State-Owned
Intellectual
Property:
Opportunities Exist for the State to Improve
Administration of Its Copyrights, Trademarks,
Patents, and Trade Secrets
November 2000
2000-110
California State Auditor
BUREAU OF STATE AUDITS
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CALIFORNIA STATE AUDITOR
STEVEN M. HENDRICKSON
CHIEF DEPUTY STATE AUDITOR
BUREAU OF STATE AUDITS
555 Capitol Mall, Suite 300, Sacramento, California 95814 Telephone: (916) 445-0255 Fax: (916) 327-0019
ELAINE M. HOWLE
STATE AUDITOR
November 16, 2000 2000-110
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:
As requested by the Joint Legislative Audit Committee, the Bureau of State Audits presents its
audit report concerning the State’s administration of its intellectual property. Intellectual
property typically consists of copyrights, trademarks, patents, and trade secrets. This report
concludes that many state agencies are not sufficiently knowledgeable about the intellectual
property they own. Lacking adequate knowledge of their intellectual property ownership and
rights, state agencies could fail to act against those who use the State’s intellectual property
inappropriately. Inappropriate use includes unauthorized use of state trademarks and improperly
profiting on products developed at state expense. Further, we note that state-level direction for
administering intellectual property is limited. The few state laws that address intellectual
property do so in a piecemeal fashion. We also point out that state agencies have either no or
incomplete written policies for managing their intellectual property.
Finally, although our survey of state agencies and other work we performed identified more than
113,000 items of state-owned intellectual property, the State likely owns more. For each of the
125 state agencies identified as having intellectual property, we list the quantity of each type of
intellectual property owned as part of the report.
Respectfully submitted,
STEVEN M. HENDRICKSON
Chief Deputy State Auditor
CONTENTS
Summary 1
Introduction 5
Chapter 1
State Agencies Generally Lack Knowledge
of and Could Improve Control Over Their
Intellectual Property 13
Recommendations 28
Chapter 2
Survey Responses Reveal Extent of State
Agencies’ Ownership and Administration
of Intellectual Property 31
Appendix A
Summary of Laws for the Four
Primary Types of Intellectual Property 43
Appendix B
Summary of the Types and Quantities
of Intellectual Property Owned by
125 State Agencies 47
1
SUMMARY
Audit Highlights . . .
Our review of the administra-
tion of state-owned
intellectual property disclosed
the following:
þ A lack of sufficient
knowledge by state
agencies of the intellectual
property they own can
hamper the State’s
protection of its interests.
þ Not only is state-level
direction for administering
intellectual property
limited, but state agencies
have either no or
incomplete policies for
its management.
þ Although our survey of
state agencies and other
work we performed
identified more than
113,000 items of state-
owned intellectual
property, the State
likely owns more.
RESULTS IN BRIEF
M
any state agencies are not sufficiently knowledgeable
about the intellectual property they own.
1
Intellectual
property consists primarily of copyrights, trademarks,
patents, and trade secrets. Lacking adequate knowledge of their
intellectual property ownership and rights, state agencies could
fail to act against individuals and entities that use the State’s
intellectual property inappropriately. Inappropriate use includes
improperly profiting from products developed at state expense,
unauthorized use of trademarks to imply state approval, and
claiming patent rights to state-developed inventions.
As part of our review of state-owned intellectual property, we
surveyed state agencies. The survey’s results, combined with
other work we performed, disclosed that more than half of them
actually own some form of intellectual property whether they
know it or not. Typical properties held by state agencies include
documents, web sites, and software, which can be copyrighted;
and agency logos and acronyms, which may qualify as trade-
marks. Few state agencies report owning patents and trade secrets.
The results of our review of the intellectual property owned by
state agencies revealed that, although 125 agencies had more
than 113,000 identified items of intellectual property, state-level
direction concerning intellectual property is limited. This lack of
direction contributes to state agencies not being knowledgeable
about the intellectual property they own, and in some instances,
agencies believing that they are not authorized to own or for-
mally protect through registration intellectual property they
create. For instance, 74 state agencies that indicated they had no
intellectual property failed to identify their web sites, which can
be copyrighted. Further, the web sites for nearly three dozen of
these agencies showed agency logos, which likely qualify as
trademarks. For these and other reasons, we believe that the
State actually owns more intellectual property than our
report identifies.
1
Throughout this report, the term state agency refers to any type of state entity,
regardless of its formal name (e.g., agency, board, bureau, commission, council,
department, university, etc.).
2
When state agencies do not adequately administer their intellec-
tual property, they risk being unable to act against people or
entities that use it inappropriately. Weak administration of
intellectual property could, for example, lead to the State’s
failure to act against a vendor that deceives consumers by
inappropriately using a trademark, such as a state agency’s logo,
in connection with its products or services to imply approval by
the State. It could also result in inaction against a publisher that
improperly sells state-copyrighted information that a state
agency otherwise provides free or at low cost. Likewise, weak
administration could cause the State to pay unnecessary license
fees to a patent owner to use a device that the State actually
invented or paid a contractor to invent for it.
Proper administration of intellectual property would allow state
agencies to act against others who infringe on their rights to
control how their property is used. For example, because the
California Department of Alcohol and Drug Programs was aware
of its intellectual property rights, it was able to prevent a person
from operating a pornographic web site with a name that was
identical to one of the department’s federally registered trademarks.
Our review of the State’s overall administration of its intellectual
property revealed other weaknesses. For example, many state
agencies have no written policies for intellectual property manage-
ment. Of those written policies provided to us, none provides
complete guidance to help the agency to, among other things,
identify items that could qualify as intellectual property, determine
whether to formally protect intellectual property, and enforce its
rights against those infringing on the intellectual property.
A final concern we observed was the limited extent to which
state agencies appeared to capitalize on their intellectual prop-
erty. Capitalizing on their intellectual property may lead to
reduced contract costs or the development of new revenue
sources. Yet, state agencies do not have statewide guidance that
describes the circumstances under which they can or should
capitalize on their intellectual property. We also question
whether the State’s use of standard contract language that
essentially gives contractors a free license to use or sell intellectual
property is in the best interest of the public.
3
RECOMMENDATIONS
The Legislature should clarify state law to specifically allow all
state agencies to own and, if necessary, formally register intellec-
tual property they create or otherwise acquire when it is deemed
to be in the public’s best interest.
The Legislature should designate a single state agency as the lead
for developing overall policies and guidance related to state-owned
intellectual property. This agency should be responsible for,
among other tasks:
• Developing an outreach campaign informing state agencies of
their rights and abilities concerning intellectual property.
• Establishing guidelines for use by state agencies in administer-
ing their intellectual property, including establishing policies
concerning the criteria for determining which products will
be treated as intellectual property, which should be placed
into the public domain, and factors that state agencies should
consider when deciding whether to sell their intellectual
property or license it to others.
Finally, the Legislature should consider whether the interest of
the public is best served when the State uses standard contract
language that essentially gives contractors a free license to use
and sell intellectual property they develop for the State. ■
4
Blank page inserted for reproduction purposes only.
5
INTRODUCTION
BACKGROUND
T
he term intellectual property describes products of the
mind, such as ideas, inventions, and creations. Unlike real
property such as land, intellectual property is intangible.
As a type of personal property, however, intellectual property is
protected by law.
There are four primary types of intellectual property: copyrights,
trademarks, patents, and trade secrets. Taken as a whole, federal,
state, and common law provide intellectual property owners
with an extensive legal tool bag to protect the items they create.
It is important to note that intellectual property laws enable an
owner to pursue legal remedies against any person or entity that
infringes on the owner’s rights; they do not always give the
owner the right to manufacture or produce a product. Infringe-
ment includes making unauthorized versions of the intellectual
property or using it against the owner’s wishes. See Appendix A
for more information on certain legal aspects of the four major
types of intellectual property.
Copyrights Protect Original Works of Authorship
A copyright grants an exclusive legal right to reproduce, publish,
perform, display, distribute, or sell the content and form (such as
print, audio, video, or electronic) of an original work of author-
ship. Examples include literary and artistic works, architectural
drawings, audiovisual materials, publications, computer programs,
web sites, data compilations, and maps.
Copyrights in the United States are governed exclusively by
federal statute. To be protected by a copyright, the material in
question must be an original creation and must be set in a
“tangible form of expression”: a vehicle from which it can be
perceived, reproduced, or otherwise communicated. For example,
a story cannot be copyrighted until its words are transcribed on
paper or another form that allows people to read, hear, or
otherwise perceive it. Likewise, a song cannot be copyrighted
until its notes and lyrics are recorded or set in some other
perceptible form.
6
Federal law recognizes two forms of copyrights: unregistered and
registered. As soon as an author transcribes, records, or otherwise
puts a work into some tangible form, federal law protects the
work under a copyright. It extends certain rights solely to the
owner, including the right to reproduce and distribute the work.
Federal copyright law also allows copyright owners to secure
additional protections by formally registering their copyrights
with the federal Copyright Office. Although formal copyright
registration is optional, there are advantages to having it. One
advantage of registration is that it establishes a public record of
the copyright claim. This puts the public on notice of the copy-
right and makes it more difficult for violators to claim they
unknowingly infringed on it. A second advantage is that, with a
formal registration, a copyright owner can file suit against any
person or entity attempting infringement. Timely registration
enables a copyright owner to claim attorneys’ fees and statutory
damages under federal law in infringement cases. Such claims
can provide leverage in obtaining early resolution of infringement
disputes on terms favorable to the copyright owner.
Trademarks Protect Names and Logos
A trademark is any name (McDonald’s), word (McBurger),
symbol (the golden arches), device (Ronald McDonald), slogan
(“You deserve a break today”), package design (the Happy Meal
box), or any combination of these features that identifies and
distinguishes the source of goods produced by one entity from
those goods produced by others. A service mark, which is
protected under federal and state trademark laws, is used to
distinguish the source of a service rather than a good.
2
Trade-
mark rights are governed by federal, state, and common law.
They give an owner the right to exclude others from using a
specific mark or one confusingly similar to the owner’s mark. To
qualify as a trademark, a word, name or the like must be both
distinctive and actually used by the owner.
Like copyrights, trademarks can be either unregistered or
registered. Registration is not required to protect trademarks
because trademark rights also arise under common law from the
owner’s actual use of the mark. Here again, however, registration
offers the owner benefits that include public notice, evidence
of ownership, and the right to claim litigation costs and
certain damages.
2
Throughout this report, we include the term service mark as part of trademark.
7
Trademarks in California can be registered with the federal
Patent and Trademark Office and California’s Secretary of State.
