SB 232-INTELLECTUAL PROPERTY OF EMPLOYEES  12:36:12 PM CHAIR COSTELLO announced the consideration of SENATE BILL NO. 232 "An Act relating to employee intellectual property." She noted that this was the first hearing and the intention was to hear the introduction, take questions, hear public testimony, and look to the will of the committee. 12:36:39 PM KATIE MCCALL, Staff, Senator Mia Costello, Alaska State Legislature, Juneau, Alaska, introduced SB 232 paraphrasing the sponsor statement that read as follows: Senate Bill 232 protects Alaskan innovators. Right now, an employer can try to claim, and profit from, an employee's personal creations. This bill will protect Alaskans' intellectual property. An employee who invents something, from widgets to software, on their own time with their own resources, will keep the rights to their invention. The bill also makes sure any disputes are heard in Alaska courts, not those of other states. Protecting Alaskans' intellectual property helps further innovation and economic development in Alaska by demonstrating our state's commitment to supporting those with new and unique ideas. Implementing the protections in Senate Bill 232 would provide assurance to Alaskan employees that their innovative ideas are their own. 12:37:49 PM SENATOR STEVENS joined the committee. 12:37:55 PM MS. MCCALL presented the sectional analysis for SB 232: Sec. 1 AS 23.10.038 Page 1, Lines 3-15 & Page 2,  Line 1 Adds a new section of law which: • Prohibits employers from claiming rights to an employee's intellectual property, if the employee developed an invention on their own time, outside the scope of employment, and without using the employer's resources • Invalidates any employment agreement which tries to give the employer rights to an employee's personal inventions • Ensures employees have access to the Alaska courts to defend their personal inventions Sec. 2 Page 2, Lines 2-5 Specifies that this Act only applies to employment agreements on or after the effective date. 12:38:56 PM CHAIR COSTELLO found no questions and invited Mark Billingsley to provide his testimony 12:39:27 PM MARK BILLINGSLEY, Director, Office of Intellectual Property & Commercialization, and the Center for Innovation, Commercialization, and Entrepreneurship, University of Alaska Fairbanks (UAF), Fairbanks, Alaska, stated that he was one of two practicing patent attorneys in the state. His job at the university was to implement and commercialize university research and development (R&D) and spur entrepreneurial endeavors. He offered his perspective that there was a lot of opportunity in Alaska and that there was a lot of interest in the state nationally, but that it had a long way to go to be competitive with the rest of the US. He said innovations don't necessarily mean designing new things. What's needed here is to take what already exists, bring it to Alaska, and adapt it for use here. He pointed out that Alaska needed programs and systems, economic structures, and financial tools. MR. BILLINGSLEY said SB 232 broadly addresses employment contracts and an employer who claims the intellectual property rights of an employee's innovation that was developed on their own time, in their own place, and using their own resources. He said it would be for the courts to decide but he wonders whether such an employment contract would be enforceable. He noted that whoever drafted the bill did a good job of recognizing potential issues with retroactive application. 12:44:16 PM CHAIR COSTELLO asked if the bill addresses the situation of an individual who on their own time and in their own place, innovates some kind of intellectual property and commercializes it, and their employer asserts ownership. MR. BILLINGSLEY said the default owner of intellectual property is the inventor or author so in that example the employee is the owner, not the employer. The main exception to that is invention for hire, which is when somebody is specifically hired to invent something. Large organizations typically have employee language in the hiring contract that assigns everything the employee invents that is related to the scope of their work to that organization. Even if that language is missing there is a legal mechanism for the employer to keep ownership of the invention. CHAIR COSTELLO asked if it was his opinion that SB 232 placed the default into statue, which was that the employee owns their intellectual property. MR. BILLINGSLEY replied the default was that the employee owns their intellectual property. His view of the legislation was that it sought to overcome a contract that tries to undermine the default. CHAIR COSTELLO thanked him for the testimony. 12:48:44 PM CHAIR COSTELLO opened public testimony on SB 232; finding none, she closed public testimony. 12:49:02 PM At ease 12:50:10 PM CHAIR COSTELLO reconvened the meeting and stated she would hold SB 232 in committee.