
Equitable principles applicable . . . . 15 USC 1069; 15 USC 1115
Errors (See subhead: Correction of mistakes)
Estoppel as equitable defense . . . . 15 USC 1069; 15 USC 1115
Evidence
Civil actions, evidence in . . . . 15 USC 1071
Registration on principal register . . . . 15 USC 1115
Examination of application
Assignment of mark . . . . 15 USC 1060
Extensions
Opposition to registration, filing of . . . . 15 USC 1063
Verified statement, filing of . . . . 15 USC 1051
Facsimiles of mark . . . . 15 USC 1051
False representations or designations (See subhead: Misrepresentation)
Famous mark
Dilution by tarnishment . . . . 15 USC 1125
Fees
Application under principal register . . . . 15 USC 1051
Cancel registration, petition to . . . . 15 USC 1064
Indian Arts and Crafts Board exempt from . . . . 15 USC 1113
Supplemental register, application . . . . 15 USC 1091
2013
Waiver of . . . . 15 USC 1113
Flag, coat of arms, or other insignia . . . . 15 USC 1052
Foreign countries
Identification by U.S. Trade Representative of foreign countries denying
adequate intellectual property protection or denying market access to
U.S. persons relying on intellectual property protection . . . . 19
USC 2242
Imports (See subhead: Imports)
Fraud in obtaining registration
Cancellation of registration, grounds for . . . . 15 USC 1064
Civil liability for . . . . 15 USC 1120
Defense to incontestable right to use mark . . . . 15 USC 1115
Generic names for goods or services . . . . 15 USC 1064; 15 USC 1065
Geographically descriptive marks . . . . 15 USC 1052
Geographical names . . . . 15 USC 1091
Geographic origin of goods or services
Civil liability for misrepresenting . . . . 15 USC 1125
Imported articles, misrepresentation as to . . . . 15 USC 1125
Gold articles, quality marks and trademarks applied to . . . . B&P 22180
Grey market goods defined . . . . Intro §5[2][e]; CC 1797.8
Hallmarks (See subhead: Certification marks)
Illegally obtaining registration . . . . 15 USC 1064
Imitations . . . . 15 USC 1114
Immoral or scandalous matter . . . . 15 USC 1052
Imports
False designation of origin or descriptions, prohibition of . . . . 15 USC
1125
Infringing mark, prohibition against imports bearing . . . . 15 USC 1124;
19 USC 1337; 19 USC 1526
Marking requirements for imports . . . . 19 USC 1304
Registration of foreign trademarks . . . . 15 USC 1126
1096
Income tax treatment of transfer of . . . . 26 USC 1253
Incontestable right to use mark
Defenses to . . . . 15 USC 1115
Indian-made products and goods (See INDIAN ARTS AND CRAFTS)
Infringement
2014
Destruction of materials bearing infringing mark . . . . 15 USC 1118
Importation of goods bearing infringing marks . . . . 15 USC 1124; 19
USC 1337; 19 USC 1526
Innocent infringement by printers and publishers . . . . 15 USC 1114
Monetary recovery . . . . 15 USC 1117
Notice of registration as prerequisite to recovery . . . . 15 USC 1111
Persons liable in civil action . . . . 15 USC 1114
Prejudgment interest, award of . . . . 15 USC 1117
Injunctions
Dilution of famous marks, injunction against . . . . 15 USC 1125
Innocent infringers, remedies . . . . 15 USC 1114
Insignia of nation or government . . . . 15 USC 1052
Interferences
Declaration by director of . . . . 15 USC 1066
Publication subject to determination of rights of parties . . . . 15 USC
1062
International bureaus, register of marks communicated by . . . . 15 USC
1126
International conventions . . . . 15 USC 1126
Inter partes proceeding
Civil action, notice to director of . . . . 15 USC 1071
Equitable principles applicable to . . . . 15 USC 1069
Jurisdiction
Cancellation or restoration of registration by court . . . . 15 USC 1119
Civil actions . . . . 15 USC 1071
Injunctions, issuance and enforcement of . . . . 15 USC 1116
Original jurisdiction of federal courts . . . . 15 USC 1121
Labels
Acts constituting infringement . . . . 15 USC 1114
Laches as equitable defense . . . . 15 USC 1069; 15 USC 1115
Lanham Act (uncodified provisions) (See subhead: Uncodified Lanham Act
provisions)
Liability of states . . . . 15 USC 1122
Living persons, marks consisting of name, portrait or signature of . . . . 15
2015
USC 1052
Madrid protocol . . . . 15 USC 1141=15 USC 1141n
Affidavits . . . . 15 USC 1141k
Assignment of extension of protection . . . . 15 USC 1141l
Basic applications
Defined . . . . 15 USC 1141
Restriction, abandonment, cancellation or expiration . . . . 15 USC
1141c
Basic registration
Defined . . . . 15 USC 1141
Restriction, abandonment, cancellation or expiration . . . . 15 USC
1141c
Certification of international application . . . . 15 USC 1141b
Contracting party
Defined . . . . 15 USC 1141
Date of recordal
Defined . . . . 15 USC 1141
Declaration of bona fide intention to use mark in commerce
Defined . . . . 15 USC 1141
Effective date . . . . 15 USC 1141 note
Extension of protection
Affidavits and fees . . . . 15 USC 1141k
Assignment . . . . 15 USC 1141l
Certificate . . . . 15 USC 1141i
Defined . . . . 15 USC 1141
Effect of extension . . . . 15 USC 1141i
Examining and opposing request . . . . 15 USC 1141h
Incontestability . . . . 15 USC 1141m
Request . . . . 15 USC 1141d
Scope and duration of rights covered in extension of protection
. . . . 15 USC 1141n
US, extension of international registration to . . . . 15 USC 1141e=15
USC 1141g; 15 USC 1141j
Fees . . . . 15 USC 1141k
Holder of international registration
Defined . . . . 15 USC 1141
Implementation act
Short title . . . . 15 USC 1051 note
Basing on US application or registration . . . . 15 USC 1141a
Certification . . . . 15 USC 1141b
2016
Defined . . . . 15 USC 1141
International bureau
Defined . . . . 15 USC 1141
International register
Defined . . . . 15 USC 1141
International registration
Certification of extension . . . . 15 USC 1141i
Defined . . . . 15 USC 1141
Examining and opposing request to extend protection . . . . 15 USC
1141h
Extension of protection subsequent to . . . . 15 USC 1141d
Incontestability of extension . . . . 15 USC 1141m
Scope and duration of rights covered in extension of protection
. . . . 15 USC 1141n
US, extension of international registration to . . . . 15 USC 1141e=15
USC 1141h; 15 USC 1141j
International registration date
Defined . . . . 15 USC 1141
Notification of refusal . . . . 15 USC 1141h
Defined . . . . 15 USC 1141
Office of contracting party
Defined . . . . 15 USC 1141
Office of origin
Defined . . . . 15 USC 1141
Opposition period
Defined . . . . 15 USC 1141
Magazines, infringement contained in . . . . 15 USC 1114
Manufacturing country of imported article, misrepresentation of . . . . 15
USC 1124
Mark defined . . . . 15 USC 1127
Misrepresentation
Civil liability for . . . . 15 USC 1125
Incompatible right to use mark, defense to . . . . 15 USC 1115
Manufacturing country of imported article . . . . 15 USC 1124
Obtaining registration by false statement . . . . 15 USC 1120
Mistakes (See subhead: Correction of mistakes)
Names
Living persons or Presidents of U.S. . . . . 15 USC 1052
Newspapers, infringement contained in . . . . 15 USC 1114
Nonresidents, service of process . . . . 15 USC 1051; 15 USC 1071
2017
Notice of acceptance or refusal
Affidavits of continuing use or excusable nonuse following expiration of
term . . . . 15 USC 1058
Renewal of registration . . . . 15 USC 1059