Federal registration allows trademark owners to file infringement
suits in federal court. Also, because state trademark registrations
can usually be obtained faster than federal registrations, some
trademark owners seek state registration to have its protections
while the federal registration is pending.
Patents Protect Inventions and Discoveries
A patent is a property right that the federal government grants
to an owner to exclude others from making, using, selling, or
importing the patented item into the United States. Examples
include inventions and discoveries, new industrial or technical
processes, improvements to existing industrial or technical
processes, business methods, or compositions of matter such as
chemical compounds. In the United States, patents are governed
exclusively by federal law and are issued by the federal Patent
and Trademark Office. Only items that are novel, operable, and
capable of use can be patented. In addition, the item must not
be obvious to a person of ordinary skill in the field in which the
item is used. Unlike a copyright or trademark, which offers the
owner some protection even when it is not registered, a patent
only protects an owner who files an application with the federal
Patent and Trademark Office and meets the statutory require-
ments of that office.
Trade Secrets Protect Sensitive Information
A trade secret is any information used in an owner’s operations
from which value is derived because the information is not
generally known. A trade secret must also be subject to reason-
able efforts to maintain its secrecy. Common examples include
formulas or recipes, patterns, data compilations, computer
programs, methods, techniques, and processes. Until recently,
trade secrets were governed only by state and common law. In
1996, the Economic Espionage Act made stealing trade secrets a
federal criminal offense. Because there are no provisions for the
registration of a trade secret, protection begins once the trade
secret is identified as such by the owner, as long as it is secret at
the time. Patent applicants generally will protect their product
or process as a trade secret while their application is pending.
Also, because patent registrations are not secret, some owners
will protect their property as a trade secret rather than under a
patent when they do not wish to disclose their property to others.
8
APPROACHES USED BY OTHERS TO ADMINISTER
INTELLECTUAL PROPERTY VARY
To determine how entities other than the State administer
intellectual property, we reviewed the practices used by organiza-
tions in the private sector, by several other states, and by several
research universities. We learned that they use a variety of methods.
Private Sector Approaches to Intellectual Property
Management Vary With the Industry
Our discussions with representatives of the private sector—two
manufacturing firms, one management consulting firm, three
trade associations, one industry task force, and two attorneys
specializing in intellectual property—revealed that intellectual
property management in the private sector varies depending on
the nature of the industry.
Because each has a unique emphasis in the marketplace, manufac-
turing firms and retail firms tend to administer their intellectual
property differently and focus their efforts on different types of
intellectual property. Firms in the manufacturing industry,
especially high-tech manufacturing, often hold large patent and
software copyright portfolios to maintain an edge over com-
petitors, preclude competitors from developing a particular
technology, or to make themselves more desirable partners for
joint development projects with other firms. For firms in the
retail industry, however, patents typically make up only a small
part of their intellectual property portfolios. Because retail firms,
like many state agencies, focus on providing services rather than
creating products, they typically hold more trademarks. A retail
firm uses a trademark to communicate information about the
company and its goods and services. A retailer’s primary “product”
often is its image and the values associated with that image,
such as quality, reputation, trust, customer service, and brand
loyalty. Consequently, retailers emphasize the protection of their
trademarks against unauthorized or inappropriate use.
Other States Have Various Approaches to Intellectual
Property Administration
Our search of other states’ intellectual property laws and our
discussions with representatives of five states (Florida, Minnesota,
New York, Texas, and Virginia) revealed various approaches to
managing and protecting intellectual property. These approaches
range from not allowing state agencies to own any intellectual
9
property without specific authorization to having written guid-
ance specifically granting state agencies the authority to own
intellectual property. For example, state agencies in Florida
cannot own patents, copyrights, or trademarks without express
legislative authorization. Florida’s intent is that the public’s
interest is best served when most of its products are placed in the
public domain where the community has maximum access to
them. The term public domain describes property rights that
belong to the community at large. Once intellectual property
has been placed in the public domain, it can no longer be pro-
tected against infringement; anyone can use it for any purpose.
3
Florida’s approach is also predicated on the public having free
access to state-owned intellectual property because it was devel-
oped with tax dollars. Florida’s “pro public domain” approach is
similar to the general legal prohibition against the federal
government owning copyrights for works it authors. In contrast,
Virginia maintains that the public’s interest is best served by
protecting state-developed intellectual property rather than
putting it into the public domain. Through a gubernatorial
executive memorandum, Virginia authorizes its state agencies to
pursue patent and copyright protections for materials believed
to have commercial or marketable value, and it directs its
secretary of administration to coordinate the administration of
intellectual property for the state.
Other states take different approaches. For example, Minnesota’s
state agencies simply follow federal intellectual property laws;
that is, they can exercise the same rights as other parties to own
and protect copyrights, trademarks, and patents under federal
laws. New York allows its state agencies to decide for themselves
whether or not they will protect their intellectual property.
We also inquired about the written intellectual property policies
of these five states. Only Virginia has a comprehensive written
policy that authorizes its state agencies to own and protect
patents and copyrights. It centralizes the administration of the
state’s intellectual property holdings through a single state
agency. Although their guidance is much more limited in scope,
Florida allows its state agencies to copyright the software they
develop, and Texas has a law that requires its state agencies to
report any technology innovations that meet certain criteria to
its Attorney General’s Office.
3
The public domain consists of works formally granted to the public; materials that
cannot be copyrighted, such as blank forms, names, and titles; lost or expired
copyrights; and, with certain exceptions, products authored by the federal government.
10
Most of these states have passed legislation authorizing certain
state agencies to own and protect one or more types of intellectual
property. For example, state laws authorize Florida’s Department
of Citrus and Minnesota’s Department of Natural Resources to
own one or more types of intellectual property. Finally, like
many other states, Florida, Minnesota, and Virginia have
adopted versions of the Uniform Trade Secrets Act, authored by
the National Conference of Commissioners on Uniform State Laws.
Intellectual Property Administration Appears More
Consistent Among Research Universities
Because federal legislation offers them a financial incentive,
universities with federally sponsored research have a relatively
consistent approach to intellectual property administration. The
federal Bayh-Dole Act assigns to universities the rights to patents
that result from research sponsored by the federal government.
This grant of ownership allows universities to pursue exclusive
licensing arrangements with corporate partners to convert
university research into marketable products—a process known
as technology transfer. The Bayh-Dole Act, consequently, creates
a potentially lucrative mechanism for research universities to
generate revenue while serving the public’s interest by converting
their discoveries into useful products. It also creates an environ-
ment where universities engage in relatively similar intellectual
property management practices to capitalize financially on the
technology transfer process. Because it can be so lucrative to
convert their research into commercially viable applications,
universities have a strong incentive to protect their intellectual
property. For example, a report issued by the University of
California shows that in fiscal year 1998-99, the university
earned approximately $89 million in licensing revenue from its
patent portfolio.
SCOPE AND METHODOLOGY
Due to concerns about the extent to which state agencies have
identified, managed, and protected their intellectual property,
the Joint Legislative Audit Committee (committee) directed the
Bureau of State Audits to review the administration of state-owned
intellectual property. Specifically, the committee asked us to
determine whether state entities have policies and procedures to
identify, manage, and protect intellectual property; to survey
state entities about their inventory and management of
11
intellectual property; and to determine how other states
and the private sector identify, manage, and protect their
intellectual property.
To gain a general understanding of intellectual property, we
interviewed private-sector attorneys who specialize in one or
more areas of intellectual property law, and state attorneys and
other state employees who participate in a working group that
periodically meets to discuss issues concerning state-owned
intellectual property. We also reviewed applicable federal and
state laws and the web sites for the federal Patent and Trademark
Office and the Copyright Office. Finally, we reviewed the web
sites for various consulting and law firms, trade groups, profes-
sional journals, and research universities.
To determine how entities other than California state agencies
identify, manage, and protect their intellectual property, we
examined the policies and practices of the private sector, other
states, and research universities. To identify a sample of states
from which to obtain further information, we scanned state laws
looking for those related to intellectual property. For five states
(Florida, Minnesota, New York, Texas, and Virginia) that appeared
to have relevant laws related to intellectual property, we discussed
their approaches with employees knowledgeable about intellectual
property. Similarly, we discussed approaches to identifying,
managing, and protecting intellectual property with representa-
tives of the private sector, including two manufacturing firms,
one management consulting firm, three trade associations, one
industry task force, and two private attorneys specializing in
intellectual property. We also reviewed the intellectual property
policies of six research universities.
To identify the nature, quantity, and policies relating to the
State’s intellectual property holdings, we surveyed the State’s
220 agencies. Our survey universe primarily included entities at
the agency and department level because they have the autonomy
to develop their own policies and procedures for administering
intellectual property. For example, we sent our survey to the
California Department of Corrections and the Department of
Mental Health rather than to each state prison and each state
hospital. However, because the Office of the Chancellor for the
California State University delegates responsibility for developing
policies related to intellectual property to each of its campuses, we
included each campus within our survey universe. We did not
include auxiliary organizations, such as foundations that are
associated with educational institutions, because they are distinct
12
legal entities separate from the State. We also did not include the
University of California in our survey universe; however, we
included it as one of the six research universities we studied to
learn how others administer their intellectual property. We
received responses to our survey from all 220 state agencies.
In our survey, we asked agencies to tell us about the intellectual
property policies or procedures they currently use; the types and
quantities of registered and unregistered intellectual property
they own; whether they keep inventories of their intellectual
property; the nature of the intellectual property they own (such
as publications, formulas, inventions, logos, software, etc.); why
they do or do not register their intellectual property; enforce-
ment actions they have taken to stop infringement; and their
opinions regarding whether the State should establish guidelines
for managing and protecting intellectual property.
We visited seven state agencies to verify the accuracy of their
survey responses and to perform additional follow-up work. We
also searched databases maintained by the federal Copyright
Office for copyrights and the federal Patent and Trademark
Office for patents and trademarks that state agencies had regis-
tered under federal law. In addition, we searched the card files at
California’s Secretary of State for trademarks that state agencies
had registered under California law.
Because intellectual property is typically defined as copyrights,
trademarks, patents, and trade secrets, we focused our review
primarily on these four types. Appendix B lists the identified
quantities of each type of intellectual property for 125 state agencies.
It was not practicable for a variety of reasons to determine the
value of the State’s intellectual property. For example, state
agencies are not always knowledgeable about the intellectual
property they own. Also, some items of intellectual property have
inherent but not market value, so their worth cannot be easily
measured. For instance, what value should be ascribed to a state
agency’s copyrighted web site or to its trademarked logo?
