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AB-2158 Invention development services contracts.(2013-2014)

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Assembly Bill
No. 2158

Introduced by Assembly Member Buchanan

February 20, 2014

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


AB 2158, as introduced, Buchanan. Invention development services contracts.
Existing law provides for the regulation of invention development services contracts and, among other things, requires that those contracts be in writing. Existing law declares the purpose of those provisions and states various findings regarding inventors.
This bill would make technical, nonsubstantive changes to that declaration and statement of findings.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


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

 (a) The Legislature finds that, in the State of California, 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 these 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 publishing literary works or from owning, operating, or controlling commercial enterprises; that their 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 on 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 on the economy and well-being of this state and its local communities; and that the provisions of this chapter relating to such those services are necessary for the public welfare.
(b) The Legislature declares that the purpose of this chapter is to safeguard the public against fraud, deceit, imposition, and financial hardship, and to foster and encourage competition, fair dealing, and prosperity in the field of invention development services by prohibiting or restricting false or misleading advertising, onerous contract terms, harmful financial practices, and other unfair, dishonest, deceptive, destructive, unscrupulous, fraudulent, and discriminatory practices by which the public has been injured in connection with invention development services but not to interfere with, or further regulate by this chapter, those persons who provide researching, marketing, surveying, or other kinds of consulting services to professional manufacturers, marketers, publishers or others purchasing such those services as an adjunct to the traditional commercial enterprises in which they engage as a livelihood.