Notices
Acceptance of mark (See subhead: Notice of acceptance or refusal)
Appeal to U.S. Court of Appeals for the Federal Circuit . . . . 15 USC
1071
Civil actions, filing of . . . . 15 USC 1116
Claim of ownership, registration as constructive notice of . . . . 15 USC
1072
Counterfeit marks, seizure of . . . . 15 USC 1116
Director's notice to parties of interference, opposition, cancellation, or
concurrent use . . . . 15 USC 1067
Refusal of mark (See subhead: Notice of acceptance or refusal)
Registration, notice of . . . . 15 USC 1072; 15 USC 1111
Numerals . . . . 15 USC 1091
Opposition to registration
Principal register . . . . 15 USC 1063
Ownership, registration as constructive notice of . . . . 15 USC 1072
Packages
Acts constituting infringement . . . . 15 USC 1114
Person defined . . . . 15 USC 1127
Petitions
Cancellations (See subhead: Cancellations)
Interference declared upon petition showing extraordinary
circumstances . . . . 15 USC 1066
Phrases . . . . 15 USC 1091
Portraits of living persons or Presidents of U.S. . . . . 15 USC 1052
Prejudgment interest in civil action . . . . 15 USC 1117
Presidents of U.S., marks consisting of name, portrait, or signature of
. . . . 15 USC 1052
Principal register
Application, filing of . . . . 15 USC 1051
2018
Certificates (See subhead: Certificates of registration)
Certification marks . . . . 15 USC 1054
Collective marks . . . . 15 USC 1054
Constructive notice of claim of ownership, registration as . . . . 15 USC
1072
Defined . . . . 15 USC 1127
Evidence of validity of mark . . . . 15 USC 1115
Foreign country, prior registration in . . . . 15 USC 1126
Notice (See subhead: Notice of acceptance or refusal)
Opposition to registration . . . . 15 USC 1062
Service marks . . . . 15 USC 1053
1095
Printers liable for infringement . . . . 15 USC 1114
Prints, acts constituting infringement . . . . 15 USC 1114
Prior acts, marks registered under
Affidavit for incontestable right to use mark . . . . 15 USC 1065; 15
USC 1115
Cancellation of registration . . . . 15 USC 1064
Evidence of exclusive right to use mark . . . . 15 USC 1115
Publication or mark . . . . 15 USC 1062
Uncodified provisions of Lanham Act (See subhead: Uncodified
Lanham Act provisions)
Priority, for registration in foreign country . . . . 15 USC 1126
Profits, recovery in infringement suit . . . . 15 USC 1117
Publication
Prior acts, marks registered under . . . . 15 USC 1062
Publishers liable for infringement . . . . 15 USC 1114
Quality marks (See subhead: Certification marks)
Recordation of assignment of mark . . . . 15 USC 1057; 15 USC 1060
Refusal of registration
Amendment of application . . . . 15 USC 1062
Notice (See subhead: Notice of acceptance or refusal)
Regional origin, marks indicative of . . . . 15 USC 1052
Registration
Amendment of . . . . 15 USC 1057
Cancellation of . . . . 15 USC 1057; 15 USC 1058
Concurrent . . . . 15 USC 1052
2019
Country of origin, prior registration in . . . . 15 USC 1126
Court determining right to . . . . 15 USC 1119
Disclaimer of . . . . 15 USC 1057
Duration . . . . 15 USC 1058
Evidence of validity of mark . . . . 15 USC 1115
International bureaus, marks communicated by . . . . 15 USC 1126
Issuance, principal register . . . . 15 USC 1063
Notice of . . . . 15 USC 1072; 15 USC 1111
Principal register (See subhead: Principal register)
Renewal of . . . . 15 USC 1059
Supplemental (See subhead: Supplemental register)
Surrender of . . . . 15 USC 1057
Regulations for conduct of proceedings . . . . 15 USC 1123
Related companies . . . . 15 USC 1055; 15 USC 1127
Renewal of registration . . . . 15 USC 1059
Reproductions of registered mark . . . . 15 USC 1114
Rules for conduct of proceedings . . . . 15 USC 1123
Sales constituting infringement . . . . 15 USC 1114
Scandalous matter . . . . 15 USC 1052
Seizures of counterfeit marks . . . . 15 USC 1116; 19 USC 1526
Service marks
Defined . . . . 15 USC 1127
Registration of . . . . 15 USC 1053
Service of papers . . . . 15 USC 1116
Service of process on nonresident . . . . 15 USC 1051; 15 USC 1071
Severability of invalid provisions . . . . Lanham Act 50
Signatures of living persons or Presidents of U.S. . . . . 15 USC 1052
Signs, acts constituting infringement . . . . 15 USC 1114
Similar marks (See subhead: Confusing or deceptive similarity)
Slogans . . . . 15 USC 1091
Sovereign immunity, waiver of . . . . 15 USC 1122
Specimens or facsimiles of mark . . . . 15 USC 1051
States
Authority with regard to alteration or display of registered marks
. . . . 15 USC 1121
Waiver of sovereign immunity . . . . 15 USC 1122
Suggestive matter . . . . 15 USC 1052
Supplemental register
Cancel registration, filing petition to . . . . 15 USC 1092
2020
Certificates of registration . . . . 15 USC 1093
Foreign country, prior registration in . . . . 15 USC 1126
Importations . . . . 15 USC 1096
Marks registrable on . . . . 15 USC 1091
Principal register, registration not precluded . . . . 15 USC 1095
Publication . . . . 15 USC 1092
Statutory provisions applicable to . . . . 15 USC 1094
Surnames . . . . 15 USC 1091
Surrender of registration for cancellation . . . . 15 USC 1057
Symbols . . . . 15 USC 1091
Tarnishment
Dilution by tarnishment . . . . 15 USC 1125
Time
Cancel registration, filing of petition to . . . . 15 USC 1064
Civil action, filing of . . . . 15 USC 1071
Extensions (See subhead: Extensions)
Trademark Trial and Appeal Board
Action by director in proceedings before . . . . 15 USC 1068
Appeal from final decision of examiner . . . . 15 USC 1070
Determinations by . . . . 15 USC 1067
Equitable principles, applicability of . . . . 15 USC 1069
Members of . . . . 15 USC 1067
Supplemental register, cancellation of . . . . 15 USC 1092
Trade name defined . . . . 15 USC 1127
Uncodified Lanham Act provisions
Acts not repealed or affected by . . . . Lanham Act 48
Appeals pending on effective date of Act . . . . Lanham Act 47(b)
Applications pending on effective date of Act . . . . Lanham Act 47(a)
Certificates of registration based upon pending applications, term of
. . . . Lanham Act 51
Existing rights not adversely affected by . . . . Lanham Act 49
Registrations existing under prior acts . . . . Lanham Act 46(b)
Renewal of registrations existing under prior acts . . . . Lanham Act
46(b)
Severability of invalid provisions . . . . Lanham Act 50
US Court of Appeals for the Federal Circuit
Notice of appeal . . . . 15 USC 1071
Opinion of . . . . 15 USC 1071
Persons entitled to appeal to . . . . 15 USC 1071
Record, transmission of . . . . 15 USC 1071
US District Court for the Eastern District of Virginia, jurisdiction of
2021
. . . . 15 USC 1071
Use in commerce, definition of . . . . 15 USC 1127
Use of mark
Application as constructive use . . . . 15 USC 1057
Incontestability of right to use mark . . . . 15 USC 1065; 15 USC 1115
Related companies . . . . 15 USC 1055
Validity of
Certificate as prima facie evidence of . . . . 15 USC 1057
Related companies, use of mark by . . . . 15 USC 1055
Verification
Application under principal register . . . . 15 USC 1051
Extension of time for filing . . . . 15 USC 1051
Waivers
Fees . . . . 15 USC 1113
Sovereign immunity . . . . 15 USC 1122
Wrappers, acts constituting infringement . . . . 15 USC 1114
TRADEMARKS (STATE) . . . . Intro §5[2][a]; B&P 14200=B&P 14272