To help ensure the accuracy of the information presented, we
discussed with agency representatives the examples and other
instances when we specifically mention a state agency by name
in the body of the report. ■
13
CHAPTER 1
State Agencies Generally Lack
Knowledge of and Could
Improve Control Over Their
Intellectual Property
CHAPTER SUMMARY
O
ur review of the intellectual property owned by state
agencies and the policies and procedures used to
administer it revealed that state agencies do not always
know that they actually own intellectual property and are not
always aware of their intellectual property rights. As a result,
they could miss opportunities to act against individuals or
entities that use the State’s intellectual property inappropriately.
One indication of the lack of knowledge is that 74 state agencies
indicated that they own no intellectual property when in fact
they have web sites, which are typically protected by copyright
law. Further, although a database for the federal Copyright
Office shows that the State owns approximately 1,600 registered
copyrights, state agencies reported owning only one-fourth of
that amount.
State agencies that are unaware of their intellectual property
holdings and the rights that accompany them risk missing
opportunities to prevent their misuse. For example, a state
agency could fail to act against a vendor that deceives consum-
ers by inappropriately using a state-owned trademark, such as an
agency’s logo, in connection with its product or service to imply
state approval. Because of its lack of knowledge, an agency
might not be able to stop a publisher from improperly selling
state-copyrighted information that a state agency otherwise
provides free or at cost. Likewise, a state agency that is unaware
of intellectual property matters could fail to patent a device it
had invented, enabling someone other than the State to receive
the patent and then charge the State a license fee to use its own
device. Being aware of the intellectual property it owns and of
its intellectual property rights would allow a state agency to act
quickly against individuals or entities that inappropriately use
its products, or infringe on its right to control how they are
14
used. When a state agency is able to identify an infringement, it
can use tools such as cease-and-desist letters or the judicial
system to stop it.
State agencies also lack guidance from the State and have incom-
plete internal policies regarding intellectual property. State law
does not expressly authorize all state agencies to own and
protect all their intellectual property. When it does address
intellectual property, it typically allows a specific state agency to
own a certain type of intellectual property or authorizes state
agencies to protect certain products such as software that can be
safeguarded by copyrights. Further, statewide policies, such as
those found in the State Administrative Manual or the State
Contracting Manual, do not address intellectual property. When
it comes to internal policies, only 43 of the 220 state agencies
report having written policies concerning intellectual property.
Interestingly, none of these policies provides state agencies with
complete guidance for, among other things, identifying products
that could be intellectual property, determining whether to
formally protect intellectual property, and enforcing their rights
against those infringing on the intellectual property.
A final issue we observed was the limited extent to which state
agencies appeared to capitalize on their intellectual property.
Additionally, state agencies lack guidance that describes the
circumstances under which they can or should capitalize on
their intellectual property. We also raise the question of whether
the State’s use of standard contract language that essentially
grants contractors a free license to use or sell intellectual property
developed through some of its contracts is appropriate.
These findings indicate a need for centralized state guidance
concerning intellectual-property administration and a campaign
to educate state agencies on their intellectual property rights
and responsibilities.
STATE AGENCIES DO NOT ALWAYS KNOW ABOUT THE
INTELLECTUAL PROPERTY THEY OWN OR THEIR
RIGHTS TO OWN IT
Our survey of state agencies and other work we performed
revealed that many agencies do not realize they own intellectual
property, are not aware of the quantity of intellectual property
they own, or are unclear or incorrect about their ability to own
15
or formally protect through registration their intellectual
property.
4
Not being knowledgeable about intellectual property
increases the risk that state agencies will not act against others
that misuse their protected material.
One indication that many state agencies may not be aware of all
intellectual property they own is that they did not identify all of
it in their survey responses. Although our search of the copyright
database of the federal Copyright Office disclosed approximately
1,600 registered copyrights owned by 60 state agencies, only
23 agencies identified 400 such copyrights in their survey
responses. For 16 of these 60 agencies, data from the Copyright
Office showed 10 or more registered copyrights that each agency
had not counted. For example, although California State
University, Dominguez Hills, reported in its survey response
that it held no copyrights, Copyright Office data shows that it
actually held 54 registered copyrights.
Another indication that not all state agencies have adequate
knowledge of their intellectual property holdings is that some
agencies either did not or could not tell us how much intellectual
property they own. For instance, despite acknowledging that it
possesses intellectual property, the California Department of
Education reported that it did not have the resources to quantify
its holdings. The Copyright Office database shows that the
department in fact owns 303 registered copyrights. The existence
of these registered copyrights suggests that the department also
holds many unregistered copyrights.
Some state agencies do not routinely keep track of what intellec-
tual property they actually own. Five state agencies that reported
owning 30 or more items of intellectual property did not provide a
written inventory of their intellectual property with their survey
responses. Further, many state agencies did not acknowledge
common items of intellectual property. Specifically, 74 state
agencies that reported not owning any intellectual property
actually have web sites, which are typically protected by copyright
law. Also, the web sites for 33 of these state agencies show logos,
which are a form of trademark.
A final indication that some state agencies are not knowledgeable
about their intellectual property is that some appear to be
unclear or incorrect about their ability or right to own or register
4
See the Introduction for a discussion of registered and unregistered copyrights
and trademarks.
Many state agencies
did not report all the
copyrights they owned.
16
intellectual property. Although state agencies have the legal
authority to own and protect their intellectual property, nine
state agencies stated in their survey responses that they had
either no legal authority to formally register their intellectual
property or no authority to own it. For example, the Department
of Finance indicated that it does not have the authority to
formally register its intellectual property. Additionally, the
California State Library believes that, other than software, it is
not authorized to own intellectual property. After we pointed
out that federal Copyright Office data showed that it owned
three registered copyrights, the California State Library stated
that its staff had obtained the copyrights without proper authori-
zation and that it was going to cancel its copyright registrations.
STATE AGENCIES RISK BEING UNABLE TO CONTROL
MISUSE OF THEIR INTELLECTUAL PROPERTY
If state agencies fail to properly identify, manage, and protect
their intellectual property, inappropriate use and missed oppor-
tunities can result. Specific effects can include the unauthorized
use of copyrighted material or trademarks, missed patent oppor-
tunities, and improper disclosure of the State’s trade secrets.
Unauthorized Use of Copyrighted Material Could
Harm the Public
When state agencies are not familiar with their copyrighted
material or do not know their rights under copyright law, they
can be ill-prepared to prevent unauthorized and inappropriate
use of copyrighted material. Failure to prevent such use can
mislead or harm the public. However, when state agencies are
familiar with their copyright material and know their rights
under copyright law, they can prevent individuals or entities
from inappropriately using state-owned property.
For example, because it knew about its rights under copyright
law, the Department of Motor Vehicles was able to stop the
unauthorized distribution of answers to its drivers’ examination.
According to its management, when it found web sites and
foreign language telephone books that distributed answers to its
drivers’ examination, the Department of Motor Vehicles
registered its copyright for the examinations and answers. Since
then, the Department of Motor Vehicles has not discovered
any announcements for the sale or distribution of answers to
the examination.
Nine state agencies
mistakenly believe that
they either had no legal
authority to register their
intellectual property or
no authority to own it.
17
Unauthorized Use of Trademarks Can Incorrectly Imply
State Endorsement or Lead to Confusion
When state agencies do not know or recognize the trademarks
they own or know the rights they possess under trademark law,
they may fail to prevent inappropriate use of their trademarks. If
the State does not prevent others from inappropriately using its
trademarks, the public may be confused or harmed. Similar to
the retail industry, which uses trademarks to associate its products
or services with a set of positive values, the State uses trademarks
to identify official state departments, programs, or state-sponsored
activities for the public’s benefit. Some state agencies allow or
even require businesses that meet specific program requirements
to use designated logos to signify authorized program participa-
tion. Such logos may be called “certification marks,” a specific
type of trademark. For example, the Department of Conservation
allows program participants, such as certified recycling centers,
to signify their state-approved participation in its recycling
program by using the department’s recycling logo. Likewise, the
Bureau of Automotive Repair, part of the Department of Consumer
Affairs, requires certified participants in its smog certification
program to display its smog check logo. Because the use of such
logos implies that the State has sanctioned these businesses, a
misused trademark can improperly suggest that the State has
given its approval of a product or service that it has not endorsed.
Misused trademarks can harm the public in other ways. For
example, the California State Lottery Commission recently won
a court decision concerning infringement on its federally
registered trademarks. Because it was aware of its rights under
trademark law, the commission was able to prevent a person
from operating five web sites that resembled its official web site.
This trademark infringement confused many individuals who
went to the misleading web sites searching for the official
California State Lottery Commission web site. In another instance,
the California Department of Alcohol and Drug Programs was
able to prevent a person from operating a pornographic web site
with a name that was identical to one of the department’s
federally registered trademarks associated with a program aimed
at teenagers.
Poor Patent Practices Can Prove Costly to the State
Although few state agencies report owning patents, the missions
of some, such as the California Energy Commission and the
California Prison Industry Authority, allow for such development.
Because it knew its
trademark rights, one
state agency was able to
stop the operation of a
pornographic web site
that used the same
name as one of
its trademarks.
18
When a state agency does not know which items or processes it
can patent or which rights it possesses under patent law, it may
be unable to keep others from patenting items it rightfully owns.
In addition, the State loses the opportunity to recoup some or all
development costs and to generate additional revenues when a
state agency misses opportunities to patent inventions.
Although we did not find examples in California, we did find an
agency in another state that had experienced problems arising
from failure to obtain patents. Until it received statutory authority
in 1995 to own and protect its intellectual property, the Texas
Department of Transportation experienced a number of owner-
ship disputes over intellectual property, including patents, that
parties such as contractors developed for the department. In
some cases, it lost ownership of the property and the right to
unrestricted use of the property. In other cases, it retained the
right to use the property but was not compensated or given
recognition of ownership when others who developed the
property for the department sold it for commercial gain.
A related issue is that the State does not have a statewide policy
for patents to help ensure that it retains ownership of the rights
to potentially patentable products or processes developed by its
employees working on state time using state resources. When
state employees create copyrightable works as part of their jobs,
the legal principle of “works made for hire” holds, meaning that
their employers typically own the copyrights over the created
works. However, this same principle does not necessarily apply
to state employees who create patentable products on the job.
Under some circumstances, state employees can secure the
patent rights to inventions created on the job and require the
State to acquire licenses to use them.
To avoid the possible loss of patent rights to products developed
as part of an employee’s job, private-sector firms and research
universities can require their employees to sign documents
acknowledging that the rights to any patentable works developed
as part of their jobs belong to the employers. These documents
are called invention assignment agreements. To ensure that
employee creativity still flourishes under invention assignment
agreements, employers may give their employees incentives
such as a percentage of any revenue generated from the sale or
licensing of their inventions.
