Pirated technology targeted by AB 473

By CMTA Staff

Capitol Update, April 21, 2011 Share this on FacebookTweet thisEmail this to a friend

A bill to address the serious problem of pirated technology is put forward in AB 473 (Charles Calderon, D-Whittier).  It allows lawsuits against manufacturers and retailers who may be the unwitting recipients of the “benefits” of the illegal act at an earlier point in the supply chain.

As noted in the findings for this bill, manufacturers are a vital source of jobs and economic growth in the State of California. A new cause of action to be used against manufacturers should be carefully crafted to appropriately address a real harm without creating unnecessary new cost burdens, excessive litigation and new risks of doing business.  This bill fails the test.

California is one of many states considering legislation to create unfair trade claims to address this problem due to the apparent failure of national and international bodies to control the theft of intellectual property.  AB 473 and similar legislation in other states is not the first or best choice as a mechanism to reduce piracy of intellectual property, as shown by the multiple layers of protections and limitations that have been included in the bill in an attempt to minimize its negative impacts.

However, efforts in the bill to minimize the burdens and provide protections to innocent manufacturers try but fail to overcome the potential harm.  AB 473 is a complex maze of definitions, specific pleading, burden of proof and notice standards, multiple safe harbors, arbitrary time frames for action, and confusing cross-references.  Lawsuits between competitors under this bill could be costly for the parties and overwhelm an already crowded court system required to hear these cases and interpret the law.

AB 473 will be heard in the Assembly Judiciary Committee on April 26th.

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