Abandonment
Definition of abandonment . . . . B&P 14202
Actions to enforce
Criminal prosecutions . . . . B&P 14252
Grounds . . . . B&P 14245
Injunctions
Famous marks . . . . B&P 14247
Registered marks . . . . B&P 14250
Advertisements
Defined . . . . B&P 14202
Applicants
Defined . . . . B&P 14202
Application for registration . . . . B&P 14207
Additional information, providing . . . . B&P 14209
Amendment in light of examination . . . . B&P 14209
Classification of goods and services . . . . B&P 14235
Communications between secretary and applicants . . . . B&P 14209
Disclaimer of components . . . . B&P 14209
Examination for conformity to provisions . . . . B&P 14209
Assignment of trademark . . . . B&P 14220
2022
Blurring, dilution by
Definition . . . . B&P 14202
Cancellation from register . . . . B&P 14230
Actions to require cancellation . . . . B&P 14254
Cease and desist
Enforcement of trademark by demand to cease and desist from certain
actions . . . . B&P 14245
Certificates of registration . . . . B&P 14215
Certification marks (See PRECIOUS METALS MARKING)
Change of name . . . . B&P 14220
Citation . . . . B&P 14200
Classification of goods and services . . . . B&P 14235
Common law
Rights acquired within common law . . . . B&P 14259
Defined . . . . B&P 14202
Confusion
Actions to enforce
Grounds . . . . B&P 14245
Copies, unauthorized
Actions
Grounds . . . . B&P 14245
Counterfeits . . . . Intro §5[2][d]
Actions
Grounds . . . . B&P 14245
Criminal prosecution to enforce . . . . B&P 14252
Defined . . . . B&P 14202; Pen 350
Fines and punishment for manufacture or sale of . . . . Pen 350
Union label or trademark, forgery of . . . . Lab 1015
Criminal enforcement . . . . B&P 14252
Damages
Denial of registration
Criteria . . . . B&P 14205
Dilution of mark . . . . Intro §5[2][c]
Blurring, dilution by
Definition . . . . B&P 14202
Definition of dilution . . . . B&P 14202
Disclaimer of components . . . . B&P 14209
2023
Duration . . . . B&P 14217
Renewal of registration . . . . B&P 14217
Famous marks
Injunctions against use by others . . . . B&P 14247
Farm name used as mark (See TRADE NAMES)
Federal provisions
Statutory construction
Effect given construction of federal provisions . . . . B&P 14272
Fees
Nonrefundable . . . . B&P 14260
Secretary of state fees . . . . Gov 12193
Franchisor's trademark . . . . B&P 20001
Gold articles, quality marks and trademarks applied to . . . . B&P 22180
Grey market goods . . . . Intro §5[2][e]
Hallmarks (See PRECIOUS METALS MARKING)
Imitations
Actions
Grounds . . . . B&P 14245
Infringement . . . . Intro §5[2][c]
Actions
Grounds . . . . B&P 14245
Injunctions
Registered marks, use by others . . . . B&P 14250
Legislative intent . . . . B&P 14272
Mark
Defined . . . . B&P 14202
Model state trademark law . . . . B&P 14200=B&P 14272
Name change . . . . B&P 14220
Person
Defined . . . . B&P 14202
Quality marks (See PRECIOUS METALS MARKING)
Recordation
Assignments . . . . B&P 14220
Records
Secretary to maintain . . . . B&P 14225
2024
Registrant
Defined . . . . B&P 14202
Registration . . . . Intro §5[2][b]
Application for registration (See subhead: Application for registration)
Assignment of trademark . . . . B&P 14220
Cancellation from register . . . . B&P 14230
Actions to require cancellation . . . . B&P 14254
Certification of registration . . . . B&P 14215
Change of name . . . . B&P 14220
Criteria for registering mark . . . . B&P 14205
Injunction against use of registered mark by others . . . . B&P 14250
Famous marks . . . . B&P 14247
Records
Secretary to maintain record of trademarks . . . . B&P 14225
Term of registration . . . . B&P 14217
Remedies
Cancellation of registration, actions to require . . . . B&P 14254
Injunctions
Registered marks, use by others . . . . B&P 14250
Limitation . . . . B&P 14245
Secretary
Defined . . . . B&P 14202
Service marks
Defined . . . . B&P 14202
Severability of provisions . . . . B&P 14265
Statutory construction
Federal provisions
Effect given construction of federal provisions . . . . B&P 14272
Legislative intent . . . . B&P 14272
Severability of provisions . . . . B&P 14265
Transitional provisions . . . . B&P 14270
Term of registration . . . . B&P 14217
Trade names
Defined . . . . B&P 14202
2025
Trade unions, mark of (See TRADE UNIONS)
Transitional provisions . . . . B&P 14270
Use of mark
Definition of use . . . . B&P 14202
Infringement . . . . Intro §5[2][c]
Actions . . . . B&P 14245
TRADEMARK TRIAL AND APPEAL BOARD ( S e e TRADEMARKS