The State lacks a
statewide policy for
patents to help ensure
that it retains ownership
to patentable products
developed using
state resources.
19
Invention assignment agreements can help to preserve the
State’s right to assert patent ownership and could help
strengthen the State’s claim of ownership in court should a
patent dispute arise. In fact, two of the four state agencies that
own patents have used invention assignment agreements with
one or more of their employees. Although few state agencies
report owning patents, other state agencies may engage in
activities from which their employees might develop products or
processes that could be patented. Thus, the need for invention
assignment agreements could be greater than otherwise indi-
cated by the results of our survey. Therefore, guidance from the
State concerning the proper use of these agreements may
encourage the other two state agencies to consider them, and it
may assist other state agencies that develop inventions or
processes worth patenting in the future.
Trade Secrets Disclosure Can Harm the State
Few state agencies report owning trade secrets. By definition, a
state agency must derive actual or potential economic value
from a trade secret based on its not being generally known to
the public or to other entities that can obtain economic value
from its disclosure or use. Since few state agencies appear to
generate economic value from their work, there may be only
limited need to protect state-owned trade secrets. However,
agencies with a quasi-business mission, such as the California
State Lottery Commission and the California Prison Industry
Authority, and agencies that develop products or processes that
are potentially marketable to other states or the private sector,
such as the Department of Forestry and Fire Protection, are more
likely to develop trade secrets.
Disclosure of state-owned trade secrets could financially harm
the State if an agency spends significant resources developing
information and it is divulged without the State receiving fair
compensation. For example, the California State Lottery Commis-
sion has developed software security and validation procedures
and other processes that it protects as trade secrets to help
ensure lottery game integrity and security. This information is
potentially marketable to other state lottery agencies and firms
in the gaming industry.
The California State
Lottery Commission has
developed processes that
it protects as trade
secrets to help ensure
lottery game integrity
and security.
20
STATE AGENCY OWNERSHIP OF INTELLECTUAL
PROPERTY STEMS FROM MANY SOURCES
As we mentioned earlier, some state agencies believe they cannot
own or formally register their intellectual property. However, two
court decisions support the position that state agencies can
legally own and protect their intellectual property. Additionally,
certain state agencies cite other reasons why they believe they
can own intellectual property.
State law does not expressly grant all state agencies the legal
ability to own intellectual property, but it can be inferred.
Specifically, we believe that this ability falls reasonably within
the bounds of “powers incidental” to the authority granted to
state agencies by statute. Decisions in two court cases support
the proposition that state agencies possess those powers that are
necessarily or fairly implied or incidental to that authority.
5
Because state agencies are obligated to protect their property—
typically thought of as assets such as equipment, supplies, and
the like—it seems reasonable to conclude that state agencies can
protect, and therefore own, intellectual property.
State agencies cite a variety of other reasons to justify their
ownership of intellectual property. For instance, the Department
of Conservation cites Section 11152 of the California Government
Code as one of the sources for its authority to issue all policies,
including those related to owning intellectual property.
Section 11152 states that the head of each department may
adopt rules and regulations as needed to govern the activities of
the department. Additionally, the Commission on Peace Officer
Standards and Training states that it is not aware of any statutory
authority that precludes it from registering its intellectual property.
Finally, some state agencies cite California law that specifically
authorizes them to own certain types of intellectual property.
Current State Laws Address Agencies’ Intellectual
Property Rights in Piecemeal Fashion
The State provides only limited direction to its agencies concern-
ing the administration of state-owned intellectual property. In
our review of California laws, we found none prohibiting state
agencies from owning intellectual property, but we also found
no laws specifically granting them general authority to own all
types of intellectual property. Laws that address intellectual
5
See Dickey v. Raisin Proration Zone No. 1, 24 Cal. 2d 796, (1944), cert. denied; and First
Industrial Loan Co. v. Daugherty, 26 Cal. 2d 545, (1945).
The State’s authority
to own intellectual
property can be
reasonably inferred.
21
property are rather piecemeal. For example, state law allows all
state agencies to own and protect trade secrets and copyrights
on software. California laws also allow at least one state agency,
the Department of Toxic Substances Control, to own copyrights
in general. It also allows the California Energy Commission to
claim a share of the rights in intellectual property developed
under certain agreements, and it permits the commission to
claim ownership of this intellectual property under certain
conditions. We even found state laws that specifically prohibit
unauthorized use of certain state agency names such as the
Department of Motor Vehicles, the California Community
Colleges, and the California State University. Current state law
also forbids the unauthorized use of the logos of certain state
agencies, such as the Department of Motor Vehicles and the
California Highway Patrol, as well as the unauthorized use of the
Great Seal of the State of California.
Although California laws address some aspects of state-owned
intellectual property, other state-level sources provide little
written guidance. Statewide policy manuals such as the State
Administrative Manual and the State Contracting Manual
contain no substantive guidance concerning intellectual
property. Moreover, staff of the California Attorney General’s
Office stated that the office has issued no published legal opin-
ions supporting or opposing state agencies’ authority to own
intellectual property.
This piecemeal approach to intellectual property creates confu-
sion among state agencies. Tellingly, 58 state agencies indicated
in their responses to our survey that guidance—both general
and specific—from the State concerning the administration of
intellectual property would be helpful. We discuss the comments
of these 58 agencies further in Chapter 2.
Arguments Against State Agency Ownership of Intellectual
Property Are Based on Concerns the State Can Address
During our review, we identified two primary arguments against
state agency ownership of intellectual property. The first is that
state agency ownership can unreasonably restrict otherwise
legally allowable public access to state-produced information.
The second argument is that state agency ownership can lead to
taxpayers paying twice for the same item from the State—once
when their taxes are used to develop the item and then again
when they have to purchase the item. The State can address the
concerns upon which both these arguments are based.
Written guidance
addressing state-owned
intellectual property
is minimal.
22
One concern arising from state ownership of intellectual property
is that ownership conflicts with the principle of open
government—as embodied in the California Public Records Act—
by restricting the dissemination of information. The argument is
that state agencies could use intellectual property laws to deny
access to information they create that would otherwise be
accessible. In at least one state, this threat exists because materials
to which access is limited by copyright or patents can be legally
withheld from the public. However, since California does not
have similar exclusions, this threat seems remote. Even so, the
State can answer this concern by clarifying existing law to
declare its intent that protection under intellectual property laws
does not preclude state agencies from disclosing otherwise
accessible information. Such a clarification, while not requiring
state agencies to disclose material kept confidential under trade
secret laws, would enable state agencies to provide access to
material protected by other intellectual property laws.
Another way the State can handle the argument that intellectual
property ownership restricts public access to government
information is by structuring its ownership rights to encourage
information dissemination while discouraging unauthorized
private economic gain or other inappropriate use. For example,
the State could provide the public with information that is
subject to a license or a terms-of-use agreement. This license or
agreement would restrict the information’s use to private,
noncommercial purposes. Consequently, the license or agreement
would allow public access to the information and, indeed, the
right to use the information in any acceptable manner.
Precedence exists in California for controlling the use of informa-
tion once it is provided to the public. Specifically, the California
Public Records Act permits disclosure of certain crime-related
information only for scholarly, journalistic, political, or
governmental purposes, or for investigation purposes by a
licensed private investigator. Such an arrangement continues to
support the principle of public access while preventing inappro-
priate economic gain or other unacceptable use from publicly
funded activities. Thus, protection of intellectual property and
access to public records do not have to be mutually exclusive
ideals working at cross purposes; they can work in tandem to
protect the public’s interest.
Moreover, intellectual property protection and exclusive licensing
arrangements sometimes are necessary to achieve wider dissemi-
nation or to serve the public’s best interest. In the Introduction
State ownership of
intellectual property
does not necessarily
conflict with the
California Public
Records Act.
23
to this report, we discussed how research universities use exclusive
licensing arrangements with corporate partners to convert their
intellectual property into marketable products. Another example
is the Office of Administrative Law, which is responsible for,
among other things, ensuring that state regulations are accessible
to the public. Because it does not have the necessary expertise
in-house, the Office of Administrative Law licenses a private
company to publish the regulations. The publisher, which will
pay the office about $2.5 million over three years for the exclusive
rights to publish the regulations, provides free copies to all county
law libraries and to depository libraries in the State and makes a
searchable version of the regulations available free on the Internet.
It also sells copies of the regulations to other organizations. The
Office of Administrative Law’s licensing arrangement ensures
that the public has access to state regulations while it returns
revenue to the State.
A second argument against state ownership of intellectual
property is that people “pay twice” for state-developed informa-
tion, first when their taxes are used to develop the information
and again when they are forced to purchase it. We believe that it
may be appropriate in some circumstances to charge for
state-developed intellectual property. As we note later in this
chapter, the decision by the State to license or sell its intellectual
property should rest primarily on whether such licensing or sale
is in the public’s best interest. However, when unauthorized
vendors repackage and sell information that the State otherwise
provides free, the public is indeed inappropriately paying twice
for that information. As we described earlier, licenses or terms-
of-use agreements are designed to inhibit private parties from
improperly profiting on the State’s intellectual property. They
would also inhibit repackaging and selling information that the
State provides free.
STATE AGENCY POLICIES CONCERNING INTELLECTUAL
PROPERTY ARE GENERALLY INCOMPLETE
In the absence of clear guidance from the State, some state
agencies have developed written policies for administering their
intellectual property. None of the policies provided to us, how-
ever, address all six areas we believe are necessary at minimum
for sound intellectual property administration. In response to
our survey, 43 state agencies provided copies of their policies
concerning intellectual property. Of the remaining 177 state
agencies, 117 stated that they had no policies concerning
Precedence exists for
the State controlling
how others use state-
provided information.
24
intellectual property, 23 stated that they had only
unwritten policies, and 37 failed to answer the
question. Twenty of the 43 state agencies submit-
ting policies were either the Office of the Chancel-
lor or campuses of the California State University.
We reviewed state agency policies to see whether
they addressed six areas that we believe are impor-
tant to ensure proper management of intellectual
property. These six areas ranged from identification
of potential intellectual property to enforcement of
intellectual property rights. No agency’s policies
addressed all six areas. Of the 43 agencies submit-
ting policies, only 28 covered at least one area. In
fact, only 2 state agencies, the State Bar of California
and the Department of Conservation, had policies
concerning as many as four of the areas.
Of the 23 agencies that provided written policies
for identifying products that could possibly be
intellectual property, 17 were campuses of the
California State University. An interesting practice
used by the Commission on Peace Officer Standards
and Training is to copyright all training materials
it produces to inhibit unauthorized commercial
use. The California Department of Corrections, meanwhile,
allows its employees to copyright at their own expense any
publications prepared as part of their official duties. However,
the copyright is considered to be held in trust for the department
if the material is pertinent to the department.
