SECTIONS 22389-22391.1 - California Statutes

BUSINESS AND PROFESSIONS CODE

SECTION 22389-22391.1

22389. Every invention developer rendering or offering to render
invention development services in this state shall maintain a bond
issued by a surety company admitted to do business in this state. The
principal sum of the bond shall be 5 percent of the invention
developer's gross income from the invention development business in
this state duing the invention developer's last fiscal year, except
that the principal sum of the bond shall not be less than twenty-five
thousand dollars ($25,000) in the first or any subsequent year of
operations. A copy of such bond shall be filed with the Secretary of
State prior to the time the invention developer first commences
business in this state. The invention developer shall have 90 days
after the end of each fiscal year within which to change the bond as
may be necessary to conform to the requirements of this section.

22390. The bond required by Section 22389 shall be in favor of the
State of California for the benefit of any person who, after entering
into a contract for invention development services with an invention
developer is damaged by fraud or dishonesty or failure to provide
the services of the invention developer in performance of the
contract.

22391. (a) When a deposit has been made in lieu of a bond pursuant
to Section 995.710 of the Code of Civil Procedure, the person
asserting a claim against the deposit shall, in lieu of Section
996.430 of the Code of Civil Procedure, establish the claim by
furnishing evidence to the Secretary of State of a money judgment
entered by a court together with evidence that the claimant is a
person described in Section 22390.
(b) When a person has established the claim with the Secretary of
State, the Secretary of State shall review and approve the claim and
enter the date of approval thereon. The claim shall be designated an
"approved claim."
(c) When the first claim against a particular deposit account has
been approved, it shall not be paid until the expiration of a period
of 240 days after the date of its approval by the Secretary of State.
Subsequent claims that are approved by the Secretary of State within
the same 240-day period shall similarly not be paid until the
expiration of the 240-day period. Upon the expiration of the 240-day
period, the Secretary of State shall pay all approved claims from
that 240-day period in full unless the deposit is insufficient, in
which case each approved claim shall be paid a pro rata share of the
deposit.
(d) When the Secretary of State approves the first claim against a
particular deposit account after the expiration of a 240-day period,
the date of approval of that claim shall begin a new 240-day period
to which subdivision (c) shall apply with respect to the amount
remaining in the deposit account.
(e) After a deposit account is exhausted, no further claims shall
be paid by the Secretary of State. Claimants who have had their
claims paid in full or in part pursuant to subdivisions (c) and (d)
shall not be required to return funds received from the deposit for
the benefit of other claimants.
(f) When a deposit has been made in lieu of a bond, the amount of
the deposit shall not be subject to attachment, garnishment, or
execution with respect to an action or judgment against the invention
developer, other than as to an amount no longer needed or required
for the purpose of this chapter which would otherwise be returned to
the invention developer by the Secretary of State.
(g) The Secretary of State shall retain a cash deposit for two
years from the date the Secretary of State receives written
notification from the assignor of the deposit that the assignor has
ceased to engage in the business of an invention developer or has
filed a bond pursuant to Section 22389, provided that there are no
outstanding claims against the deposit. The written notice shall
include all of the following: (1) name, address, and telephone number
of the assignor; (2) name, address, and telephone number of the bank
at which the deposit is located; (3) account number of the deposit;
and (4) a statement whether the assignor is ceasing to engage in the
business of an invention developer or has filed a bond with the
Secretary of State. The Secretary of State shall forward an
acknowledgment of receipt of the written notification to the assignor
at the address indicated therein, specifying the date of receipt of
the written notice and anticipated date of release of the deposit.
(h) This section shall apply to all deposits retained by the
Secretary of State.
(i) A judge of a superior court may order the return of the
deposit prior to the expiration of two years upon evidence
satisfactory to the judge that there are no outstanding claims
against the deposit or order the Secretary of State to retain the
deposit for a sufficient period beyond the two years specified in
subdivision (g) to resolve outstanding claims against the deposit.

22391.1. (a) The Secretary of State shall enforce the provisions of
this title that govern the filing and maintenance of bonds and
deposits in lieu of bonds.
(b) The Secretary of State shall charge and collect a filing fee
not to exceed the cost of filing the bond or the deposit in lieu of a
bond pursuant to Section 995.710 of the Code of Civil Procedure.