(FEDERAL))
TRADE NAMES
Agricultural commodities, contract with registrant for delivery of . . . . B&P
14438
Articles of incorporation, filing of
Rebuttable presumption of right to use name . . . . B&P 14415
Violation of other laws, use of name in . . . . B&P 14417
Association names (See subhead: Organization names)
Attorneys' fees in action by registrant . . . . B&P 14438
Beneficial associations names (See subhead: Organization names)
Bottles (See subhead: Container brands)
Brands (See subhead: Container brands)
Cans (See subhead: Container brands)
Cases (See subhead: Container brands)
Casks (See subhead: Container brands)
Certificate of registration of farm name . . . . B&P 14461
Civil actions by container brands registrant . . . . B&P 14438
Container brands
Acts prohibited . . . . B&P 14430
Agricultural commodities, contract with registrant for delivery of
. . . . B&P 14438
Civil action by registrant . . . . B&P 14438
Corporations or associations registering brand . . . . B&P 14426
Deposit to secure return of . . . . B&P 14433
Description of name or mark used as brand, registration of . . . . B&P
14427
Duty of persons to return containers to owners . . . . B&P 14434
Notice of registration . . . . B&P 14429
2026
Penalty for violations of provisions concerning . . . . B&P 14436
Prior laws, brands registered under . . . . B&P 14437
Search warrant to discover containers . . . . B&P 14435
Unlawful use of or trafficking in . . . . B&P 14430; B&P 14431
Vendor's rights in brand, acquisition of . . . . B&P 14432
Container of another
Defacement or obliteration of trade name . . . . B&P 14404
Fraudulent use of . . . . B&P 14403
Refilling of . . . . B&P 14405
Trafficking in . . . . B&P 14405
Corporations
Articles of incorporation (See subhead: Articles of incorporation,
filing of)
Brand, registration of . . . . B&P 14426
Fictitious name registrant, conflict with . . . . B&P 14416
Foreign corporations, certificate of qualification of . . . . B&P 14415
Covers (See subhead: Container brands)
Damages
Container brands registrant, action by . . . . B&P 14438
Organization name, unauthorized use of . . . . B&P 14494
Dealers in secondhand articles
Laundry supplies . . . . B&P 14486
Possession of container brands . . . . B&P 14431
Defacement of . . . . B&P 14404
Defined . . . . B&P 14202
Deposits
Laundry supplies, acceptance of deposit to secure return of . . . . B&P
14485
Money to secure return of containers . . . . B&P 14433
Farm names
Certificate of registration . . . . B&P 14461
Container brands . . . . Intro §5[4]
Definition of farm . . . . B&P 14460
Knowing use or registration of another's name . . . . B&P 14465
Priority of first to register . . . . B&P 14464
Registration of . . . . B&P 14461
Trademarks
Registration, effect of . . . . B&P 14463
Use of name as . . . . B&P 14462
Fees
Description of name or mark used as brand, registration of . . . . B&P
2027
14427
Farm name, registration of . . . . B&P 14461
Laundry supply designation, filing of . . . . B&P 14483
Fictitious business name statement
Corporation entitled to rebuttable presumption, conflict with . . . . B&P
14416
Prior law, date of filing under . . . . B&P 14413
Rebuttable presumption of exclusive right to use name . . . . B&P
14411; B&P 14412
Violation of other laws, use of name in . . . . B&P 14418
Voluntary filing . . . . B&P 14414
Fines and penalties
Container brands, violation of provisions concerning . . . . B&P 14436
Laundry supply designations, violations concerning . . . . B&P 14491
Sales or offers to sell goods and misrepresenting name of maker
. . . . Pen 351a
Foreign corporations, certificate of qualification of . . . . B&P 14415
Franchisor's trade name . . . . B&P 20001
Fraternal societies names (See subhead: Organization names)
Fraudulent use of container of another . . . . B&P 14403
Good will, transfer of trade name with . . . . B&P 14401
Historical organization (See subhead: Organization names)
Income tax treatment of transfer of . . . . 26 USC 1253
Injunctions
Infringing use of name . . . . B&P 14402
Organization name, unauthorized use of . . . . B&P 14493; B&P 14494
Junk dealers
Possession of container brands . . . . B&P 14431
Kegs (See subhead: Container brands)
Label of another
Fraudulent use of . . . . B&P 14403
Sales or offers to sell goods, misrepresentations concerning . . . . Pen
351a
Labor unions, names of (See subhead: Organization names)
Laundry supply designations
Deposit, acceptance not constituting sale . . . . B&P 14485
Duty to return supplies . . . . B&P 14488
2028
Farm names . . . . Intro §5[4]
Fee for registration . . . . B&P 14483
Fines for violations of statute . . . . B&P 14491
Prohibited acts . . . . B&P 14484
Registration of . . . . B&P 14481; B&P 14482
Search warrant to discovery and obtain supplies . . . . B&P 14489
Unlawful use of or traffic in marked supplies, presumption . . . . B&P
14486
Vendor's rights, acquisition of . . . . B&P 14487
Violations of statute concerning . . . . B&P 14490; B&P 14491
Lodge names (See subhead: Organization names)
Military organization, names of (See subhead: Organization names)
Obliteration of . . . . B&P 14404
Organization names
Damages for unauthorized use of . . . . B&P 14494
Injunction for unauthorized use of . . . . B&P 14493; B&P 14494
Presumption of unauthorized use of . . . . B&P 14495
Registration of . . . . B&P 14492
Packages (See subhead: Container brands)
Presumptions
Laundry supply designations, unlawful use of or traffic in . . . . B&P
14486
Organization name, unauthorized use of . . . . B&P 14495
Rebuttable (See subhead: Rebuttable presumptions)
Priority
Corporation and fictitious name registrant both entitled to rebuttable
presumption . . . . B&P 14416
Farm names, registration of . . . . B&P 14464
Rebuttable presumptions
Article of incorporation, filing of . . . . B&P 14415
Fictitious business name statement, filing of . . . . B&P 14411; B&P
14412
Search warrants
Containers, warrant to discover . . . . B&P 14435
Laundry supply designations, violations concerning . . . . B&P 14489
Siphons (See subhead: Container brands)
2029
Vendor's rights, acquisition of
Container brands . . . . B&P 14432
Vessels (See subhead: Container brands)
Veterans organization, name of (See subhead: Organization names)
TRADE SECRETS
Access defined . . . . Pen 499c
Air pollution information and data, disclosure of . . . . Gov 6254.7
Article defined . . . . Pen 499c
Benefit defined . . . . Pen 499c
Civil procedure involving . . . . Intro §[4]; Intro §14[3]
Computer system, network or program, defined . . . . Pen 499c
Copy defined . . . . Pen 499c
Customer lists
Employment agencies, customer lists of . . . . B&P 16607
Telephone answering services, customer lists of . . . . B&P 16606
Definition of . . . . Pen 499c
Disclosure to government . . . . Intro §6[5]
Employment agency, customer list of . . . . B&P 16607
Equalization hearings, request for closing of . . . . Rev&Tax 1605.4
Misappropriation (See UNIFORM TRADE SECRETS ACT)
Pesticide information as trade secrets, protection against disclosure of
. . . . 7 USC 136h; Gov 6254.2
Privilege, claim of
Criminal proceedings
Closed criminal proceedings . . . . Ev 1062
Definitions . . . . Ev 1061
Disclosure of information to determine . . . . Ev 915
Effect of . . . . Ev 1060
Protective orders . . . . Ev 1061
Sealing articles
Request to seal articles . . . . Ev 1063
Uniform Trade Secrets Act, privileged communications under . . . . CC
3426.11
Protective orders to prevent disclosure . . . . Intro §6[6]
Restraint of trade, prohibition on contracts in . . . . Intro §7
Status as property . . . . Intro §6[1]
2030
Telephone answering service, customer list of . . . . B&P 16606
Theft, acts constituting . . . . Intro §6[4]; Pen 499c
538.5
Uniform Act (See UNIFORM TRADE SECRETS ACT)
TRADE UNIONS
Defined . . . . B&P 14003
Trademark or label of
Forgery of . . . . Lab 1015
Unauthorized use or display of . . . . Lab 1016
TRADING STAMP COMPANY