Thirteen state agencies provided written policies for determining
whether to protect products as intellectual property. For example,
one factor used by California State University, Chico, is the level
of direct supervision or oversight the university has over a
product; the more the university controls the acceptance of the
final work, the greater the likelihood of copyrighting. Another
three state agencies also have written policies for determining
whether a work product should be protected formally through
registration or informally. As we described in the Introduction,
registration of copyrights or trademarks provides state agencies
additional protections for their intellectual property. The Depart-
ment of Conservation bases its decision on whether any statutes
deny formal protection of a particular product, whether the
benefits outweigh the costs, and whether the public interest is
Six Areas That an Intellectual
Property Policy Should Address
1. Identification of products that could be
intellectual property whether created by
employees or contractors.
2. Factors for determining whether to protect
products as intellectual property (e.g.,
potential commercial value, need for
ensuring accuracy or access, etc.).
3. Criteria for determining whether possible
copyrights or trademarks should be
protected through registration.
4. Maintenance of an inventory of intellectual
property.
5. Procedures for allowing others to use
intellectual property.
6. Guidance for pursuing infringement of
intellectual property rights (e.g., referral to
legal counsel, use of cease-and-desist calls
or letters, etc.).
25
best served by formally protecting a product. No state agency
has any written requirements concerning maintaining an
inventory of its intellectual property.
Only 12 state agencies provided written policies concerning
requests to use their intellectual property. The Department of
Boating and Waterways grants permission to reproduce and
distribute its intellectual property on condition that the requester
does not profit from the reproduction or distribution, does not
alter the material, and includes the department’s copyright
notice on all printed copies. No state agency provided written
policies concerning the enforcement of its intellectual property
rights against alleged violators.
When state agencies do not establish and follow adequate
policies and procedures concerning their intellectual property,
they increase the risk that they will not recognize the need to
make critical decisions in a consistent and deliberative manner
to best protect the intellectual property assets of the State.
STATE AGENCIES CAPITALIZE ON INTELLECTUAL
PROPERTY ONLY TO A LIMITED EXTENT
Another issue that came to our attention was the limited extent
to which state agencies capitalize on their intellectual property.
Although some state agencies capitalized on their intellectual
property by selling it or licensing it to others, the survey responses
for most indicated that they did not. Given that only 16 state
agencies we surveyed stated that they formally protect their
intellectual property to generate revenue, and given that the
State owns the rights to at least 113,000 identified intellectual
property items, it can be argued that state agencies are missing
opportunities to capitalize on their intellectual property. Two
specific concerns came to our attention. First, the State does not
have guidance that describes the circumstances under which
state agencies can or should capitalize on their intellectual
property or the factors that state agencies should consider when
deciding whether to sell or license their intellectual property.
Second, the State’s use of standard language that essentially gives
contractors a free license to use or sell intellectual property they
developed under some state-funded contracts raises questions as
to whether this is in the best interest of the public.
Weak policies for
administering intellectual
property increase
the risk of poor
decisions regarding
its management.
26
State-Issued Guidance for Capitalization
of Intellectual Property Is Lacking
Obviously, opportunities exist for the State to capitalize on its
intellectual property; some state agencies currently do so. For
example, as we mentioned earlier, the Office of Administrative
Law stands to make about $2.5 million over three years by
licensing the publication rights for one of its documents to a
publisher. However, we found no state-issued guidance describ-
ing the circumstances under which state agencies can or should
take advantage of these opportunities or the factors they should
consider when making such decisions.
A state agency’s decision to capitalize on its intellectual property
should not be made lightly. This decision needs to rest primarily
on whether the licensing or sale of its intellectual property will
be in the public’s best interest. Two factors helpful when consid-
ering public interest are the purpose for creating the intellectual
property and the purpose for which other parties will use it.
Knowing why a product was produced or the goal a state agency
hopes to achieve through the product can often indicate the
route to achieve the public’s best interest. For example, one of
the purposes of the California Driver Handbook is to achieve a
higher rate of compliance with California’s traffic laws. If the
Department of Motor Vehicles attempted to capitalize on this
document by licensing its publication and sale (or even selling it
itself), a likely effect is that relatively fewer drivers would obtain
the handbook. Consequently, fewer drivers would be familiar
with the laws, and compliance with traffic laws would likely
decrease. Clearly, if the Department of Motor Vehicles expected
lower compliance, which runs counter to the goal it hopes to
achieve, it would not be in the public’s best interest to charge for
the handbook. The Department of Motor Vehicles currently
provides this document at no cost and does not intend to sell it.
It may also be useful to know how others intend to use the
intellectual property. For example, a state agency may have no
concerns about providing copies of documents to a member of
the public who wants simply to keep an eye on the operations of
the State. In fact, the law may require the agency to provide
access to or copies of the intellectual property in this situation.
On the other hand, the state agency may object to someone
commercially profiting from its intellectual property if it does
not receive proper compensation, especially since it developed
the material at state expense. A few state agencies indicated in
The public’s best interest
should be key in
determining whether to
capitalize on state-owned
intellectual property.
27
their survey responses that it would be an illegal “gift of public
funds” to allow others to make a profit on state-produced intel-
lectual property. As discussed earlier, state agencies could inhibit
unauthorized profit making on their intellectual property by
limiting its use to only private, noncommercial purposes.
In addition to these two factors, others may also come into play.
However, absent any direction from the State, it is likely that
state agencies will continue to miss opportunities to capitalize
on their intellectual property when appropriate.
Standard Contract Language Raises Questions
That Should Be Considered Further
During our review, we also noted standard contract language
regarding intellectual property rights that raises questions as to
whether it is in the best interest of the public. The Department
of General Services requires state-funded contracts for the devel-
opment of information technology that exceed $500,000 to
include standard language that essentially gives the contractors
a free license to use and sell intellectual property developed
under these contracts. Specifically, the standard language grants
contractors a “nonexclusive, royalty-free license for any such
invention, discovery, or improvement” arising from the contracts
and states that contractors may sub-license the intellectual
property to others on the same royalty-free basis. Thus, it raises
the question as to why the State is apparently giving a portion of
its intellectual property rights to contractors without considering
the potential value of these rights. The State’s inclusion of this
language in its contracts may result in missed opportunities to
either lower contract costs or, if a licensing arrangement can be
made, to establish additional revenue sources.
The chief counsel of the Department of General Services
comments that it is speculative whether the State would actually
receive any financial benefit as a result of changing the standard
language and that there are few, if any, demonstrable instances
of contractors being “enriched at the expense of California
taxpayers.” Additionally, he states that it is costly to enforce
intellectual property rights and that the State is not currently
equipped to pursue remedies. He believes that the existing
language is an appropriate balance of these factors plus others,
including the unknown value of the rights to intellectual property
before contracts are begun and the need for contractors to use
incremental discoveries for other customers without being
burdened by costly tracking and accounting procedures. He also
Knowledge of how state-
owned intellectual
property will be used can
help determine the
public’s best interest.
28
stated that changes in the language could result in fewer vendors
bidding for state contracts and increased costs of information
technology products. Further, he indicates that, to the extent
that the private sector benefits from working on state contracts,
it should be regarded as incidental only and that such incidental
benefit is “in the best interest of contributing to the creativity of
the State’s vital technology resources.” Finally, he believes that
any change in the current language should be considered only
after careful consultation with affected stakeholders.
Although the chief counsel’s arguments against changing the
standard language may have merit, it still seems questionable to
us that the State would enter the competitive process for
selecting contractors having already given them a free license
to use and sell intellectual property they ultimately develop
for the State. We believe the question of whether the standard
language is in the public’s best interest is a matter that merits
further consideration.
RECOMMENDATIONS
The Legislature should clarify existing state law to specifically
allow all state agencies to own and, if necessary, register the
intellectual property they create or otherwise acquire when such
actions are deemed to be in the public’s best interest.
The Legislature should also clarify existing law to declare its
intent that protection of state-developed products under
intellectual property laws does not preclude state agencies from
disclosing information otherwise accessible under the California
Public Records Act.
The Legislature should designate one state agency as the lead for
developing intellectual property policies and guidance. This lead
agency should also, as necessary, recommend any statutory
clarifications necessary to better protect the State’s intellectual
property. Such an agency should have the ability to issue
guidelines that all state entities could follow.
This lead agency should be responsible for the following tasks:
• Establishing an outreach campaign informing state agencies
of their rights and responsibilities concerning intellectual
property.
The Department of
General Services favors
keeping the existing
standard contract
language for
several reasons.
29
• Developing guidelines that state agencies can use to manage
their intellectual property. These guidelines should cover:
❍ General policy development for state agencies’ intellectual
property administration.
❍ Identification of employee or contractor products that
could be potential intellectual property.
❍ Factors for deciding whether to protect products as
intellectual property.
❍ Criteria for deciding whether to seek the additional
protections provided by registering their intellectual
property or relying on the protections provided for
unregistered intellectual property.
❍ Maintenance of an inventory of intellectual property.
❍ Procedures for allowing others to use state-owned intel-
lectual property.
❍ Guidance for pursuing infringement of intellectual
property rights.
❍ Factors that state agencies should consider when deciding
whether to sell their intellectual property or license it
to others.
• Developing sample invention assignment agreements that
state agencies can consider if they believe it is necessary to
secure the rights to potentially patentable items created by
their employees on work time using state resources.
• Developing sample language for licenses or terms-of-use
agreements that state agencies can use to limit the use of their
intellectual property by others to only appropriate purposes.
Finally, the Legislature should consider whether the interest of
the public is best served when the State uses standard contract
language that essentially gives vendors a free license to use and
sell intellectual property they develop as a result of state-funded
contracts. ■
30
Blank page inserted for reproduction purposes only.
31
CHAPTER 2
Survey Responses Reveal Extent
of State Agencies’ Ownership
and Administration of
Intellectual Property
CHAPTER SUMMARY
A
s part of this audit, we developed and issued a survey to
state agencies concerning their ownership and adminis-
tration of intellectual property. Among other things, we
asked the State’s 220 agencies to identify the types and quanti-
ties of registered and unregistered intellectual property they
own. According to the survey responses we received and other
work we performed, the State owns a fair amount of intellectual
property, most of it copyrights. Our review disclosed that a little
more than half of all state agencies have intellectual property.
However, other information obtained during the course of our
work led us to conclude that the State likely owns more intellec-
tual property than we describe in this report.