Franchise fee not including payments to . . . . B&P 20007
TRANSFERS
Assignments (See ASSIGNMENTS)
Conveyances (See PATENTS; PLANT VARIETY PROTECTION)
TRANSMISSION PROGRAMS
Broadcasting transmissions (See BROADCASTING TRANSMISSIONS)
TRANSPORTATION
17537.2
Interstate commerce (See INTERSTATE COMMERCE)
TRAVEL-ACCOMMODATION PACKAGES
TREASURY DEPARTMENT
TREATIES
Berne Convention (See COPYRIGHTS)
Patent Cooperation Treaty (See PATENTS)
2031
TRESPASS
Limitation of actions . . . . CCP 338
TRIAL AND APPEAL BOARD ( S e e PATENT TRIAL AND APPEAL

BOARD)
TROVER
Limitation of actions . . . . CCP 338
TRUCKS, COMMERCIAL
Secondary transmissions to . . . . 17 USC 119
TRUST ACCOUNTS
TRUSTS
Allocation of receipts on property subject to depletion
Definition of liquidating asset . . . . Pro 16362
Convicted felon's story, proceeds from sale of . . . . Intro §4[3]; CC 2225
. . . . CC 3344.1
Insolvent person as trustee
Recommending to trustor that insolvent person serve as trustee
. . . . B&P 17530.1
Involuntary trusts
Convicted felon's story, proceeds from sale of . . . . CC 2225
Mistake or wrongful acts as grounds for . . . . CC 2224
Wrongful detention as grounds for . . . . CC 2223
Liquidating assets
Defined . . . . Pro 16362
Mistake as grounds for involuntary trust . . . . CC 2224
Wrongful detention as grounds for involuntary trust . . . . CC 2223
TRUTH IN MUSIC ADVERTISING ACT . . . . B&P 17537.12
TYPE SIZE
2032
U
UCC (See UNIFORM COMMERCIAL CODE)
UNCLAIMED PROPERTY
Museums, applicability of law to property on loan to . . . . CC 1899.11
UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL

PROPERTY
UNEMPLOYMENT COMPENSATION
Definitions under Unemployment Insurance Code (See EMPLOYERS AND
EMPLOYEES)
UNFAIR COMPETITION
Attorney General, actions brought by . . . . B&P 17204; B&P 17206; B&P
17207
Board within the Department of Consumer Affairs
Defined . . . . B&P 17201.5
Reasonable expenses incurred by . . . . B&P 17206; B&P 17207
City attorney, actions brought by . . . . B&P 17204; B&P 17206; B&P
17207
Civil penalties
Disabled persons, acts perpetrated against . . . . B&P 17206.1
Injunctions, intentional violations of . . . . B&P 17207
Senior citizens, acts perpetrated against . . . . B&P 17206.1
County attorney, actions brought by . . . . B&P 17204; B&P 17206; B&P
17207
Cumulative remedies under Bus. & Prof. Code . . . . B&P 17205
Definition of . . . . Intro §2[1]; B&P 17200
Department of Consumer Affairs (See subhead: Board within the
Department of Consumer Affairs)
Disabled persons, additional civil penalties for acts perpetrated against
. . . . B&P 17206.1
District attorney, actions brought by . . . . B&P 17204; B&P 17206; B&P
2033
17207
False advertising (See ADVERTISEMENTS)
Fines (See subhead: Civil penalties)
Fund
Unfair competition law fund . . . . B&P 17206
Grey market goods, violations in sale of . . . . CC 1797.86
Hotel rooms, handbills distributed in . . . . B&P 17210
Imported articles, sale of . . . . 19 USC 1337
Injunctions
Generally . . . . B&P 17202; B&P 17203
Attorney General or district attorney, prosecution of action by
. . . . B&P 17204
City of San Jose, prosecution of action by city attorney for . . . . B&P
17204.5
Intentional violation of injunction, civil penalties for . . . . B&P 17207
Restoration of money or property acquired wrongfully . . . . B&P 17203
Jurisdiction of district courts . . . . 28 USC 1338
Local consumer affairs agency
Defined . . . . B&P 17201.5
Reasonable expenses incurred by . . . . B&P 17206; B&P 17207
Penalties (See subhead: Civil penalties)
Person, defined . . . . B&P 17201
Proof of notice served on Attorney General or district attorney involving
unfair competition actions on appeal . . . . B&P 17209
Restitution
Disabled persons, acts perpetrated against . . . . B&P 17206.1
Senior citizens, acts perpetrated against . . . . B&P 17206.1
Senior citizens, additional civil penalties for acts perpetrated against
. . . . B&P 17206.1
Service of notice on Attorney General or district attorney involving unfair
competition actions on appeal . . . . B&P 17209
Specific relief . . . . B&P 17202
Statute of limitation . . . . B&P 17208
UNFAIR COMPETITION LAW FUND . . . . B&P 17206
UNIFORM COMMERCIAL CODE

2034
UNIFORM SINGLE PUBLICATION ACT
Cause of action founded upon single publication . . . . CC 3425.3
Citation of . . . . CC 3425.1
Interpretation of . . . . CC 3425.2
Retroactivity denied . . . . CC 3425.5
Second cause of action, judgment in first action barring . . . . CC 3425.4
UNIFORM TRADE SECRETS ACT

Affirmative acts to protect, court ordering . . . . CC 3426.2
Attorneys' fees for filing bad faith claims . . . . CC 3426.4
Bad faith claims, attorneys' fees for . . . . CC 3426.4
Citation of . . . . CC 3426
Court to preserve secrecy . . . . CC 3426.5
Customer lists (See TRADE SECRETS)
Damages for loss caused by misappropriation . . . . CC 3426.3
Definitions . . . . CC 3426.1
Disclosure to government . . . . Intro §6[5]
Discovery
Identification or description of trade secret with reasonable particularity
. . . . CCP 2019.210; Intro §14[4]
Protective order . . . . CC 3426.5
Effective date of . . . . CC 3426.10
Exemplary damages . . . . CC 3426.3
Government activities conducted improperly not protected as trade secret
information, disclosures of . . . . CC 3426.11
Improper means, definition of . . . . CC 3426.1
In-camera hearings . . . . CC 3426.5
Limited liability companies included under . . . . CC 3426.1
Misappropriation
Bad faith claims . . . . CC 3426.4
Damages for . . . . CC 3426.3
Defined . . . . CC 3426.1
Identification of secret as prerequisite to discovery . . . . Intro §14[4]
Injunctive relief . . . . CC 3426.2
Statute of limitation . . . . CC 3426.6
2035
Other laws applicable to trade secrets . . . . CC 3426.7
Person defined . . . . CC 3426.1
Private business activities conducted improperly not protected as trade
secret information, disclosures of . . . . CC 3426.11
Privileged communications, claim of . . . . CC 3426.11
Public records, disclosure of . . . . CC 3426.7
Purpose of . . . . CC 3426.8
Royalties
Court order to pay reasonable royalty . . . . CC 3426.3
Injunction conditioning future use on payment of . . . . CC 3426.2
Sealing court records . . . . CC 3426.5
Severability provision . . . . CC 3426.9
Theft, acts constituting . . . . Intro §6[4]; Pen 499c
Trade secret defined . . . . CC 3426.1
Unjust enrichment, recovery for . . . . CC 3426.3
UNINCORPORATED ASSOCIATIONS
UNITED STATES
Civil actions against U.S. for infringement . . . . 28 USC 1498
Contracts with (See GOVERNMENT CONTRACTS)
Federally owned or supported inventions (See PATENTS)
Plant variety protection, claims against government . . . . 7 USC 2566
Presidents, trademarks consisting of name, portrait, or signature of . . . . 15
USC 1052
Records kept by government, admissibility of . . . . 28 USC 1733
Venue in civil actions against officer or employee of . . . . 28 USC 1391
UNITED STATES ARMS CONTROL AND DISARMAMENT AGENCY

Patents, processes, and developments from research developed by . . . . 22
USC 2572
UNITED STATES BOARD OF PATENT APPEALS AND

INTERFERENCES (See PATENTS)
UNITED STATES CIRCUIT COURT OF APPEALS ( S e e UNITED

STATES COURTS OF APPEALS)
2036
UNITED STATES CLAIMS COURT
Civil actions against U.S. for infringement . . . . 28 USC 1498

Authors, clause protecting rights of . . . . US Const art I §8 cl. 8
Commerce Clause . . . . US Const art I §8 cl. 3
Freedom of speech, press and public assembly . . . . US Const amd I
Inventors, clause protecting rights of . . . . US Const art I §8 cl. 8
UNITED STATES COURTS OF APPEALS

Exclusive jurisdiction of . . . . 28 USC 1295
Interlocutory orders of inferior courts, appellate jurisdiction of . . . . 28
USC 1292
UNITED STATES CUSTOMS

Infringing mark, prohibition against imports bearing . . . . 19 USC 1337; 19
USC 1526
Marking requirements for imports . . . . 19 USC 1304
Trade representative to identify countries denying protection of intellectual
property rights . . . . 19 USC 2242
Unfair competition and practices in importation of articles . . . . 19 USC
1337
UNITED STATES DEFENSE AGENCIES

UNITED STATES DEPARTMENT OF AGRICULTURE

UNITED STATES DEPARTMENT OF ARMY

. . . . 22 USC 526
UNITED STATES DEPARTMENT OF COMMERCE
2037
1155
UNITED STATES DEPARTMENT OF DEFENSE

UNITED STATES DEPARTMENT OF EDUCATION

3480
UNITED STATES DEPARTMENT OF ENERGY

UNITED STATES DEPARTMENT OF HEALTH AND HUMAN

SERVICES
PRODUCTS)
UNITED STATES DEPARTMENT OF NAVY

. . . . 22 USC 526
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF

COLUMBIA
UNITED STATES DISTRICT COURTS

Air pollution patents, order requiring owner to license . . . . 42 USC 7608
Civil actions relating to patents, plant variety protection, etc. . . . . 28 USC
1338
District of Columbia court (See UNITED STATES DISTRICT COURT FOR
THE DISTRICT OF COLUMBIA)
Federal question jurisdiction OF . . . . 28 USC 1295; 28 USC 1331
2038
UNITED STATES ENERGY RESEARCH AND DEVELOPMENT
ADMINISTRATION
Acquisition of copyrights and patents related to non-nuclear energy . . . . 42
USC 5817
Dissemination of information by . . . . 42 USC 5817
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