We also asked state agencies to tell us the reasons for registering
or not registering their intellectual property, the reasons for
assigning the rights to their intellectual property to others, the
tools they used to enforce their intellectual property rights, and
their opinions about the extent to which the State should
establish guidelines for managing and protecting intellectual
property. Among the state agencies answering questions about
intellectual property registration, most cited preventing unau-
thorized use or ensuring control of the content as the primary
reasons for registering. Concerning assignment of rights to
others, few state agencies reported doing so to generate revenue.
In those limited instances in which state agencies have enforced
their intellectual property rights, the State generally has stopped
infringement. Finally, many state agencies would like to see
additional guidance from the State concerning administration of
intellectual property.
32
MORE THAN HALF OF STATE AGENCIES HAVE
INTELLECTUAL PROPERTY
To identify the nature and extent of state-owned intellectual
property, we conducted a survey of the State’s 220 agencies,
asking a variety of questions ranging from the policies state
agencies used to administer their intellectual
property to how successful they were in fending off
violators. We received responses from all 220 state
agencies. In addition to the survey responses, we
relied on several other sources to help compile the
inventory information presented in this report: site
visits to 7 state agencies to verify their responses,
reviews of copyright registrations at the federal
Copyright Office, patent information and
trademark registrations at the federal Patent and
Trademark Office, and trademark registrations at
California’s Secretary of State. Of the State’s 220
agencies, 125 (57 percent) have at least one type of
intellectual property. In total, these agencies have
more than 113,000 identified items of intellectual
property. In fact, as indicated in Table 1, one
agency owns about 88 percent of all state-owned
intellectual property. The 20 state agencies with
the most identified intellectual property own almost 99 percent
of it. See Appendix B for a summary inventory of intellectual
property held by the 125 agencies.
The majority of state-owned intellectual property consists of
copyrights; 92 state agencies own nearly 112,000 copyrights.
The California Department of Parks and Recreation has the
largest share, with more than 100,000 copyrights, mostly
unregistered slides and photographs. The copyrights held by the
Department of Finance, all of which are unregistered, include
approximately 3,500 software items, about 155 publications,
59 items of data, and 56 maps.
Trademarks are the second most frequent type of intellectual
property owned by state agencies; 80 agencies own 462 trade-
marks. The California State Lottery Commission owns 18 percent
(84 of 462) of all state-owned trademarks, including the phrases
California Lottery, Big Spin, and Scratchers. The California State
Lottery Commission registers its trademarks to protect the image
and integrity of its name and logos.
Survey Topics
• Types and quantities of the intellectual
property owned.
• Policies and procedures used to administer
intellectual property.
• Reasons why agencies choose to register or
not register their intellectual property.
• Tools used to thwart infringement.
• Whether the State should establish
guidelines for managing and protecting
intellectual property.
33
TABLE 1
Summary of the Types and Amounts of Identified Intellectual
Property Owned By State Agencies
Trade
Agency Name Copyrights Trademarks Secrets Patents Other
*
Totals
Parks and Recreation, California Department of 100,005 10 100,015
Finance, Department of 3,770 2 3,772
Forestry and Fire Protection, Department of 1,912 86 12 3 2,013
Bar of California, State 868 7 875
Judicial Council of California 808 8 816
Peace Officer Standards and Training, Commission on 740 1 741
Health Services, Department of 736 2 738
Teachers’ Retirement System, California State 3 607 610
Integrated Waste Management Board, California 545 6 551
Community Colleges, California 332 1 1 334
Education, California Department of 303 303
African American Museum, California 274 274
Humboldt State University (California State University) 203 203
Criminal Justice Planning, Office of 177 177
Little Hoover Commission 155 155
Sonoma State University (California State University) 134 3 13 150
Motor Vehicles, Department of 105 1 2 108
Lottery Commission, California State 2 84 5 91
Office of the Chancellor (California State University) 68 1 69
Public Employees’ Retirement System, California 60 2 62
The other 200 state agencies 765 245 1 15 134 1,160
Totals 111,807 462 20 15 913 113,217
Sources: Survey responses from state agencies, copyright registrations at the federal Copyright Office, patent information and
trademark registrations at the federal Patent and Trademark Office, trademark registrations at California’s Secretary of
State, and our site visits to seven state agencies.
Note: State agencies did not always report precise numbers in the inventories they submitted with their surveys. For example,
the California Department of Parks and Recreation reported that it had “100,000+” copyrighted photographs and slides.
* The amounts reported in this column, although they accurately reflect what state agencies reported to us, may not be truly
“other” types of intellectual property. State agencies sometimes included items in this category that more accurately belong in
another category. For example, within this category, the California State Teachers’ Retirement System included software,
publications, and web site addresses; and the Little Hoover Commission included reports.
34
The State also owns some trade secrets and patents. Just four
agencies possess the 20 state-owned trade secrets. The Depart-
ment of Forestry and Fire Protection owns 12 of the 20 trade
secrets to protect the processes it developed for reformulating
and refurbishing mechanical parts and maintenance methods
for its fleet of aircraft. Similarly, four state agencies—California
State University, Fullerton; the Department of Transportation;
the California Prison Industry Authority; and the California
Energy Commission—own the State’s 15 patents. State-owned
patents include wheelchair locks that an employee of the
Department of Transportation developed and performance-
enhanced, gas turbine power plants developed by an employee
of the California Energy Commission.
The specific intellectual property items owned by state agencies
vary. They include maps owned by the Department of Finance
and the Department of Forestry and Fire Protection, photographs
and slides owned by the Department of Parks and Recreation,
and inventions owned by the California Energy Commission.
Table 2 shows the intellectual property items owned by state
agencies. Note that because state agencies’ responses to our
survey were occasionally inconsistent, the amounts listed in
Table 2 do not reconcile to those in Table 1.
TABLE 2
Intellectual Property Items That State Agencies
Report Owning
Description of Item Total Quantity Identified
Photographs and slides 100,000
Software 4,797
Publications 3,656
Other (e.g., videotapes and audiotapes, etc.) 1,570
Maps 1,210
Logos 532
Web sites 476
Data 261
Formulas 108
New processes 108
Inventions 20
Total 112,738
Source: Survey responses from state agencies.
The State owns a
variety of intellectual
property items such as
photographs, maps,
and software.
35
SURVEY DATA LIKELY DOES NOT REFLECT ALL
STATE-OWNED INTELLECTUAL PROPERTY
When combined with the concerns we described in Chapter 1,
other information that we obtained during our review causes us
to believe that the State likely owns more intellectual property
than we describe in this report. As we noted in Chapter 1, many
state agencies are not aware of the quantity of intellectual
property they own, do not recognize all intellectual property
they own, or are unclear or incorrect about their ability to own
or register intellectual property. Although our search of the
federal Copyright Office’s database disclosed approximately
1,600 state-owned registered copyrights for 60 state agencies,
state agencies reported owning only 400, or one-fourth of the
total. Further, although the Copyright Office shows that the
California Department of Education owns more than 300 reg-
istered copyrights, the department stated that it did not have
sufficient resources to quantify the amount of intellectual
property it owns. Also, 74 state agencies that reported having no
intellectual property actually had web sites, which are typically
protected by copyright laws, and the web sites for 33 of these
state agencies display logos, which likely qualify as trademarks.
Moreover, certain responses to our survey refer to unspecified
quantities of intellectual property. Notably, some state agencies
did not specifically quantify the intellectual property they
owned. For example, the Department of Conservation reported
that the maps it owns “numbers in the thousands,” while the
California Public Utilities Commission stated that it owns
“many thousands” of reports and other records that technically
have unregistered copyrights. Other state agencies described the
amount of intellectual property they owned as “numerous,”
“several,” “very few,” “unknown,” and “?.” Because state agencies
did not properly quantify their intellectual property in some
cases, we cannot include it in the State’s inventory.
While some state agencies gave vague answers, others attempted
to give at least ballpark estimates of the amount of intellectual
property they own. The California Department of Parks and
Recreation, for instance, indicated that it owns “100,000+” unreg-
istered copyrighted photographs and slides, the Department of
Finance reported that it owns “approximately” 3,500 unregistered
copyrighted software items, and the California State Lottery
Commission stated that it owns “~ 5” trade secrets. Although
not specific quantities, we included these amounts and other
similarly reported quantities in this report to better reflect how
Some state agencies
estimated the amount of
intellectual property they
owned, while others
could only provide vague
responses regarding what
they own.
36
much intellectual property the State owns. However, the lack of
precision in some state agencies’ responses indicates that the
numbers we report do not accurately reflect the State’s intellec-
tual property holdings.
Other departments included comments in their survey responses
that also indicate that the State owns more intellectual property
than disclosed. For example, the California Department of Parks
and Recreation stated that because its operations are decentral-
ized to 265 park units, each of which “may be responsible for
the creation and stewardship of intellectual property,” the time
frame for responding to our survey did not allow it to gather
information from each unit. Further, the Department of Health
Services stated that, given the vast array of its programs and the
extensive number of contracts and grants awarded, it is difficult
to provide an exact count of the intellectual property it owns.
We also believe the amount of intellectual property owned by
the State is higher than what we disclose in this report because
our reviews at seven state agencies, although limited in scope,
resulted in the identification of additional intellectual property.
For instance, the Commission on Peace Officer Standards and
Training has 530 more copyrighted documents than it originally
reported in its survey response. Also, the Department of
Pesticide Regulation has three logos that it did not recognize as
trademarks in its survey response, while the Department of
Toxic Substances Control has one. Although we corrected the
inventory for the unreported items, other state agencies that we
did not visit are likely to have made similar omissions.
Finally, we found it impracticable to search the federal databases
for intellectual property registered under other than the most
obvious of various permutations of their names, under former
names of state agencies, or under the names of state agencies
that no longer exist. Consequently, it is likely that these databases
could identify more state-owned intellectual property than we
disclose in this report. Although we corrected amounts of
intellectual property owned by the State when these errors came
to our attention, it is likely that other errors remain.
Federal databases for
copyrights, trademarks,
and patents may identify
more state-owned
intellectual property than
we include in this report.
37
OTHER SURVEY TOPICS INCLUDED REGISTRATION,
ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS,
ENFORCEMENT ACTIONS, AND THE EXTENT OF STATE
GUIDANCE NEEDED
In addition to identifying the quantities of intellectual property
owned by state agencies, the survey also inquired about why
state agencies registered or did not register their intellectual
property, why state agencies assigned their intellectual property
rights to other parties, actions taken by state agencies against
those who violated their intellectual property rights, and the
extent to which the State should provide guidance to its agencies
on managing and protecting their intellectual property.
Reasons for Formally Registering Intellectual Property Vary
Nearly one-third of the state agencies responding to our survey
provided reasons why they formally registered their intellectual
property. Most wanted to prevent unauthorized use or ensure
control over the contents. Far fewer registered their intellectual
property to ensure access to the property or to generate revenue.