Air pollution inventions, patents and licenses to . . . . 42 USC 7404
Solid waste inventions, ownership and issuance of patents for . . . . 42 USC
6981
UNITED STATES FOOD AND DRUG ADMINISTRATION

UNITED STATES TREASURY DEPARTMENT

UNIVERSITIES AND COLLEGES

UNJUST ENRICHMENT
Trade secrets, misappropriation of . . . . CC 3426.3
UNPUBLISHED WORKS (See COPYRIGHTS)
US DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA

Patents
Trademarks (federal)
Jurisdiction of court . . . . 15 USC 1071
USEFUL ARTICLES
USE OF MARK
2039
V
VACATIONS
17537.2
VALUATION
Advertised value of thing offered, defined . . . . B&P 17501
VEHICLES
Advertisements, pricing terms used in . . . . B&P 17537.7
Franchise Relations Act applicable to motor vehicles . . . . B&P 20042
Patent infringement, exemption from . . . . 35 USC 272
VENDING MACHINES
VENDOR AND PURCHASER

purchaser . . . . B&P 17919
VENUE
Civil actions, generally . . . . 28 USC 1391
Copyrights and mask works, civil actions relating to . . . . 28 USC 1400
Franchise agreement, venue restrictions in . . . . B&P 20040.5
Mulitparty, mulitforum jurisdiction . . . . 28 USC 1391
Patent infringement suits . . . . 28 USC 1400
VERIFICATIONS
VESSELS
Analysis of teaching, use of protected design for . . . . 17 USC 1309
Application for registration of protected design
Cancellation of registration, application for . . . . 17 USC 1313
Decision on . . . . 17 USC 1313
Fee for . . . . 17 USC 1316
2040
Foreign country, effect of earlier filing in . . . . 17 USC 1311
Judicial review of refusal to register . . . . 17 USC 1321
Oaths and acknowledgments . . . . 17 USC 1312
Reconsideration of denied application, request for . . . . 17 USC 1313
Refusal to register . . . . 17 USC 1313
Assignment of property right in registered design . . . . 17 USC 1320
Attorneys' fees in action regarding infringement of protected design . . . . 17
USC 1323
Cancellation of registration of protected design
Application for . . . . 17 USC 1313
Court order for . . . . 17 USC 1324
Lists and indexes of cancellations, publication of . . . . 17 USC 1315
Certificate of registration of protected design
Errors in certificate, correction of . . . . 17 USC 1319
Commencement of design protection . . . . 17 USC 1304
Copies of official record of design protection proceedings . . . . 17 USC
1318
Drawings of registered designs, availability of . . . . 17 USC 1315
Exclusive rights of owner of protected design . . . . 17 USC 1308
False marking respecting design protection, penalty for . . . . 17 USC 1326
False representation respecting design protection, penalty for . . . . 17 USC
1327
Fee for application for registration of protected design . . . . 17 USC 1316
Foreign country, effect of prior application for registration of protected
design in . . . . 17 USC 1311
Fraudulently obtained registration, liability for . . . . 17 USC 1325
Identification of owner . . . . 17 USC 1306
Implementing regulations for design protection provisions . . . . 17 USC
1317; 17 USC 1328
Importation, design protection provisions for . . . . 17 USC 1328
Indexes of registered designs and cancellations of designs, publication of
. . . . 17 USC 1315
Infringement of protected design
Arbitration to resolve dispute . . . . 17 USC 1321
Court orders . . . . 17 USC 1324
Damages
2041
Injunction, wrongly obtained . . . . 17 USC 1322
Fraudulently obtained registration, liability of plaintiff for . . . . 17 USC
1325
Injunction to prevent . . . . 17 USC 1322
Recovery for . . . . 17 USC 1323
Remedy for . . . . 17 USC 1321
Jurisdiction of district courts with respect to design protection . . . . 28 USC
1338
Lists of registered designs and cancellations of designs, publication of
. . . . 17 USC 1315
Mortgage of property right in registered design . . . . 17 USC 1320
Notice of protected design
Omission of notice, effect of . . . . 17 USC 1307
Official record of design protection proceedings, copies of . . . . 17 USC
1318
Ownership of protected design . . . . 17 USC 1320
Patents
Design protection rules' effect on issuance of design patent . . . . 17
USC 1329
Infringement, exemption from . . . . 35 USC 272
Penalties for design protection violations . . . . 17 USC 1325=17 USC 1327
Pictorial representations of registered designs, availability of . . . . 17 USC
1315
Property right in protected design . . . . 17 USC 1320
Registration of protected design
Announcement by publication . . . . 17 USC 1313
Application for (See subhead: Application for registration of
protected design)
Cancellation of registration, application for . . . . 17 USC 1313
Certificate of . . . . 17 USC 1314
Court proceedings, orders in . . . . 17 USC 1324
Remedies
Infringement of protected design . . . . 17 USC 1321
Other laws, effect of design protection law on rights under . . . . 17 USC
1330
Rights of owner of protected design . . . . 17 USC 1308
Scope of protection for original designs
2042
Administration of design protection law . . . . 17 USC 1331
Effective date of law, designs made public after . . . . 17 USC 1332
Excluded designs . . . . 17 USC 1302
Hull, vessel . . . . 17 USC 1301
Molds . . . . 17 USC 1301
Originality criterion . . . . 17 USC 1301
Plugs . . . . 17 USC 1301
Revision, adaptation, or rearrangement of otherwise excluded designs
. . . . 17 USC 1303
“Useful article” criterion . . . . 17 USC 1301
Seizure of imports violative of design protection provisions . . . . 17 USC
1328
Statute of limitation for infringement actions . . . . 17 USC 1323
Teaching or analysis, use of protected design for . . . . 17 USC 1309
Term of design protection . . . . 17 USC 1305
Transfer of property right in registered design . . . . 17 USC 1320
Venue in civil actions respecting design protection . . . . 28 USC 1400
Will bequest of property right in registered design . . . . 17 USC 1320
VESSELS (CONTAINERS)
VETERANS
Licenses fees
Exemption of veterans from city licensing fees . . . . B&P 16001.7
Memorial object, interstate transportation of stolen . . . . 18 USC 2314
VETERANS' ORGANIZATIONS
Copyrighted work performed for . . . . 17 USC 110
VETERINARY PRACTICES
Patent for new drugs or veterinary biological product . . . . 35 USC 156; 35
USC 271
VEXATIOUS LITIGATION
VICTIMS
Beneficiaries defined . . . . CC 2225
2043
. . . . CC 2225
Restitution Fund for . . . . CC 2225
VIDEOTAPES (See AUDIOVISUAL WORKS)
VIRUS-SERUM-TOXIN ACT
Patent for drug product subject to . . . . 35 USC 156
VISUAL ART WORK