Only 16 responded that they registered their intellectual prop-
erty to generate revenue. Eighty-nine state agencies responded
that they do not register their intellectual property for one or
more reasons. Most reported that the property was either already
in the public domain or that it was a non-value-added task. A
smaller number claimed that they lacked adequate resources,
either staff or funding, to formally register their intellectual
property. Six agencies responded that they lacked adequate
knowledge, expertise, guidance, or training to protect their
intellectual property.
Few State Agencies Have Transferred Their Intellectual
Property Rights
Only 36 state agencies reported having assigned their intellectual
property rights to other individuals or entities in the last five
years, and 30 agencies gave one or more reasons why. Of these,
11 agencies transferred their rights to recover a portion of the
development costs associated with the intellectual property, and
14 did it to reduce contract costs. All 5 agencies that indicated
they assigned their intellectual property rights to generate
revenue were campuses of the California State University. Further,
20 state agencies checked “other” in response to this question,
offering a variety of reasons for transferring their intellectual
property rights. For example, the Supreme Court assigned its
Few state agencies
register their
intellectual property
to generate revenue.
38
rights for a manual to a private legal publisher to reduce the
cost of publication and printing in exchange for providing free
copies to the courts.
When Enforcing Their Intellectual Property Rights,
State Agencies Are Typically Successful
A small portion of state agencies reported instances in which
they took steps to enforce their intellectual property rights. In
total, only 32 of the 220 state agencies responded that they had
acted against violators in the last five years. However, when state
agencies pursued violators on their intellectual property, they
usually were successful in stopping them without resorting
to litigation.
Examples of actions taken against alleged violators include 13 state
agencies reporting that they placed 144 telephone calls to warn
off violators. The Board for Professional Engineers and Land
Surveyors placed 100 of these calls. Similarly, 18 state agencies
reported sending cease-and-desist letters generated by their staff
on 63 separate occasions. Three state agencies—the California
State Lottery Commission, the California Department of Parks
and Recreation, and California State University, Fullerton—sent
more than half of these in-house letters. Eight state agencies
reported using outside counsel a total of 13 times to issue cease-
and-desist letters; the California State Lottery Commission led
this group by using outside counsel on 5 occasions. State agencies
reported that, generally, these informal actions stopped the
infringement or potential infringement.
One agency reported pursuing litigation to a successful
conclusion. As we discussed in Chapter 1, the California State
Lottery Commission successfully challenged an instance of
trademark infringement.
Many State Agencies Would Like Additional Guidance
From the State
Since we found little state-issued guidance concerning adminis-
tration of intellectual property, we asked state agencies about the
extent to which they believed that the State should establish
guidelines for managing and protecting intellectual property. Of
the 106 state agencies that responded to this question, 58, or
nearly 55 percent, indicated that they wanted some sort of
additional guidance or help from the State. Suggestions ranged
from the general to the specific. Some suggestions also applied
To enforce their
intellectual property
rights, state agencies
report taking steps such
as placing warning calls,
issuing cease-and-
desist letters, and
pursuing litigation.
39
to only one type of intellectual property. Other state agencies,
however, questioned either the need for the additional guidance
or the ease of implementing it.
The California Exposition and State Fair is one state agency that
provided a general suggestion concerning the issuance of state-
wide guidance. Specifically, it recommended that state agencies
be responsible for protecting their own intellectual property
based on general guidelines provided by the State. Further, the
Department of Alcoholic Beverage Control mentioned that the
State should establish guidelines for managing and protecting
intellectual property to protect the State and the public against
use by unauthorized individuals or groups.
Other departments made suggestions related to specific areas of
intellectual property administration. Concerning decisions
about whether to protect intellectual property, for instance, the
Department of Conservation stated that it would be helpful if
the State provided the factors that state agencies should consider
when making such decisions. Similarly, the California Department
of Social Services stated that guidelines would be valuable to
the extent that they clarified which intellectual property the
State might be or should be protecting. Moreover, the Business,
Transportation and Housing Agency indicated that it would be
helpful for the State to establish general guidelines for ensuring
that all agencies are aware of the existence of intellectual prop-
erty, take a full and complete inventory of such intellectual
property, and consider the necessity of formally protecting such
property. Further, the Department of Pesticide Regulation believes
that the State should provide statutory authority to own
intellectual property, including definitions, time frames, chain
of custody protocols, and written policy to all state agencies.
Two state agencies that specifically desired guidance about
patents are the California Prison Industry Authority and the
California Energy Commission. The California Prison Industry
Authority said that state law should be enacted to govern who
owns patents and other intellectual property when developed
during employment with the State. Similarly, the California
Energy Commission would like to see policies identifying
whether the State or a state employee owns products invented
by state employees. Finally, some state agencies mentioned that
a single state entity should oversee aspects of intellectual prop-
erty. The Office of Statewide Health Planning and Development
recommended that a state agency be established to advise other
More than half of those
state agencies that
commented on the
matter in our survey
desire additional
guidance concerning
intellectual property.
40
state agencies when it is appropriate to protect intellectual
property. The Unemployment Insurance Appeals Board suggested
that one state agency provide the services for securing protection
for intellectual property.
Not all state agencies, however, believe that additional guidance
from the State is necessary or will be easy to implement. For
example, the Judicial Council of California states that an
information guide to assist public agencies in determining how
to approach intellectual property issues might be helpful. How-
ever, it also stated that it would be difficult to develop uniform
guidelines that take into account all individual characteristics
and responsibilities of every state agency. The Judicial Council
also stated that if the policies eliminated flexibility or added
bureaucracy, they would not be helpful. The Youth and Adult
Correctional Agency believes that intellectual property is so
diverse that uniform guidelines would be difficult to apply. The
California State Summer School for the Arts stated that “one size
fits all” solutions that typify state government could cause more
harm than good.
Additionally, the California State Lottery Commission questioned
the idea of statewide guidelines because they might prevent state
agencies from taking into account their own needs and resources.
The California State Lottery Commission also stated that any
guidelines could be used as evidence against the State if the State
wishes to enjoin someone from infringing activities but has not
followed “each and every guideline set forth.” Finally, the
Department of Finance stated that because the types of
intellectual property are diverse, establishing formal policies for
the management of all intellectual property would require
extensive documentation specific to each situation and would be
burdensome to administer and verify. It also stated that protection
of state-owned intellectual property should be unnecessary
except in very rare circumstances, such as when releasing the
property into the public domain could jeopardize the privacy or
health and safety of the public. Otherwise, the Department of
Finance believes that all intellectual property of the State should
be available to the public subject only to reproduction costs.
Some state agencies are
not convinced that more
guidance from the State
concerning intellectual
property is necessary.
41
We conducted this review under the authority vested in the California State Auditor by
Section 8543 et seq. of the California Government Code and according to generally accepted
government auditing standards. We limited our review to those areas specified in the audit
scope section of this report.
Respectfully submitted,
STEVEN M. HENDRICKSON
Chief Deputy State Auditor
Date: November 16, 2000
Staff: Karen L. McKenna, CPA, Audit Principal
Dale A. Carlson, CGFM
Miles L. Burnett, Ph.D.
Vikram Mandla
42
Blank page inserted for reproduction purposes only.
43
APPENDIX A
Summary of Laws for the Four
Primary Types of Intellectual
Property
T
able 3 summarizes selected information regarding the four
major types of intellectual property: copyrights, trade
marks, patents, and trade secrets. For each type, the table
identifies the laws from which they derive their authority, states
the length of time they are protected against unauthorized use,
describes any designations or markings that can or must be used,
and describes actions that constitute infringement.
44
TABLE 3
Certain Legal Aspects Related to Intellectual Property
Length of Designation
Legal Base Protection or Marking Infringement
For all works, copyrights
begin the moment the work
is fixed in a “tangible form of
expression” (e.g., put on
paper or on a computer disk).
For works created by
noncorporate authors,
copyrights expire 70 years
after the author’s death. If
multiple authors, they expire
70 years after the death of
the last surviving author.
For works created by
corporate authors (also
known as “works made for
hire”) or anonymously,
copyrights expire 95 years
after the publication date or
120 years after the creation
date, whichever is shorter.
Federal trademark registration
lasts for 10 years and is
renewable indefinitely as long
as the trademark is in use.
Trademarks registered before
November 16, 1989, last for
20 years.
State trademark registration
also lasts for 10 years.
Notice of copyright should
include the © symbol or the
word copyright, the year of
first publication, and the
owner’s name (e.g., © 2000
Bureau of State Audits).
For works created after
March 1, 1989, the use of the
copyright notice is optional.
Under common law, notice
should include the symbols ™
for a trademark or
SM
for a
service mark. If the mark has
been registered with the
federal Patent and Trademark
Office, the symbol ® may be
used. Notice may also state
“[mark] is a trademark of
[owner].”
Copying, distributing,
displaying in public, or
performing in public a
copyrighted work or
derivative work without the
owner’s permission is
considered infringement.
Civil and criminal penalties
may apply.
Without the consent of the
owner, use of a mark that is
confusingly similar to an
existing mark by a party other
than the owner is considered
infringement. Also, without
the consent of the owner, use
of a mark that dilutes a
famous mark is also a
violation of federal trademark
law.
Civil penalties may apply.
Copyrights
Federal Copyright Act
Trademarks
Federal Trademark Act
California’s Trademark Law
Common law
45
Patents
Federal Patent Act
Trade Secrets
California’s Uniform
Trade Secrets Act
Common law
Federal Economic
Espionage Act
Utility patents, which cover
new and useful machines,
processes, business methods,
and compositions of matter,
and plant patents, which
cover distinct and new
asexually reproduced plants,
last for 20 years from the date
of filing an application.
Design patents last for 14
years from the date the
patent is granted.
Indefinite, as long as secrecy
is maintained.
If an application has been
filed with the federal Patent
and Trademark Office, the
phrases “patent pending” or
“patent applied for” may be
used.
Once a patent has been
issued, the words “patent” or
“pat.” followed by the patent
number may be used.
Material should be marked
“trade secret,” “proprietary,”
“confidential,” “restricted,”
or otherwise labeled. Also,
employee confidentiality and
vendor nondisclosure
agreements should be used in
addition to observing other
reasonable steps based on
common practice in the
relevant industry.
Making, selling, offering for
sale, or importing a patented
product without the owner’s
consent is considered
infringement.
Civil penalties may apply.
Persons to whom trade
secrets have been disclosed
under a duty of nondisclosure
who then make an
unauthorized disclosure, or
persons who use improper
means to obtain trade secret
information from the owner
may be liable for trade secret
misappropriation.