Defined . . . . 17 USC 106A
VOICE
Another's voice, unauthorized use of in advertising . . . . CC 3344
Deceased personality, use of voice of . . . . CC 3344.1
VOID AND VOIDABLE CONTRACTS (See CONTRACTS)
VOLUNTEERS
Employment status of . . . . Lab 3352
W
WAIVERS
Attorneys' fees, contract providing for waiver of . . . . CC 1717
Consignment of fine art, waiver of statutory provisions . . . . CC 1738.8
Franchise law, waiver of compliance with . . . . B&P 20010
Plant variety protection, waiver of rights under certificate . . . . 7 USC 2483
Seller assisted marketing plans, waiver of statutory provisions void
. . . . CC 1812.216
Sovereign immunity under trademark law . . . . 15 USC 1122
WARRANTIES
2044
Computer software developed by state or local agency . . . . Gov 6254.9
Fine art multiples, sale of . . . . CC 1744.7
WARRANTY AGAINST INFRINGEMENT

WARRANTY OF FITNESS
Personal property leases, exclusion or modification of fitness warranty for
. . . . UCC 10214
WARRANTY OF MERCHANTABILITY
Personal property leases, exclusion or modification of warranty of
merchantability for . . . . UCC 10214
WARRANTY OF TITLE
Sale of goods . . . . UCC 2312
WATER QUALITY CONTROL

WEAPONS
Atomic weapons, denial of patent for inventions useful solely in . . . . 42
USC 2181
WEBCASTER SETTLEMENT ACT . . . . 17 USC 114
WEIGHT
Platinum group metals, parts or percentages of . . . . B&P 22127
WHISTLE BLOWING ACTIVITIES

Disclosure of improper government or private business activities not
actionable as trade secret violation . . . . CC 3426.11
WILLS
. . . . CC 3344.1
WINDING BARS
2045
WINES
Labels . . . . B&P 25236=B&P 25246; Intro §5[9]
California Central Coast Counties Dry Wine . . . . B&P 25236
False representation as to origin . . . . B&P 25237
Records of growers or bottlers . . . . B&P 25238
Counterfeit labels . . . . B&P 25239
Lodi wine labels . . . . B&P 25245
Multicounty appellations . . . . B&P 25243
Napa Valley . . . . B&P 25240; B&P 25241
Pasa Robles . . . . B&P 25244
Sonoma County . . . . B&P 25242
Sonoma county wine labels . . . . B&P 25246
WIRELESS OR CELLULAR TELEPHONES

Advertisements
pagers
. . . . B&P 17538.9
WIRES
Fraudulent use of transmission to obtain privileged information . . . . Pen
538.5
WITNESSES
Franchise registration, Corporations Commissioner issuing subpoenas
. . . . Corp 31401
Patents, contested cases . . . . 35 USC 24
Plant variety protection, contested cases . . . . 7 USC 2354
Sound recordings, custodian of business records concerning . . . . Pen 653s;
Pen 653u
WORDS AND PHRASES (See DEFINITIONS)
WORK-AT-HOME PARAPHERNALIA
WORKERS' COMPENSATION
Definitions under workers' compensation law (S e e EMPLOYERS AND
EMPLOYEES)
2046
WORKS
WORKS FOR HIRE (See EMPLOYERS AND EMPLOYEES)
WORKS OF U.S. GOVERNMENT (See COPYRIGHTS)
WRAPPERS
WRITING
Proof of content
Oral evidence . . . . Ev 1523
Original writing as . . . . Ev 1520
Secondary evidence . . . . Ev 1521; Ev 1522
Seller assisted marketing plans contracts . . . . CC 1812.207
WRONGFUL DETAINER
Involuntary trusts resulting from . . . . CC 2223
WTO MEMBER COUNTRIES

Inventions in . . . . 35 USC 104 (Repeal of section in 2013)
2047

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CALIFORNIA

Library of Congress Card Number: 91-070515

Cite this publication as:

In order to distinguish between the links to other sections within

Following is a color key for the links:

1 INTRODUCTION TO CALIFORNIA INTELLECTUAL PROPERTY LAWS

4 CONSTITUTIONAL PROVISIONS AND FEDERAL STATUTES

5 LEAHY-SMITH AMERICA INVENTS ACT

This publication represents an amalgamation of statutes, cases, articles,

§ 1. Basic Property Laws

§ 2. Unfair Competition and False Advertising

[2] False Advertising

[3] Plug Molding

6 Bus. & Prof. Code § 17535.5.

7 Bus. & Prof. Code § 17206.1.

8 See Bus. & Prof. Code § 17204.

§ 3. Patents and Inventions

[2] Invention Development Service Contracts

14 Civ. Code § 983.

15 See 5 Chisum, P ATENTS, § 22.03.

16 Bus. & Prof. Code § 22372.

17 Bus. & Prof. Code § 22373.

18 Bus. & Prof. Code § 22374.

19 Bus. & Prof. Code § 22386.

20 Bus. & Prof. Code §§ 22389, 22391.

[2] Record Piracy

[3] Royalties From Copyrights

§ 5. Goodwill and Its Representations: Trademarks,

[b] Registration of Trademarks

[c] Infringement and Dilution of Trademarks

[d] Anti-Counterfeiting Provisions

[e] Grey Market Goods

[4] Container Brands, Farm Names, Laundry Supply Designations, and

[5] Fictitious Business Names

[6] Corporate and Limited Partnership Names

[7] Precious Metal Quality Marks

[9] Wine Labels

26 Bus. & Prof. Code § 14215(b).

27 Bus. & Prof. Code § 14220.

28 Bus. & Prof. Code § 14230.

31 Bus. & Prof. Code § 14427.

32 Bus. & Prof. Code §§ 14430, 14436.

33 See 15 U.S.C. § 1127.

[2] Uniform Trade Secrets Act

[3] Customer Lists

[4] Theft of Trade Secrets

[5] Disclosure of Trade Secrets to Government

[6] Protective Orders

36 Civ. Code § 3426.2.

37 Civ. Code § 3426.3.

38 Civ. Code § 3426.4.

39 Civ. Code § 3426.5.

40 Civ. Code §§ 3426–3426.10.

44 Civ. Code §§ 3426–3426.10.

§ 7. Contracts in Restraint of Trade; Employee

[2] Franchise Investment Law

[3] Franchise Relations

[4] Fair Dealership Law

[5] Seller Assisted Marketing Act