Civil and criminal penalties
may apply.
Length of Designation
Legal Base Protection or Marking Infringement
46
Blank page inserted for reproduction purposes only.
47
APPENDIX B
Summary of the Types and
Quantities of Intellectual Property
Owned by 125 State Agencies
M
ore than half of the 220 state agencies in our review
own at least one item of intellectual property. In total,
125 state agencies own more than 113,000 identified
items of intellectual property. Copyrights constitute 99 percent
of all intellectual property holdings.
To develop the following table, we relied on several sources:
survey responses from state agencies, copyright registrations
filed with the federal Copyright Office, patent information and
trademark registrations filed with the federal Patent and
Trademark Office, trademark registrations filed with California’s
Secretary of State, and our site visits to seven state agencies to
validate certain information from their survey responses. As we
note in the Introduction, copyrights and trademarks can be
either registered or unregistered. We report the quantities for
both in this appendix.
In numerous instances, we found differences between the quan-
tities state agencies reported in their responses and numbers we
obtained from other sources. When the amounts that we ob-
tained from the registration information or our site visits were
higher than those in the survey responses, we reported the
higher quantities. If the amounts reported by the state agencies
in their survey responses were higher, we used those numbers
because of the limitations in identifying all registered copyrights
and trademarks that we describe in Chapter 2. In the following
table, entries that include the footnote reference † are for the 59
state agencies whose survey responses differ from the quantities
we report. We report as one any trademark registered with both
the federal Patent and Trademark Office and California’s Secre-
tary of State. Likewise, we count as one any trademark with
multiple registrations that show only variations in color or that
are registered as both a trademark and a service mark. When
state agencies reported an approximate number, we recorded
that number. For example, the California Earthquake Authority
indicated that it owned “>10” unregistered copyrights, and we
recorded that as 10 unregistered copyrights. As we describe in
Chapter 2, the quantities of intellectual property we identify in
this report are likely not complete.
48
Accountancy, California Board of 3 3 6
Administrative Law, Office of 1 2 3
African American Museum, California 274 274
Air Resources Board 30 1 31
Alcohol and Drug Programs,
California Department of 3 * 3
Architects Board, California 3
†
13 16
Arts Council, California 2
†
3 5
Audits, Bureau of State 112
Bar of California, State 25 843 5 2 875
Behavioral Sciences, Board of 3
†
1 4
Boating and Waterways, Department of 8 1 9
Building Standards Commission, California 11 1 12
Business, Transportation and
Housing Agency 1 1 2
Child Support Services, Department of 2 21 23
Coastal Commission, California 2
†
11 4
Coastal Conservancy, California 1
†
1
Community Colleges, California 17
†
315 1 1 334
Conservation Corps, California 41 41
Conservation, Department of 3
†
*53 11
Consumer Affairs, Department of 10
†
30 40
Contractors State License Board 1 1 13 15
Control, State Board of 8 8
Corporations, Department of 1 1
Correctional Peace Officer
Standards and Training, Commission on 3 1 4
Corrections, State Board of 1
†
27 28
Corrections, California Department of 2
†
53
‡
55
Criminal Justice Planning, Office of 177 177
Debt and Investment Advisory
Commission, California 28 28
Dental Board of California 44
Developmental Disabilities, Area Boards on 2 2
Developmental Services, Department of 4
†
4
TABLE 4
Summary of Identified State-Agency Owned Intellectual Property
Copyrights Trademarks
Trade
Department Registered Unregistered Registered Unregistered Secrets Patents Other Totals
Note: Footnotes for this table appear on page 52.
49
Earthquake Authority, California 10
‡
212
Education, California State Board of 9 1 10
Education, California Department of 303
†
303
Emergency Medical Services Authority 5 1 6
Emergency Services, Office of 3
†
3
Employment Development Department 1
†
13
†
5
Energy Commission, California 12
†
2822
Equalization, Board of 22
Exposition and State Fair, California 6 6
Fair Employment and Housing,
Department of 1
†
1
Finance, Department of 3,770
‡
2 3,772
Fish and Game, Department of 1
†
12
Food and Agriculture,
California Department of 2 3 3 3 11
Forestry and Fire Protection,
Department of 84 1,828 86 12 3 2,013
Franchise Tax Board 1
†
1
General Services, Department of 5
‡
1
†
2
‡
8
Geologists and Geophysicists,
State Board of Registration for 10 10
Health and Human Services
Agency Data Center, California 1
†
1
Health Services, Department of 11
†
725 2 738
Highway Patrol,
Department of the California 1
†
1
Housing and Community
Development, Department of 6 6
Housing Finance Agency, California 3
†
1
†
1
†
5
Industrial Relations, Department of 13 3 16
Information Technology, Department of 1 * 1
Insurance, California Department of 1 1
Integrated Waste
Management Board, California 5
†
540 1 5 551
Judicial Council of California 8 800 8 816
Justice, Department of 8
†
31 12
Lands Commission, California State 1 1 2
Library, California State 3
†
3
Little Hoover Commission 155 155
Lottery Commission, California State 2
†
*34
†
50 5
‡
91
Copyrights Trademarks
Trade
Department Registered Unregistered Registered Unregistered Secrets Patents Other Totals
Note: Footnotes for this table appear on page 52.
50
Managed Risk Medical Insurance Board 2 2
Mental Health, Department of 20
†
20
Motor Vehicles, Department of 2
†
103
†
12
‡
108
Native American Heritage
Commission, California 11
Parks and Recreation,
California Department of 5*,
†
100,000
‡
10 100,015
Peace Officer Standards and
Training, Commission on 740
†
1 741
Personnel Administration, Department of 55
Personnel Board, State *
Pesticide Regulation, Department of 3
†
3
Pharmacy, California State Board of 3 1 4
Planning and Research, Office of 3 3
Prison Industry Authority, California 1 41 1 4 3 50
Professional Engineers and
Land Surveyors, Board for 5 10 15
Public Employees’
Retirement System, California 1 59 2 62
Public Employment Relations Board 55
Public Utilities Commission, California *
Public Works Board, State 11
Real Estate, Department of 15
†
15
Reclamation Board 11
Registered Nursing, Board of 11
Resources Agency, California 1 1 2
San Joaquin River Conservancy 1 1
Santa Monica Mountains Conservancy 1 1 2
Secretary of State 15 1 7 23
Seismic Safety Commission 2
†
50 52
Social Services, California Department of 1
†
1
Statewide Health Planning and
Development, Office of 1
†
12
Stephen P. Teale Data Center 1 1 2
Student Aid Commission, California 1
†
38 1 40
Supreme Court of California 1 1 2
Teacher Credentialing,
California Commission on 6 1 6 2 2 17
Copyrights Trademarks
Trade
Department Registered Unregistered Registered Unregistered Secrets Patents Other Totals
Note: Footnotes for this table appear on page 52.
51
Teachers’ Retirement System,
California State 2
†
1 607 610
Toxic Substances Control, Department of 2
†
1
†
3
Trade and Commerce Agency, California 6
†
* 8
†
* 14
Transportation, Department of 12
†
21 2 17
Unemployment Insurance Appeals Board 11
University, California State:
Office of the Chancellor 68
†
* 1
†
69
Bakersfield 1
†
1
Chico 23
†
17 40
Dominguez Hills 54
†
54
Fresno 4
†
1
†
5
Fullerton 23
†
1
†
20 1 45
Hayward 1 1 8 10
Humboldt 3
†
200 203
Long Beach 31
†
132
Los Angeles 28
†
12 31
Maritime Academy 10
‡
10
Monterey Bay 3 1 4
Northridge 7
†
1
†
12 20
Pomona 10
†
2
†
12
Sacramento 10
‡
8
‡
18
San Bernardino 4
* 26
San Diego 26
†
127
San Francisco 5
†
27
San Jose 5
†
2
†
7
San Luis Obispo 1
†
1
Sonoma 134 3 13 150
Stanislaus 1
†
1
Vocational Nursing and Psychiatric
Technicians, Board of 4
†
3 7
Water Resources, Department of 5
†
* 16
Wildlife Conservation Board 1 1
Youth and Adult Correctional Agency 1 1
Totals 1,667 110,140 155 307 20 15 913 113,217
Copyrights Trademarks
Trade
Department Registered Unregistered Registered Unregistered Secrets Patents Other Totals
Note: Footnotes for this table appear on page 52.
52
* State agency provided an unquantifiable response for the quantity of intellectual property owned.
• California Department of Alcohol and Drug Programs reported that it owns an “unknown” number of unregistered
trademarks.
• Department of Conservation reported that it owns an unquantified number of unregistered copyrights and that maps alone
number in the thousands.
• Department of Information Technology reported that it owns several items of other intellectual property.
• California State Lottery Commission reported that it owns numerous unregistered copyrights.
• California Department of Parks and Recreation reported that it owns very few registered copyrights.
• State Personnel Board reported that it owns numerous materials that could be construed as falling within the definition of
intellectual property but that it has not protected these materials, either formally or informally.
• California Public Utilities Commission reported that it owns many thousands of other unregistered intellectual property.
• California Trade and Commerce Agency reported that it owns a number of unregistered copyrights and trademarks.
• California State University, Office of the Chancellor, reported that it owns an unknown number of unregistered copyrights.
• California State University, San Bernardino, reported that it owns an unknown number of unregistered copyrights.
• Department of Water Resources reported that it was not aware of its unregistered copyrights and responded with a “?.”
†
The quantity of intellectual property reported in this table is different from the quantity identified by agency in its survey
response. (See the narrative in this appendix for why we reported a different amount in these instances.)
‡
Survey response provided an approximation for the quantity of intellectual property owned.
• California Department of Corrections reported that it owns +/- 53 items of other intellectual property.
• California Earthquake Authority reported that it owns >10 unregistered copyrights.
• Department of Finance reported that it owns approximately 3,770 unregistered copyrights.
• Department of General Services reported that it owns <5 unregistered copyrights and <2 unregistered trademarks.
• California State Lottery Commission reported that it owns ~5 trade secrets.
• Department of Motor Vehicles reported that it owns >2 trade secrets.
• California Department of Parks and Recreation reported that it owns 100,000+ unregistered copyrights.
• California Maritime Academy (California State University) reported that it owns 5-10 unregistered trademarks.
• California State University, Sacramento, reported that it owns approximately 10 registered copyrights and 6-8 registered
trademarks.
53
cc: Members of the Legislature
Office of the Lieutenant Governor
Milton Marks Commission on California State
Government Organization and Economy
Department of Finance
Attorney General
State Controller
State Treasurer
Legislative Analyst
Senate Office of Research
California Research Bureau
Capitol Press
